Placement Document

Not for Circulation

Serial Number ____

APOLLO HOSPITALS ENTERPRISE LIMITED

(Incorporated in the Republic of India with limited liability with corporate identification number of L85110TN1979PLC008035 under the Companies Act, 1956, as amended (the “Companies Act”)).

Apollo Hospitals Enterprise Limited (the ―Company‖ or the ―Issuer‖ or ―Apollo‖) is issuing up to 6,666,666 equity shares of the Company of a face value of ` 5 each (―Equity Shares‖) at a
price of ` 495 per Equity Share (―Issue Price‖), including premium of ` 490 per Equity Share aggregating up to ` 3,300 million (the ―Issue‖).

ISSUE IN RELIANCE UPON CHAPTER VIII OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2009, AS AMENDED (THE ―SEBI REGULATIONS‖)

THE DISTRIBUTION OF THIS PLACEMENT DOCUMENT IS BEING MADE IN RELIANCE UPON CHAPTER VIII OF THE SEBI REGULATIONS. THIS PLACEMENT
DOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR AND DOES NOT CONSTITUTE AN OFFER OR INVITATION OR SOLICITATION OF AN OFFER TO
THE PUBLIC OR TO ANY OTHER PERSON OR CLASS OF INVESTORS WITHIN OR OUTSIDE INDIA.

YOU ARE NOT AUTHORIZED TO AND MAY NOT (1) DELIVER THIS PLACEMENT DOCUMENT TO ANY OTHER PERSON; OR (2) REPRODUCE THIS PLACEMENT
DOCUMENT IN ANY MANNER WHATSOEVER. ANY DISTRIBUTION OR REPRODUCTION OF THIS PLACEMENT DOCUMENT IN WHOLE OR IN PART IS
UNAUTHORISED. FAILURE TO COMPLY WITH THIS INSTRUCTION MAY RESULT IN A VIOLATION OF THE SEBI REGULATIONS OR OTHER APPLICABLE LAWS
OF INDIA AND OTHER JURISDICTIONS.

INVESTMENTS IN EQUITY SHARES INVOLVE A DEGREE OF RISK AND PROSPECTIVE INVESTORS SHOULD NOT INVEST IN THIS ISSUE UNLESS THEY ARE
PREPARED TO TAKE THE RISK OF LOSING ALL OR PART OF THEIR INVESTMENT. PROSPECTIVE INVESTORS ARE ADVISED TO CAREFULLY READ THE
SECTION TITLED ―RISK FACTORS‖ BEFORE MAKING AN INVESTMENT DECISION RELATING TO THIS ISSUE. EACH PROSPECTIVE INVESTOR IS ADVISED TO
CONSULT ITS OWN ADVISORS ABOUT THE PARTICULAR CONSEQUENCES OF AN INVESTMENT IN THE EQUITY SHARES BEING ISSUED PURSUANT TO THIS
PLACEMENT DOCUMENT.

The Equity Shares are listed on The National Stock Exchange of India Limited (the ―NSE‖) and the Bombay Stock Exchange Limited (the ―BSE‖, together with the NSE, the ―Stock
Exchanges‖). In-principle approvals under Clause 24(a) of the Equity Listing Agreements (as defined hereinafter) for listing of the Equity Shares have been received from the NSE on July 13,
2011 and the BSE on July 13, 2011. Applications will be made for obtaining listing and trading approvals of the Equity Shares offered through this placement document (the ―Placement
Document‖) to the Stock Exchanges. The Stock Exchanges assume no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Admission of the
Equity Shares to trading on the Stock Exchanges should not be taken as an indication of the merits of the business of the Company or the Equity Shares.

A copy of this Placement Document has been delivered to the Stock Exchanges. A copy of this Placement Document will be delivered to the Securities and Exchange Board of India (the
―SEBI‖) for record purposes. This Placement Document has not been reviewed by SEBI, the Reserve Bank of India (the ―RBI‖), the Stock Exchanges or any other regulatory or listing authority
and is intended only for use by qualified institutional buyers as defined in the SEBI Regulations (the ―QIBs‖). This Placement Document has not been and will not be registered as a prospectus
with the Registrar of Companies (―RoC‖) in India, will not be circulated or distributed to the public in India or any other jurisdiction, and will not constitute a public offer in India or any other
jurisdiction.

Invitations, offers and sales of the Equity Shares shall only be made pursuant to this Placement Document together with the respective Application Form (defined hereinafter) and Confirmation of
Allocation Note (defined hereinafter). See section titled ―Issue Procedure‖. The distribution of this Placement Document or the disclosure of its contents without the prior consent of the
Company to any person, other than QIBs and persons retained by QIBs to advise them with respect to their purchase of the Equity Shares is unauthorised and prohibited. Each prospective
investor, by accepting delivery of this Placement Document, agrees to observe the foregoing restrictions and make no copies of this Placement Document or any documents referred to in this
Placement Document.

The information on the website of the Company or any website directly or indirectly linked to the website of the Company does not form part of this Placement Document and prospective
investors should not rely on such information contained in, or available through, any such website.

All of the Company‘s outstanding Equity Shares are listed on each of the Stock Exchanges. The closing price of the outstanding Equity Shares on the NSE and the BSE on July 13, 2011, was `
495.05 and ` 495.20 per Equity Share respectively.

This Placement Document has been prepared by the Company solely for providing information in connection with the Issue.

The Equity Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the ―Securities Act‖), and may not be offered or sold within the United States except
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Equity Shares are being offered and
sold under the Securities Act outside the United States in reliance on Regulation S under the Securities Act (―Regulation S‖). In addition, the Equity Shares are being offered and sold in the
United States only to ―qualified institutional buyers‖ (as defined in Rule 144A under the Securities Act) in transactions exempt from the registration requirements of the Securities Act.
Prospective purchasers are hereby notified that sellers of the Equity Shares may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A under
the Securities Act.

This Placement Document is dated July 18, 2011.

JOINT BOOK RUNNING LEAD MANAGERS (In an alphabetical order)

Citigroup Global Markets India Private Enam Securities Private Limited Nomura Financial Advisory and Securities
Limited 801/ 802, Dalamal Tower (India) Private Limited
12th Floor, Bakhtawar Nariman Point Ceejay House, Level 11, Plot F
Nariman Point Mumbai 400 021 Shivsagar Estate, Dr. Annie Besant Road, Worli
Mumbai 400 021 Tel: (91 22) 6638 1800 Mumbai 400 018
Tel: (91 22) 6631 9890 Fax: (91 22) 2284 6824 Tel: (91 22 ) 4037 4037
Fax: (91 22) 3919 7814 E-mail: [email protected] Fax: (91 22) 4037 4111
E-mail: [email protected] E-mail: project.pegasus- [email protected]
 TABLE OF CONTENTS
NOTICE TO INVESTORS .........................................................................................................................................1
PRESENTATION OF FINANCIAL AND OTHER INFORMATION ..................................................................9
INDUSTRY AND MARKET DATA..........................................................................................................................9
AVAILABLE INFORMATION ............................................................................................................................... 10
FORWARD-LOOKING STATEMENTS ............................................................................................................... 11
ENFORCEMENT OF CIVIL LIABILITIES ......................................................................................................... 13
EXCHANGE RATES ................................................................................................................................................ 14
DEFINITIONS AND ABBREVIATIONS ............................................................................................................... 15
SUMMARY OF BUSINESS ..................................................................................................................................... 19
SUMMARY OF THE ISSUE ................................................................................................................................... 27
SELECTED FINANCIAL INFORMATION .......................................................................................................... 29
RISK FACTORS ....................................................................................................................................................... 35
MARKET PRICE INFORMATION ....................................................................................................................... 54
USE OF PROCEEDS ................................................................................................................................................ 56
CAPITALISATION STATEMENT ........................................................................................................................ 57
DIVIDENDS ............................................................................................................................................................... 58
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS ........................................................................................................................................................... 59
INDUSTRY OVERVIEW ......................................................................................................................................... 78
BUSINESS .................................................................................................................................................................. 87
BOARD OF DIRECTORS AND SENIOR MANAGEMENT ............................................................................. 112
PRINCIPAL SHAREHOLDERS ........................................................................................................................... 126
ISSUE PROCEDURE ............................................................................................................................................. 130
PLACEMENT .......................................................................................................................................................... 139
SELLING RESTRICTIONS .................................................................................................................................. 141
TRANSFER RESTRICTIONS............................................................................................................................... 145
THE SECURITIES MARKET OF INDIA............................................................................................................ 149
DESCRIPTION OF THE EQUITY SHARES ...................................................................................................... 153
TAXATION.............................................................................................................................................................. 156
US FEDERAL INCOME TAXATION .................................................................................................................. 164
LEGAL PROCEEDINGS ....................................................................................................................................... 169
INDEPENDENT ACCOUNTANTS ...................................................................................................................... 170
GENERAL INFORMATION ................................................................................................................................. 171
SUMMARY OF SIGNIFICANT DIFFERENCES AMONG INDIAN GAAP, US GAAP AND IFRS............ 172
FINANCIAL STATEMENTS ................................................................................................................................ 180
DECLARATION ..................................................................................................................................................... 289
 NOTICE TO INVESTORS

The Company has furnished and accepts full responsibility for all of the information contained in this Placement
Document and confirms that to its best knowledge and belief, having made all reasonable enquiries, this Placement
Document contains all information with respect to the Company and the Equity Shares that is material in the context
of the Issue. The statements contained in this Placement Document relating to the Company and the Equity Shares
are, in every material respect, true and accurate and not misleading. The opinions and intentions expressed in this
Placement Document with regard to the Company and the Equity Shares are honestly held, have been reached after
considering all relevant circumstances, are based on information presently available to the Company and based on
reasonable assumptions. There are no other facts in relation to the Company and the Equity Shares, the omission of
which would, in the context of the Issue, make any statement in this Placement Document misleading in any
material respect. Further, all reasonable enquiries have been made by the Company to ascertain such facts and to
verify the accuracy of all such information and statements. Citigroup Global Markets India Private Limited, Enam
Securities Private Limited and Nomura Financial Advisory and Securities (India) Private Limited (the ―Joint Book
Running Lead Managers‖) have not separately verified the information contained in this Placement Document
(financial, legal or otherwise). Accordingly, neither any of the Joint Book Running Lead Managers nor any of their
respective shareholders, employees, counsel, officers, directors, representatives, agents or affiliates make any
express or implied representation, warranty or undertaking, and no responsibility or liability is accepted by any of
the Joint Book Running Lead Managers as to the accuracy or completeness of the information contained in this
Placement Document or any other information supplied in connection with the Equity Shares. Each person receiving
this Placement Document acknowledges that such person has not relied on either any of the Joint Book Running
Lead Managers or on any of their respective shareholders, employees, counsel, officers, directors, representatives,
agents or affiliates in connection with its investigation of the accuracy of such information or its investment
decision, and each such person must rely on its own examination of the Company and the merits and risks involved
in investing in the Equity Shares.

No person is authorised to give any information or to make any representation not contained in this Placement
Document and any information or representation not so contained must not be relied upon as having been authorised
by or on behalf of the Company or by or on behalf of the Joint Book Running Lead Managers. The delivery of this
Placement Document at any time does not imply that the information contained in it is correct as of any time
subsequent to its date.

The Equity Shares issued pursuant to the Issue have not been approved, disapproved or recommended by the
US Securities and Exchange Commission, any other federal or state authorities in the US or the securities
authorities of any non-US jurisdiction or any other US or non-US regulatory authority. No authority has
passed on or endorsed the merits of the Issue or the accuracy or adequacy of this Placement Document. Any
representation to the contrary is a criminal offence in the US and may be a criminal offence in other
jurisdictions.

The Equity Shares have not been and will not be registered under the Securities Act and, unless so registered, may
not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act. Accordingly, the Equity Shares are being offered and sold (a)
in the United States only to ―qualified institutional buyers‖ (as defined in Rule 144A under the Securities Act and
referred to in this Placement Document as ―US QIBs‖, for the avoidance of doubt, the term US QIBs does not refer
to a category of institutional investor defined under applicable Indian regulations and referred to in this Placement
Document as ―QIBs‖) in transactions exempt from the registration requirements of the Securities Act and (b)
outside the United States in compliance with Regulation S and the applicable laws of the jurisdiction where those
offers and sales occur.

This Placement Document has been prepared on the basis that all offers of Equity Shares will be made pursuant to
an exemption under the Prospectus Directive, as implemented in Member States of the European Economic Area
(―EEA‖), from the requirement to produce a prospectus for offers of Equity Shares. The expression ―Prospectus
Directive‖ means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to
the extent implemented in the Relevant Member State (as defined below) and includes any relevant implementing
measure in each Relevant Member State and the expression ―2010 PD Amending Directive‖ means Directive
2010/73/EU. Accordingly, any person making or intending to make an offer within the EEA of Equity Shares which

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are the subject of the placement contemplated in this Placement Document should only do so in circumstances in
which no obligation arises for the Company or any of the Joint Book Running Lead Managers to produce a
prospectus for such offer. None of the Company and the Joint Book Running Lead Managers have authorised, nor
do they authorise, the making of any offer of Equity Shares through any financial intermediary, other than the offers
made by the Joint Book Running Lead Managers which constitute the final placement of the Equity Shares
contemplated in this Placement Document.

The distribution of this Placement Document and the issue of the Equity Shares may be restricted in certain
jurisdictions by law. As such, this Placement Document does not constitute, and may not be used for or in
connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not
authorized or to any person to whom it is unlawful to make such offer or solicitation. In particular, no action has
been taken by the Company and the Joint Book Running Lead Managers which would permit an offering of the
Equity Shares or distribution of this Placement Document in any jurisdiction, other than India, where action for that
purpose is required. Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and neither
this Placement Document nor any offering material in connection with the Equity Shares may be distributed or
published in or from any country or jurisdiction, except under circumstances that will result in compliance with any
applicable rules and regulations of any such country or jurisdiction.

In making an investment decision, investors must rely on their own examination of the Apollo Group and the terms
of the Issue, including the merits and risks involved. Investors should not construe the contents of this Placement
Document as legal, tax, accounting or investment advice. Investors should consult their own counsel and advisors as
to business, legal, tax, accounting and related matters concerning the Issue. In addition, neither the Company nor the
Joint Book Running Lead Managers are making any representation to any offeree or purchaser of the Equity Shares
regarding the legality of an investment in the Equity Shares by such offeree or purchaser under applicable legal,
investment or similar laws or regulations. Each purchaser of the Equity Shares in the Issue is deemed to have
acknowledged, represented and agreed that it is eligible to invest in India and in the Company under Indian law,
including Chapter VIII of the SEBI Regulations and that it is not prohibited by SEBI or any other statutory authority
from buying, selling or dealing in the Equity Shares. Each purchaser of the Equity Shares in the Issue also
acknowledges that it has been afforded an opportunity to request from the Company and review information relating
to the Apollo Group and the Equity Shares.

This Placement Document contains summaries of certain terms of certain documents, which summaries are qualified
in their entirety by the terms and conditions of such document.

The information on the Company‘s website, www.apollohospitals.com, or on the websites of the Joint Book
Running Lead Managers, does not constitute nor form part of this Placement Document.

References herein to ―you‖ or ―your‖ is to the prospective investors in the Issue.

REPRESENTATIONS BY INVESTORS

By subscribing to any Equity Shares in the Issue, you are deemed to have represented, warranted, acknowledged and
agreed to the Company and the Joint Book Running Lead Managers, as follows:

You are a ―QIB‖ as defined in Regulation 2(1)(zd) of the SEBI Regulations, having a valid and existing
registration under applicable laws and regulations of India, and undertake to acquire, hold, manage or
dispose of any Equity Shares that are allocated to you in accordance with Chapter VIII of the SEBI
Regulations;

If you are not a resident of India, you are a QIB (other than a multilateral or bilateral financial institution),
you are an FII (including a sub-account other than a sub-account which is a foreign corporate or a foreign
individual) or a FVCI, and have a valid and existing registration with SEBI under the applicable laws in
India;

2
if you are a resident in any jurisdiction other than India, you are permitted by all applicable laws to
subscribe to the Equity Shares in such country;

If you are Allotted (as defined hereinafter) Equity Shares, you shall not, for a period of one year from the
date of Allotment (as defined hereinafter), sell the Equity Shares so acquired except on the floor of the
Stock Exchanges (additional restrictions apply if you are within the United States, see the section titled
―Transfer Restrictions‖);

You have made, or been deemed to have made, as applicable, the representations and warranties as set forth
under the sections titled ―Selling Restrictions‖ and ―Transfer Restrictions‖;

You are aware that the Equity Shares have not been and will not be registered under the Companies Act,
the SEBI Regulations or under any other law in force in India. This Placement Document has not been
reviewed or affirmed by SEBI, RBI, the Stock Exchanges or any other regulatory or listing authority, and
will not be filed with the RoC, and is intended only for use by QIBs. This Placement Document has been
filed with the Stock Exchanges and will be displayed on the websites of the Company and the Stock
Exchanges;

You are entitled to subscribe for and acquire the Equity Shares under the laws of all relevant jurisdictions
that apply to you and you have necessary capacity, have obtained all necessary consents, governmental or
otherwise, and authorisations and complied with all necessary formalities, to enable you to commit to
participation in the Issue and to perform your obligations in relation thereto (including, without limitation,
in the case of any person on whose behalf you are acting, all necessary consents and authorisations to agree
to the terms set out or referred to in this Placement Document), and will honour such obligations;

You confirm that, either: (i) you have not participated in or attended any investor meetings or presentations
by the Company or its agents (―Company Presentations‖) with regard to the Company or the Issue; or (ii)
if you have participated in or attended any Company Presentations: (a) you understand and acknowledge
that the Joint Book Running Lead Managers may not have knowledge of the statements that the Company
or its agents may have made at such Company Presentations and are therefore unable to determine whether
the information provided to you at such Company Presentations may have included any material
misstatements or omissions, and, accordingly you acknowledge that the Joint Book Running Lead
Managers have advised you not to rely in any way on any information that was provided to you at such
Company Presentations, and (b) you confirm that, to the best of your knowledge, you have not been
provided any material information relating to the Company and the Issue that was not publicly available;

Neither the Company nor any of the Joint Book Running Lead Managers or any of their respective
shareholders, directors, officers, employees, counsel, representatives, agents or affiliates are making any
recommendations to you or advising you regarding the suitability of any transactions it may enter into in
connection with the Issue and your participation in the Issue is on the basis that you are not, and will not,
up to the Allotment of the Equity Shares, be a client of any of the Joint Book Running Lead Managers.
Neither any of the Joint Book Running Lead Managers nor any of their respective shareholders, directors,
officers, employees, counsel, representatives, agents or affiliates have any duties or responsibilities to you
for providing the protection afforded to their clients or customers or for providing advice in relation to the
Issue and are not in any way acting in any fiduciary capacity;

All statements other than statements of historical fact included in this Placement Document, including those
regarding the Company‘s financial position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating to the Company‘s business), are
forward-looking statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause actual results to be materially different from
future results, performance or achievements expressed or implied by such forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding the Company‘s present and
future business strategies and environment in which the Company will operate in the future. You should not
place undue reliance on forward-looking statements, which speak only as of the date of this Placement

3
Document. The Company assumes no responsibility to update any forward-looking statements contained in
this Placement Document;

You are aware of and understand that the Equity Shares are being offered only to QIBs and are not being
offered to the general public and the Allotment (as defined hereinafter) shall be on a discretionary basis at
the discretion of the Company and the Joint Book Running Lead Managers;

You are aware that if you are Allotted (as defined hereinafter) more than 5% of the Equity Shares in the
Issue, the Company shall be required to disclose your name and the number of the Equity Shares Allotted
(as defined hereinafter) to you to the Stock Exchanges and the Stock Exchanges will make the same
available on their website and you consent to such disclosures;

You have been provided a serially numbered copy of this Placement Document, and you have read it in its
entirety, including in particular, the section titled ―Risk Factors‖;

In making your investment decision, you have (i) relied on your own examination of the Company and the
terms of the Issue, including the merits and risks involved, (ii) made your own assessment of the Apollo
Group, the Equity Shares and the terms of the Issue based solely on the information contained in this
Placement Document and no other disclosure or representation by the Company or any other party, (iii)
consulted your own independent counsel and advisors or otherwise have satisfied yourself concerning, the
effects of local laws, (iv) received all information that you believe is necessary or appropriate in order to
make an investment decision in respect of the Company and the Equity Shares, and (v) relied upon your
own investigation and resources in deciding to invest in the Issue;

Neither any of the Joint Book Running Lead Managers nor any of their respective shareholders, directors,
officers, employees, counsel, representatives, agents or affiliates, have provided you with any tax advice or
otherwise made any representations regarding the tax consequences of purchase, ownership and disposal of
the Equity Shares (including the Issue and the use of proceeds from the Equity Shares). You will obtain
your own independent tax advice from a reputable service provider and will not rely on any of the Joint
Book Running Lead Managers or any of their respective shareholders, directors, officers, employees,
counsel, representatives, agents or affiliates, when evaluating the tax consequences in relation to the Equity
Shares (including, in relation to the Issue and the use of proceeds from the Equity Shares). You waive, and
agree not to assert any claim against the Company or any of the Joint Book Running Lead Managers or any
of their respective shareholders, directors, officers, employees, counsel, representatives, agents or affiliates,
with respect to the tax aspects of the Equity Shares or as a result of any tax audits by tax authorities,
wherever situated;

You are a sophisticated investor and have such knowledge and experience in financial, business and
investments as to be capable of evaluating the merits and risks of the investment in the Equity Shares. You
are experienced in investing in private placement transactions of securities of companies in a similar nature
of business, similar stage of development and in similar jurisdictions. You and any accounts for which you
are subscribing to the Equity Shares (i) are each able to bear the economic risk of the investment in the
Equity Shares, (ii) will not look to the Company and/or any of the Joint Book Running Lead Managers or
any of their respective shareholders, directors, officers, employees, counsel, representatives, agents or
affiliates for all or part of any such loss or losses that may be suffered in connection with the Issue,
including losses arising out of non-performance by the Company of any of its respective obligations or any
breach of any representations and warranties by the Company, whether to you or otherwise, (iii) are able to
sustain a complete loss on the investment in the Equity Shares, (iv) have no need for liquidity with respect
to the investment in the Equity Shares, and (v) have no reason to anticipate any change in your or their
circumstances, financial or otherwise, which may cause or require any sale or distribution by you or them
of all or any part of the Equity Shares. You acknowledge that an investment in the Equity Shares involves a
high degree of risk and that the Equity Shares are, therefore, a speculative investment. You are seeking to
subscribe to the Equity Shares in the Issue for your own investment and not with a view to resale or
distribution;

4
If you are acquiring the Equity Shares pursuant to the Issue, for one or more managed accounts, you
represent and warrant that you are authorised in writing, by each such managed account to acquire the
Equity Shares for each managed account and make the representations, warranties, acknowledgements and
agreements herein for and on behalf of each such account, reading the reference to ‗you‘ to include such
accounts;

You are not a Promoter (as defined under the SEBI Regulations) of the Company or any of its affiliates and
are not a person related to the Promoter, either directly or indirectly and your Bid does not directly or
indirectly represent the Promoter or Promoter Group (as defined under the SEBI Regulations) of the
Company;

You have no rights under a shareholders‘ agreement or voting agreement with the Promoter or persons
related to the Promoter, no veto rights or right to appoint any nominee director on the board of directors of
the Company (the ―Board‖), other than the rights, if any, acquired in the capacity of a lender not holding
any Equity Shares, which shall not be deemed to be a person related to the Promoter;

You have no right to withdraw your Bid (as defined hereinafter) after the Bid/Issue Closing Date (as
defined hereinafter);

You are eligible to apply and hold the Equity Shares Allotted (as defined hereinafter) to you together with
any Equity Shares held by you prior to the Issue. Further, you confirm that your aggregate holding after the
Allotment (as defined hereinafter) of the Equity Shares shall not exceed the level permissible as per any
applicable regulation;

The Bid (as defined hereinafter) made by you would not result in triggering a tender offer under the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended (the ―Takeover Code‖);

To the best of your knowledge and belief, your aggregate holding, together with other QIBs in the Issue
that belong to the same group or are under common control as you, pursuant to the Allotment (as defined
hereinafter) under the Issue shall not exceed 50% of the Issue. For the purposes of this representation:

a. The expression ‗belong to the same group‘ shall derive meaning from the concept of ‗companies
under the same group‘ as provided in sub-section (11) of Section 372 of the Companies Act; and

b. ‗Control‘ shall have the same meaning as is assigned to it by Regulation 2(1)(c) of the Takeover
Code;

You shall not undertake any trade in the Equity Shares credited to your beneficiary account until such time
that the final listing and trading approvals for the Equity Shares are issued by the Stock Exchanges as
applicable;

You are aware that (i) applications for in-principle approval, in terms of clause 24(a) of the Equity Listing
Agreement, for listing and admission of the Equity Shares and for trading on the Stock Exchanges, were
made and approval has been received from each of the Stock Exchanges, and (ii) the application for the
final listing and trading approval will be made only after Allotment (as defined hereinafter) of the Equity
Shares in the Issue. There can be no assurance that the final approvals for listing of the Equity Shares will
be obtained in time or at all. The Company shall not be responsible for any delay or non-receipt of such
final approvals or any loss arising from such delay or non-receipt;

You are aware and understand that the Joint Book Running Lead Managers have entered into a placement
agreement with the Company, whereby the Joint Book Running Lead Managers have, subject to the
satisfaction of certain conditions set out therein, severally and not jointly, agreed to manage the Issue and
use reasonable efforts to procure subscription for the Equity Shares on the terms and conditions set forth
therein;

5
You understand that the contents of this Placement Document are exclusively the responsibility of the
Company and that neither the Joint Book Running Lead Managers nor any person acting on their behalf has
or shall have any liability for any information, representation or statement contained in this Placement
Document or any information previously published by or on behalf of the Company and will not be liable
for your decision to participate in the Issue based on any information, representation or statement contained
in this Placement Document or otherwise. By participating in the Issue, you agree to the same and confirm
that the only information you are entitled to rely on, and on which you have relied in committing yourself
to acquire the Equity Shares is contained in this Placement Document, such information being all that you
deem necessary to make an investment decision in respect of the Equity Shares, you have neither received
nor relied on any other information, representation, warranty or statement made by, or on behalf of, the
Joint Book Running Lead Managers or the Company or any of their respective affiliates or any other person
and neither the Joint Book Running Lead Managers nor the Company nor any other person will be liable
for your decision to participate in the Issue based on any other information, representation, warranty or
statement that you may have obtained or received;

You understand that none of the Joint Book Running Lead Managers has any obligation to purchase or
acquire all or any part of the Equity Shares purchased by you in the Issue;

You are eligible to invest in India under applicable law, including the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, as amended, and any
notifications, circulars or clarifications issued thereunder, and have not been prohibited by SEBI or any
other regulatory authority, from buying, selling or dealing in securities;

You understand that the Equity Shares have not been and will not be registered under the Securities Act or
with any securities regulatory authority of any state of the United States and accordingly, may not be
offered or sold within the United States, except in reliance on an exemption from the registration
requirements of the Securities Act;

If you are within the United States, you are a ―qualified institutional buyer‖ as defined in Rule 144A under
the Securities Act, are acquiring the Equity Shares for your own account or for the account of an
institutional investor who also meets the requirements of a ―qualified institutional buyer‖, for investment
purposes only, and not with a view to, or for resale in connection with, the distribution (within the meaning
of any United States securities laws) thereof, in whole or in part;

You are not acquiring or subscribing for the Equity Shares as a result of any general solicitation or general
advertising (as those terms are defined in Regulation D under the Securities Act or directed selling efforts
(as defined in Regulation S)) and you understand and agree that offers and sales are being made in reliance
on an exemption to the registration requirements of the Securities Act provided by Section 4(2) under the
Securities Act or Regulation S and the Equity Shares may not be eligible for resales under Rule 144A
thereunder;

You agree that any dispute arising in connection with the Issue will be governed by and construed in
accordance with the laws of Republic of India, and the courts in Chennai, India shall have exclusive
jurisdiction to settle any disputes which may arise out of or in connection with this Placement Document;

Each of the representations, warranties, acknowledgements and agreements set out above shall continue to
be true and accurate at all times up to and including the Allotment (as defined hereinafter), listing and
trading of the Equity Shares in the Issue;

You are a sophisticated investor who is seeking to purchase the Equity Shares for your own investment and
not with a view to distribution;

You agree to indemnify and hold the Company and the Joint Book Running Lead Managers harmless from
any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in
connection with any breach of the foregoing representations, warranties, acknowledgements and

6
 undertakings made by you in this Placement Document. You agree that the indemnity set forth in this
paragraph shall survive the resale of the Equity Shares by, or on behalf of, the managed accounts;

The Company, the Joint Book Running Lead Managers, their respective affiliates and others will rely on
the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings,
which are given to the Joint Book Running Lead Managers on their own behalf and on behalf of the
Company, and are irrevocable; and

We acknowledge that the Company by way of its joint venture Apollo Munch Health Insurance Company
Limited (―AMHICL‖) is involved in the insurance business. The Company is the Indian promoter of
AMHICL, whereas Munich Health Holding AG is the foreign promoter of AMHICL. In order to ensure
compliance with the foreign investment limits prescribed for the Indian insurance sector, we represent that
our Bid does not, directly or indirectly, represent Munich Health Holding AG, any of its affiliates or its
nominees or any persons related to Munich Health Holding AG, including whether such affiliates or
persons are controlled by or are in control of, Munich Health Holding AG.

OFFSHORE DERIVATIVE INSTRUMENTS

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of
Regulation 15A(1) of the SEBI (Foreign Institutional Investors) Regulations, 1995, as amended, (―FII
Regulations‖) an FII, including affiliates of the Joint Book Running Lead Managers, may issue or otherwise deal in
offshore derivative instruments such as participatory notes, equity-linked notes or any other similar instruments
against underlying securities, listed or proposed to be listed on any stock exchange in India, such as the Equity
Shares in the Issue (all such offshore derivative instruments are referred to herein as ―P-Notes‖), for which they may
receive compensation from the purchasers of such instruments. P-Notes may be issued only in favor of those entities
which are regulated by any appropriate foreign regulatory authorities in the countries of their incorporation or
establishment subject to compliance of ‗know your client‘ requirements. An FII shall also ensure that no further
issue or transfer of any instrument referred to above is made to any person other than such entities regulated by
appropriate foreign regulatory authorities. P-Notes have not been and are not being offered or sold pursuant to this
Placement Document. This Placement Document does not contain any information concerning P-Notes or the
issuer(s) of any P-notes, including any information regarding any risk factors relating thereto. In terms of the SEBI
(Foreign Institutional Investors) (Amendment) Regulations, 2008, came in effect from May 22, 2008, no sub-
account of an FII is permitted directly and indirectly to issue P-Notes.

Any P-Notes that may be issued are not securities of the Company and do not constitute any obligation of, claims on
or interests in the Company. The Company has not participated in any offer of any P-Notes, or in the establishment
of the terms of any P-Notes, or in the preparation of any disclosure related to any P-Notes. Any P-Notes that may be
offered are issued by, and are the sole obligations of, third parties that are unrelated to the Company. The Company
and the Joint Book Running Lead Managers do not make any recommendation as to any investment in P-Notes and
do not accept any responsibility whatsoever in connection with any P-Notes. Any P-Notes that may be issued are not
securities of the Joint Book Running Lead Managers and do not constitute any obligations of or claims on the Joint
Book Running Lead Managers. Affiliates of the Joint Book Running Lead Managers that are registered as FIIs may
purchase, to the extent permissible under law, the Equity Shares in the Issue, and may issue P-Notes in respect
thereof.

Prospective investors interested in purchasing any P-Notes have the responsibility to obtain adequate
disclosures as to the issuer(s) of such P-Notes and the terms and conditions of any such P-Notes from the
issuer(s) of such P-Notes. Neither SEBI nor any other regulatory authority has reviewed or approved any P-
Notes or any disclosure related thereto. Prospective investors are urged to consult their own financial, legal,
accounting and tax advisors regarding any contemplated investment in P-Notes, including whether P-Notes
are issued in compliance with applicable laws and regulations.

7
 DISCLAIMER CLAUSE OF THE STOCK EXCHANGES

As required, a copy of this Placement Document has been submitted to each of the Stock Exchanges. The Stock
Exchanges do not in any manner:

(1) Warrant, certify or endorse the correctness or completeness of the contents of this Placement Document;
(2) Warrant that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges; or
(3) Take any responsibility for the financial or other soundness of the Company, its promoters, its management
or any scheme or project of the Company,

and it should not for any reason be deemed or construed to mean that this Placement Document has been cleared or
approved by the Stock Exchanges. Every person who desires to apply for or otherwise acquire any Equity Shares
may do so pursuant to an independent inquiry, investigation and analysis and shall not have any claim against the
Stock Exchanges whatsoever, by reason of any loss which may be suffered by such person consequent to or in
connection with, such subscription/acquisition, whether by reason of anything stated or omitted to be stated herein,
or for any other reason whatsoever.

8
 PRESENTATION OF FINANCIAL AND OTHER INFORMATION

In this Placement Document, unless otherwise specified or the context otherwise indicates or implies, references to
‗you‘, ‗your‘, ‗offeree‘, ‗purchaser‘, ‗subscriber‘, ‗recipient‘, ‗investors‘, ‗prospective investors‘ and ‗potential
investor‘ are to the prospective investors in the Issue, references to ‗Apollo Hospitals‘ or ‗AHEL‘, the ‗Company‘,
‗Our Company‘, ‗we‘, ‗us‘, ‗our‘ or the ‗Issuer‘ are to Apollo Hospitals Enterprise Limited.

In this Placement Document, references to ‗US$‘ and ‗US dollars‘ are to the legal currency of the United States of
America, and references to ‗`‘, ‗INR‘, ‗Rs.‘, ‗Indian Rupees‘ and ‗Rupees‘ are to the legal currency of India. All
references herein to the ‗US‘ or the ‗United States‘ are to the United States of America and its territories and
possessions. References to the singular also refers to the plural and one gender also refers to any other gender,
wherever applicable, and the words ―Lakh‖ or ―Lac‖ mean ―100 thousand‖ and the word ―million‖ means ―10 lakh‖
and the word ―crore‖ means ―10 million‖ or ―100 lakhs‖ and the word ―billion‖ means ―1,000 million‖ or ―100
crores‖. All references herein to ―India‖ are to the Republic of India and its territories and possessions and the
‗Government‘ or the ‗Central Government‘ or the ‗State Government‘ are to the Government of India, central or
state, as applicable.

The audited consolidated financial statements of the Company as of and for the years ended March 31, 2009, 2010
and 2011 included in this Placement Document (collectively, the ―Audited Financial Statements‖), have been
prepared and audited in accordance with accounting principles generally accepted in India, or Indian GAAP (other
than as noted therein), the Companies Act and the requirements under the Equity Listing Agreements entered with
the Stock Exchanges. Indian GAAP differs in certain significant respects from International Financial Reporting
Standards (―IFRS‖), US GAAP and other accounting principles and auditing standards with which prospective
investors may be familiar with in other countries. We have not attempted to quantify the impact of US GAAP or
IFRS on the financial data included in this Placement Document, nor do we provide a reconciliation of our financial
statements to those of US GAAP or IFRS. Each of US GAAP and IFRS differs in significant respects from Indian
GAAP. However, a narrative summary of the principal differences between Indian GAAP, US GAAP and IFRS
relevant to the Company‘s business is provided in this Placement Document. For a description of the principal
differences between Indian GAAP, US GAAP and IFRS, see section titled ―Summary of Significant Differences
among Indian GAAP, US GAAP and IFRS‖. Accordingly, the degree to which the financial statements prepared
in accordance with Indian GAAP included in this Placement Document will provide meaningful information is
entirely dependent on the reader‘s level of familiarity with the respective accounting practices. Any reliance by
persons not familiar with Indian accounting practices on the financial disclosures presented in this Placement
Document should accordingly be limited. See section titled ―Risk Factors – Significant differences exist between
Indian GAAP and other accounting principles, such as US GAAP and IFRS, which may be material to
investors’ assessments of our financial condition.‖

In this Placement Document, certain monetary thresholds have been subjected to rounding adjustments; accordingly,
figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.

The fiscal year of the Company and the Subsidiaries commences on April 1 of each calendar year and ends on
March 31 of the succeeding calendar year, so, unless otherwise specified or if the context requires otherwise, all
references to a particular ‗fiscal year‘ or ‗fiscal‘ or ‗FY‘ are to the twelve month period ended on March 31 of that
year.

INDUSTRY AND MARKET DATA

Information regarding market position, growth rates, other industry data and certain industry forecasts pertaining to
the businesses of the Company contained in this Placement Document consists of estimates based on data reports
compiled by government bodies, professional organizations and analysts, data from other external sources and
knowledge of the markets in which the Company competes. Unless stated otherwise, the statistical information
included in this Placement Document relating to the industry in which the Company operates has been reproduced
from various trade, industry and government publications and websites.

9
This data is subject to change and cannot be verified with certainty due to limits on the availability and reliability of
the raw data and other limitations and uncertainties inherent in any statistical survey. Neither the Company nor any
of the Joint Book Running Lead Managers have independently verified this data and do not make any representation
regarding accuracy or completeness of such data. The Company takes responsibility for accurately reproducing such
information but accept no further responsibility in respect of such information and data. In many cases, there is no
readily available external information (whether from trade or industry associations, government bodies or other
organizations) to validate market-related analysis and estimates, so the Company has relied on internally developed
estimates. Similarly, while the Company believes its internal estimates to be reasonable, such estimates have not
been verified by any independent sources and neither the Company nor any of the Joint Book Running Lead
Managers can assure potential investors as to their accuracy.

AVAILABLE INFORMATION

The Company has agreed that, for so long as any Equity Shares are ―restricted securities‖ within the meaning of
Rule 144(a)(3) under the Securities Act, the Company will, during any period in which it is neither subject to
Section 13 or 15(d) of the US Securities Exchange Act of 1934 nor exempt from reporting pursuant to Rule 12g3-
2(b) thereunder, provide to any holder or beneficial owner of such restricted securities or to any prospective
purchaser of such restricted securities designated by such holder or beneficial owner, upon the request of such
holder, beneficial owner or prospective purchaser, the information required to be provided by Rule 144A(d)(4)
under the Securities Act.

10
 FORWARD-LOOKING STATEMENTS

Certain statements contained in this Placement Document that are not statements of historical fact constitute
‗forward-looking statements‘. Investors can generally identify forward-looking statements by terminology such as
‗aim‘, ‗anticipate‘, ‗believe‘, ‗continue‘, ‗can‘, ‗could‘, ‗estimate‘, ‗expect‘, ‗intend‘, ‗may‘, ‗objective‘, ‗plan‘,
‗potential‘, ‗project‘, ‗pursue‘, ‗shall‘, ‗should‘, ‗will‘, ‗would‘, or other words or phrases of similar import.
Similarly, statements that describe the strategies, objectives, plans or goals of the Company are also forward-looking
statements. However, these are not the exclusive means of identifying forward-looking statements.

All statements regarding the Company‘s expected financial conditions, results of operations, business plans and
prospects are forward-looking statements. These forward-looking statements include statements as to the Company‘s
business strategy, planned projects, revenue and profitability (including, without limitation, any financial or
operating projections or forecasts), new business and other matters discussed in this Placement Document that are
not historical facts. These forward-looking statements contained in this Placement Document (whether made by the
Company or any third party), are predictions and involve known and unknown risks, uncertainties, assumptions and
other factors that may cause the actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or implied by such forward-looking
statements or other projections. All forward-looking statements are subject to risks, uncertainties and assumptions
about the Company that could cause actual results to differ materially from those contemplated by the relevant
forward-looking statement. Important factors that could cause the actual results, performances and achievements of
the Company to be materially different from any of the forward-looking statements include, among others:

general economic and business conditions in India and other countries;

performance of the healthcare sector;

our ability to raise money in normal course of business as well as to fund our business plans;

foreign exchange rates;

adverse weather and natural disasters;

any reduction in, or delays in the provision of the Indian central and state governments‘ incentives and
initiatives and adverse changes in government policies and regulations;

our prolonged cash conversion cycle;

capacity constraints and our ability to complete our expansion programme as planned;

our ability to achieve and manage growth and successfully integrate acquisitions;

the failure to obtain, or unfavourable terms under which we are able to obtain, needed capital;

competition in the markets in which we operate;

ability to respond to technological changes;

renewal of lease agreements for our hospital lands;

regulatory compliance in India and globally; and

success of our investment in an affiliated entity.

11
Additional factors that could cause actual results, performance or achievements of the Company to differ materially
include, but are not limited to, those discussed under the sections titled ―Risk Factors‖, ―Industry‖, ―Business‖ and
―Management’s Discussion and Analysis of Financial Condition and Results of Operations‖.

The forward-looking statements contained in this Placement Document are based on the beliefs of management, as
well as the assumptions made by, and information currently available to, management of the Company. Although
the Company believes that the expectations reflected in such forward-looking statements are reasonable at this time,
it cannot assure investors that such expectations will prove to be correct. Given these uncertainties, investors are
cautioned not to place undue reliance on such forward-looking statements. In any event, these statements speak only
as of the date of this Placement Document or the respective dates indicated in this Placement Document, and the
Company undertakes no obligation to update or revise any of them, whether as a result of new information, future
events or otherwise. If any of these risks and uncertainties materialise, or if any of the Company‘s underlying
assumptions prove to be incorrect, the actual results of operations or financial condition of the Company could differ
materially from that described herein as anticipated, believed, estimated or expected. All subsequent forward-
looking statements attributable to the Company are expressly qualified in their entirety by reference to these
cautionary statements.

12
 ENFORCEMENT OF CIVIL LIABILITIES

The Company is a public company incorporated with limited liability under the laws of India. The majority of the
Directors and the Key Managerial Personnel named here are residents of India and all or a substantial portion of the
assets of the Company and such persons are located in India. As a result, it may be difficult for investors outside
India to effect service of process upon the Company or such persons in India, or to enforce judgments obtained
against such parties outside India.

Recognition and enforcement of foreign judgments is provided for under Section 13 and Section 44A of the Code of
Civil Procedure, 1908, as amended (the ―Civil Procedure Code‖), on a statutory basis. Section 13 of the Civil
Procedure Code provides that a foreign judgment shall be conclusive regarding any matter directly adjudicated
upon, except: (i) where the judgment has not been pronounced by a court of competent jurisdiction; (ii) where the
judgment has not been given on the merits of the case; (iii) where it appears on the face of the proceedings that the
judgment is founded on an incorrect view of international law or a refusal to recognize the law of India in cases in
which such law is applicable; (iv) where the proceedings in which the judgment was obtained were opposed to
natural justice; (v) where the judgment has been obtained by fraud; and (vi) where the judgment sustains a claim
founded on a breach of any law then in force in India.

India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments.
However, Section 44A of the Civil Procedure Code provides that a foreign judgment rendered by a superior court
(within the meaning of that section) in any jurisdiction outside India which the Government (as defined hereinafter)
has by notification declared to be a reciprocating territory, may be enforced in India by proceedings in execution as
if the judgment had been rendered by a competent court in India. However, Section 44A of the Civil Procedure Code
is applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes or other
charges of a like nature or in respect of a fine or other penalties and does not include arbitration awards.

Each of the United Kingdom, Singapore and Hong Kong has been declared by the GoI to be a reciprocating territory
for the purposes of Section 44A of the Civil Procedure Code, but the United States of America has not been so
declared. A judgment of a court in a jurisdiction which is not a reciprocating territory may be enforced only by a
fresh suit upon the judgment and not by proceedings in execution. The suit must be brought in India within three
years from the date of the foreign judgment in the same manner as any other suit filed to enforce a civil liability in
India. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is
brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it viewed the
amount of damages awarded as excessive or inconsistent with public policy. Further, any judgment or award in a
foreign currency would be converted into Rupees on the date of such judgment or award and not on the date of
payment. A party seeking to enforce a foreign judgment in India is required to obtain approval from the RBI to
repatriate outside India any amount recovered, and any such amount may be subject to income tax in accordance
with applicable laws.

13
 EXCHANGE RATES

Fluctuations in the exchange rate between the Rupee and foreign currencies will affect the foreign currency
equivalent of the Rupee price of the Equity Shares on the Stock Exchanges. These fluctuations will also affect the
conversion into foreign currencies of any cash dividends paid in Rupees on the Equity Shares.

The following table sets forth information with respect to the exchange rates between the Rupee and the US dollar
(in ` Per US$1.00), for the periods indicated. The exchange rates are based on the reference rates released by the
RBI, which are available on the website of the RBI. No representation is made that any Rupee amounts could have
been, or could be, converted into US dollars at any particular rate, the rates stated below, or at all.

Period End Average(1) High Low

Fiscal year: (` Per US$1.00)
2011 44.65 45.58 47.57 44.03
2010 45.14 47.42 50.53 44.94
2009 50.95 45.91 52.06 39.89

Quarter Ended:
June 30, 2011 44.72 44.74 45.38 44.04
March 31, 2011 44.65 45.26 45.95 44.65
December 31, 2010 44.81 44.86 46.04 44.03
September 30, 2010 44.92 46.50 47.33 44.92
June 30, 2010 46.60 45.67 47.57 44.33

Month Ended:
June 30, 2011 44.72 44.85 45.10 44.61
May 31, 2011 45.03 44.90 45.38 44.30
April 30, 2011 44.38 44.37 44.68 44.04
March 31, 2011 44.65 44.99 45.27 44.65
February 28, 2011 45.18 45.44 45.81 45.11
January 31, 2011 45.95 45.39 45.95 44.67
(1) Average of the official rate for each working day of the relevant period.
(Source: www.rbi.org.in)

14
 DEFINITIONS AND ABBREVIATIONS

This Placement Document uses the definitions and abbreviations set forth below which you should consider when
reading the information contained herein. References to any legislation, act or regulation shall be to such term as
amended from time to time.

Company related terms

Term Description
the ―Company‖, ―our Apollo Hospitals Enterprise Limited unless otherwise specified
Company‖, the
―Issuer‖, ―we‖, ―us‖ or
―our‖
Apollo Group The Company, its Subsidiaries, Joint Ventures and associates and British American
Hospitals Enterprise Limited
Articles of Association The articles of association of the Company, as amended from time to time
or Articles
Associate Companies Indrapastha Medical Corporation Limited, Family Health Plan Limited, Apollo Health
Street Limited and Stemcyte India Therapeutics Private Limited
Audit Committee The audit committee of the Board of Directors described in the section titled ―Board of
Directors and Senior Management‖
Auditors The statutory auditors of the Company, being M/s S. Viswanathan, Chartered
Accountants
Board or Board of The board of directors of the Company or a committee constituted thereof.
Directors
Directors The directors of the Company
Equity Shares The equity shares of the Company of a face value of ` 5 each
Joint Ventures Apollo Hospitals International Limited, Apollo Gleneagles Hospital Limited, Apollo
Gleneagles PET-CT Private Limited, Apollo Munich Health Insurance Company
Limited, Western Hospitals Corporation Private Limited, Quintiles Phase One Clinical
Trials India Private Limited and Apollo Lavasa Health Corporation Limited
Memorandum The memorandum of association of the Company, as amended from time to time
of Association or
Memorandum
Promoters Promoters of the Company as per the definition provided in Regulation 2(1)(za) of the
SEBI Regulations
Promoter Group Promoter group of the Company as per the definition provided in Regulation 2(1)(zb) of
the SEBI Regulations
Registered Office The registered office of the Company located at 19 Bishop Gardens, Raja
Annamalaipuram, Chennai 600 028, Tamil Nadu
Subsidiaries Unique Home Health Care Limited, AB Medical Centers Limited, Samudra HealthCare
Enterprises Limited, Apollo Hospitals (UK) Limited, Apollo Health and Lifestyle
Limited, Imperial Hospital & Research Centre Limited, Pinakini Hospitals Limited,
Apollo Cosmetic Surgical Centre Private Limited and Alliance Medicorp (India) Limited

Issue related terms

Term Description
Allocation /Allocated The allocation of the Equity Shares following the determination of the Issue Price to
QIBs on the basis of the Application Form submitted by them, by the Company in
consultation with the Joint Book Running Lead Managers and in compliance with
Chapter VIII of the SEBI Regulations
Allot/Allotment Unless the context otherwise requires, the issue and allotment of the Equity Shares
/Allotted pursuant to the Issue
Allottees QIBs to whom Equity Shares are issued and Allotted pursuant to the Issue

15
 Term Description
Application Form The form (including any revisions thereof) pursuant to which a QIB shall submit a Bid
for the Equity Shares in the Issue
Bid An indication of QIBs‘ interest, including all revisions and modifications thereto, as
provided in the Application Form, to subscribe for the Equity Shares in the Issue
Bid/Issue Closing Date July 18, 2011, the last date up to which the Application Form shall be accepted
Bid/Issue Opening Date July 14, 2011
Bid/Issue Period The period between the Bid/Issue Opening Date and Bid/Issue Closing Date inclusive of
both dates during which QIBs can submit their Bids
CAN/Confirmation of The note or advice or intimation to not more than 49 QIBs confirming the Allocation of
Allocation Note Equity Shares to such QIBs after determination of the Issue Price, requiring such QIBs
to pay the entire applicable Issue Price for the Equity Shares Allocated to such QIBs
Closing Date On or about July 20, 2011
Designated Date The date of credit of the Equity Shares to the QIB‘s demat account, as applicable to the
respective QIBs
Equity Listing The equity listing agreements entered by the Company with each of the Stock
Agreements Exchanges
Escrow Agents Citibank N.A. and Deutsche Bank A.G.
Floor Price The floor price of ` 491.29 for issue of the Equity Shares which has been calculated in
accordance with Chapter VIII of the SEBI Regulations. In terms of the SEBI
Regulations, the Issue Price cannot be lower than the Floor Price
Issue The offer, issue and Allotment of 6,666,666 Equity Shares pursuant to Chapter VIII of
the SEBI Regulations
Issue Price ` 495 per Equity Share including the face value of ` 5 and a premium of ` 490
Issue Size The issue of 6,666,666 Equity Shares aggregating up to ` 3,300 million
Joint Book Running Citigroup Global Markets India Private Limited, Enam Securities Private Limited and
Lead Managers Nomura Financial Advisory and Securities (India) Private Limited
Mutual Fund A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996
as amended
Mutual Fund Portion 10% of the Equity Shares issued to QIBs available for Allocation to Mutual Funds
Pay-In Date The last date specified in the CAN for payment of application monies by the QIBs
Placement Agreement Agreement dated July 14, 2011, among the Company and the Joint Book Running Lead
Managers
Placement Document This placement document issued in accordance with Chapter VIII of the SEBI
Regulations
Preliminary Placement The preliminary placement document dated July 14, 2011 issued in accordance with
Document Chapter VIII of the SEBI Regulations
QIB or Qualified A qualified institutional buyer, as defined under Regulation 2(1)(zd) of the SEBI
Institutional Buyer Regulations
QIP Qualified institutions placement under Chapter VIII of the SEBI Regulations
Relevant Date July 14, 2011, which is the date of the meeting of the Board deciding to open the Issue
Stock Exchanges The NSE and the BSE
US QIB A qualified institutional buyer, as defined under Rule 144A under the Securities Act

Conventional and general terms

Term Description
AS Accounting Standards
Act or Companies Act Companies Act, 1956, as amended
AGM Annual general meeting
BSE Bombay Stock Exchange Limited
CAGR Compound annual growth rate
CDSL Central Depository Services (India) Limited

16
 Term Description
CII Confederation of Indian Industry
Calendar Year Year ending on December 31
Crore 10 million
DER Debt equity ratio
DP ID Depository participant identity
Depositories NSDL and CDSL
Depositories Act Depositories Act, 1996, as amended
―Depository Participant‖ A depository participant as defined under the Depositories Act
or ―DP‖
EBITDA Earnings before interest, tax and depreciation and amortization
ECS Electronic clearing service
EGM Extraordinary general meeting
EPS Earnings per share, i.e., profit after tax for a fiscal year divided by the weighted average
number of equity shares during the fiscal year
FCCBs Foreign Currency Convertible Bonds
FEMA Foreign Exchange Management Act, 1999, as amended, together with rules and
regulations thereunder
FDI Foreign Direct Investment
FIIs Foreign Institutional Investors (as defined under the Securities and Exchange Board of
India (Foreign Institutional Investors) Regulations, 1995, as amended) registered with
SEBI
Fiscal year Period of 12 months ended March 31 of that particular year
FIPB Foreign Investment Promotion Board
FVCI Foreign Venture Capital Investors (as defined under the SEBI (Foreign Venture Capital
Investors) Regulations, 2000) registered with SEBI
GAAP Generally Accepted Accounting Principles
GDP Gross Domestic Product
GDRs Global Depository Receipts
―GoI‖ or ―Government‖ Government of India
General Meeting AGM or EGM
HUF Hindu Undivided Family
ICAI Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
I.T. Act Income Tax Act, 1961, as amended
Indian GAAP Generally Accepted Accounting Principles in India
Ltd. Limited
MAT Minimum Alternate Tax
MoF Ministry of Finance
MoU Memorandum of Understanding
NEFT National Electronic Fund Transfer
―Non-Resident‖ or ―NR‖ A person resident outside India, as defined under the FEMA and includes a Non-
Resident Indian
NRE Account Non-Resident External Account established in accordance with the FEMA
NRO Account Non-Resident Ordinary Account established in accordance with the FEMA
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
―OCB‖ or ―Overseas A company, partnership, society or other corporate body owned directly or indirectly to
Corporate Body‖ the extent of at least 60% by NRIs including overseas trusts in which not less than 60%
of the beneficial interest is irrevocably held by NRIs directly or indirectly and which
was in existence on October 3, 2003 and immediately before such date was eligible to
undertake transactions pursuant to the general permission granted to OCBs under the
FEMA. OCBs are not allowed to invest in the Issue
P.A. Per annum

17
 Term Description
PAN Permanent Account Number allotted under the I.T. Act
Pvt. Private
RBI Reserve Bank of India
Re. One Indian Rupee
RoC/Registrar Registrar of Companies, Tamil Nadu at Chennai
―Rs.‖, ―INR‖, `, Indian Rupees
―Rupees‖
RTGS Real Time Gross Settlement
SCRA Securities Contracts (Regulation) Act, 1956, as amended
SCRR Securities Contracts (Regulation) Rules, 1957, as amended
SEBI Securities and Exchange Board of India established under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992, as amended
SEBI Insider Trading Securities and Exchange Board of India Act (Prohibition of Insider Trading)
Regulations Regulations, 1992, as amended
SEBI Regulations Securities and Exchange Board of India Act (Issue of Capital and Disclosure
Requirements) Regulations, 2009, as amended
STT Securities Transaction Tax
Securities Act The US Securities Act of 1933, as amended
Supreme Court Supreme Court of India
US GAAP Generally accepted accounting principles in the United States of America
VCF(s) Venture Capital Funds as defined and registered with SEBI under the Securities and
Exchange Board of India Act (Venture Capital Fund) Regulations, 1996, as amended

18
 SUMMARY OF BUSINESS

In this section, unless the context otherwise requires, “we”, “us” and “our”, includes our subsidiaries, joint
ventures and associates, and British American Hospitals Enterprises Limited, which is treated as an investment of
the Company for accounting purposes. See section titled “Business—Corporate Structure”.

Overview

We are one of the largest private healthcare services providers in India according to CRISIL, operating a wide
network of hospitals predominantly based in Asia. Our primary line of business is the provision of healthcare
services, through (i) hospitals, (ii) pharmacies, (iii) projects and consultancy services, and (iv) primary care clinics.
In addition, we provide medical business process outsourcing (―mBPO‖) services through one of our associates and
health insurance services through one of our joint venture companies. To enhance our service to our customers and
complement our business, we also provide the following services: telemedicine services, education and training
programs and research services.

The Company was founded by Dr. Prathap C. Reddy in 1979 and became a public listed company on the BSE in
1983 and was listed on the NSE in 1996. We are headquartered in Chennai and operate our business through the
Company, and its nine subsidiaries, seven joint ventures and four associates.

We have continuously invested in bed capacity creation and have increased the bed capacity under our management
from approximately 150 operational beds at the commencement of our hospital services business in 1983 to 8,717
operational beds in 54 hospitals located in India and overseas as of March 31, 2011. Of the 8,717 beds, 5,842 beds
are in 37 hospitals owned by us and 2,875 beds are in 17 hospitals under our management through operations and
management contracts.

We have a presence both in India and outside India, including the Republic of Mauritius, Bangladesh and Kuwait.
We have also recently signed a preliminary joint venture agreement with the Board of Trustees of the National
Social Security Fund, Tanzania and the Tanzanian Ministry of Health & Social Welfare, in connection with the
establishment of an advanced healthcare facility in the city of Dar es Salaam. With the objective of making high
quality healthcare services and advanced medical technology available in semi-urban and rural areas in India, we
started the ―Apollo REACH‖ initiative and we are currently in the process of establishing a network of smaller
hospitals with around 100 to 200 beds in Tier II and Tier III cities (each as defined below) in India.

We had a total employee strength of 30,640 (including employees of our subsidiaries, joint ventures and associates
only), including 1,761 doctors, 7,863 nurses, and 2,403 paramedical personnel, as of March 31, 2011. We also have
2,414 ―fee for service‖ doctors working in our hospitals. During fiscal 2011, hospitals owned by us provided care to
over 2.5 million patients.

We constantly seek to be in the forefront of the healthcare services industry by providing new services and
introducing specialized healthcare models. Seven of our hospitals have received accreditations from the Joint
Commission International, USA (―JCI‖) for meeting international healthcare quality standards for patient care and
organization management, and three of our hospitals have received accreditations from the National Accreditation
Board for Hospitals & Healthcare Providers (―NABH‖). Our healthcare facilities provide treatment for acute and
chronic diseases across primary, secondary, and tertiary care sectors. Our tertiary care hospitals provide advanced
levels of care in over 50 specialties, including cardiac sciences, oncology, radiology and imaging, gastroenterology,
neurosciences, orthopedics and critical care services. In addition, we have a focus on core specialties such as
cardiology, oncology, neurology, orthopedics, radiology and imaging and transplants, and we specialize in
minimally invasive surgery across various specialties.

We reported total revenues of ` 26,240 million, ` 20,587 million and ` 16,350 million in fiscal 2011, fiscal 2010 and
fiscal 2009, respectively. We report our revenues under the following business segments:

(i) healthcare services, which consists of hospitals, hospital-based pharmacies and projects and consultancy
services;

19
(ii) stand-alone pharmacy; and

(iii) others.

Our healthcare services segment contributed 73.5%, 75.3% and 78.8% of our total revenues in fiscal 2011, fiscal
2010 and fiscal 2009, respectively and our stand-alone pharmacy segment contributed 25.1%, 23.4% and 20.3% of
our total revenues in fiscal 2011, fiscal 2010 and fiscal 2009, respectively.

Our Competitive Strengths

We believe that the following competitive strengths distinguish us from our competitors.

Leading private healthcare services provider in India

We are a leading private healthcare services provider in India offering comprehensive end-to-end healthcare
services. Our primary line of business is the provision of healthcare services, through hospitals, pharmacies, projects
and consultancy services, and primary clinics. In addition, we provide mBPO services and health insurance services.
To complement our primary business, we also provide telemedicine services, education and training programs and
research services.

We have an established pan-India presence with a large network of 54 hospitals and 1,199 stand-alone pharmacies
spread across India as of March 31, 2011. Of the 54 hospitals, 37 hospitals are owned by us and 17 hospitals are
under our management through operations and management contracts. We believe our pan-India presence has
allowed us establish ―Apollo‖ as a healthcare services provider brand that is recognized across India. Our facilities
have received accreditations from various Indian and international accreditation agencies such as the JCI, the NABH
and the National Accreditation Board for Testing and Calibration Laboratories (―NABL‖). In addition, we have
received numerous awards. For the last four consecutive years (2007 – 2010), The Week magazine in India has
ranked our hospitals in Chennai and New Delhi as among the leading private sector hospitals in India. We were also
named ―Healthcare Retail Company of the Year‖ by Frost & Sullivan, a business research and consulting firm, in
2010.

We have developed a distributed access model to comprehensively serve the healthcare needs of patients in their
local communities through our network of multi-specialty hospitals and primary clinics. These multi-specialty
hospitals and primary clinics also support our super-specialty hospitals by referring patients who require more
sophisticated and advanced procedures and specialized care. This model has helped us to expand our reach and also
allow us to efficiently deploy our resources across our network and increase the quality of care.

Through our presence in various healthcare services and initiatives across the healthcare services delivery chain, we
believe that we have a competitive advantage and are able to benefit from the following:

Cost efficiencies through sharing of managerial and clinical resources;

Economies of scale and competitive prices from our suppliers and service providers through centralized
purchasing;

Access to qualified and trained medical resources through our educational initiatives; and

Access to a larger patient base through our pan-India presence in primary clinics, telemedicine and other
healthcare programs.

20
Clinical excellence

Since our first hospital commenced operations in 1983, we have been focused on providing high quality healthcare
services. We constantly strive for clinical excellence because we believe that it is a critical consideration for many
people when choosing their healthcare services provider. We have created a quality and care assessment and
management scorecard, the ―Apollo Clinical Excellence‖ program which we refer to as ―ACE @ 25‖, and have
implemented it throughout our network of hospitals. Through ACE @ 25, we aim to continuously assess the quality
of care and services received by our patients to ensure that we deliver consistently high quality service and achieve
clinical excellence throughout our network of hospitals. ACE @ 25 assesses performance based on 25 clinical
parameters, including average length of stay (―ALOS‖), coronary artery bypass surgery mortality rates, ALOS post
renal transplant and the survival rate of liver transplant patients one year after surgery. See section titled
―Business—Ethical and Compliance Program‖.

Our hospitals follow well-defined quality and patient safety protocols and adhere to accepted clinical standards in
patient handling and care. A number of our facilities have been accredited by various Indian and international
accreditation agencies. Indraprastha Apollo Hospital was the first hospital in India to be accredited by the JCI and
six of our other hospitals have also been accredited by the JCI for meeting international healthcare quality standards
for patient care and organization management. In addition, three of our hospitals have been accredited by the
NABH.

We believe that a number of our hospitals have successfully performed more procedures than the minimum number
required internationally to be considered a reputed healthcare facility in that particular medical field. For instance, in
the field of cardiac sciences, our hospitals performed 9,095 percutaneous transluminal coronary angioplasties and
7,603 cardiac surgeries in fiscal 2011. Certain third party studies indicate that hospitals that perform high volumes of
certain procedures, such as cardiovascular surgery, major cancer resections and other high risk procedures, generally
produce better clinical results. These studies also indicate that such hospitals possess not just skillful surgeons but
also tend to make fewer technical errors with respect to procedures, and generally provide better care in all aspects,
including pre- and post-operative care.

Tradition of technology innovation and leadership

We continuously invest in medical technology and equipment and modernize our hospital facilities so as to offer
high quality healthcare services to our patients and expand our range of healthcare services. Over the last three
years, we have invested ` 2,703 million towards the purchase of new medical equipment for our hospitals.

We believe that we have been the first healthcare services provider to introduce many cutting-edge medical
technology and equipment in the Indian sub-continent, including the following:

G4 CyberKnife® Robotic Radiosurgery System, an advanced cancer treatment system, was first launched in
India at Apollo Specialty Hospital, Nandanam, Chennai, in March 2009.

Toshiba Aquillion ONE 320 slice dynamic multi-detector computed tomography (―CT‖) scanner, an
advanced diagnostic tool used in heart, brain and whole body scanning, was first launched at the Apollo
Heart Centre, Chennai, in September 2008.

Novalis Tx™ Radiotherapy and Radiosurgery system, one of the most precise, non-invasive and fastest
treatments available for cancerous and non-cancerous conditions of the entire body, was installed in each of
our hospitals in Hyderabad, Kolkata and New Delhi, in November 2009, March 2010 and September 2010,
respectively.

Philips Gemini TF Time of Flight positron emission tomography computed tomography (―PET-CT‖) 64
slice scan system, was first installed in India at Apollo Specialty Cancer Hospital, Chennai, in January
2009.

21
The availability of sophisticated medical equipment ensures that we are among the few healthcare services providers
in India who are able to offer advanced healthcare procedures, such as stereo-tactic radio surgery and bone marrow
transplants. Our hospital in Chennai has also commissioned the next generation of 3D electro-anatomical mapping
system, which will enable our doctors to accurately locate and treat electro-physiological disorders of the human
heart. In addition, Apollo Specialty Cancer Center, Chennai, was the first hospital in South India to install the digital
mammography with tomosynthesis (3D) system, which allows for faster and more accurate stereo-static biopsies to
be performed.

We consistently promote telemedicine as a method to provide healthcare solutions to patients in remote locations.
We launched the first rural telemedicine centre in India in 2000 to cater to a large segment of the population in
various parts of India and neighboring countries that do not have adequate access to healthcare services.

We believe that our investment in the latest and most advanced medical technology and equipment has enabled us to
attract renowned doctors from India and abroad to practice in our hospitals and has also made our hospitals the
preferred treatment destinations for patients from various countries around the world. We have dedicated teams in
place to constantly monitor technological innovations and medical developments globally to ensure that we have and
are kept up-to-date with the latest relevant technology and treatments in the industry.

Our strong brand value

We believe that the ―Apollo‖ brand is widely recognized in India by both healthcare professionals and patients. Our
reputation has helped us to attract well-known doctors and other healthcare professionals to our facilities, who in
turn draw more patients to our facilities. We believe that our strong track record in building long-term relationships
with our doctors and other medical professionals together with our focus on achieving and maintaining world-class
clinical outcomes have enabled us to build a strong brand name. We have received numerous awards which we
believe are a testimony to our strong brand value built over 27 years in the healthcare services industry. The
following are a few key awards that we have received over the past few years:

For the last four consecutive years (2007 - 2010), The Week magazine in India has consistently ranked our
hospitals in Chennai and New Delhi as among the leading private sector hospitals in India. A number of our
other hospitals have been ranked as leading hospitals in their respective cities. Our hospital in Chennai
(located at Greams Road) was ranked the ―Best Private Sector Hospital in the Country‖ for 2007, 2009 and
2010 while our hospitals in New Delhi and Kolkata were ranked among the top two hospitals in their
respective cities between 2007 to 2010.

Apollo Health City - Hyderabad is the first hospital in India to be recognized as the ―Best Medical Tourism
Facility for 2009-2010‖ by the Ministry of Tourism of India.

The ―Billion Hearts Beating‖ campaign, a corporate social initiative undertaken by the Company in
association with the Times of India Foundation to raise awareness of heart disease in the country, won the
―Best Marketing Campaign of the Year‖ award at the World Brand Congress 2010.

A special postage stamp in recognition of the Company‘s contribution towards the Indian healthcare sector
was released on November 2, 2009.

In 2009, our hospital in Hyderabad and Indraprastha Apollo Hospital won the Federation of Indian
Chambers of Commerce and Industry (―FICCI‖) Healthcare awards for Excellence in Patient Care and
Excellence in Healthcare Delivery. Our hospital in Hyderabad also bagged the FICCI Healthcare award for
Excellence in HR Practices in the same year.

The Company was featured in the world‘s top 50 Local Dynamos List compiled by global consultancy
firm, Boston Consulting Group, in 2008.

Named ―Healthcare Retail Company of the Year‖ by Frost & Sullivan, a business research and consulting
firm, in 2010.

22
 Awarded ―India‘s Most Preferred Hospital – Viewer‘s Choice‖ award at the India Healthcare Awards 2010
by ICICI Lombard and CNBC-TV18.

Strong relationships with doctors and other medical professionals

We believe that we are among the leading private healthcare services employers in India. One of the pillars of our
success is our huge talent pool (including our subsidiaries, joint ventures and associates only) of 4,175 doctors
(comprising 1,761 doctors employed by us and 2,414 ―fee for service‖ doctors) across more than 50 specialties,
7,863 nurses and 2,403 paramedical personnel, as of March 31, 2011. Many of our doctors have received
qualifications or training or work experience in the United Kingdom, Australia or the United States. In addition,
many of them are prominent members of the medical field having received accolades and awards, including the Dr.
B.C. Roy National award, and the Padma Bhushan and the Padma Shree awards, with certain of our doctors heading
national medical associations.

In addition to attracting doctors and other medical professionals to our facilities, we have a strong track record in
building long-term relationships with our doctors and other medical professionals. We believe that our commitment
to continuing education and training has helped us in attracting and retaining prominent and skilled doctors. We
have different customized training programs for our doctors, nurses, paramedical and management personnel,
including nursing colleges, technology schools, exchange programs with affiliated leading universities outside India,
that provide training in general as well as specialist skills including in patient care, intensive care, neonatal care,
surgery and communication.

Experienced and professional management team with domain expertise and strong execution track record

We benefit from an experienced management team which has made significant contributions to our growth and
which has a long and proven track record in the healthcare services industry. For instance, our Chairman, Dr.
Prathap C. Reddy, was conferred the Padma Vibhushan Award in 2010, the second highest civilian award in India,
in recognition of his contribution towards the Indian healthcare industry, by the Government of India. Our
management team is composed of directors with extensive experience in the healthcare services industry, as well as
doctors with both clinical and administrative experience. We believe that a professionally managed administration
with a commitment to patient care and high ethical standards enables us to operate our facilities efficiently while at
the same time providing quality care to our patients.

Our Business Strategy

Our mission is to continuously improve the quality of healthcare services provided to the communities we serve by
striving to bring healthcare services of international standards within the reach of every individual. We are
committed to the achievement and maintenance of excellence in education, research and healthcare for the benefit of
humanity. At the same time, we seek to generate strong financial performance and appropriate returns to our
shareholders through the execution of a strong business strategy.

We aim to achieve our mission and to grow our business by pursuing the following strategic goals:

Strengthen our presence in key strategic markets

We believe we have a dominant share of the hospital beds available in Chennai, New Delhi, Kolkata, Hyderabad,
Bangalore and Ahmedabad. We intend to continue to strengthen our presence and increase our market share in these
key strategic markets by establishing new healthcare facilities, including primary care clinics, and increasing bed
capacity at our existing hospitals. Currently, we have hospitals located in three (Chennai, New Delhi and Kolkata)
out of India‘s four key metropolitan cities and are in the process of establishing new hospitals in Mumbai. We
believe that these key metropolitan cities will continue to have a strong demand for high quality tertiary care
services such as cardiac surgeries, oncology services and orthopedic surgeries. By strengthening our presence in
these markets, we intend to increase our market share for such tertiary care services. In addition, we are expanding
the capacity of our existing hospitals in Hyderabad, New Delhi, Chennai and Bangalore. These projects and other
plans to establish new healthcare facilities in other parts of India are at various stages of implementation and are

23
expected to be completed over the next three years. We expect to increase bed capacity by around 2,400 additional
beds upon the completion of these projects. See section titled ―Business—Key Hospital Expansion Plans‖. We
also intend to increase the number of primary care clinics from 62 clinics as of March 31, 2011 to around 100 clinics
over the next few years. We are constantly evaluating new opportunities in our existing and new markets. Our
evaluation criteria include location, the demographics and revenue potential, and the cost of expanding or setting up
new facilities.

Focus on a portfolio of high value clinical specialties

We believe that a combination of factors, including changing demographics, increasing affluence of the Indian
population, greater health awareness, an increase in lifestyle-related diseases such as heart disease and diabetes,
increasing health insurance coverage and a growing medical tourism market, will lead to an increase in demand for
quality healthcare services, particularly tertiary healthcare services. We have therefore identified cardiology,
oncology, neurology, orthopedics, critical care and transplants as our key focus areas of our tertiary care hospitals.
We internally designate these focus areas as ―Centers of Excellence‖. Due to the complex nature of the treatments
involved, the medical procedures performed in the Centers of Excellence typically command relatively high prices.
These Centers of Excellence contributed approximately 60.0% of our in-patient revenues during each of fiscal 2011
and fiscal 2010. According to CRISIL, cardiac and cancer cases accounted for 22.3% and 13.1%, respectively, of in-
patient revenues for hospitals in India in 2008, and will increase to 32.1% and 16.2%, respectively, by end-2018.

To maximize our market share of the tertiary care procedures performed in each Center of Excellence, we plan to
undertake a number of initiatives to ensure that we provide high quality healthcare services and improve our clinical
outcomes, including:

Strengthening each Center of Excellence through the addition of experienced and skilled surgeons and
physicians.

Expanding each Center of Excellence practice area to provide comprehensive sub-specialties and treatment
services.

Continually investing in the latest medical technology and equipment so as to offer high quality healthcare
services to our patients.

Establishing well-defined clinical guidelines and protocols with a strong focus on clinical outcomes.

Integration of our network of hospitals to enable knowledge sharing and the adoption of best practices for
each Center of Excellence across the network through dedicated service line managers.

Focus on life enhancing procedures and elective surgeries

We believe that with increasing disposable incomes and health awareness, there is a growing demand for elective or
planned surgeries. Apart from our focus on Centers of Excellence, we also plan to focus on elective procedures to
capture this growing market and build a strong presence in the elective and life enhancing procedures market. Our
hospitals are well-equipped to offer various elective procedures like knee replacements, hip replacements, cosmetic
surgeries, dental services and other similar procedures. We intend to increase the volume of such procedures
performed in our hospitals by creating specialized centers for such procedures, recruiting more surgeons specializing
in such procedures and investing in the latest medical technology to improve our clinical outcomes in these areas.

Geographic expansion through setting up hospitals in Tier II and Tier III cities in India

We are in the process of establishing a network of hospitals under the ―Apollo REACH‖ initiative with the objective
of making high quality healthcare services and advanced medical technology available in semi-urban and rural
areas. Hospitals established under this initiative will have a capacity of around 100 to 200 beds, and will be located
in Tier II and Tier III cities in India. These hospitals will be a combination of new or acquired facilities as well as
expansion of some existing facilities. We believe that this will give patients in such locations greater access to high
quality healthcare services without having to travel to the Tier 1 cities. At the same time, these hospitals will allow

24
us to expand our network and penetrate different markets in the Tier II and Tier III cities.

We have already established Apollo REACH hospitals in Tier II cities, including Kakinada, Karaikudi, Karimnagar,
Bhubaneswar and Karur, and have put in place plans to establish four additional Apollo REACH hospitals across the
country. These projects are at various stages of implementation and are expected to be completed over the next three
years. See section titled ―Business—Key Hospital Expansion Plans‖. We have identified a number of Tier II and
Tier III cities across the country which is currently under-served in terms of healthcare services but have a sizable
population and spending potential. Based on our experience, capital costs per hospital bed in a Tier II or Tier III city
are generally lower compared to a Tier I city. As income levels in these markets rise, purchasing power will
accordingly increase; therefore, we expect our revenues generated from providing healthcare services in these
markets to increase further.

We generally consider a city in India with a population (i) over five million as a Tier I city, (ii) over one million as a
Tier II city, and (iii) between 500,000 to one million as a Tier III city, subject to other prevailing factors at the time
of determination, including the level of economic activity in the relevant city.

Improve operating efficiencies and profitability

We believe that maximizing operating efficiencies and profitability across our network is a key component of our
growth strategy. We intend to focus on the following key areas to improve our operating efficiencies and
profitability:

Improve average revenue per occupied bed per day

We seek to improve the average revenue per occupied bed per day through a combination of initiatives, including:

- Increase focus on high growth tertiary care areas. We continually focus on investing in the latest medical
technology, attracting skilled physicians and surgeons and developing our expertise in high growth tertiary
care areas to serve the increasing demand for sophisticated clinical care and procedures. By implementing
our strategy to focus on high growth Centers of Excellence and other technology and specialist skill-driven
clinical areas, we intend to improve our case mix and increase revenues per occupied bed per day.

- Reduction in ALOS. As a significant portion of in-patient revenues are derived from medical services
provided in the initial two to three days of a patient‘s stay in the hospital, we plan to reduce the ALOS at
our hospitals, thereby increasing patient turnover rate and the revenue per occupied bed per day, by
capitalizing on improvements in medical technology and focusing on minimally invasive surgeries, which
reduces surgical trauma to patients and patient recovery time.

Maximize efficiencies through greater integration, better supply chain management and human resource
development

We plan to maximize efficiencies at our hospitals and pharmacies through greater integration across our
network. Our hospitals and pharmacies are large consumers of drugs and medical consumables like stents,
implants, sutures and other surgical materials. To minimize costs and leverage on economies of scale, we
intend to focus on standardizing the type of medical and other consumables used across our network,
optimizing procurement costs, consolidating our suppliers and optimizing the use of medical consumables
by establishing guidelines for medical procedures across our network.

To improve the productivity of our employees, we plan to place greater emphasis on training our
employees in best practices and implement programs to provide incentives for performance. We have also
introduced an initiative to encourage our doctors to be more involved in administrative matters such as
scheduling surgeries and in the management of the hospitals as we believe that this will help to improve
clinical outcomes and service standards.

25
 Improve occupancy rates and equipment utilization at our hospitals

To improve occupancy rates and the utilization of key equipment and operating theatres at our hospitals in
Bhubaneswar, Bangalore, Ahmedabad and other hospitals, we plan to focus on preventive healthcare and
health screening programs, place greater emphasis on the delivery of tertiary care services, expand our
referral network and attract more medical value travelers.

Focus on medical value travelers

According to CRISIL, India is fast emerging as a major medical tourist destination. We believe that India is highly
competitive in terms of healthcare costs compared to other developed and developing countries, such as the United
States, the United Kingdom and Singapore. A number of our facilities have been accredited by various Indian and
international accreditation agencies such as the JCI, the NABH and the NABL, which we believe helps us to attract
medical value travelers. We intend to focus on attracting more medical value travelers from select markets including
those in the Middle East, Africa and Southeast Asia by increasing our marketing efforts in these regions. We believe
that medical value travelers will help to contribute to higher revenues per bed day and increase our profitability.

Focus on continued growth in stand-alone pharmacies market

We have increased the number of stand-alone pharmacies in our network to 1,199 stand-alone pharmacies as of
March 31, 2011 and the revenues from our stand-alone pharmacy segment contributed 25.1% of our total revenues
in fiscal 2011. We intend to continue growing this business segment through a measured roll-out of new stand-alone
pharmacies based on market demand, revenue potential and availability of high visibility locations. We also plan to
increase revenues generated by our existing stand-alone pharmacies through:

Improving the profitability of our existing stand-alone pharmacies by introducing generic and in-house
brand (private label) products which have better profit margins and increasing sales through the bulk
distribution of medical supplies and consumables to hospitals and other healthcare providers.

Improving operating efficiencies by implementing a centralized database and inventory management

system to track inventory and revenue collections across our stand-alone pharmacy network.

Improving our supply chain management by standardizing prices across our network and consolidating our
suppliers.

Monitoring the performance of our stand-alone pharmacies on an on-going basis and closing loss-making
and low-growth pharmacies.

26
 SUMMARY OF THE ISSUE

The following is a general summary of the terms of the Issue. This summary should be read in conjunction with, and
is qualified in its entirety by, the more detailed information appearing elsewhere in this Placement Document,
including the sections titled ―Risk Factors‖, ―Use of Proceeds‖, ―Placement and Lock-up‖, ―Issue Procedure‖
and ―Description of the Equity Shares‖.

ISIN No. INE 437A01024

Issuer Apollo Hospitals Enterprise Limited

Face Value ` 5 per equity share

Issue Size 6,666,666 equity shares of face value of ` 5 each, aggregating up to `

3,300 million

A minimum of 10% of the Issue Size i.e. up to 666,667 Equity Shares

shall be available for Allocation to Mutual Funds only, and up to
5,999,999 Equity Shares shall be available for Allocation to all QIBs,
including Mutual Funds. If no Mutual Fund is agreeable to take up the
minimum portion mentioned above, such minimum portion or part
thereof may be Allotted to other eligible QIBs

Floor Price ` 491.29 per Equity Share. In terms of the SEBI Regulations, the Issue
Price cannot be lower than the Floor Price

Issue Price ` 495 per Equity Share

Eligible Investors QIBs as defined in Regulation 2(1)(zd) of the SEBI Regulations. See
section titled ―Issue Procedure— Qualified Institutional Buyers‖

Equity Shares issued and 131,076,874 Equity Shares

outstanding immediately prior to
the Issue*

Equity Shares issued and 137,743,540 Equity Shares

outstanding immediately after the
Issue*

Listing The Company has obtained in-principle approvals for listing of the
Equity Shares issued pursuant to the Issue from the Stock Exchanges.
The Company would make applications to each of the Stock Exchanges
to obtain final listing and trading approval for the Equity Shares

Lock-up The Company will not, for a period of 90 days from the date of this
Placement Document, without the prior written consent of the Joint Book
Running Lead Managers, (A) directly or indirectly, issue, offer, lend,
pledge, sell, contract to sell or issue, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any Equity
Shares or any securities convertible into or exercisable or exchangeable
for Equity Shares or publicly announce an intention with respect to any of
the foregoing, (B) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, any of
the economic consequences of ownership of the Equity Shares or any
securities convertible into or exercisable or exchangeable for Equity

27
 Shares or publicly announce an intention to enter into any such
transaction, whether any such swap or transaction described in clause (A)
or (B) hereof is to be settled by delivery of Equity Shares or such other
securities, in cash or otherwise, or (C) deposit Equity Shares or any
securities convertible into or exercisable or exchangeable for Equity
Shares or which carry the right to subscribe for or purchase Equity Shares
in depositary receipt facilities or enter into any transaction (including a
transaction involving derivatives) having an economic effect similar to
that of a sale or a deposit of Equity Shares in any depositary receipt
facility, or publicly announce any intention to enter into any transaction.

The foregoing restrictions shall not apply to: (i) any issuance, sale,
transfer or disposition of Equity Shares by the Company to the extent
such issuance, sale, transfer or disposition is required by Indian law; (ii)
the Issue; and (iii) all outstanding warrants, convertible instruments and
depositary receipt representing underlying Equity Shares issued by the
Company prior to the date of the Final Placement Document. For further
details, see section titled ―Placement‖.

Transferability The Equity Shares being Allotted pursuant to the Issue shall not be sold
Restrictions for a period of one year from the date of Allotment except on the floor of
the Stock Exchanges

Use of Proceeds After deducting the Issue expenses of approximately ` 66 million, the net
initial proceeds of the Issue will be approximately ` 3,234 million. See
section titled ―Use of Proceeds‖

Risk Factors See section titled ―Risk Factors‖ for a discussion of factors you should
consider before deciding whether to buy Equity Shares
Pay-In Date Last date specified in the CAN sent to QIBs for payment of Issue Price

Closing The Allotment of the Equity Shares offered pursuant to the Issue is
expected to be made on or about July 20, 2011 (―Closing Date‖)

Ranking The Equity Shares being issued shall be subject to the provisions of the
Company‘s Memorandum and Articles of Association and shall rank pari
passu in all respects with the existing Equity Shares including rights in
respect of dividends. The shareholders of the Company will be entitled to
participate in dividends and other corporate benefits, if any, declared by
the Company after the Closing Date, in compliance with the Companies
Act. Shareholders may attend and vote in Shareholders‘ meetings on the
basis of one vote for every Equity Share held. See section titled
―Description of the Equity Shares‖

*Assuming full conversion of outstanding warrants issued to the Promoters and excluding conversion of FCCBs issued to
International Finance Corporation. For further details on conversion of FCCBs, see section titled “Financial Statements”.

28
 SELECTED FINANCIAL INFORMATION

APOLLO HOSPITALS ENTERPRISE LIMITED

CONSOLIDATED BALANCE SHEET

The following selected financial data as of and for fiscal years 2009, 2010 and 2011 have been derived from our
audited financial statements included elsewhere in this Placement Document. The financial data set forth below
should be read in conjunction with, and are qualified by reference to the section titled ―Management’s Discussion
and Analysis of Financial Condition and Results of Operations‖ and the financial statements and notes thereto
included elsewhere in this Placement Document. Our financial statements are prepared and presented in accordance
with Indian GAAP and audited by M/s S. Viswanathan, Chartered Accountants. Our historical results do not
necessarily indicate results expected for any future period.

Neither the information set forth below nor the format in which it is presented should be viewed as comparable to
information prepared in accordance with IFRS or other accounting principles. Indian GAAP differs in certain
material respects from US GAAP and IFRS. For a discussion of certain significant differences among Indian GAAP,
US GAAP and IFRS, see section titled ―Summary of Significant Differences among Indian GAAP, US GAAP
and IFRS‖.
` in million
Sl. Particulars Schedule As at As at As at
No 31.03.2011 31.03.2010 31.03.2009
` ` `
I SOURCES OF FUNDS
(1)Share holder's Funds:
(a) Share capital A 623.55 617.85 602.36
(b) Preferential issue of equity share warrants 685.07 - 77.10
Refer Clause 14 of Schedule (J)
(c) Reserves & Surplus B 17,521.53 15,786.24 13,878.54
(d) Capital Reserve on Consolidation 159.26 130.68 130.80
18,989.41 16,534.77 14,688.80

(2)Minority Interest 248.76 241.42 265.41

(3)Loan Funds:
(a)Secured Loans C 7,439.99 6,764.68 6,401.41
(b) Unsecured Loans D 2,144.76 2,367.29 304.49
9,584.75 9,131.97 6,705.90

(4 )Deferred Tax Liability 1,100.74 776.26 651.85

TOTAL 29,923.66 26,684.42 22,311.95

II APPLICATION OF FUNDS

(1)Goodwill on Consolidation 676.50 499.80 293.78

(2)Fixed Assets: F
(a) Gross Block 19,767.05 16,950.40 13,657.34
(b)Less depreciation 5,148.47 4,230.59 3,512.97
(c)Net Block 14,618.58 12,719.81 10,144.37
(d)Capital Work in progress 3,609.96 3,037.07 2,445.58
18,228.54 15,756.88 12,589.95

(2)Investments G 5,020.06 4,165.78 5,914.32

29
 Sl. Particulars Schedule As at As at As at
No 31.03.2011 31.03.2010 31.03.2009
` ` `

(3)Deferred Tax Asset 255.93 240.25 205.39

(4)Current Assets,Loans and advances H

(a ) Inventories 1,584.44 1,412.24 1,161.64
(b )Sundry Debtors 3,003.14 2,228.38 1,744.14
(c)Cash and bank balances 1,780.51 3,116.72 876.04
(d) Loans & Advances 5,729.90 5,237.66 3,663.10
12,098.00 11,995.00 7,444.92
Less :
Current Liabilities & Provisions E
(a)Liabilities 3,635.25 3,357.76 2,148.19
(b)Provisions 2,720.12 2,615.64 1,988.68
6,355.37 5,973.40 4,136.87

Net Current Assets 5,742.63 6,021.60 3,308.06

(5) Miscellaneous Expenditure to the extent not I - 0.12 0.46

written off or adjusted

TOTAL 29,923.66 26,684.42 22,311.95

Schedules 'A' to 'I' and notes in schedule (J) form part of the Balance sheet

30
 APOLLO HOSPITALS ENTERPRISE LIMITED

CONSOLIDATED PROFIT AND LOSS ACCOUNT

` in million
SCHEDULE 31.03.2011 31.03.2010 31.03.2009
` ` `
INCOME
(a) Income from Operations 24,636.56 19,206.51 15,310.73
Add: Share of Joint Ventures 1,416.94 1,058.14 831.33
(b) Other Income I 186.52 322.39 207.99

TOTAL 26,240.02 20,587.04 16,350.04

EXPENDITURE
(a) Operative Expenses II 13,886.42 10,725.99 8,728.01
(b) Payments and Provisions for Employees III 4,151.16 3,307.93 2,594.34
(c) Administration and Other Expenses IV 3,827.41 3,217.64 2,545.29
(d) Financial Expenses V 814.35 602.06 458.79
(e ) Preliminary Expenses 0.09 1.07 2.22
(f) Deferred Revenue Expenditure 5.72 6.41 5.31

TOTAL 22,685.15 17,861.09 14,333.96

PROFIT BEFORE DEPRECIATION & TAX 3,554.88 2,725.95 2,016.08

Less : Depreciation 941.70 749.51 632.17
PROFIT BEFORE EXTRAORDINARY ITEM & 2,613.18 1,976.44 1,383.91
TAX
Extraordinary item - - 40.19
PROFIT BEFORE TAX 2,613.18 1,976.44 1,343.72
Less :Fringe Benefit Tax - - 28.62
Less :Provision for Taxation - Current 580.42 582.69 483.53
Less :Provision for Taxation - Previous (13.58) 0.75 (0.04)
Less :Deferred Tax Liability 328.32 128.62 32.87
Add : Deferred Tax Asset (22.21) (35.91) (55.04)
PROFIT AFTER TAX 1,740.23 1,300.29 853.78
Less :Minority Interest (15.23) (36.30) (55.92)
PROFIT AFTER MINORITY INTEREST 1,755.46 1,336.59 909.70
Add :Share in Associates 83.77 39.09 115.24
PROFIT AFTER SHARE IN ASSOCIATES 1,839.22 1,375.68 1,024.94

Add :Surplus in Profit & Loss Account brought forward 520.69 399.34 594.26

AMOUNT AVAILABLE FOR APPROPRIATIONS 2,359.92 1,775.02 1,619.19

APPROPRIATIONS
Dividend 467.67 432.49 401.60
Dividend tax payable 75.87 71.83 68.25
Transfer to general reserve 1,000.00 750.00 750.00
Transfer to Debenture Redemption reserve 100.00 - -
Balance of profit in Profit & loss a/c 716.39 520.69 399.34

TOTAL 2,359.92 1,775.02 1,619.19

Earnings Per Share (Refer Clause 30 in Schedule J)

31
 SCHEDULE 31.03.2011 31.03.2010 31.03.2009
` ` `
Before Extraordinary Item
Basic earnings per share of face value ` 5/- (2009-10 : ` 14.84 11.15 8.82
5) each
Diluted earnings per share of face value ` 5/- (2009-10 : ` 14.37 11.10 8.51
5) each
After Extraordinary Item
Basic earnings per share of face value ` 5/- (2009-10 : ` 14.84 11.15 8.60
5) each
Diluted earnings per share of face value ` 5/- (2009-10 : ` 14.37 11.10 8.30
5) each

Schedules 'I' to 'V' and notes in Schedule (J) Form part of the Profit and Loss Account

32
 APOLLO HOSPITALS ENTERPRISE LIMITED

CONSOLIDATED CASH FLOW STATEMENT

` in million
31.03.2011 31.03.2010 31.03.2009
` ` `
A Cash Flow from operating activities
Net profit before tax and 2,613.18 1,976.44 1,383.91
extraordinary items

Adjustment for:
Depreciation 941.70 749.51 632.17
Profit on sale of assets (0.13) (0.60) 4.12
Profit on sale of investments (5.74) (81.72) (10.09)
Loss on sale of Investments 4.05 0.43 -
Loss on sale of assets 34.74 40.63 17.32
Interest paid 778.44 587.01 427.70
Foreign Exchange Loss (6.26) (7.91) 31.09
Misc. Exp. written off 5.81 7.48 6.71
Provision for bad debts 17.30 12.11 17.22
Dividend received (20.69) (103.94) (176.21)
Interest received (106.03) (104.77) (34.98)
Income from Treasury operations (11.77) (31.35) -
Bad debts written off 63.95 102.75 35.90
Liability & sundry balances Written (6.05) (2.61) (5.28)
back
1,689.32 1,167.02 945.68

Operating profit before working 4,302.51 3,143.45 2,329.59

capital changes

Adjustment for:
Trade or other receivables (919.51) (666.26) (502.22)
Inventories (165.83) (250.50) (297.94)
Trade payables 380.82 1,341.16 371.15
Others (338.31) (718.55) (360.39)
(1,042.83) (294.16) (789.39)
Cash generated from operations 3,259.68 2,849.29 1,540.19

Foreign Exchange (Loss)/Gain 6.26 7.91 (30.94)

Taxes paid (including Fringe Benefit (675.11) (864.71) (594.53)
Tax)
Adjustments for Misc. Exp. written (3.15) (6.23) (3.19)
off

Net cash from operating activities 2,587.67 1,986.26 911.53

B Cash flow from Investing activities

Purchase of fixed assets (Including (3,334.98) (3,938.43) (3,723.94)
Capital Work in Progress) #
Pre-operative expenses (53.99) (20.92) (5.89)
Purchase of investments (3,922.68) (3,052.14) (6,920.39)
Sale of investments 2,615.96 4,716.61 7,683.33

33
 31.03.2011 31.03.2010 31.03.2009
` ` `
Sale of fixed assets 178.07 46.70 85.71
Interest received 52.00 99.31 46.01
Dividend received 50.97 131.99 167.28
Cash flow before extraordinary item (4,414.65) (2,016.89) (2,667.88)
Extraordinary Item - - (40.19)
Net cash used in Investing activities (4,414.65) (2,016.89) (2,708.07)

C Cash flow from financing activities

Membership fees - - -
Proceeds from issue of share premium 35.03 818.39 783.35
Proceeds from issue of share capital 71.52 50.58 27.66
Proceeds from advance against share 685.31 14.52 -
capital
Proceeds from long term borrowings 1,949.50 2,716.86 1,410.34
Proceeds from short term borrowings 181.70 383.29 36.69
Repayment of finance/lease liabilities (1,254.54) (732.12) (113.06)
Interest paid (780.36) (613.33) (398.77)
Income from Treasury operations 11.77 31.35 -
Dividend paid (432.49) (401.60) (352.11)
Net cash from financing activities 467.44 2,267.94 1,394.09

Net increase in cash and cash (1,359.54) 2,237.31 (402.44)

equivalents
(A+B+C)
Cash and cash equivalents 3,140.06 879.42 1,278.49
(opening balance )
Cash and cash equivalents 1,780.52 3,116.73 876.05
(Closing balance )

Component of Cash and cash

equivalents
Cash Balances 55.37 38.94 37.16
Bank Balances*
i) Available with the company for day 1,706.87 3,058.27 816.85
to day operations
ii) Amount available in unpaid 18.28 19.52 22.04
dividend and unpaid deposit payment
accounts

Notes :
1. Figures in the bracket represents outflow
#Purchase of Fixed Asset includes and interest paid excludes ` 154.42 million (31.03.2010 ` 198.68 million and
31.03.2009 ` 254.64 million) of interest capitalized.

34
 RISK FACTORS

This Placement Document contains certain forward-looking statements that involve risks and uncertainties.

Prospective investors should carefully consider the following risk factors as well as other information included in
this Placement Document prior to making any decision as to whether or not to invest in the Equity Shares.

You should read this section in conjunction with the sections titled “Business” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”, as well as the other financial and statistical
information contained in this Placement Document.

The risks described below and any additional risks and uncertainties not presently known to the Company or that
currently are deemed immaterial could adversely affect the Company’s business, financial condition, liquidity,
results of operations and capital resources. As a result, the trading price of the Equity Shares could decline and
investors may lose part or all of their investment.

Prospective investors should pay particular attention to the fact that we are an Indian company and are subject to a
legal and regulatory environment which may differ in certain respects from that of other countries.

In this section, unless the context otherwise requires, “we”, “us” and “our”, includes our subsidiaries, joint
ventures and associates, and British American Hospitals Enterprises Limited, which is treated as an investment of
the Company for accounting purposes. See section titled “Business—Corporate Structure”.

Risks Relating to the Business of the Company

We are highly dependent on our doctors, nurses and other healthcare professionals and our business and
financial results could be harmed if we are not able to attract and retain such doctors, nurses and other
healthcare professionals.

Our operations depend on the efforts, ability and experience of our employees and the doctors and medical staff at
our hospitals. Our performance and the execution of our business strategy depend substantially on our ability to
attract and retain leading doctors and other healthcare professionals in a particular specialty or in a region relevant to
our growth plans. We compete with other healthcare services providers, including providers located in Europe and
North America, in recruiting and retaining these doctors and other healthcare professionals.

The factors that doctors consider important before deciding where they will work include the level of compensation,
the reputation of the hospital and its owner, the quality of the facilities, research opportunities and community
relations. We may not compare favorably with other healthcare services providers on these factors. Many of these
healthcare professionals are well-known personalities in their fields and regions with large patient bases and referral
networks, and it may be difficult to negotiate favorable terms and arrangements with them. In some of our markets,
doctor recruitment and retention is also affected by a shortage of doctors in certain specialties such as nephrology,
physiatry, optometry and ophthalmology.

Our performance also depends on our ability to identify, attract and retain other healthcare professionals, including
nurses. We have experienced and expect to continue to experience significant wage and benefit pressures created by
the current global nursing shortage, with many of our nurses pursuing opportunities overseas upon the expiry of
their two-year bond with us. We expect the global nursing shortage to continue, and we may be required to enhance
wages and benefits to recruit and retain nurses or increase our use of more expensive temporary personnel in the
face of increasing opportunities for our nurses to work overseas. In fiscal 2011, we entered into a three-year wage
settlement in Chennai involving around 3,400 employees.

If we are unable to attract or retain doctors, nurses or other medical personnel as required, we may not be able to
maintain the quality of our services and we could be forced to admit fewer patients to our hospitals, thereby having a
material adverse effect on our business, financial position and results of operations. We have also incurred increased
costs to retain and recruit medical personnel and we expect such costs to continue to increase in the future.

35
If we are unable to increase our hospital occupancy rates, we may not be able to generate adequate returns on
our capital expenditures, which could materially adversely affect our operating efficiencies and our profitability.

We have invested and continue to invest a significant amount of capital expenditures in creating bed capacity and
opening new hospitals. We have also introduced new technologies, modernized our facilities and expanded our
range of services.

We intend to focus on improving occupancy rates throughout our hospital network. Improving occupancy rates at
our hospitals is highly dependent on brand recognition, wider acceptance in the communities in which we operate,
our ability to attract and retain well-known and respected doctors, our ability to develop super-specialty practices
and our ability to compete effectively with other hospitals and clinics. In addition, occupancy rates at our super-
specialty hospitals are partly dependent on referrals from our multi-specialty hospitals and clinics.

If we fail to improve our occupancy rates, which stood at 76%, 73% and 73% for fiscal 2009, 2010 and 2011,
respectively, our significant capital expenditures of ` 3,644 million, ` 3,864 million and ` 3,127 million for fiscal
2009, 2010 and 2011, respectively, as well as any capital expenditure incurred in the future, could materially
adversely affect our operating efficiencies and our profitability.

Rapid technological obsolescence, technological failures, inability to identify and understand evolving
technological advancements and other challenges related to our medical equipment could adversely affect our
business.

We use sophisticated and expensive medical equipment in our hospitals to provide our services, such as the Philips
Gemini TF Time of Flight PET-CT 64 slice scan system, the Toshiba Aquillion ONE 320 slice dynamic multi-
detector CT scanner, the G4 CyberKnife ® Robotic Radiosurgery System and the Novalis Tx™ Radiotherapy and
Radiosurgery system. The healthcare services industry is characterized by frequent product improvements and
evolving technology, which could, at times, lead to earlier than planned redundancy of our medical equipment and
result in asset impairment charges. The purchase and replacement of some of these equipment may involve
significant costs, and may expose us to currency fluctuation risk, as such equipment are imported from other
countries. In addition, because of the high costs of such medical equipment, we may not maintain back-up
equipment, and, therefore, even though we generally obtain warranties for our equipment, if such equipment is
damaged or breaks down, our ability to provide services to our patients may be impaired, which could adversely
affect our business. Our success in the future will depend significantly on our ability to take advantage of and adapt
to technological developments to compete with other healthcare services providers. Our failure to understand,
anticipate or respond adequately to evolving medical technologies, market demands or client healthcare
requirements may cause adverse effects on our business and reduce our competitiveness and market share.

We face competition from other hospitals, stand-alone pharmacies and healthcare services providers. Any
adverse effects on our competitive position could result in a decline in our revenues, profitability and market
share.

The healthcare services business, including the hospital and stand-alone pharmacy businesses, is competitive and
competition for patients and customers among hospitals, stand-alone pharmacies and other healthcare services
providers has intensified in recent years. In some cases, competing hospitals are more established than our hospitals.
Some of the hospitals that we compete with are owned or operated by tax-supported governmental bodies or by
private not-for-profit entities supported by endowments and charitable contributions which can finance capital
expenditures on a tax-exempt basis. In some of these markets, we also face competition from other healthcare
services providers such as stand-alone laboratories, orthopedic, oncology, radiology and imaging centers. We may
also face competition from the foreign healthcare chain industry which may begin providing services in India in the
future. New or existing competitors may price their services at a significant discount to our prices or offer better
services or amenities than us. Smaller hospitals, stand-alone clinics and other hospitals may exert pricing pressure
on some or all of our services and also compete with us for doctors and other medical professionals. Some of our
competitors may also have plans to expand their hospital networks, which may exert further pricing and recruiting
pressure on us. If we are forced to reduce the price of our services or are unable to attract patients, doctors or other
healthcare professionals, our business, revenues, profitability and market share may be adversely affected.

36
Although some of our hospitals operate in geographic areas where they are currently the sole provider of general
acute care hospital services in their communities, these hospitals also face competition from other hospitals. Despite
the fact that these competing hospitals may be as far as 30 to 50 miles away, patients in these markets may
increasingly migrate to these competing facilities as a result of local doctor referrals or personal choice.

Our projects and consultancy business faces competition from government-owned hospitals, specialized healthcare
firms, hospitals owned or operated by non-profit and charitable organizations and numerous independent
practitioners. Furthermore, some hospitals choose to obtain management services from large, tertiary care facilities
that create referral networks with smaller surrounding hospitals. As a result, hospitals have various alternatives to
the consulting services currently offered by us. In our stand-alone pharmacies business, we compete with other
hospital-based pharmacies and stand-alone pharmacies for customers.

The competition we face from other healthcare services providers, stand-alone pharmacies and other firms may
result in a decline in our revenues, profitability and market share.

Our arrangements with some of our doctors may give rise to conflicts of interest and time-allocation constraints,
adversely affecting our operations.

Our contracts and other arrangements with some of our visiting doctors permit them to maintain their own private
practices, as well as positions, at other hospitals. Some of these doctors may also have admitting privileges at other
hospitals in addition to our hospitals. Certain of our senior doctors may also maintain positions at local clinics or
affiliations with teaching hospitals. These arrangements may give rise to conflicts of interest, including with regard
to how these doctors allocate their time and other resources between our hospitals and other clinics or hospitals at
which they work and where doctors refer patients. Such conflicts may prevent us from providing a high quality of
service at our hospitals and adversely affect the level of our patient intake.

The terms of our indebtedness could have a significant effect on our operations.

As of March 31, 2011, we had consolidated debt of ` 9,584.75 million. Of our consolidated debt, approximately
20% matures within the next 12 months. Our existing operations and execution of our business strategy require
substantial capital resources and we intend to incur additional debt in the future, including as part of our expansion
plans. However, we may be unable to obtain sufficient financing on terms satisfactory to us, or at all. If interest rates
increase it will be more difficult to obtain credit. As a result, our development activities may have to be curtailed or
eliminated and our financial results may be adversely affected.

Our level of indebtedness and debt service obligations could have important consequences, including the following:

The terms of our existing debt obligations contain numerous financial and other restrictive covenants
which, among other things, require us to maintain certain financial ratios and comply with certain reporting
requirements and restrict any changes in controlling interest or restrict our ability to make capital
expenditures and investments, raise additional capital by way of equity or debt offerings, declare dividends,
merge with other entities, incur further indebtedness and incur, or dispose of, liens on our assets, sell assets,
undertake new projects, change our management and Board of Directors, allow any Director who has been
identified as a willful defaulter, materially amend or terminate any material contract or document and
modify our capital structure. If we do not comply with these obligations, it may cause an event of default,
which, if not cured or waived, could require us to repay the indebtedness immediately.

A default under one financing document may also trigger cross-defaults under our other financing
documents. An event of default, if not cured or waived, could result in the acceleration of all or part of our
financial indebtedness or other obligations.

We may be more vulnerable in the event of downturns in our businesses and to general adverse economic
and industry conditions.

37
 If we have difficulty obtaining additional financing at favorable interest rates we may face difficulties in
meeting our requirements for working capital, capital expenditures, acquisitions, general corporate
purposes or other purposes.

Any borrowings we may make at variable interest rates leave us vulnerable to increases in interest rates
generally. As of March 31, 2011, ` 8,552 million or approximately 89.3% of our consolidated debt of `
9,584.75 million is subject to variable rates of interest. Interest rate fluctuations can be highly
unpredictable, and can be further affected by a number of factors, including global economic trends and
adverse events in the global financial markets. Our failure to effectively manage our interest rate risk
sensitivity could result in increased debt service costs and adversely affect our results of operations.

We may be required to dedicate a significant portion of our operating cash flow to making periodic
principal and interest payments on our debt, thereby limiting our ability to take advantage of significant
business opportunities and placing us at a competitive disadvantage compared to healthcare services
providers who have relatively less debt.

We depend heavily on our senior management team, and loss of the services of one or more of our key executives
or a significant portion of our local management personnel could weaken our management team and adversely
affect our financial condition and prospects.

We are heavily dependent on members of our senior management team, including certain employees who have been
with us since our inception, to manage our current operations. Our success and ability to meet future business
challenges largely depends on the skills, experience and efforts of members of our senior management team and on
the efforts, ability and experience of key members of our local management staff.

The loss of services of one or more members of our senior management team or of a significant portion of any of
our local management staff could weaken significantly our management expertise and our ability to deliver
healthcare services efficiently or continue managing or expanding our business. Since fiscal 2009 to the date of this
Placement Document, seven of our key managerial personnel have left our employment. Almost all of our Directors
and executive officers are not covered by key man life insurance policies.

Our operations are affected by the geographic concentration of our hospital beds.

As of March 31, 2011, the largest concentrations of our hospital beds were in Chennai and Hyderabad, where 20%
and 17%, respectively, of our owned hospital beds were located. Our Chennai and Hyderabad clusters contributed
41% and 15%, respectively, to our overall healthcare services revenue for fiscal 2011. Such concentrations increase
the risk that, should adverse economic, regulatory or other developments occur within Chennai and Hyderabad, our
business, financial position, results of operations or cash flows could be adversely affected.

We are subject to risks associated with expansion into new geographic regions.

We are in the process of establishing a network of hospitals under the ―Apollo REACH‖ initiative with the objective
of making high quality healthcare services and advanced medical technology available in semi-urban and rural
areas. Hospitals established under this initiative will be smaller hospitals with around 100-200 beds, and will be
located in Tier II and Tier III cities in India. We have already established Apollo REACH hospitals in Tier II cities
including Kakinada, Karaikudi, Karimnagar, Bhubaneswar and Karur, and have put in place plans to establish four
additional Apollo REACH hospitals across the country. All these projects are at various stages of implementation
and are expected to be completed over the next three years. See the section titled ―Business—Key Hospital
Expansion Plans‖. As part of our expansion strategy, we have also extended our presence offshore, where we have
licensing or service arrangements in place with projects located in the Republic of Mauritius, Bangladesh and
Kuwait. Such arrangements are typically governed by the local law of the country in which the relevant project is
located. We have also recently signed a preliminary joint venture agreement with the Board of Trustees of the
National Social Security Fund, Tanzania and the Tanzanian Ministry of Health & Social Welfare, in connection with
the establishment of an advanced healthcare facility in the city of Dar es Salaam.

38
Expansion into new geographic regions, including different parts of India, subjects us to various challenges,
including those relating to our lack of familiarity with the culture and economic conditions of these new regions,
language barriers, difficulties in staffing and managing such operations, and the lack of brand recognition and
reputation in such regions. The risks involved in entering new geographic markets and expanding operations, may
be higher than expected, and we may face significant competition in such markets. By expanding into new
geographical regions, we could be subject to additional risks associated with establishing and conducting operations,
including:

compliance with a wide range of laws, regulations and practices, including uncertainties associated with
changes in laws, regulations and practices and their interpretation;

exposure to expropriation or other government actions; and

political, economic and social instability.

If we fail to effectively manage the businesses of our subsidiaries, joint ventures and associates, our business,
financial position and prospects could be adversely affected.

Our primary line of business is the provision of healthcare services, through hospitals, pharmacies, projects and
consultancy services, and primary clinics. Our operations are presently conducted through nine subsidiaries, seven
joint ventures and four associates. See the section titled ―Business - Corporate Structure‖. As of March 31, 2011,
the number of hospital beds owned by our subsidiaries, joint ventures and associates comprised 4.8%, 9.8% and
10.9%, respectively, of the 8,717 hospital beds owned and managed by us. In addition, we provide medical business
process outsourcing services through our associate, Apollo Health Street Limited and health insurance services
through our joint venture company, Apollo Munich Health Insurance Company Limited, in which we currently hold
a 11.01% equity interest (reduced from 20% equity interest at the time of investment) and have no intention to
further increase our shareholding interest. Our revenues and profits depend upon our ability to successfully manage
the businesses of these subsidiaries, joint ventures and associates. If we fail to do this successfully, our business,
financial position and prospects could be adversely affected.

If we are unable to identify expansion opportunities or experience delays or other problems in implementing
expansion projects, our growth, financial condition, cash flows and results of operations may be adversely
affected.

Our growth depends on our ability to develop, acquire and manage additional hospitals and also expand and improve
our existing hospital facilities. We have certain projects under development and are continuously evaluating other
projects, including acquisition opportunities. See the section titled ―Business - Key Hospital Expansion Plans‖.
We may not be able to identify suitable greenfield sites for new hospitals, acquisition or hospital management
opportunities or opportunities for expanding capacity at our existing hospital facilities. The number of attractive
expansion opportunities may be limited and may command high valuations. We may be unable to secure the
necessary financing or negotiate attractive terms to implement expansion projects.

Any new project we undertake could be subject to a number of risks. We may face challenges while building new
hospitals or renovating, rebuilding or repositioning existing hospitals. We may also be unable to effectively integrate
new facilities with our current operations. Undertaking new hospital projects requires significant managerial and
financial resources and we may face difficulties in recruiting and retaining an adequate pool of doctors, nurses and
other medical personnel for our new projects. The costs and time required to integrate the new hospitals with our
existing business could cause an interruption or a loss of momentum in our business activities. All of these factors
may adversely affect our business and growth prospects.

Our ability to build and operate new hospital projects is subject to various factors that may involve delays or
problems, including the failure to receive or renew regulatory approvals, constraints on human and capital resources,
the unavailability of equipment or supplies or other reasons, events or circumstances. Our projects may incur
significant cost overruns and may not be completed on time or at all. The acquisition of a listed company in India
involves various legal and regulatory requirements, including with respect to tender offers, as a result of which we
may experience further delays in our expansion and incur additional costs.

39
New hospital projects are characterized by long gestation periods and substantial capital expenditures. We may not
achieve the operating levels that we expect from future projects and it may not be able to achieve our targeted return
on investment on, or intended benefits or operating synergies from, these projects. Potential title uncertainties
regarding the lands on which potential acquisition targets and management contracts opportunities are or may be
located, including related litigation, may also cause delays in, and may otherwise curtail, our expansion plans. We
may experience delays in obtaining regulatory approvals regarding the use of our land for hospital purposes that may
adversely affect our schedule for implementation of these projects. The projects that we have under development are
at various stages of implementation and are expected to be completed over the next three years. Some or all of these
projects may not be undertaken or, if undertaken, may be altered or take longer than anticipated to complete or may
exceed our cost expectations.

In view of the highly competitive nature of the industry in which we operate, we may have to revise our
management estimates from time to time and consequently our funding requirements may also change. This may
result in the rescheduling of our proposed project expenditure and an increase or decrease in our proposed
expenditure for a particular project. Any unanticipated increase in expansion costs could adversely affect our cost
estimates and our ability to implement our expansion plans as proposed.

Our stand-alone pharmacy business had historically been loss making and has turned profitable only in the
second quarter of fiscal 2011. We may not be able to successfully grow our stand-alone pharmacy network which
may have an adverse effect on the Company’s results of operations and financial condition.

We have increased the number of stand-alone pharmacies in our network to 1,199 stand-alone pharmacies as at
March 31, 2011 and the revenues from our stand-alone pharmacy segment contributed 25.1% of our total revenues
in fiscal 2011. Our stand-alone pharmacy business had historically been loss making and has turned profitable only
in the second quarter of fiscal 2011. We intend to continue growing this business segment through a measured roll-
out of new stand-alone pharmacies based on market demand, revenue potential and availability of high visibility
locations. There is no assurance that this intended growth of our stand-alone pharmacy network can be achieved or
will be profitable. If the expansion of our stand-alone pharmacy network is not successfully managed, our operating
costs may increase and our results of operations and financial condition may be adversely affected. In addition, in
the event of an economic downturn, which may adversely affect the profitability of stand-alone pharmacies, this
could result in a longer lead-time for our new stand-alone pharmacies to reach their optimal operating levels.

We may have difficulty in effectively integrating future acquisitions and joint ventures into our ongoing
operations.

The competition to acquire hospitals and form joint ventures in the markets that we target is significant, and we may
not be able to consummate such transactions on terms favorable to us if other healthcare services companies,
including those with greater financial resources than ours, are competing for the same target businesses. In order to
consummate such acquisitions, joint ventures or consolidations, we may be required to incur or assume additional
indebtedness. We may not be able to obtain financing, if necessary, for any acquisitions or joint ventures that we
may make or we may be required to borrow at higher rates and on less favorable terms. Additionally, we may not be
able to effectively integrate the facilities that we acquire or we may experience difficulties arising from coordinating
and consolidating corporate and administrative functions, including integration of internal controls and procedures
with our ongoing operations. A failure to successfully integrate an acquired business or inability to realize the
anticipated benefits of such joint venture or acquisition could adversely affect our results of operations and financial
condition.

Acquired businesses may have unknown or contingent liabilities, including liabilities for failure to comply with
healthcare laws and regulations, and we may become liable for the past activities of such businesses. Although we
have policies in place to ensure that the practices of newly acquired facilities conform to our standards, and
generally will seek indemnification from prospective sellers covering these matters, we may become liable for past
activities of any acquired business.

40
Certain cities in India require prior approval for the purchase, construction and expansion of healthcare facilities.
The failure to obtain any required approval or the failure to maintain a required license could impair our ability to
operate or expand operations in any city.

Certain lands on which our hospital buildings and our stand-alone pharmacies are operating are not owned by
us, which could affect our operations. If the owner of premises does not renew the lease agreement, our business
operations may suffer disruptions.

We currently own 37 hospitals, of which 30 are located on land that has been leased. See the section titled ―Business
- Properties‖ for lease information relating to key hospitals owned by us. Further, all of the 1,199 stand-alone
pharmacies operated by us as of March 31, 2011 are maintained on a lease basis. We are using such premises
pursuant to the respective lease agreements. The lease agreements are renewable on mutual consent upon payment
of such rates as stated in these lease agreements. Moreover, the lessors of these properties may terminate the lease
agreements early in the event of any breach of the terms of allotment, including delay in payment of rent, usage of
the property other than for the purpose for which it was allotted, or transfer or assignment of the land without prior
consent of the lessor. If these lease agreements are not renewed or are not renewed on terms and conditions that are
favorable to us, we may suffer a disruption in our operations which could have an adverse effect on our business.

We will need to find suitable locations to open and operate our hospitals and stand-alone pharmacies and a
failure to do so could have a material adverse impact on the Company’s results of operations and financial
condition.

As part of our growth strategy, we continuously evaluate other projects and identify suitable greenfield sites for our
new hospitals and stand-alone pharmacy business. The success of our expansion strategy lies largely in identifying
suitable locations, whether for lease or acquisition, at a competitive cost. We have to compete with other healthcare
services providers and pharmacy retailers to find suitable greenfield sites for our hospitals and stand-alone
pharmacies on an ongoing basis. We cannot give any assurance that we will be able to expand and grow at the rate at
which we may desire to, as we may not be able to find locations that we believe will be necessary for implementing
our expansion strategy or at a competitive cost. If we are unable to find locations at the time and place that we desire
or at competitive rates, it may have a material adverse impact on our results of operations and financial condition.

We and our subsidiaries, joint ventures and associates are exposed to legal claims and regulatory actions arising
from the provision of healthcare services that, if adversely determined against us or our subsidiaries, joint
ventures or associates, could have a material adverse effect on our liquidity, financial position or results of
operations.

From time to time, we may be subject to litigation alleging, among other things, medical negligence by our doctors
and other healthcare professionals and product negligence and product liability for medical devices we use or
pharmaceuticals we dispense. Further, we could also be the subject of complaints from patients who are dissatisfied
with the quality and cost of healthcare services.

The results of these claims and lawsuits cannot be predicted, and it is possible that the ultimate resolution of these
legal claims and regulatory actions, individually or in the aggregate, may have a material adverse effect on our
business both in the near and long term, financial position, results of operations or cash flows. Although we defend
ourselves vigorously against claims and lawsuits, these matters could:

require us to pay substantial damages or amounts in judgments or settlements, which individually or in the
aggregate could exceed amounts, if any, that may be recovered under our insurance policies where
coverage applies and is available;

harm our reputation and the goodwill associated with our brand;

cause us to incur substantial expenses and/or substantial increases in our insurance premiums;

require significant time and attention from our management; and

41
 require us to incur debt to finance any damages or amounts in judgment or settlement.

If any of our future cases are not resolved in our favor, and if our insurance coverage or any applicable indemnity is
insufficient to cover the damages awarded, we may be required to make substantial payments or modify or restrict
our operations, which could have an adverse impact on our reputation and competitive position, as well as our
business and financial results. As of June 30, 2011, we are subject to a number of legal claims and regulatory
actions, including various claims in relation to alleged medical negligence. See the section titled ―Legal
Proceedings‖. Also see section titled ―Risk Factors - If we are exposed to claims exceeding the scope of our
insurance coverage or that are not covered by our insurance policies or if our insurance costs increase, and if
our doctors are unable to obtain appropriate insurance coverage, our liquidity, financial condition and
results of operations may be adversely affected.‖ below.

We may be subject to liabilities arising from the risks of hospital management, including liabilities from claims of
medical negligence against our doctors and other healthcare professionals, which may adversely affect our
business, financial position, results of operations or cash flow.

We may incur liabilities in the ordinary course of managing our hospitals, including liabilities that arise from claims
of medical negligence against our doctors and other healthcare professionals. Our hospital management contracts
generally require the hospitals we manage to indemnify us against certain claims and maintain specified amounts of
insurance. However, our managed hospitals or other third parties may not indemnify us against losses we incur
arising out of the activities or omissions of the employees of the hospitals we manage. If we are held liable for
amounts exceeding the limits of insurance coverage or for claims outside the scope of that coverage or any
indemnity, or if any indemnity agreement is determined to be unenforceable, then any such liability could adversely
affect our business, financial position, results of operations or cash flow. Also see section titled ―Risk Factors - If
we are exposed to claims exceeding the scope of our insurance coverage or that are not covered by our
insurance policies or if our insurance costs increase, and if our doctors are unable to obtain appropriate
insurance coverage, our liquidity, financial condition and results of operations may be adversely affected.‖
below.

If we are exposed to claims exceeding the scope of our insurance coverage or that are not covered by our
insurance policies or if our insurance costs increase, and if our doctors are unable to obtain appropriate
insurance coverage, our liquidity, financial condition and results of operations may be adversely affected.

We maintain professional liability and general liability insurance coverage to cover certain claims arising out of the
operations of our hospitals. See the section titled ―Business—Professional and General Liability Insurance‖.
Some of the claims, however, could exceed the scope of the coverage in effect or coverage of particular claims could
be denied. We also provide services to projects located outside of India. Claims under the laws in such foreign
countries may expose us to far greater liability than would be the case in India, and we may not have adequate
insurance to cover such liability. We believe our professional and other liability insurance has been adequate in the
past but there can be no assurance that our insurance coverage will be sufficient to cover all future claims. If our
arrangements for insurance or indemnification are not adequate to cover claims, we may be required to make
substantial payments and our financial condition and results of operations may be adversely affected.

In addition, some doctors, including those who practice at some of our hospitals, face increases in malpractice
insurance premiums and limitations on availability of insurance coverage. The inability of our doctors to obtain
appropriate insurance coverage could cause those doctors to limit their practice. That, in turn, could result in lower
admissions to our hospitals.

All reinsurance and any excess insurance purchased by us are subject to policy aggregate limitations. Should such
policy aggregates be partially or fully exhausted in the future, or if actual payments of claims materially exceed
projected estimates of claims, we may be required to make substantial payments and our financial position, results of
operations or cash flows could be materially adversely affected.

42
In the past, the RBI has compounded a contravention by us of the provisions of the FEMA. If there are any
similar contravention within three years from the date of such compounding, the Company will not be able to
approach the RBI or the Enforcement Directorate to compound such contravention which may have an adverse
effect on our business and results of operations.

The RBI has, by way of a letter dated August 24, 2010, noted the contravention of certain provisions of FEMA
relating to the utilization of the proceeds from the global depository receipts issued by us in 2005 and have advised
us to strictly adhere to the provisions of the FEMA and rules, regulations, notifications, circulars made thereunder in
future. In accordance with the FEMA and the regulations made thereunder, we may not be able to seek
compounding with respect to any similar contravention by us within the period of three years from the date of
aforesaid compounding, which may have an adverse effect on our business.

Compliance with applicable safety, health, environmental and other governmental regulations and any violations
of existing regulations may be costly and adversely affect our business and results of operations.

The healthcare services industry is subject to laws, rules and regulations in certain states in which we currently
conduct our business or in which we intend to expand our operations.

We are subject to extensive international and local regulations relating, among other things, to:

conduct of operations;

addition of facilities and services;

adequacy of medical care, including required ratios of nurses to hospital beds;

quality of medical equipment and services;

discharge of pollutants into the air and water and handling and disposal of bio-medical, radioactive and
other hazardous waste;

qualifications of medical and support personnel;

confidentiality, maintenance and security issues associated with health-related information and medical
records; and

the screening, stabilization and transfer of patients who have emergency medical conditions.

Safety, health and environmental laws and regulations in India are stringent and it is possible that the evolving
regulatory environment in India may lead to significantly more stringent healthcare laws and regulations in the
future. To comply with these requirements, we may have to incur substantial operating costs and/or capital
expenditure in the future.

Further, if a determination is made that we were in violation of such laws, rules or regulations, including conditions
in the permits required for our operations, we may have to pay fines, modify or discontinue our operations, incur
additional operating costs or make capital expenditures and our business, financial position, results of operations or
cash flows could be adversely affected. Any public interest or class action legal proceedings related to such safety,
health or environmental matters could also result in the imposition of financial or other obligations on us. Any such
costs could adversely affect our competitive position and results of operations. In addition, regulation is constantly
changing and we are unable to predict the future course of international and local regulation. Further changes in the
regulatory framework affecting healthcare services providers could have a material adverse effect on our business,
financial position, results of operations or cash flows.

43
We are subject to restrictive covenants under the shareholders agreement entered into with Apax Mauritius FDI
One Limited (―Apax‖) that could limit our flexibility in managing our business.

We have entered into a shareholders‘ agreement with Apax, whereby Apax has been given certain rights in the
Company pursuant to its subscription of Equity Shares of the Company. Certain of these rights have been included
in our Articles of Association which may restrict our operations and may affect the rights of our shareholders,
including the following:

in case of preferential issue, we are required to offer additional Equity Shares to Apax and Apax shall have
the right to buy all or a part of the Equity Shares offered either directly or through its affiliates;

Apax shall have the right to acquire Equity Shares in proportion to its existing shareholding in the case of
any fresh issue of the Company‘s Equity Shares;

in the event that any financial investor is granted special rights, such rights would have to be offered to
Apax as well;

Apax shall have the right of first offer and the right to tag along its Equity Shares in the case of a transfer of
Equity Shares by our Promoter and certain members of our Promoter Group to a third party aggregating in
excess of 5% of the share capital on a basis cumulated with all past transfers by such promoter group to a
third party in the last three years;

so long as Apax maintains a shareholding of 5.65% of our share capital, it shall have the right to nominate a
director to the Board; and

so long as Apax maintains a shareholding of 5.65% of our share capital, Apax shall have affirmative voting
rights relating to, among other things, (a) restructurings, including but not limited to mergers, demergers,
spin-offs and amalgamations, (b) investments made by us outside India for acquisition of a target entity
having a value of ` 4,000 million, and (c) any amendments to the Memorandum of Association or Articles
of Association that may affect the rights of Apax.

Such rights may enable Apax to influence our decisions to the detriment of other stakeholders and restrict our ability
to manage our business effectively.

We have yet to obtain certain clearances, licenses, registrations and other approvals and renewals thereof
required in the ordinary course of our business, and the failure to obtain these approvals in a timely manner or at
all may materially adversely affect our operations.

We have applied for but have not yet received certain clearances, licenses, registrations and other approvals and
renewals required in the ordinary course of our business as a result of the expiration of existing approvals.

We have yet to receive certain approvals from the relevant authorities, including environmental clearances (under
the Air (Prevention and Control of Pollution) Act, 1981 and the Water (Prevention and Control of Pollution) Act,
1974), fire and rescue services license from the Director of Fire & Rescue Services, Chennai, license under the
Tamil Nadu Narcotic Drug Rules, 1985, license to stock, sell or exhibit drugs under the Drugs and Cosmetics Act,
1940, registration under the Nursing Homes Act from the Chennai Municipal Corporation and consent under the
Bio-Medical Waste (Management and Handling) Rules, 1988.

If we do not receive such approvals, we may be unable to offer certain of our services or may be required to
discontinue operations at one or more hospitals, and this may have a material adverse effect on our financial results.

44
We may suffer reputational harm from the activities or omissions of hospitals managed by our joint venture
partners.

Our reputation and the goodwill associated with our brand may be adversely affected due to the activities or
omissions of the hospitals managed by our joint venture partners, who are authorized to use the ―Apollo‖ brand. If
we suffer reputational harm from such activities or omissions, our business, competitive and financial positions and
results of operations could be adversely affected.

Our operations could be impaired by a failure of our information technology systems.

Our information technology systems are essential to a number of critical areas of our business operations, including:

accounting and financial reporting;

coding and compliance;

clinical systems;

medical records and document storage;

inventory management;

negotiating, pricing and administering healthcare delivery contracts;

training programs; and

research services.

Any technical failure that causes an interruption in service or availability of our systems could adversely affect
operations or delay the collection of revenue or cause interruptions in our ability to provide services to our patients.
Corruption of certain information could also lead to delayed or inaccurate diagnoses in the treatment of patients and
could result in damage to the health of our patients. In addition, we may be subject to liability as a result of any theft
or misuse of personal information stored on our systems. Although we have implemented network security
measures, our servers are vulnerable to computer viruses, hacking, break-ins and similar disruptions from
unauthorized tampering. The occurrence of any of these events could result in interruptions, delays, the loss or
corruption of data, or cessations in the availability of systems, all of which could have a material adverse effect on
the financial position, results of operations and harm our business reputation.

Challenges that affect the healthcare industry and other external factors also have an effect on our operations.

We are impacted by the challenges currently facing the healthcare industry as a whole. We believe that the key
ongoing industry-wide challenges are providing quality patient care in a competitive environment and managing
costs.

In addition, our business and results of operations are also affected by other factors that affect the entire industry,
including:

technological and pharmaceutical improvements that increase the cost of providing, or reduce the demand
for, healthcare;

general economic and business conditions, both nationally and regionally;

demographic changes; and

changes in the distribution process or other factors that increase the cost of supplies.

45
In particular, the patient volumes and net operating revenues at our general hospitals and related healthcare facilities
are subject to economic and seasonal variations caused by a number of factors, including, but not limited to:

unemployment levels;

the business environment of local communities;

the number of uninsured and underinsured patients in local communities;

seasonal cycles of illness;

climate and weather conditions;

vacation patterns and religious observance of both patients and doctors;

healthcare services competitors;

physician recruitment, retention attrition; and

other factors relating to the timing of elective procedures.

Any failure by us to effectively face these challenges could have a material adverse effect on our results of
operations.

We have limited protection of our intellectual property.

We have registered the ―Apollo‖ name and logo and ―Apollo Hospitals‖, ―The Apollo Clinic‖, ―Apollo Pharmacy‖
and ―Apollo Health City‖ names as trademarks and the ―Apollo‖ name as a service mark, under the Trade Marks
Act, 1999, as amended. We have licensed the ―Apollo‖ name, logo and trademarks for use by the franchisees of
Apollo Health and Lifestyle Limited‘s primary care clinics and by our managed hospitals. Unauthorized use of our
brand name or logo by our franchisees, our managed hospitals or other third parties could adversely affect our
reputation, which could in turn adversely affect our business, financial condition and results of operations.
Intellectual property rights and our ability to enforce them may be unavailable or limited in some circumstances. In
addition, trade mark registration applications may not be allowed or competitors may challenge the validity of our
trade mark registrations. If we fail to successfully obtain or enforce intellectual property rights, our competitive
position and operating results could be adversely affected.

Actions of our Promoters and the Promoter Group, as substantial shareholders and Directors, could conflict with
the interests of other shareholders.

As of March 31, 2011, the Promoters and the Promoter Group, through their direct and indirect holdings, held
approximately 33.2% of our issued Equity Shares. Following the completion of the Issue, and assuming the full
conversion of warrants held by the Promoters and the Promoter Group into Equity Shares during their respective
warrant exercise period at the warrant exercise price, it is expected that the Promoters and the Promoter Group will
hold 34.7% of our issued Equity Shares. For as long as the Promoters and the Promoter Group continue to hold a
substantial percentage of our Equity Shares and continue to have significant influence on our Board of Directors,
they may influence our material policies in a manner which could conflict with the interests of other shareholders.

Certain of our subsidiaries, joint ventures and associates have been or are currently incurring losses. If the
business and operations of these subsidiaries, joint ventures and associates deteriorate, our investments may be
required to be written down or written off.

Certain of our subsidiaries, joint ventures and associates have been or are currently incurring losses. See the section
titled ―Business—Subsidiaries‖, ―Business—Joint Ventures” and ―Business—Associates”. We have made and

46
may continue to make significant capital investments and/or advances and other commitments to support certain of
our subsidiaries, joint ventures and associates. These investments and commitments have included capital
contributions to enhance the financial condition or liquidity position of such subsidiaries, joint ventures and
associates. We may make capital contributions in the future, which may be financed through additional debt,
including through debt of subsidiaries, joint ventures or associates. If the business and operations of these
subsidiaries, joint ventures and associates deteriorate, our investments may be required to be written down or written
off. Additionally, certain loans and advances may not be repaid or may need to be restructured or we may be
required to outlay further capital under our commitments to support such subsidiaries, joint ventures and associates.
This could have a material adverse effect on our business, financial condition and results of operations.

A portion of our Equity Shares held by the Promoters and the Promoter Group has been pledged in favor of
lenders, who may exercise their rights under the respective pledge agreements in events of default.

As of March 31, 2011, the Promoters and the Promoter Group had pledged approximately 24.44 million Equity
Shares constituting approximately 58.96% of their total equity shareholding in the Company in favor of lenders.

Under the pledge arrangements with the lenders, in the event of a failure to pay the loan amounts, the lenders have a
right to sell, assign or otherwise dispose off all or a part of the pledged Equity Shares. In addition, under certain
pledge arrangements, the pledged Equity Shares must cover a certain proportion of the credit limit and such margins
are required to be maintained during the tenor of the loan. If the lenders in their discretion conclude that the margins
have become inadequate, including as a result of a decline in the market value of the Equity Shares, the pledgor is
under an obligation to pledge such additional Equity Shares as may be acceptable to the lenders. In the event of a
failure to pledge additional Equity Shares, the lenders have a right to enforce the pledge. The pledge arrangements
also provide that any accretions to the pledged Equity Shares, including through issue of bonus Equity Shares or
rights entitlements or any other benefits, shall also be automatically pledged in favor of the lenders and such
accretions shall form part of the pledged Equity Shares.

If the Promoters and the Promoter Group default on their obligations under the relevant financing documents, the
lenders may exercise their rights under the share pledges, have the pledged Equity Shares transferred to their names
and take significant control over us, which may adversely affect our overall business strategy and the market price of
the Equity Shares.

Our income may decrease if our operations and management contracts are not renewed or are renewed on terms
that are not favorable to us.

Of our 54 hospitals, 37 hospitals are owned by us and 17 hospitals are under our management through operations
and management contracts. We operate these 17 managed hospitals for a fee, which is typically a fixed amount or an
identified percentage of gross income or profits of the hospital, which in some cases is subject to certain targets
being reached or profits being achieved. Most of the contracts may be terminated with adequate notice, at the
discretion of either party or, in some cases, by one party if the other materially breaches its obligations under the
contract. Accordingly, these relationships may not continue for the full term of the contract or may not be renewed,
and the owner of a hospital may terminate its relationship with us, including after we have made improvements at a
hospital. The loss of more of these contracts or the renewal of any such contract on unfavorable terms could have a
material adverse impact on our results of operations.

Further, if a dispute occurs between us and the owner of a hospital or such owner encounters financial difficulties,
we may not receive fees owed to us or costs borne by us in relation to the operation and management of such
hospital.

Your holdings may be diluted by additional issuances of Equity Shares and conversions of outstanding
instruments into Equity Shares. Furthermore, sales of Equity Shares by the Promoters may adversely affect the
market price of the Equity Shares.

Any future issuance of Equity Shares or warrants, including pursuant to the exercise of outstanding stock options
under any future employee stock option scheme or any other similar scheme in the future, may dilute the positions
of investors in our Equity Shares, which could adversely affect the market price of the Equity Shares. We may issue

47
Equity Shares in the future in order to help fund acquisitions and other expansion plans, as well as improvements to
our existing hospitals and other business activities. Conversions of our outstanding instruments, such as warrants
and foreign currency convertible bonds, may also dilute the positions of investors in our Equity Shares. Any such
future issuance of Equity Shares or conversion of outstanding instruments into Equity Shares could negatively
impact the market price of the Equity Shares.

As of March 31, 2011, the Promoters and the Promoter Group, through their direct and indirect holdings, held
approximately 33.2% of our issued Equity Shares. The sale of a large number of Equity Shares by the Promoters and
the Promoter Group, or the perception that such sale could occur, may also adversely affect the market price of the
Equity Shares.

We have entered into various related party transactions.

We have entered into various transactions with related parties, including our Subsidiaries, associates, Directors,
employees and their relatives, the Promoters and the Promoter Group entities. For further details relating to such
related party transactions, see the section titled ―Financial Statements‖.

We believe that all such transactions have been conducted on an arm‘s length basis, however in the event that
obligations owed to us arising from such transactions are not fulfilled, either individually or in aggregate, our
business and financial condition and/or results of operations may be adversely affected. We will continue to enter
into related party transactions in the future, in the normal course of business. Such transactions, either individually
or in the aggregate, may have an adverse effect on our business, revenues, results of operations and financial
condition.

If we lose or fail to renew our accreditation from the JCI it could adversely affect our reputation and business
operations.

Seven of our hospitals have received accreditation from the JCI, a non-profit corporation which is the largest
accreditor of healthcare organizations in the United States. The accreditation is for a period of three years, and the
accreditation of five of our hospitals, located in Bangalore, Kolkata, Chennai, New Delhi and Hyderabad, will be up
for renewal between 2011 and 2012. If we lose our accreditation or do not receive re-accreditation of our hospitals
by JCI, or are refused accreditation of our hospitals, our reputation and business operations could be adversely
affected.

We have not entered into definitive agreements to utilize any of the net proceeds of the Issue.

We intend to use the net proceeds of the Issue substantially for expansion activities with the remaining proceeds to
be applied towards working capital and general corporate purposes. See the section titled ―Use of Proceeds‖.

Our expansion plans are based on management estimates. Accordingly, our Directors and senior management team
will have significant flexibility in applying the proceeds received by us from the Issue. In addition, our expansion
plans are subject to a number of variables, including possible cost overruns and changes in our management‘s views
of the desirability of our current plans. Any unanticipated increase in the cost of our intended expansion plans could
adversely affect our estimates of the cost of such expansion.

We may be classified as a passive foreign investment company for US federal income tax purposes, which could
result in adverse US federal income tax consequences to US Holders of Equity Shares.

Based on the current and anticipated valuation of our assets, including goodwill, and composition of our income and
assets, we do not expect to be a passive foreign investment company (―PFIC‖), for US federal income tax purposes
for our current taxable year or in the foreseeable future. However, the application of the PFIC rules is subject to
uncertainty in several respects, and we cannot assure you that we will not be a PFIC for any taxable year. A non-US
corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year is passive
income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during
such year is attributable to assets that produce passive income or are held for the production of passive income. We
must make a separate determination after the close of each taxable year as to whether we were a PFIC for that year.

48
Because the value of our assets for purposes of the PFIC test will generally be determined by reference to the market
price of our Equity Shares, fluctuations in the market price of the Equity Shares may cause us to become a PFIC. In
addition, changes in the composition of our income or assets may cause us to become a PFIC. If we are a PFIC for
any taxable year during which a US Holder (as defined in ―Taxation – US Federal Income Taxation‖) holds an
Equity Share, certain adverse US federal income tax consequences could apply to such US Holder. See the section
titled ―Taxation – US Federal Income Taxation – Passive Foreign Investment Company Considerations‖.

Our independent auditors’ audit report is subject to certain qualifications in relation to impairment losses
suffered by our associate which may harm our business reputation and adversely affect the trading price of our
Equity Shares.

Our independent auditors in its audit report included in the section titled ―Financial Statements‖, has included a
qualification in relation to the effect of the impairment loss, if any, which has been reported by the auditors of one of
our associates, Apollo Health Street Limited (―Apollo Health Street‖). As stated in the audit report, the effect of the
impairment loss, if any, has not been considered for the purpose of consolidation and no adjustment has been made
to the group‘s share of total assets as the auditors of Apollo Health Street have not quantified the quantum of such
impairment loss. In addition, in relation to Apollo Health Street, the Audited Financial Statements do not include
any adjustments for impairment loss, if any, on the carrying value of goodwill paid on various acquisitions made by
the Company. We believe, on the basis of our estimates and projections of future cash flows, that the entire carrying
value of goodwill of ` 6917.08 million as of March 31, 2011 is recoverable in the ordinary course of business.
However, based on our independent auditors‘ review of the projections and understanding of the underlying
assumptions, they were unable to comment on appropriateness of the assumptions and consequently on the
achievability of the projected cash flows. There is no assurance that any part of the entire carrying value of goodwill
of ` 6917.08 million as of March 31, 2011 is recoverable. If at any time in the future, any impairment losses suffered
by Apollo Health Street is quantified by its auditors, such impairment losses may harm our business reputation and
adversely affect the trading price of our Equity Shares.

Risks Relating to Investments in Indian Companies

A slowdown in economic growth in India could cause our businesses to suffer.

We currently operate primarily in the domestic Indian market, and our performance is intertwined with the overall
economy, the gross domestic product growth rate and the economic cycle in India. A substantial portion of our
assets and employees are located in India, and we intend to continue to develop and expand our facilities in India.
Our performance and the growth of our business is dependant on the performance of the Indian economy and the
economies of the regional markets we currently serve. These economies could be adversely affected by various
factors, such as political and regulatory changes including adverse changes in liberalization policies, social
disturbances, religious or communal tensions, terrorist attacks and other acts of violence or war, natural calamities,
interest rates, commodity and energy prices and various other factors. Any slowdown in these economies could
adversely affect the ability of our patients to afford our services, which in turn would adversely impact our business
and financial performance and the price of the Equity Shares.

Our ability to raise foreign capital may be constrained by Indian law.

As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such
regulatory restrictions limit our financing sources and hence could constrain our ability to obtain financing on
competitive terms and refinance existing indebtedness. In addition, we cannot assure you that the required approvals
will be granted to us without onerous conditions, or at all. The limitations on foreign debt may have an adverse
effect on our business growth, financial condition and results of operations.

Our business and activities may be affected by the recent amendments to the competition law in India.

The Parliament has enacted the Competition Act, 2002, as amended, (the ―Competition Act‖) for the purpose of
preventing practices having an adverse effect on competition in the relevant market in India under the auspices of
the Competition Commission of India (the ―CCI‖). Under the Competition Act, any arrangement, understanding or
action whether or not formal or informal which causes or is likely to cause an appreciable adverse effect on

49
competition is void and attracts substantial penalties. Any agreement among competitors which directly or indirectly
involves determination of purchase or sale prices, limits or controls production, or shares the market by way of
geographical area or number of customers in the relevant market is presumed to have an appreciable adverse effect
on competition in the relevant market in India and shall be void. Further, the Competition Act prohibits abuse of
dominant position by any enterprise. If it is proved that the contravention committed by a company took place with
the consent or connivance or is attributable to any neglect on the part of, any director, manager, secretary or other
officer of such company, that person shall be deemed guilty of the contravention and liable to be punished.

On March 4, 2011 the Government of India notified and brought into force the combination regulation (merger
control) provisions under the Competition Act with effect from June 1, 2011. The combination regulation provisions
require that acquisition of shares, voting rights, assets or control or mergers or amalgamations which cross the
prescribed asset and turnover based thresholds shall be mandatorily notified to and pre-approved by the CCI. In
addition, on May 11, 2011, the CCI issued the final Competition Commission of India (Procedure in regard to the
transaction of business relating to combinations) Regulations, 2011 which sets out the mechanism for
implementation of the combination regulation provisions under the Competition Act. It is unclear as to how the
Competition Act and the CCI will affect the business environment in India.

If we are adversely impacted, directly or indirectly, by any provision of the Competition Act, or its application or
interpretation, generally or specifically in relation to any merger, amalgamation or acquisition proposed by us, or
any enforcement proceedings initiated by the CCI, either suo moto or pursuant to any complaint, for alleged
violation of any provisions of the Competition Act it may have a material adverse effect on our business, financial
condition and results of operations.

Hostilities, terrorist attacks, civil unrest and other acts of violence could adversely affect our business and the
trading price of the Equity Shares could decrease.

Terrorist attacks, civil unrests like Telengana movement and other acts of violence or war in India and around the
region may adversely affect worldwide financial markets and result in a loss of consumer confidence and ultimately
adversely affect our business, results of operations, financial condition and cash flows. Political tensions could
create a perception that an investment in Indian companies involves higher degrees of risk and on the business and
price of the Equity Shares.

Natural disasters could have a negative impact on the Indian economy and harm our business.

India has experienced natural calamities such as earthquakes, a tsunami, floods and drought in the past few years.
The extent and severity of these natural disasters determines their impact on the Indian economy. The erratic
progress of a monsoon would also adversely affect sowing operations for certain crops. Further prolonged spells of
below normal rainfall or other natural calamities in the future could have a negative impact on the Indian economy,
adversely affecting our business and the price of the Equity Shares.

Any downgrading of India’s debt rating by an international rating agency could have a negative impact on our
business.

Any adverse revision to India‘s credit rating for domestic and international debt by international rating agencies may
adversely impact our ability to raise additional financing and the interest rates and other commercial terms at which
such additional financing is available. This could have an adverse effect on our financial performance, cash flows,
results of operations and future financial performance and our ability to obtain financing to fund our growth on
favorable terms or at all, as well as the trading price of the Equity Shares.

If inflation were to rise in India, we might not be able to increase the prices of our products at a proportional rate
in order to pass costs on to our customers and our profits might decline.

Inflation rates in India have been volatile in recent years, and such volatility may continue in the future. Increasing
inflation in India could cause a rise in the price of transportation, wages, raw material, equipment and other
expenses, and we may be unable to reduce our costs or pass increased costs on to our consumers by increasing the
price we charge for our products, and our results of operations, cash flows and financial condition may therefore be

50
adversely affected.

Our profitability will decrease if the Indian Government reduces or withdraws tax benefits and other incentives
that it currently provides.

The statutory corporate income tax rate in India for Indian Companies is currently 30%. This tax rate is presently
subject to a 5% surcharge and an education cess of 3%, resulting in an effective tax rate of 32.4%. We cannot
provide assurance that the corporate income tax rate or the surcharge will not be increased further in the future. With
effect from fiscal 2011, we will benefit from the tax deduction given in respect of capital expenditure incurred on
setting up new hospital projects consisting of at least 100 beds which can be set off against the profits earned by our
other business operations. As a result, our operations have been subject to relatively lower cash outflows on account
of reduced tax liabilities in the initial year in which new hospital projects have been commissioned. However, these
benefits are expected to reverse over a period of time because depreciation charges relating to such hospital projects
will be disallowed for corporate tax purposes and tax liabilities will therefore increase in the future.

Significant differences exist between Indian GAAP and other accounting principles, such as US GAAP and
IFRS, which may be material to investors’ assessments of our financial condition.

Our financial statements, including the financial statements provided in this Placement Document are prepared in
accordance with Indian GAAP. We have not attempted to quantify the impact of US GAAP or IFRS on the financial
data included in this Placement Document, nor do we provide a reconciliation of our financial statements to those of
US GAAP or IFRS. Each of US GAAP and IFRS differs in significant respects from Indian GAAP. Accordingly,
the degree to which the Indian GAAP financial statements included in this Placement Document will provide
meaningful information is entirely dependent on the reader‘s level of familiarity with Indian accounting practices.
Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this
Placement Document should accordingly be limited. See the section titled ―Summary of Significant Differences
among Indian GAAP, US GAAP and IFRS‖.

The transition to IFRS in India is still unclear and we may be negatively impacted by such transition.

On February 25, 2011, the Ministry of Corporate Affairs, Government of India (―MCA‖), notified that the IND AS
will be implemented in a phased manner. It was also mentioned that the date of implementation of IND AS will be
notified by the MCA at a later date. As of the date of this Placement Document, the MCA has not yet notified the
date of implementation of IND AS. There is not yet a significant body of established practice on which to draw in
forming judgments regarding its implementation and application. Additionally, IND AS has fundamental differences
with IFRS and hence financial statements prepared under IND AS may be substantially different from financial
statements prepared under IFRS. There can be no assurance that the financial condition, results of operations, cash
flow or changes in shareholder‘s equity of our Company will not appear materially worse under IND AS than under
Indian GAAP. As our Company adopts IND AS reporting, it may encounter difficulties in the ongoing process of
implementing and enhancing its management information systems. Moreover, there is increasing competition for the
small number of IFRS-experienced accounting personnel available once Indian companies begin to prepare IND AS
financial statements. There can be no assurance that the adoption of IND AS by our Company will not adversely
affect its reported results of operations or financial condition and any failure to successfully adopt IND AS in
accordance with the prescribed timelines could have a material adverse effect on our financial position and results of
operations.

Risks Relating to the Equity Shares

Fluctuations in operating results and other factors may cause the market prices of the Equity Shares to decline.

The stock markets have experienced extreme volatility that has often been unrelated to the operating performance of
particular companies. These broad market fluctuations may adversely affect the trading prices of the Equity Shares.
There may be significant volatility in the market prices of the Equity Shares. If we are unable to operate our
hospitals or stand-alone pharmacies as profitably as we have in the past, investors could sell the Equity Shares when
it becomes apparent that the expectations of the market may not be realized, resulting in a decline in the market
prices of the Equity Shares.

51
In addition to our operating results, the operating results of other hospital companies, changes in financial estimates
or recommendations by analysts, changes in government healthcare programs, governmental investigations and
litigation, speculation in the press or investment community, the possible effects of war, terrorist and other
hostilities, adverse weather conditions, the level of seasonal illnesses, changes in general conditions in the economy
or the financial markets, or other developments affecting the healthcare industry, could cause the market prices of
the Equity Shares to fluctuate substantially or decline.

You may be restricted in your ability to transfer the Equity Shares.

The Equity Shares are subject to restrictions on transfers. Pursuant to the SEBI Regulations, for a period of 12
months from the date of the issue of the Equity Shares, QIBs subscribing to the Equity Shares in the Issue may only
sell their Equity Shares on the Stock Exchanges and may not enter into any off market trading in respect of these
Equity Shares. We cannot be certain that these restrictions will not have an impact on the price and liquidity of the
Equity Shares.

We may decide to retain all of our earnings to finance the development and expansion of our business and,
therefore, may not declare dividends on our Equity Shares.

Whether we will pay dividends in the future and the amount of any such dividends, if declared, will depend on a
number of factors, including our future earnings, financial condition, cash flows, working capital requirements,
capital expenditures and other factors considered relevant by our Board of Directors and shareholders. We may
decide to retain all of our earnings to finance the development and expansion of our business and, therefore, may not
declare dividends on our Equity Shares. Our ability to pay dividends may also be restricted under certain financing
arrangements that we have and may enter into. There can be no assurance that we will, or have the ability to, declare
and pay any dividends on the Equity Shares at any point in the future.

Investors may not be able to enforce a judgment of a foreign court against us.

We are a public company incorporated with limited liability under the laws of India. It may not be possible for
investors in the Equity Shares to effect service of process outside of India on us or our Directors and executive
officers and experts named in this Placement Document who are residents of India, or to enforce judgments obtained
against us or these persons in foreign courts predicated upon the liability provisions of foreign countries. Moreover,
it is unlikely that a court in India would award damages on the same basis as a foreign court if an action were
brought in India or that an Indian court would enforce foreign judgments if it viewed the amount of damages as
excessive or inconsistent with Indian practice. See the section titled ―Enforcement of Civil Liabilities‖.

Rights of shareholders under Indian law may be more limited than under the laws of other jurisdictions.

Our Articles of Association and Indian law govern our corporate affairs. Legal principles relating to these matters
and the validity of corporate procedures, directors‘ fiduciary duties and liabilities, and shareholders‘ rights may
differ from those that would apply to a company in another jurisdiction. The shareholders‘ rights under Indian law
may not be as extensive as shareholders‘ rights under the laws of other countries or jurisdictions. You may have
more difficulty in asserting your rights as a shareholder of an Indian company than as a shareholder of a corporation
in another jurisdiction.

We cannot guarantee that the Equity Shares will be listed on the Stock Exchanges in a timely manner or at all,
and any trading closure at the BSE or the NSE may adverse affect the trading price of the Equity Shares.

In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued in this
Issue will not be granted until after the Equity Shares have been issued and Allotted. Approval for listing and trading
will require all relevant documents authorizing the issuing of the Equity Shares to be submitted. There could be a
failure or delay in listing the Equity Shares issued in this Issue on the Stock Exchanges. Any failure or delay in
obtaining the approval would restrict your ability to dispose of your Equity Shares.

52
The regulation and monitoring of Indian securities markets and the activities of investors, brokers and other
participants differ, in some cases significantly, from those in Europe and the United States. A closure of, or trading
stoppage on, the BSE or the NSE could adversely affect the trading price of the Equity Shares. Historical trading
prices, therefore, may not be indicative of the prices at which the Equity Shares will trade in the future.

There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a
holder’s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.

We are subject to a daily circuit breaker imposed by all stock exchanges in India, which will not allow transactions
beyond specified increases or decreases in the price of the Equity Shares. This circuit breaker operates
independently of the index-based market-wide circuit breakers generally imposed by SEBI on Indian stock
exchanges. The maximum movement allowed in the price of the Equity Shares before the circuit breaker is triggered
is determined by the Stock Exchanges based on the historical volatility in the price and trading volume of the Equity
Shares.

The Stock Exchanges do not inform us of the triggering point of the circuit breaker in effect from time to time, and
may change it without our knowledge. This circuit breaker limits the upward and downward movements in the price
of the Equity Shares. As a result of this circuit breaker, no assurance may be given regarding your ability to sell your
Equity Shares or the price at which you may be able to sell your Equity Shares at any particular time.

53
 MARKET PRICE INFORMATION

As on the date of this Placement Document, 124,710,710 Equity Shares have been issued and are fully paid up. All
the Equity Shares are listed on the Stock Exchanges.

The tables set forth below indicate the high, low and average market prices and trading volume of the Equity Shares
on the Stock Exchanges for the years 2010, 2009 and 2008. The shareholders of the Company at the Annual General
Meeting held on July 26, 2010 approved the split of face value of the Equity Shares from ` 10 per equity share to ` 5
per equity share (the ―Stock Split‖). The Equity Shares traded ex-split on and from September 2, 2010.

Accordingly, the stock market price information of the Equity Shares provided in this section for the period prior to
September 2, 2010 is for equity shares of face value of ` 10 each. The stock market price from September 2, 2010
onwards is for equity shares of face value ` 5 each. The shares of the Company were voluntarily delisted from the
Madras Stock Exchange on November 29, 2006.

The following tables set forth for the years 2010, 2009 and 2008, the reported high, low and average market
prices and the trading volumes of the Equity Shares on the Stock Exchanges on the dates on which such high
and low prices were recorded and the total trading volumes for the years 2010, 2009 and 2008:

NSE
Calendar High Date of High No. of Total Low Date of No. of Total Average Total volume of Equity
Year (`) Equity Volume (`) Low Equity Volume price for Shares traded in the
Shares of Shares of the year Fiscal years
traded Equity traded on Equity (`)* In number (` in
on date Shares date of low Shares million)
of high traded traded
on date on date
of high of low
(` in (` in
million) million)
2010*** 599.70 October 1,083,230 6,126.62 408.00 September 29,655 123.13 479.42 9,092,197 4,607.68
13,2010 21, 2010
2010** 849.95 August 17, 111,622 903.36 627.10 January 28, 137,888 894.54 739.39 8,739,884 6,502.51
2010 2010
2009 696.00 December 29, 694,371 4,584.11 347.10 March 17, 5,6173 199.27 492.36 12,224,199 6,416.41
2009 2009
2008 627.00 January 1, 481,468 2,833.02 345.00 October 27, 34,431 125.66 471.35 16,702,202 7,778.62
2008 2008
* Average of the daily closing prices.
** For Equity Shares of face value ` 10 each.
***For Equity Shares of face value ` 5 each.

BSE
Calendar High Date of No. of Total Low (`) Date of No. of Total Average Total volume of Equity
Year (`) High Equity Volume Low Equity Volume price for Shares traded in the
Shares of Shares of the year Fiscal years
traded Equity traded on Equity (`)* In number (` in
on date Shares date of low Shares million)
of high traded traded
on date on date
of high of low
(` in (` in
million) million)
2010*** 599.00 October 13, 367,260 208.70 406.00 September 4,819 1.99 479.80 2,173,648 1,109.60
2010 6, 2010
2010** 858.80 August 17, 34,499 27.97 627.00 January 28, 25,645 16.62 740.03 3,176,158 2,366.65
2010 2010
2009 694.00 December 351,115 232.69 350.00 March 17, 4,072 1.46 492.67 5,120,944 2,678.40
29, 2009 2009
2008 630.30 January 1, 256,003 152.19 350.00 October 27, 18,673 6.93 470.89 5,711,314 2,836.71
2008 2008
* Average of the daily closing prices.
** For Equity Shares of face value ` 10 each.
***For Equity Shares of face value ` 5 each.
(Source: www.nseindia.com and www.bseindia.com, the websites of NSE and BSE, respectively)

54
The following tables set forth for each of the last six months, the reported high, low and average market prices
and the trading volumes of the Equity Shares of the Company on the Stock Exchanges on the dates on which
such high and low prices were recorded and the total trading volumes for each of the last six months:

NSE

Month High Date of No. of Total Low (`) Date of No. of Total Average Total volume of Equity
(`) High Equity Volume Low Equity Volume price Shares traded in the
Shares of Equity Shares of Equity for the month
traded on Shares traded on Shares month In number (` in
date of traded on date of traded on (`)* million)
high date of low date of
high (` in low (` in
million) million)
June, 511.50 1-Jun-11 79,275 39.79 462.25 23-Jun-11 24,196 11.28 481.49 918,726 445.41
2011
May, 517.00 May 31, 343,028 171.16 447.80 May 30, 27,232 13.18 478.11 1,347,534 652.55
2011 2011 2011
April, 514.80 April 18, 158,019 78.40 468.20 April 28, 28,010 13.21 482.90 1,096,111 535.49
2011 2011 2011
March, 506.00 March 22, 205,672 101.28 454.05 March 1, 59,990 27.58 473.31 1,598,519 763.97
2011 2011 2011
February, 521.20 February 108,119 49.63 450.30 February 50,745 23.05 465.69 1,518,518 708.25
2011 11, 2011 14, 2011
January, 541.90 January 369,775 190.30 449.00 January 7, 50,411 23.18 475.07 1,369,262 671.42
2011 24, 2011 2011
* Average of the daily closing prices.

BSE

Month High (`) Date of No. of Total Low (`) Date of No. of Total Average Total volume of Equity
High Equity Volume Low Equity Volume price Shares traded in the
Shares of Equity Shares of Equity for the month
traded on Shares traded on Shares month In number (` in
date of traded on date of low traded on (`)* million)
high date of date of
high (` in low (` in
million) million)
June, 511.20 1-Jun-11 32,901 16.53 432.30 24-Jun-11 4,958 2.31 481.90 388,929 187.82
2011
May, 516.80 May 31, 129,647 65.03 454.20 May 4, 6,393 2.93 478.25 370,018 180.93
2011 2011 2011
April, 514.85 April 18, 15,679 7.81 467.00 April 29, 3,219 1.52 483.31 169,307 82.45
2011 2011 2011
March, 502.00 March 22, 57,112 28.10 453.00 March 15, 18,576 8.75 472.71 408,254 195.36
2011 2011 2011
February, 501.80 February 10,020 4.92 450.10 February 3,308 1.50 466.01 571,4821 2603.14
2011 1, 2011 10, 2011
January, 542.00 January 172,158 89.43 450.00 January 4, 8,570 3.96 474.85 448,796 223.40
2011 24, 2011 2011
* Average of the daily closing prices.

(Source: www.nseindia.com and www.bseindia.com, the websites of NSE and BSE, respectively)

Market price on December 10, 2010, the first working day following the Board meeting held on December 9,
2010 approving the Issue:

NSE BSE
Open High Low Close Volume Open High Low Close Volume
(`) (`) (`) (`) (`) (`) (`) (`)
464.80 475.00 455.15 469.85 49440 466.00 475.50 455.25 469.80 7195

(Source: www.nseindia.com and www.bseindia.com, the websites of NSE and BSE, respectively)

55
 USE OF PROCEEDS

The total initial proceeds of the Issue will be ` 3,300 million. After deducting the Issue expenses of approximately `
66 million, the net initial proceeds of the Issue will be approximately ` 3,234 million (―Net Proceeds‖).

Subject to compliance with applicable laws and regulations, the Company intends to use the Net Proceeds
substantially for the expansion activities, with any remaining proceeds to be applied for working capital and general
corporate purposes.

In accordance with the decision of the Board and as permissible under applicable laws, our management will have
flexibility in deploying the Net Proceeds received by the Company from the Issue. Pending utilisation of the Net
Proceeds for the purposes described above, the Company intends to temporarily invest the funds in liquid
fund/mutual fund related instruments.

56
 CAPITALISATION STATEMENT

The following table sets forth the Company‘s capitalisation and total debt as at March 31, 2011 on a consolidated
basis and as adjusted for the Issue. This table should be read in conjunction with the section titled ―Management’s
Discussion and Analysis of Financial Condition and Results of Operations‖ and other financial information
contained in the section titled ―Financial Statements‖.

(In ` million)
As at March 31, 2011 As adjusted for the As adjusted for the
outstanding warrants Issue
prior to the Issue*

Shareholders’ funds
Equity share capital 623.55 655.38 688.71
Preferential issue of share 685.07 - -
warrants
Reserves and surplus 17,521.53 20,229.99 23,496.66
Total shareholders’ funds (A) 18,830.15 20,885.37 24,185.37

Loan funds
Secured Loans 7,439.99 7,439.99 7,439.99
Unsecured loans 2,144.76 2,144.76 2,144.76
Total Loan funds (B) 9,584.75 9,584.75 9,584.75

Total Capitalisation (A+B) 28,414.90 30,470.12 33,770.12

* Assuming conversion of 6.36 million outstanding warrants prior to the Issue.

57
 DIVIDENDS

The declaration and payment of dividends will be recommended by our Board of Directors and approved by our
shareholders at their discretion and will depend on a number of factors, including but not limited to, our profits,
capital requirements and overall financial condition. The Board may also, from time to time, pay interim dividends.
All dividend payments are made in cash to the shareholders of the Bank.

The following are the dividend pay outs in relation to the Equity Shares of face value ` 10* each in the last three
fiscal years by the Company:

Fiscal year Dividend per Equity Amount

Share of face value of ` 10* each (In ` million)(1)
(Amount in `)
2009 6.50 469.85
2010 7.00 504.32
2011** 3.75 543.54
(1)
Inclusive of dividend distribution tax where applicable.
*The shareholders of the Company at the annual general meeting held on July 26, 2010 approved the split of face value of the Company’s equity
shares from ` 10 per equity share to ` 5 per equity share from September 3, 2010, the record date for the split. The face value of equity shares is
currently ` 5 each.
** The Board, on May 24, 2011, has recommended the payment of dividend of ` 3.75 per Equity Share subject to approval by the shareholders of
the Company at the annual general meeting proposed to be held on July 22, 2011.

The Company does not have a formal dividend policy. Dividend amounts are determined from year to year in
accordance with the Board‘s assessment of the Company‘s earnings, cash flow, financial conditions and other
factors prevailing at the time.

The amounts paid as dividends in the past are not necessarily indicative of the Company‘s dividend policy or
dividend amounts, if any, in the future. Investors are cautioned not to rely on past dividends as an indication of the
future performance of the Company or for an investment in the Equity Shares.

58
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion and analysis of our financial condition is based on our consolidated financial statements
as of and for fiscal 2011, fiscal 2010 and fiscal 2009 referred to in this section as the “Consolidated Financial
Statements”.

This discussion should be read in conjunction with the section titled “Selected Financial Information”, and the
Consolidated Financial Statements included elsewhere in this Placement Document.

We prepare our Consolidated Financial Statements in accordance with Indian GAAP, which differs in some respects
from US GAAP and IFRS. See the section titled “Summary of Significant Differences among Indian GAAP, US
GAAP and IFRS”.

This discussion contains forward-looking statements, that involve risks and uncertainties and reflects our current
views with respect to future events and financial performance. We caution investors that our business and financial
performance is subject to substantive risks and uncertainties. Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of certain factors such as those set forth under the
sections titled “Forward-Looking Statements” and “Risk Factors” and elsewhere in this Placement Document.

In this section, unless the context otherwise requires, “we”, “us” and “our”, includes our subsidiaries, joint
ventures and associates, and British American Hospitals Enterprises Limited, which is treated as an investment of
the Company for accounting purposes. See section titled “Business—Corporate Structure”.

Overview

We are one of the largest private healthcare services providers in India according to CRISIL, operating a wide
network of hospitals predominantly based in Asia. Our primary line of business is the provision of healthcare
services, through (i) hospitals, (ii) pharmacies, (iii) projects and consultancy services, and (iv) primary care clinics.
In addition, we provide mBPO services through one of our associates and health insurance services through one of
our joint venture companies. To enhance our service to our customers and complement our business, we also
provide the following services: telemedicine services, education and training programs and research services.

We operate our business through the Company, and its nine subsidiaries, seven joint ventures and four associates.

We have continuously invested in bed capacity creation and have increased the bed capacity under our management
from approximately 150 operational beds at the commencement of our hospital services business in 1983 to 8,717
operational beds in 54 hospitals located in India and overseas as of March 31, 2011. Of the 8,717 beds, 5,842 beds
are in 37 hospitals owned by us and 2,875 beds are in 17 hospitals under our management through operations and
management contracts.

We have a presence both in India and outside India, including the Republic of Mauritius, Bangladesh and Kuwait.
We have also recently signed a preliminary joint venture agreement with the Board of Trustees of the National
Social Security Fund, Tanzania and the Tanzanian Ministry of Health & Social Welfare, in connection with the
establishment of an advanced healthcare facility in the city of Dar es Salaam. With the objective of making high
quality healthcare services and advanced medical technology available in semi-urban and rural areas in India, we
started the ―Apollo REACH‖ initiative and we are currently in the process of establishing a network of smaller
hospitals with around 100 to 200 beds in Tier II and Tier III cities (each as defined in ―Business— Our Business
Strategy—Geographic expansion through setting up hospitals in Tier II and Tier III cities in India‖) in India.

We reported total revenues of ` 26,240 million, ` 20,587 million and ` 16,350 million in fiscal 2011, fiscal 2010
and fiscal 2009, respectively. We report our revenues under the following business segments:

(i) healthcare services, which consists of hospitals, hospital-based pharmacies and projects and consultancy
services;

59
(ii) stand-alone pharmacy; and

(iii) others.

Our healthcare services segment contributed 73.5%, 75.3% and 78.8% of our total revenues in fiscal 2011, fiscal
2010 and fiscal 2009, respectively and our stand-alone pharmacy segment contributed 25.1%, 23.4% and 20.3% of
our total revenues in fiscal 2011, fiscal 2010 and fiscal 2009, respectively.

Revenues

The following table sets forth our total revenues for each of our business segments for the fiscal years indicated:

2011 2010 2009

(` in millions) (%) (` in millions) (%) (` in millions) (%)
Healthcare services(1) 19,295 73.5 15,511 75.3 12,884 78.8
Stand-alone 6,583 25.1 4,821 23.4 3,322 20.3
Pharmacy(2)
Others(3) 362 1.4 255 1.3 144 0.9
Total ` 26,240 100.0% ` 20,587 100.0% ` 16,350 100.0%
__________
Notes:

(1) Consists of revenues from hospitals, hospital-based pharmacies and projects and consultancy services and
includes revenues from our subsidiaries Samudra HealthCare Enterprises Limited, Imperial Hospital &
Research Centre Limited, Apollo Cosmetic Surgical Centre Private Limited and Alliance Medicorp (India)
Limited (and its one subsidiary) and our proportionate share of revenues from our joint ventures, Apollo
Hospitals International Limited, Apollo Gleneagles Hospital Limited, Apollo Gleneagles PET-CT Private
Limited, Western Hospitals Corporation Private Limited, Quintiles Phase One Clinical Trials India Private
Limited and Apollo Lavasa Health Corporation Limited

(2) Consists of revenue from stand-alone pharmacies.

(3) Consists primarily of revenues from Unique Home Health Care Limited, Apollo Health and Lifestyle Limited
(and its two subsidiaries) and AB Medical Centers Limited and our proportionate share of revenues from our
joint venture, Apollo Munich Health Insurance Company Limited

Our revenues are mainly derived from the provision of healthcare services, consisting of hospitals, hospital-based
pharmacies and projects and consultancy services. In our hospital services business, we generate revenues primarily
from the provision of in-patient and out-patient hospital services. Hospital revenues are recorded during the period
the healthcare services are provided, net of fees to doctors under ―fee for service‖ arrangements, if applicable, and
adjusted, if applicable, for discounts on our regular rates and charges.

In our projects and consultancy services, revenues are recognized under the percentage of completion method of
accounting according to contractually agreed milestones in a project. Our post-commissioning consultancy services
fees are based on a percentage of gross operational revenues, profit before tax, agreed EBITDA formulations or a
combination of these three measures and are payable on a periodic basis, primarily annually. We recognize revenues
from the provision of these post-commissioning consultancy services at the end of each such period.

In our stand-alone pharmacy business, we generate revenues from pharmacy sales, which we recognize at the point
of sale, less any discounts, and we adjust for sales returns during the period in which sales returns occur.

We generate revenues from the provision of clinical and diagnostics services through our wholly-owned subsidiary
Apollo Health and Lifestyle Limited (―Apollo Health and Lifestyle‖). In fiscal 2009 and fiscal 2010, Apollo Health
and Lifestyle provided such services through franchised clinics and charged two types of fees: (i) a one-time fixed
license fee for operational clinics, which we recognize at the time of signing the franchise agreement and (ii) a

60
periodic royalty fee, which we recognize on a quarterly basis. In fiscal 2011, Apollo Health and Lifestyle changed
its business model and predominately set up clinics through its own investment. Revenues from clinics owned by
Apollo Health and Lifestyle are recorded during the period for the clinical and diagnostics services provided, net of
fees to doctors under ―fee for service‖ arrangements.

We also receive income from mBPO services provided by our associate, Apollo Health Street Limited (―Apollo
Health Street‖) and health insurance services provided by our joint venture, Apollo Munich Health Insurance
Company Limited (―AMHICL‖). Our associate, Apollo Health Street, generates revenues from its provision of
mBPO services, consisting primarily of revenue cycle management of clients‘ hospitals and professional services
including medical coding, billing and records maintenance services and patient claims management services.
Revenues from revenue cycle management services are recognized based on percentage of net collections on clients‘
accounts receivable, when the right to receive such revenue is established. Revenues from professional services are
recognized upon rendering of the services, based on the terms agreed with the clients. Our joint venture AMHICL
generates revenues by way of premiums for the provision of health insurance services. AMHICL recognizes these
revenues over the contract period or period of risk whichever is appropriate.

Expenses

Our expenditure consists primarily of operating expenses, payments to and provisions for employees, administrative
and other expenses, interest expense and depreciation.

Operating expenses consists primarily of materials consumed (including customs duty and freight charges), utility
charges and housekeeping expenses. Payments to and provisions for employees consist primarily of salaries and
wages, staff welfare expenses, contributions to the statutory provident fund, gratuities, bonus payments, provision
for retirement obligation, employee state insurance and staff education and training. Administrative and other
expenses consist primarily of repairs and maintenance expenses, advertising, publicity and marketing, rent,
travelling charges, and legal and professional fees.

Factors Affecting Results of Operations

Our results of operations have been, and will continue to be, affected by a number of events and actions, some of
which are beyond our control. Below are the principal factors that we believe have, or could have, an impact on our
financial results.

Utilization rate of our facilities

The utilization rate of our facilities depends on our bed occupancy and utilization of our major medical equipment.
Both of these rates are critical to optimizing profitability at our facilities and form an integral part of our
management information system. We monitor utilization rates closely: under-utilization serves as an input for our
marketing strategy and over-utilization serves as an indicator of a need to increase existing capacity.

We focus in particular on intensive critical care unit (―ICCU‖) utilization and operating theatre utilization to
optimize profitability. We believe that we have one of the largest ICCU bed capacities in the private healthcare
sector in India and the utilization rate at our ICCU facilities is usually higher than our general occupancy rate.
Operating theatre utilization rate is a combination of space occupancy and equipment utilization.

The occupancy of a hospital is a function of conversions of out-patients to in-patients and of direct admissions.
Average occupancy rates in hospitals owned by us were 73% in fiscal 2011, 73% in fiscal 2010 and 76% in fiscal
2009. As a significant portion of in-patient revenues are derived from medical services provided in the initial two to
three days of a patient‘s stay in hospital, we aim to reduce the average length of stay (―ALOS‖), which would lead
to an increase in patient turnover and result in higher operating efficiency. Through the adoption of improved
medical technology and advancements in medical treatments, we have managed to reduce the ALOS of patients in
hospitals owned by us to an ALOS per patient of 4.83 days in fiscal 2011 as compared to an ALOS per patient of
4.84 days in fiscal 2010 and an ALOS per patient of 5.15 days in fiscal 2009.

To reduce ALOS, we also plan to focus on minimally invasive surgery. Minimally invasive surgery reduces surgical

61
trauma to patients and patient recovery time, thereby reducing ALOS, increasing patient turnover rate which we
believe will help to improve revenue per occupied bed per day in such units and asset utilization levels.

We believe that the important factors influencing the overall utilization of a hospital include the quality and market
position of the hospital and the number, quality and specialties of the facility‘s doctors. We believe that the ability of
a hospital to meet the healthcare needs of its community is determined by its breadth of services, level of
technology, emphasis on quality of care and convenience for patients and doctors. Other factors which impact
utilization include the growth in local population and local economic conditions. Improved treatment protocols as a
result of advancement in medical technology and pharmacology also had an effect on utilization rates across the
healthcare services industry.

As of March 31, 2011, we had a capacity of 8,717 beds in 54 hospitals located in India and overseas. Of these 54
hospitals, 37 are hospitals owned by us and 17 are managed hospitals. The following table sets forth certain statistics
for the hospitals owned by us for each of the past three fiscal years.

Year ended March 31,

2011 2010 2009
Number of owned hospitals at end of period 37 33 27
Number of owned beds at end of period 5,842 5,376 4,236
Number of operating beds at end of period 4,786 4,257 3,930
In-patient admissions(a) 264,902 235,160 210,596
Adjusted admissions(b) 348,498 305,340 278,170
Average length of stay (days)(c) 4.83 4.84 5.15
Average daily census(d) 3,506 3,121 2,974
Bed occupancy rate(e) (%) 73 73 76
Average revenue per occupied bed per day (f) (`)
18,706 16,620 15,184
__________

Notes:
(a) Represents the total number of patients admitted (in the facility for a period in excess of 23 hours) to our
hospitals and is used by management and certain investors as a general measure of in-patient volume.

(b) Adjusted admissions are used by management and certain investors as a general measure of combined in-
patient and out-patient volume. Adjusted admissions are computed by multiplying admissions (in-patient
volume) by the sum of gross in-patient revenue and gross out-patient revenue and then dividing the
resulting amount by gross in-patient revenue. The adjusted admissions computation ―adjusts‖ out-patient
revenue to the volume measure (admissions) used to measure in-patient volume resulting in a general
measure of combined in-patient and out-patient volume.

(c) Represents the average number of days admitted patients stay in our hospitals.

(d) Represents the average number of beds occupied by patients in our hospitals each day.

(e) Represents the percentage of available hospital beds occupied by patients. This is calculated by dividing the
average daily census by total number of operating beds.

(f) This is calculated by dividing total hospital revenues by patient days. Patient days are calculated by
multiplying average daily census by the number of days. Average revenue per occupied bed per day is
calculated net of doctor fees.

62
Patient volumes

Patient volumes are driven by, among other things, the hospital image and brand reputation, the type of services
offered, the economic and social conditions of local communities, seasonal illness cycles, climate and weather
conditions, the clinical reputation of our doctors, doctor retention and attrition, the patient-to-doctor ratio, healthcare
services competitors, negotiations or terminations of corporate contracts in respect of employee healthcare needs,
spending ability and unfavorable publicity, which impacts relationships with doctors and patients. The number of in-
patients admitted to our hospitals was 264,902 for fiscal 2011, 235,160 for fiscal 2010 and 210,596 for fiscal 2009,
and the number of out-patients at our hospitals was 2.31 million for fiscal 2011, 1.95 million for fiscal 2010 and
1.68 million for fiscal 2009.

Service mix

Charges for in-patient and out-patient services vary significantly depending on the type of service, such as
preventive care, medical, surgical, intensive or preventive care and the corporate payer. In fiscal 2011, we have seen
an increasing contribution of revenue from the following departments: (i) cardiology and cardiothoracic procedures
of ` 3,550 million, (ii) neurology of ` 1,314 million, (iii) gastroenterology of ` 860 million, (iv) oncology of ` 986
million and (v) orthopedics of ` 1,496 million. We expect the trend to continue in the near future as a result of
changing demographics and the increasing affluence of the Indian population leading to an increase in lifestyle-
related diseases such as heart diseases, cancer and diabetes, and as the shortage of supply of tertiary care services
continues.

Expansion

We have continuously invested in bed capacity creation and have increased the bed capacity under our management
from approximately 150 operational beds at the commencement of our hospital services business in 1983 to 8,717
operational beds as of March 31, 2011. Of the 8,717 beds, 5,842 beds are in 37 hospitals owned by us and 2,875
beds are in 17 hospitals under our management through operations and management contracts.

We grow by undertaking new hospital projects and expanding or upgrading existing facilities. When evaluating the
viability of a new opportunity, we examine the demographics and revenue potential of the local population, the
competitive landscape, location, pricing structure and cost, and for existing facilities, the skills, specialty and
reputation of doctors and other medical and non-medical staff, the work culture of the institution and the quality of
the infrastructure.

We are currently implementing projects across various locations in India including Mumbai, Chennai, New Delhi,
Hyderabad and Bangalore. We are also expanding into Tier II and Tier III cities in India by establishing a network
of hospitals under the ―Apollo REACH‖ initiative. We have already established Apollo REACH hospitals in Tier II
cities including Kakinada, Karaikudi, Karimnagar, Bhubaneswar and Karur, and have put in place plans to establish
four additional Apollo REACH hospitals across the country. In addition, we are expanding the capacity of our
existing hospitals in Hyderabad, New Delhi, Chennai and Bangalore. All these projects are at various stages of
implementation and are expected to be completed over the next three years. We expect to increase bed capacity by
around 2,400 additional beds upon the completion of these projects. See the section titled ―Business—Key Hospital
Expansion Plans‖. We also intend to increase the number of primary care clinics from 62 clinics as of March 31,
2011 to around 100 clinics over the next few years.

The projects we undertake require substantial funding, including costs of constructing the hospital buildings (in the
case of new hospital projects), acquiring and upgrading equipment and financing hospital operations.

In addition to the costs relating to the development or acquisition of the facility, we typically take a number of steps,
such as increasing our marketing efforts at the initial stages, when we add a hospital to our network. These efforts
often result in additional costs relating to the offered services, facilities and medical staff. Our new hospitals, due to
the long gestation period before a hospital matures (particularly with respect to occupancy rates), may operate at a
loss for a period of 12 to 36 months before achieving profitability. Consequently, the financial performance of a
newly added hospital may adversely affect our overall operating margins.

63
Geographic concentration

As of March 31, 2011, the largest concentrations of our hospital beds were in Chennai and Hyderabad, where 20%
and 17%, respectively, of our owned hospital beds were located. Our Chennai and Hyderabad clusters contributed
41% and 15%, respectively, to our overall healthcare services revenue for fiscal 2011. Such concentrations increase
the risk that, should adverse economic, regulatory or other developments occur within Chennai and Hyderabad, our
business, financial position, results of operations or cash flows could be adversely affected.

Equipment

The complex nature of the procedures we perform at our hospitals requires us to invest in technologically
sophisticated and expensive equipment, such as the Philips Gemini TF Time of Flight PET-CT 64 slice scan system,
the Toshiba Aquillion ONE 320 slice dynamic multi-detector CT scanner, the G4 CyberKnife® Robotic
Radiosurgery System, the Novalis Tx™ Radiotherapy and Radiosurgery system, MRI machines, neuro-navigation
systems and scopes used in minimally invasive surgeries. We generally purchase these kind of equipment for our
hospitals on a collective basis. These equipment are generally very expensive and form a major component of our
annual capital expenditures budget. The healthcare services industry is characterized by frequent product
improvements and evolving technology, which could, at times, lead to earlier than planned redundancy of our
medical equipment and result in asset impairment charges. The purchase and replacement of some of these
equipment may involve significant costs, and may expose us to currency fluctuation risk, as such equipment are
imported from other countries. Most of these equipment are imported from internationally reputable equipment
manufacturers, such as Fresenius, GE, Toshiba, Philips and Siemens. We generally obtain warranties for our
equipment, and pay for the equipment within 90 days after the relevant invoices have been issued by the suppliers.

Employee Costs

Our employee costs are influenced by increasing employee compensation in India. Our employees are remunerated
at market rates which we have historically increased in line with inflation.

Critical Accounting Policies

This discussion and analysis of our financial condition and results of operations is based upon the Consolidated
Financial Statements, which have been prepared in accordance with Indian GAAP. The notes to the Consolidated
Financial Statements contain a summary of our significant accounting policies. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses and related disclosures of contingent assets and liabilities. We base our estimates on
historical experience and on various other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Our actual results may differ from these estimates under different
assumptions or conditions. We have described below certain of our critical accounting policies under Indian GAAP.
The following is not intended to be a comprehensive list or description of all our significant accounting policies. Our
significant accounting policies are more fully described in the notes to our Consolidated Financial Statements.

Depreciation

We have invested significantly in medical equipment and we regularly upgrade our property, plant and equipment.
We depreciate our property, plant and equipment based on statutorily prescribed rates. Business requirements,
underlying technology and patient requirements may change in the future which could cause the actual useful lives
to differ from the statutorily prescribed rates or useful lives estimates. Any deviation of actual useful lives from the
statutorily prescribed rates or useful lives estimates could have a significant effect on our future operating results.

Impairment of assets

We review property, plant and equipment for impairment at each balance sheet date to determine if the carrying
amounts may not be recoverable. Management‘s judgment is critical in assessing the following criteria for asset
impairment:

64
 a significant decrease in the asset‘s market prices;

a significant adverse change in the extent or manner in which assets are being used or in their physical
condition, including the age of the asset;

technological obsolescence leading to earlier-than-planned redundancy of equipment;

a significant adverse change in the operating performance of the asset;

an accumulation of costs significantly in excess of the amount originally expected for an asset‘s acquisition
or construction;

a current period operating or cash flow loss combined with a history of operating or cash flow losses or a
projection or forecast that demonstrates continuing losses associate with an asset‘s use; and

a current expectation that it is more likely than not that the asset will be sold or otherwise disposed of
significantly before the end of the statutorily prescribed rate of useful life (or, in the case of Apollo
Gleneagles, its previously estimated useful life).

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to the
discounted cash flows expected to be generated from the asset. The applicable rate for evaluating discounted cash
flows is based on management‘s judgment. If the carrying amount of the asset exceeds the future discounted cash
flows, such assets are considered to be impaired and an impairment charge is recognized for the amount that the
carrying value of the asset exceeds the expected discounted cash flows or its fair value, as applicable. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less costs to sell. In determining the fair
value of machinery and equipment, we consider offers to purchase such equipment and expected future discounted
cash flows. We may not be able to anticipate declines in the utility of our machinery and equipment. Consequently,
additional impairment charges may be necessary in the future, which could have a significant negative impact on our
future operating results.

Impairment of investments

Investments are broadly classified into current investments and long-term investments. Current investments are
readily realizable and intended to be held for not more than one year. All investments other than current investments
are long-term investments.

Current investments are valued at lower of cost and market value and long-term investments are valued at cost.
Provisions for diminution in investments are made to recognize a decline, other than those of a temporary nature, in
the value of long-term investments. We review investments for permanent diminution in value on an annual basis. If
the carrying value of the investment exceeds its fair value, a provision for the difference between the carrying value
and the fair value of the investment is made.

Deferred tax asset

As part of the process of preparing our Consolidated Financial Statements, we are required to estimate our income
taxes and this process involves us estimating our actual current tax exposure together with assessing temporary
differences resulting from differing treatment of items for tax and accounting purposes. These differences result in
deferred tax assets and liabilities. We record a deferred tax asset when we believe that there is virtual certainty that
sufficient taxable income will be available in the future against which the deferred tax asset will be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. The amount of the deferred tax asset considered
realizable could be reduced in the near term if estimates of future taxable income during the carry forward period
differ materially from current estimates. In the event we are not able to realize the deferred tax assets, an adjustment
to the deferred tax asset would be charged to income in the period such determination was made which would result

65
in a reduction of our net income.

Provision for contingencies

We are subject to claims and legal proceedings arising in the ordinary course of business, some or all of which may
not covered by our insurance policies or which may exceed our insurance coverage. We are required to assess the
likelihood of any adverse judgments or outcomes to these matters and record reserves for claims when they are
probable and reasonably estimable. We estimate reserves for losses and related expenses for these contingencies
based on a careful analysis of each individual issue. There is no assurance that the ultimate liability will not exceed
our estimates. Adjustments to the estimated reserves are recorded in our profit and loss accounts in the period when
such amounts are determined. Any such adjustment could have a material adverse effect on our results of operations
or financial position.

Results of Operations

The following table sets forth certain profit and loss data in rupees and as a percentage of total income and certain
operating data for fiscal 2011, 2010 and 2009:

Year ended March 31,

2011 2010 2009
(` in (% ) (` in (% ) (` in (%)
millions) millions) millions)
Income 26,054 99.3 20,265 98.4 16,142 98.7
Other Income 186 0.7 322 1.6 208 1.3
Total 26,240 100 20,587 100 16,350 100

Expenditure
Operating expenses 13,886 52.9 10,726 52.1 8,728 53.4
Payments to and provisions for
employees 4,151 15.8 3,308 16.1 2,594 15.9
Administration and other expenses 3,828 14.6 3,218 15.6 2,545 15.6
Preliminary expenses 0.0 - 1.0 0.0 2.0 0.0
Deferred revenue expenses 6.0 0.0 6.0 0.0 6.0 0.0
Total Expenditure 21,871 83.3 17,259 83.8 13,875 84.9

Profit before interest, depreciation and 4,369 16.7 3,328 16.2 2,475 15.1
tax
Less: Depreciation 942 3.6 750 3.6 632 3.9
Profit before interest and tax 3,427 13.1 2,578 12.5 1,843 11.3
Less: Extraordinary items - - - - 40 0.2
Financial expenses 814 3.1 602 2.9 459 2.8
Profit before tax 2,613 10 1,976 9.6 1,344 8.2
Less: Fringe benefit tax - - - - 29 0.2
Less: Provision for taxation 567 2.2 583 2.8 484 3
Less: Deferred tax liability net of deferred 306 1.2 93 0.5 (22) (0.1)
tax asset
Profit after tax 1,740 6.6 1,300 6.3 854 5.2

66
 Year ended March 31,
2011 2010 2009
(` in (% ) (` in (% ) (` in (%)
millions) millions) millions)
Less: Minority interest (15) (0.1) (36) (0.2) (56) (0.3)
Profit after minority interest 1,755 6.7 1,337 6.5 910 5.6
Add: Share in associates 84 0.3 39 0.2 115 0.7
Profit after share in associates 1,839 7.0 1,376 6.7 1,025 6.3
Selected Operating Data:

As of March 31,
2011 2010 2009
Number of Hospitals:
Owned by the Company 26 24 19
Owned by the Company‘s subsidiaries 3 1 2
Owned by the Company‘s joint ventures 5 5 4
Owned by the Company‘s associates1 3 3 2

Managed Hospitals 17 14 16

Total 54 47 43

Number of Beds:
Owned by the Company 3,618 3,179 2,361
Owned by the Company‘s subsidiaries 421 400 400
Owned by the Company‘s joint ventures 855 865 743
Owned by the Company‘s associates1 . 948 932 732

Managed Hospitals 2,875 2,608 2,642

Total 8,717 7,984 6,878

Average Bed Utilization2:

Owned by the Company 2,256 2,036 1,891
Owned by the Company‘s subsidiaries 251 241 219
Owned by the Company‘s joint ventures 496 422 388
Owned by the Company‘s associates1 503 422 476

Total 3,506 3,121 2,974

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 As of March 31,
2011 2010 2009

Number of Pharmacies:
Stand-alone 1,199 1,049 883
__________

Notes:

(1) This data takes into account the hospital or beds owned by British American Hospitals Enterprises Limited
(Mauritius) (―BAHEL‖), which was formed in 2006 in association with BAI Medical Centres Limited.
BAHEL was treated as an associate of the Company in fiscal 2009 and fiscal 2010. As of March 31, 2010,
the Company had a 19.72% equity interest in BAHEL. In fiscal 2011, the Company‘s effective equity
interest in BAHEL was reduced to 10.51% and BAHEL ceased to be treated as an associate of the
Company. As of March 31, 2011, it is treated as an investment of the Company for accounting purposes.

(2) Represents the average number of patients in our hospital beds each day.

Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010

Income. Total revenues increased 27.5% to ` 26,240 million in fiscal 2011 from ` 20,587 million in fiscal 2010.
During fiscal 2011, revenues from healthcare services grew by ` 3,784 million, or 24.4%, stand-alone pharmacies
grew by ` 1,762 million, or 36.5%, and other revenues grew by ` 107 million, or 42.0%, as compared to fiscal 2010.
Our proportionate share of our joint ventures accounted for 5.4% and 5.2% of revenues in fiscal 2011 and fiscal
2010, respectively.

Revenues from healthcare services increased 24.4% to ` 19,295 million in fiscal 2011 from ` 15,511 million in
fiscal 2010. This increase was primarily due to increased utilization of existing facilities and the addition of new
hospital units at Secunderabad, Karaikudi and Bhubaneshwar. Revenues from stand-alone pharmacies increased
36.5% to ` 6,583 million in fiscal 2011 from ` 4,821 million in fiscal 2010. This increase was due to growth in sales
volumes by existing stand-alone pharmacies and an increase in the number of stand-alone pharmacies by 150 new
stand-alone pharmacies to 1,199 stand-alone pharmacies as of March 31, 2011 from 1,049 stand-alone pharmacies
as of March 31, 2010. Other revenues increased 42.0% to ` 362 million in fiscal 2011 from ` 255 million in fiscal
2010 primarily due to revenues from Apollo Health and Lifestyle, whose revenues increased by ` 65 million to `
154 million in fiscal 2011 due to referrals from corporate tie-ups with its primary care clinics and revenues from
three clinics which were acquired during the year, and due to revenues from AMHICL, whose revenues increased by
` 48 million to ` 181 million in fiscal 2011 due to a combination of factors, including improved distribution
channels, broader geographical spread of offices and an increase in the number of insurance products marketed.

Expenditure (excluding depreciation, financial expenses and tax). Total expenditure increased by 26.7% to ` 21,871
million in fiscal 2011 from ` 17,259 million in fiscal 2010. The primary reasons for the increase were (i) a ` 3,160
million increase in operating expenses due to an overall growth in our business; (ii) a ` 843 million increase in
payments to employees to support our growing business, salary increases and three-year wage settlement in Chennai
involving around 3,400 employees; and (iii) a ` 610 million increase in administrative and other expenses caused by
(a) an increase in advertisement and publicity expenses of ` 167 million; (b) an increase in rental expenditure of `
122 million due to an increase in the number of properties taken on rent; (c) an increase in repairs and maintenance
expenses of ` 103 million incurred towards maintenance and upkeep of hospital buildings, equipment, vehicles and
other assets; (d) an increase in outsourcing expenses of ` 89 million; (e) an increase in legal and professional
charges of ` 72 million attributable primarily to TCS Consultancy Services Limited for the development of in-house
software, to Deloitte Touche Tohmatsu India Private Limited for services rendered in relation to share valuation and
IFRS-related assignments and to CRISIL Limited for the rating of our outstanding debt instruments; and (f) an
increase in travelling and conveyance cost of ` 52 million. These increases were partially offset by a ` 1 million
decrease in preliminary expenses. Expenditure as a percentage of income decreased marginally to 83.3% in fiscal
2011 from 83.8% in fiscal 2010.

68
Total expenditure from healthcare services increased 19.8% to ` 15,493 million in fiscal 2011 from ` 12,436 million
in fiscal 2010 in line with the increase in revenues from healthcare services of 24.4%. Total expenditure from stand-
alone pharmacies increased 33.1% to ` 6,626 million in fiscal 2011 from ` 4,979 million in fiscal 2010. This
increase is in line with the increase in revenues from stand-alone pharmacies of 36.5%.

Profit before interest, depreciation and tax. Profit before interest, depreciation and tax increased 31.3% to ` 4,369
million in fiscal 2011 from ` 3,328 million in fiscal 2010. Profit before interest, depreciation and tax as a percentage
of total revenues increased to 16.7% in fiscal 2011 from 16.2% in fiscal 2010 primarily due to the growth in total
revenues.

Depreciation. Depreciation increased by 25.6% to ` 942 million in fiscal 2011 from ` 750 million in fiscal 2010
primarily due to the acquisition of new capital assets including new hospital facilities at Secunderabad, Karaikudi
and Bhubaneshwar.

Profit before interest and tax. Profit before interest and tax increased 32.9% to ` 3,427 million in fiscal 2011 from `
2,578 million in fiscal 2010. Profit before interest and tax as a percentage of total revenues increased to 13.1% in
fiscal 2011 from 12.5% in fiscal 2010 primarily due to a decrease in losses from stand-alone pharmacies. Profit
before interest and tax from healthcare services increased 23.6% to ` 3,802 million in fiscal 2011 from ` 3,075
million in fiscal 2010. This increase was primarily due to an increase in revenues and profits of our joint venture
hospitals. Loss before interest and tax from stand-alone pharmacies reduced by 72.8% to ` 43 million in fiscal 2011
from ` 158 million in fiscal 2010. This decrease in losses was primarily due to the improved profitability of our
existing stand-alone pharmacies as a result of (i) introducing generic and in-house brand (private labels) products
and (ii) increasing sales through bulk distribution of medical supplies and consumables to hospitals and other
healthcare providers, and closure of loss-making pharmacies.

Financial expenses. Financial expenses increased by 35.2% to ` 814 million in fiscal 2011 from ` 602 million in
fiscal 2010 as a result of an increase in financial expenses incurred on loans primarily used to fund the project costs
of new hospital facilities being commissioned.

Profit before tax. Profit before tax increased 32.2% to ` 2,613 million in fiscal 2011 from ` 1,976 million in fiscal
2010. Profit before tax as a percentage of total revenues increased to 10.0% in fiscal 2011 from 9.6% in fiscal 2010
primarily due to an increase in the profit margins of stand-alone pharmacies and growth in revenues from healthcare
services.

Provision for taxation. Provision for taxation totaled ` 567 million, or a 21.7% effective tax rate, in fiscal 2011
compared to ` 583 million, or a 29.5% effective tax rate, in fiscal 2010.

Deferred tax liability net of deferred tax asset. Deferred tax liability net of deferred tax asset increased to ` 306
million in fiscal 2011 from ` 93 million in fiscal 2010, primarily due to the application of section 35AD of the
Income Tax Act of India, which provides for full tax deduction of the project costs of new hospital projects which
are commissioned during the year against taxable income and the consequent reduction in the provision for taxation
with a corresponding increase in deferred tax.

Fringe benefit tax. Fringe benefit tax was abolished with effect from fiscal 2010.

Profit after tax. As a result of the foregoing, profit after tax increased by 33.8% to ` 1,740 million in fiscal 2011
from ` 1,300 million in fiscal 2010.

Minority interest. Minority interest in losses was ` 15 million in fiscal 2011 as compared to minority interest in
losses of ` 36 million in fiscal 2010, primarily reflecting losses attributable to IHRCL, PHL and ACSPL.

Profit after minority interest. As a result of the foregoing, profit after minority interest increased by 31.3% to `
1,755 million in fiscal 2011 from ` 1,337 million in fiscal 2010.

69
Share in associates. Share in associates was ` 84 million in fiscal 2011 as compared with ` 39 million in fiscal 2010.
The profit in fiscal 2011 was attributable primarily to profits made by Indraprastha Medical Corporation Limited
and Apollo Health Street.

Profit after share in associates. As a result of the foregoing, profit after share in associates increased by 33.6% to `
1,839 million in fiscal 2011 from ` 1,376 million in fiscal 2010.

Fiscal Year Ended March 31, 2010 Compared to Fiscal Year Ended March 31, 2009

Income. Total revenues increased 25.9% to ` 20,587 million in fiscal 2010 from ` 16,350 million in fiscal 2009.
During fiscal 2010, revenues from healthcare services grew by ` 2,627 million, or 20.4%, stand-alone pharmacies
grew by ` 1,499 million, or 45.1% and other revenues grew by ` 111 million, or 77.1%, as compared to fiscal 2009.
Our proportionate share of our joint ventures accounted for 5.2% of revenues in both fiscal 2010 and fiscal 2009.

Revenues from healthcare services increased 20.4% to ` 15,511 million in fiscal 2010 from ` 12,884 million in
fiscal 2009. This increase was primarily due to (i) increased utilization of existing facilities; (ii) the addition of a
new pediatric hospital in Chennai; (iii) the expansion of our oncology facility in our hospital in Chennai, leading to
increased patient volumes; and (iv) the opening of two new hospitals in Karur and Karimnagar. Revenues from
stand-alone pharmacies increased 45.1% to ` 4,821 million in fiscal 2010 from ` 3,322 million in fiscal 2009. This
increase was due to the growth in sales volumes by existing stand-alone pharmacies and an increase in the number
of stand-alone pharmacies by 166 new stand-alone pharmacies to 1,049 stand-alone pharmacies as of March 31,
2010 from 883 stand-alone pharmacies as of March 31, 2009. Other revenues increased 77.1% to ` 255 million in
fiscal 2010 from ` 144 million in fiscal 2009 primarily due to revenues from Apollo Health and Lifestyle, whose
revenues increased by ` 20 million to ` 89 million in fiscal 2010 and due to revenues from AMHICL, whose
revenues increased by ` 75 million to ` 133 million in fiscal 2010 due to improved productivity and an increase in
the number of insurance agents marketing their insurance products.

Expenditure (excluding depreciation, financial expenses and tax). Expenditure increased by 24.4% to ` 17,259
million in fiscal 2010 from ` 13,875 million in fiscal 2009. The primary reasons for the increase were (i) a ` 1,998
million increase in operating expenses due to an overall growth in our business; (ii) a ` 714 million increase in
payments to and provisions for employees caused by staff recruitment to support our growing business and salary
increments in the ordinary course; and (iii) a ` 673 million increase in administrative and other expenses caused by
(a) an increase in repairs and maintenance expenses of ` 95 million; (b) an increase in rental expenses of ` 132
million caused by an increase in the number of properties taken on rent; (c) an increase in legal and professional
charges of ` 46 million attributable primarily to the engagement of McKinsey & Company; (d) an increase in
outsourcing expenses of ` 132 million; and (e) an increase in bad debts of ` 61 million due to a one-time write off of
bad debts in our projects and consultancy services business. These increases were partially offset by a ` 1.0 million
decrease in preliminary expenses. Expenditure as a percentage of income decreased marginally to 83.8% in fiscal
2010 from 84.9% in fiscal 2009.

Total expenditure from healthcare services increased 18.6% to ` 12,436 million in fiscal 2010 from ` 10,486 million
in fiscal 2009. This increase is in line with the increase in revenues from healthcare services of 20.4%. Total
expenditure from stand-alone pharmacies increased 40.5% to ` 4,979 million in fiscal 2010 from ` 3,545 million in
fiscal 2009. This increase is in line with the increase in revenues from stand-alone pharmacies of 45.1%.

Profit before interest, depreciation and tax. Profit before interest, depreciation and tax increased 34.5% to ` 3,328
million in fiscal 2010 from ` 2,475 million in fiscal 2009. Profit before interest, depreciation and tax as a percentage
of total revenues increased to 16.2% in fiscal 2010 from 15.1% in fiscal 2009 primarily due to the improved
profitability of healthcare services.

Depreciation. Depreciation increased by 18.7% to ` 750 million in fiscal 2010 from ` 632 million in fiscal 2009
primarily due to the acquisition of new capital assets including the addition of a new pediatric hospital in Chennai
and the commissioning of two new hospitals in Karur and Karimnagar.

Extraordinary items. Extraordinary item of ` 40 million in fiscal 2009 due to a one-time payment made in

70
connection with the arbitration proceedings in respect of a dispute relating to a managed hospital owned by
Universal Quality Services LLC, Dubai.

Profit before interest and tax. Profit before interest and tax increased 39.9% to ` 2,578 million in fiscal 2010 from `
1,843 million in fiscal 2009. Profit before interest and tax as a percentage of total revenues increased to 12.5% in
fiscal 2010 from 11.3% in fiscal 2009 primarily due to the growth in total revenues. Profit before interest and tax
from healthcare services increased 28.2% to ` 3,075 million in fiscal 2010 from ` 2,398 million in fiscal 2009. This
increase was primarily due to an increase in revenues and profits of our joint venture hospitals. Loss before interest
and tax from stand-alone pharmacies decreased by 29.1% to ` 158 million in fiscal 2010 from ` 223 million in fiscal
2009. This decrease in losses was primarily due to the improved profitability of our existing stand-alone pharmacies
as a result of (i) introducing generic and in-house brand (private labels) products and (ii) increasing sales through
bulk distribution of medical supplies and consumables to hospitals and other healthcare providers, and closure of
loss-making pharmacies.

Financial expenses. Financial expenses increased by 31.2% to ` 602 million in fiscal 2010 from ` 459 million in
fiscal 2009 as a result of an increase in financial expenses incurred on loans primarily used to fund the project costs
of new hospital facilities being commissioned.

Profit before tax. Profit before tax increased 47.0% to ` 1,976 million in fiscal 2010 from ` 1,344 million in fiscal
2009. Profit before tax as a percentage of total revenues increased to 9.6% in fiscal 2010 from 8.2% in fiscal 2009
primarily due to the increase in total revenues.

Fringe benefit tax. Fringe benefit tax totaled ` 29 million in fiscal 2009 and was abolished in fiscal 2010.

Provision for taxation. Provision for taxation totaled ` 583 million, or a 29.5% effective tax rate, in fiscal 2010
compared to ` 484 million, or a 36.0% effective tax rate, in fiscal 2009.

Deferred tax liability net of deferred tax asset. Deferred tax liability net of deferred tax asset increased to ` 93
million in fiscal 2010 from a credit of ` 22 million in fiscal 2009, primarily due adjustments that are required to be
made to align profits with the figures in the books of account to the profit computed under the the Income Tax Act
of India as required under the Indian Accounting Standards.

Profit after tax. As a result of the foregoing, profit after tax increased by 52.2% to ` 1,300 million in fiscal 2010
from ` 854 million in fiscal 2009.

Minority interest. Minority interest in losses was ` 36 million in fiscal 2010 as compared to minority interest in
losses of ` 56 million in fiscal 2009, primarily reflecting losses attributable to IHRCL, PHL and Apollo Health and
Lifestyle.

Profit after minority interest. As a result of the foregoing, profit after minority interest increased by 46.9% to `
1,337 million in fiscal 2010 from ` 910 million in fiscal 2009.

Share in associates. Share in associates was ` 39 million in fiscal 2010 as compared to ` 115 million in fiscal 2009.
The profit in fiscal 2010 was primarily attributable to profits made by Indraprastha Medical Corporation Limited
and Apollo Health Street.

Profit after share in associates. As a result of the foregoing, profit after share in associates increased by 34.2% to `
1,376 million in fiscal 2010 from ` 1,025 million in fiscal 2009.

Liquidity and Capital Resources

Cash Flow

Our primary liquidity needs have historically been to finance our operations and working capital needs and
investments in our subsidiaries, joint ventures and associates. Working capital is required principally to finance
accounts receivable, salaries and inventory. Capital expenditures consist primarily of investments in medical

71
equipment and surgical instruments, buildings and electrical installations and generators. Capital expenditure will
vary from year to year depending upon a number of factors, including the need to replace medical equipment and the
timing of certain projects, such as investment in new technologies and acquisition opportunities.

The table below summarizes our cash flow from operating, investing and financing activities, for fiscal 2011, 2010
and 2009.

As of March 31,
2011 2010 2009
(` in millions)
Cash Flow from Operating Activities 2,588 1,986 912
Cash Flow from Investing Activities (4,415) (2,017) (2,708)
Cash Flow from Financing Activities 467 2,268 1,394

Cash Flow from Operating Activities

Net cash from operating activities was ` 2,588 million in fiscal 2011, ` 1,986 million in fiscal 2010 and ` 912
million in fiscal 2009.

In fiscal 2011, non-cash adjustments to reconcile the net profit before tax and extraordinary items of ` 2,613 million
to net cash from operating activities consisted primarily of depreciation expense of ` 942 million, interest paid of `
778 million and deferred revenue expenses and preliminary expenses of ` 6 million. Trade and other receivables
increased by ` 920 million, inventories increased by ` 166 million, trade payables increased by ` 381 million and
other net current assets increased by ` 338 million.

In fiscal 2010, non-cash adjustments to reconcile the net profit before tax and extraordinary items of ` 1,976 million
to net cash from operating activities consisted primarily of depreciation expense of ` 750 million, interest paid of `
587 million and deferred revenue expenses and preliminary expenses of ` 8 million. Trade and other receivables
increased by ` 666 million, inventories increased by ` 251 million, trade payables increased by ` 1,341 million and
other net current assets increased by ` 719 million.

In fiscal 2009, non-cash adjustments to reconcile the net profit before tax and extraordinary items of ` 1,384 million
to net cash from operating activities consisted primarily of depreciation expense of ` 632 million, interest paid of `
428 million and deferred revenue expenses and preliminary expenses of ` 7 million. Trade and other receivables
increased by ` 502 million, inventories increased by ` 298 million, trade payables increased by ` 371 million and
other net current assets increased by ` 360 million.

Cash Flow from Investing Activities

In fiscal 2011, net cash used in investing activities was ` 4,415 million and consisted of fixed assets of ` 3,335
million and purchase of investments of ` 3,923 million. The net cash used in investing activities was reduced by (i)
receipts of (a) ` 178 million from the sale of assets and (b) ` 2,616 million from the sale of investments, and (ii) `
103 million of interest and dividends received.

In fiscal 2010, net cash used in investing activities was ` 2,017 million and consisted of fixed assets of ` 3,938
million and purchase of investments of ` 3,052 million. The net cash used in investing activities was reduced by (i)
receipts of (a) ` 47 million from the sale of assets and (b) ` 4,717 million from the sale of investments, and (ii) `
231 million of interest and dividends received.

In fiscal 2009, net cash used in investing activities was ` 2,708 million and consisted of fixed assets of ` 3,724
million and purchase of investments of ` 6,920 million. The net cash used in investing activities was reduced by (i)
receipts of (a) ` 86 million from the sale of assets and (b) ` 7,683 million from the sale of investments, and (ii) `
213 million of interest and dividends received.

72
Fixed assets comprised mainly of medical equipment and surgical instruments, buildings and electrical installations
and generators. Our investments comprised mainly of investments in short-term financial instruments in mutual
funds in fiscal 2011, 2010 and 2009. In fiscal 2010 and 2009 we liquidated a significant portion of our short-term
investments in mutual funds.

Cash Flow from Financing Activities

Cash provided by financing activities totaled ` 467 million in fiscal 2011 as compared to ` 2,268 million in fiscal
2010 and ` 1,394 million in fiscal 2009. Cash provided by financing activities in fiscal 2011 resulted primarily from
(a) the issuance of (i) warrants to Dr. Prathap C. Reddy and (ii) non-convertible debentures issued to Life Insurance
Corporation of India (―LIC‖), and (b) the US dollar denominated external commercial borrowings (―ECBs‖) from
the International Finance Corporation (―IFC‖). In fiscal 2011, 2010 and 2009, we received proceeds of ` 792
million, ` 883 million and ` 811 million, respectively, from the issuance of equity interests to Dr. Prathap C. Reddy
and issuance of shares by AMHICL to Apollo Energy Limited and Munich Health Holding AG. We also received
proceeds of long-term and short-term borrowings of ` 2,131 million in fiscal 2011, ` 3,100 million in fiscal 2010
and ` 1,447 million in fiscal 2009. We used part of the proceeds from financing activities to repay loans of ` 1,255
million in fiscal 2011, ` 732 million in fiscal 2010 and ` 113 million in fiscal 2009. We paid interest and dividends
of ` 1,213 million in fiscal 2011 as compared to ` 1,015 million for fiscal 2010 and ` 751 million for fiscal 2009.
The refinancing of certain indebtedness with borrowings at lower interest rates has helped to improve our
profitability.

Capital Expenditures

We have made investments to increase bed capacity and build new hospitals. We have also made investments at our
hospitals to add new technologies, modernize facilities and expand our services. We believe that these investments
will help us to attract and retain doctors and to make our hospitals the first choice for patients.

The following table reflects our capital expenditures for the fiscal years indicated:

(` in millions)
2011 2010 2009
Capital work in progress 573 592 1,734
Capital expenditure including technical upgrading 2,554 3,271 1,910
Total 3,127 3,863 3,644

Our Board has approved a capital expenditure of approximately ` 10 billion, which is expected to be incurred over
the next three years. We expect to finance this primarily from debt and equity offerings, including the proceeds of
this Issue and operating cash flows. Our capital expenditure will primarily relate to our expansion activities. The
amount and purpose of these expenditures may change in accordance with our business requirements.

Financing Arrangements

During fiscal 2011, we issued ` 1,000 million in non-convertible debentures bearing interest at a fixed rate of 10.3%
to LIC (the ―10.3% Debentures‖). These debentures will be redeemed in three installments, 30% in December
2018, 30% in December 2019 and 40% in December 2020, provided that the call option is not exercised in
December 2017.

Total secured debt was ` 7,440 million at March 31, 2011, compared to ` 6,765 million at March 31, 2010 and `
6,401 million at March 31, 2009.

73
At March 31, 2011, our outstanding long-term indebtedness included the following:

Name of the Institution Rate of Interest for fiscal Floating / Amount Outstanding as Year of
201113 Fixed of Maturity1
6
Rate March 31,
of 2011 2010 2009
Interest
(%) (` in millions)
Apollo Hospitals Enterprise Limited
LIC 10.30 Fixed 1,000 - - 2021
2
Canara Bank 11.25 Floating 1,504 2,160 2,160 2016
3
Indian Bank 10.25 Floating 762 905 1,000 2016
4
Bank of India 11.30 Floating 610 952 1,000 2017
5 14 15 15
IFC 10.30 Floating 1,609 697 - 2020
Apollo Gleneagles Hospital Limited1
IFCI Limited - Fixed 11 11 11 2012
6
HDFC Limited 12.45 Floating 373 434 288 2020
7
Indian Bank 12.00 Floating 222 213 135 2017
1
Apollo Gleneagles PET-CT Private Limited
Indian Bank 12.00 Floating 11 24 40 2012
1
Apollo Hospitals International Limited
IDBI Limited 11.00 Fixed 1 6 11 2012
Dena Bank Limited8 12.50 Floating 182 281 275 2020
HDFC Limited 11.00 Fixed 1 1 - 2014
Punjab National Bank 12.50 Floating 90 - - 2016
Philips Electronics 10.50 Fixed 17 - - 2016
Limited
IDFC Limited 9 10.25 Floating 21 33 45 2017
Imperial Hospital & Research Centre Limited
Jammu & Kashmir 11.25 Floating 270 270 270 2018
Bank10
Canara Bank11 11.45 Floating 388 388 388 2018
Indian Overseas Bank12 11.50 Floating 227 227 227 2017
__________

Notes:

(1) Loan obligations of our joint venture companies have been calculated on a proportionate basis based on our
shareholdings which is 50% in both cases.

(2) The Company had prepaid ` 300 million of this loan in fiscal 2011. The applicable rate of interest is
calculated based on the base rate plus 175 basis points and the applicable rates of interest for fiscal 2009
and fiscal 2010 were 9.25% and 10.50%, respectively.

74
(3) The Company had prepaid ` 200 million of this loan in fiscal 2011. The applicable rate of interest is
calculated based on the bank‘s prime lending rate (―BPLR‖) plus 350 basis points and the applicable rates
of interest for fiscal 2009 and fiscal 2010 were 9.50% and 9.75%, respectively.

(4) The applicable rate of interest is calculated based on BPLR plus 245 basis points and the applicable rates of
interest for fiscal 2009 and fiscal 2010 were 12% and 9.55%, respectively.

(5) The Company draws down on the ECBs in installments. The Company has drawn down US$20 million in
fiscal 2011.

(6) The applicable rate of interest is calculated based on BPLR and the applicable rates of interest for fiscal
2009 and fiscal 2010 were 16.25% and 11.15%, respectively.

(7) The applicable rate of interest is calculated based on BPLR and the applicable rates of interest for fiscal
2009 and fiscal 2010 were 10.25% and 10.21%, respectively.

(8) The applicable rate of interest is calculated based on BPLR plus 300 basis points and the applicable rates of
interest for fiscal 2009 and fiscal 2010 were 11.75% and 10.75%, respectively.

(9) The applicable rate of interest is calculated based on BPLR and the applicable rates of interest for fiscal
2009 and fiscal 2010 were 13.89% and 11.72%, respectively.

(10) The applicable rate of interest is calculated based on BPLR minus 275 basis points and the applicable rates
of interest for fiscal 2009 and fiscal 2010 were 9.25% and 10.75%, respectively.

(11) The applicable rate of interest is calculated based on BPLR plus 230 basis points and the applicable rate of
interest was 10.50% for both fiscal 2009 and fiscal 2010.

(12) The applicable rate of interest is calculated based on BPLR minus 275 basis points and the applicable rates
of interest for fiscal 2009 and fiscal 2010 were 9.75% and 10.50%, respectively.

(13) The floating rates of interest indicated are applicable for the entire fiscal year and are reset annually.

(14) The Company has entered into an interest rate and currency swap with HDFC Bank Limited in respect of
the ECBs, for a sum of US$35 million, at an effective interest rate of 10.3%.

(15) Calculated based on an exchange rate of US$1.00 = ` 45.96.

(16) Represents the year during which the final installment of the outstanding indebtedness is due to be repaid.

The terms of certain of our borrowings contain certain restrictive covenants, such as requiring lender consents for,
among other things, issuance of new shares, incurring further indebtedness, creating encumbrances on our assets,
disposing of our assets or incurring capital expenditures beyond certain limits. Some of these borrowings also
contain covenants which limit our ability to make any change or alteration in our capital structure, make
investments, effect any scheme of amalgamation or restructuring, enlarge or diversify our scope of business. In
addition, certain of these borrowings contain financial covenants, which require us to maintain, among other matters,
debt service cover ratio and maintenance of security coverage. Certain of our long-term debt is secured by a charge
over our fixed assets, land and buildings, and all of our short-term debt (excluding the current portion of long-term
debt) is secured by a charge on our current assets, including, but not limited to, our inventory and receivables. As of
the date of this Placement Document, we believe that we are in full compliance with all the covenants and
undertakings as described above.

We finance our short-term working capital requirement through cash flow from operations and short-term loans and

75
overdraft facilities from banks and financial institutions.

Management believes that cash flows from operations and financing activities and our anticipated access to debt and
equity markets will be sufficient to meet expected liquidity needs during the next 12 to 24 months.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Contractual Obligations

The following table shows our total future contractual debt obligations as of March 31, 2011:

Payments due by period

(` in millions)
Contractual Obligations Total Less than 1-3 Years 4-5 Years More than
1 Year 5 Years
Long-term debt obligations(1) 7,297 940 2,252 1,748 2,358
__________

Note:

(1) Obligations of our joint venture companies have been calculated on a proportionate basis (50%).

Contingent Liabilities

See the notes to the Consolidated Financial Statements in the section titled ―Financial Statements‖ for full details
on our contingent liabilities.

Recent Accounting Pronouncements

The Institute of Chartered Accountants of India has issued Accounting Standards AS 30, AS 31 and AS 32 covering
the recognition and measurement, presentation and disclosures of Financial Instruments. However, these standards
have not yet been notified under the Companies (Accounting Standard) Rules, 2006.

The Institute of Chartered Accountants of India has also finalized and sent to National Advisory Committee on
Accounting Standards (―NACASA‖) for their recommendations, IFRS converged Indian Accounting Standards
(―IND AS‖) to conform Indian GAAP to IFRS standards which are applicable to certain Indian companies such as
the Company. On February 25, 2011, the Ministry of Corporate Affairs, Government of India (―MCA‖), notified
that the IND AS will be implemented in a phased manner. It was also mentioned that the date of implementation of
IND AS will be notified by the MCA at a later date. As of the date of this Placement Document, the MCA has not
yet notified the date of implementation of IND AS. See the section titled ―Risk Factors— The transition to IFRS
in India is still unclear and we may be negatively impacted by such transition‖.

Effects of Inflation and Changing Prices

Our revenues are mainly derived from the provision of healthcare services, which are substantially free of statutory
pricing controls. We do not expect any adverse changes in pricing flexibility.

Historically, we have been able to maintain the prices of our services at or above applicable rates of inflation. Our
revenues have also remained substantially independent of the payor‘s pricing policies.

The Indian healthcare services industry is relatively labor intensive and during prolonged periods of inflation, wages
and related expenses show an upward trend. Suppliers have also tended to pass on the effects of higher costs by
increasing the supply prices payable by us.

76
In the past, we have been able to offset the effects of increasing operating costs by measures such as increasing our
own charges, expanding our range of services and implementing cost control policies. However, we cannot assure
you that we will continue to be able to do so.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk primarily related to changes in interest rates and changes in foreign exchange rates.

As of March 31, 2011, ` 8,552 million or approximately 89.3% of our consolidated debt of ` 9,584.75 million is
subject to variable rates of interest. Our management closely monitors movements in interest rates.

To mitigate the impact of fluctuations in the London Interbank Offered Rate, or LIBOR, and the US dollar to Indian
rupee exchange rate, the Company has entered into an interest rate and currency swap pursuant to the ISDA Master
Agreement dated January 17, 2003 with HDFC Bank Limited, in respect of the ECBs from IFC, for a sum of US$35
million, at an effective interest rate of 10.3%.

Foreign exchange risk is managed in consultation with our bankers and advisors. Our general approach is to
minimize the impact of purchasing in foreign exchange by negotiating fixed rates of exchange with our suppliers.

Our investments in associates include companies which are listed on the Indian capital markets. The market value of
these investments may fluctuate due to, among other things, general economic conditions, the state and outlook of
capital markets and the performance and valuation of other publicly traded companies.

Significant developments after March 31, 2011

In compliance with AS 4, to our knowledge no circumstances, except as disclosed in this Placement Document, have
arisen since the date of the last audited financial statements contained in this Placement Document, which materially
and adversely affect or are likely to affect, the trading and profitability of our Company, or the value of our assets or
our ability to pay material liabilities within the next 12 months.

77
 INDUSTRY OVERVIEW

Unless otherwise stated, all information, estimates and expectations set forth herein are based on the CRISIL
Research Hospitals Annual Reviews published in August 2009 and November 2010 by CRISIL Limited (“CRISIL
research”). Other sources cited herein include the WHO World Health Statistics 2011 published by the World
Health Organization (“WHO”). CRISIL research and WHO have consented to the inclusion of such data in this
Placement Document.

Neither the Company, the Joint Book Running Lead Managers nor any other persons connected with this Issue has
independently verified this information or makes any representation to the accuracy of this information. Industry
sources and publications generally state that the information contained therein has been obtained from sources
generally believed to be reliable, but that their accuracy, completeness and underlying assumptions are not
guaranteed and their reliability cannot be assured and, accordingly, investment decisions should not be based on
such information.

The data involves risks, uncertainties and numerous assumptions and is subject to change based on various factors,
including those discussed in the section titled “Risk Factors” of this Placement Document.

This section contains forward-looking statements with respect to future events and the development of the healthcare
industry in India. Actual results and events may differ materially from those anticipated in this section. See section
titled “Forward-looking Statements”.

General Overview of the Healthcare Services Industry in India

According to the WHO, India‘s healthcare expenditure constituted approximately 4.2% of its gross domestic product
(―GDP‖) in 2008 and its per capita health expenditure stood at approximately US$122. This compares poorly with
other countries such as the United States, the United Kingdom, Brazil and China where healthcare expenditure
constituted approximately 15%, 9%, 8% and 4%, respectively, of their GDP and per capita health expenditure was
approximately US$7,164, US$3,222, US$875 and US$265, respectively. The average per capita health expenditure
globally was US$899.

Healthcare expenditure (as % of GDP) (2008)

Per capita $7,164 $3,222 $899 $875 $265 $122

expenditure 15%

9% 9% 8%

4% 4%

US UK Global Brazil China India

Source: WHO World Health Statistics 2011.

The Indian healthcare services market is comprised of both public and private sectors. According to CRISIL
research, the World Bank‘s assessment of the Indian public healthcare sector is that it is under-funded and too small
to meet the current health needs of the country. Over the last two decades, a majority of tertiary care institutions in
the public sector have been facing a resource crunch resulting in their inability to maintain their equipment, pay for
consumables and upgrade their infrastructure to meet the growing demand for complex diagnostic and therapeutic
treatments. As a result, there is an increasing preference for private hospitals.

78
The healthcare services industry can be broadly divided into four segments: hospitals, pharmaceuticals, diagnostic
centers and ancillary services such as health insurance and medical equipment.

Classification of Hospitals

According to CRISIL research, hospitals can be classified based on the following:

Types of services rendered

Complexity of ailment
Type of ownership

Classification of hospitals based on types of services rendered:

Primary care/dispensaries/clinics

Primary care facilities offer basic, point-of-contact medical services and healthcare prevention services in
an out-patient setting. These are clinics with one or more general practitioners on site. These units do not
have any intensive care units (―ICUs‖) or operation theatres.

Secondary care hospitals

o General secondary care hospitals.

The essential medical specialties in general secondary care hospitals include internal medicine
(dealing with prevention and diagnosis of diseases), general surgery, obstetrics and gynecology,
pediatrics, ear-nose-throat (―ENT‖) specialists, orthopedics and ophthalmology. Such a hospital
usually has one central laboratory, a radiology and imaging center, and an emergency care
department. Generally, secondary care hospitals have a number of beds which are reserved for the
ICUs. The remaining beds are distributed between the general ward and private rooms.

o Specialty secondary care hospitals

Apart from offering essential medical specialties, these hospitals also offer specialties including
gastroenterology, cardiology, neurology, dermatology, urology, dentistry and oncology. Besides
this, the hospital may offer additional surgical specialties. Diagnostic facilities in a specialty
secondary care hospital may include a radiology department, a biochemistry laboratory, a
hematology laboratory, a microbiology laboratory and a blood bank. Depending on the specialty
of focus, these hospitals could have a higher percentage of beds reserved for critical care.

Tertiary care hospitals

o Single specialty tertiary care hospitals

A single specialty tertiary care hospital caters largely to the tertiary care needs of one particular
ailment or medical specialty (for instance a cardiac tertiary care hospital or an oncology tertiary
care centre).

o Multi-specialty tertiary care hospitals

Multi-specialty tertiary care hospitals have all the medical specialties under one roof and treat
complex cases such as multi-organ failure, high risk and trauma cases. The medical specialties
may include cardio-thoracic surgery, neuro-surgery, nephrology, surgical oncology, neonatology,
endocrinology, plastic and cosmetic surgery and nuclear medicine. In addition, these hospitals
may have high-end diagnostic facilities such as a histopathology laboratory and an immunology
laboratory as a part of their diagnostic facilities.

79
 Quaternary care

Quaternary care facilities offer similar services to tertiary care facilities with focus on ‗super-specialty‘
surgical procedures, including advanced cardiac, neurological and joint-replacement surgeries.

Nursing homes

Generally, nursing homes are run by a single doctor or a small group of doctors and have
approximately 20-30 beds. There are instances of nursing homes which specialize in the treatment
of specific groups of ailments and conditions like orthopedic, ophthalmic, general surgery,
pediatric and maternity homes. Nursing homes also include clinics such as ENT and dental clinics.

Classification of hospitals based on complexity of ailment:

Healthcare services may also be classified on the basis of the complexity of ailment being treated. For example, a
hospital addressing heart diseases (cardiac ailments) may be classified as a primary facility if treating conditions
such as high cholesterol, a secondary facility if treating the patient for a stroke and a tertiary facility if dealing with
cases such as cardiac arrest or heart transplants.

Classification based on ownership:

Hospitals are categorized based on their ownership into the following:

Government owned and managed (for example, Brihanmumbai Municipal Corporation (BMC) Hospitals,
KEM Hospital, Cooper Hospital in Mumbai);

Private owned and managed (for example, Asian Heart, Apollo, Wockhardt);

Trust owned and managed (for example, Lilavati, Hinduja);

Trust owned and managed by private party (for example, Apollo in Ahmedabad is owned by a trust and
managed by the Apollo group); and

Owned by a private player and managed by another private player (for example, Kamineni Hospitals,
Hyderabad managed by Wockhardt Hospitals).

Current and Projected Healthcare Services Landscape in India

According to CRISIL research, the private sector accounted for approximately 75% of total healthcare expenditure
in India during 2007, which is among the highest proportions of private healthcare spending in the world. The
private sector in India comprises of assorted providers such as not-for-profit and voluntary organizations,
commercially driven providers including corporate houses, stand-alone specialist services, diagnostic laboratories
and pharmacies. CRISIL research estimates suggest that the private health sector accounts for 50-55% of in-patient
care and 70-75% of out-patient care.

CRISIL research estimated that the healthcare services market was at 2.6 billion treatments in 2008, which translates
into approximately ` 1,690 billion in value terms. The in-patient and out-patient segments of the healthcare services
market accounted for approximately 1.7% and 98.3%, respectively, in volume terms and approximately 53% and
47%, respectively, in value terms. CRISIL research defines ―out-patient‖ as where a patient doesn‘t have to stay
overnight in the hospital. It includes consultancy, day surgeries and diagnostics and excludes pharmaceuticals
purchased from stand-alone pharmacies.

80
CRISIL research expects the healthcare services market to grow at a compounded rate of approximately 11% and
reach Rs 4,950 billion by 2018. According to CRISIL research, the growth will be driven by a number of factors
including a shift in demographics, increasing health awareness and improving health insurance coverage.

CRISIL research predicts in-patient revenues to significantly outpace out-patient revenues. CRISIL research
estimated that in-patient revenues amounted to ` 903 billion (accounting for approximately 53% of the total
revenues), and out-patient revenues amounted to ` 787 billion (accounting for approximately 47% of the total
revenues) in 2008.

It is predicted that in-patient revenues will grow at a compound annual growth rate (―CAGR‖) of approximately
14% between 2008 and 2018 to reach approximately ` 1,802 billion and approximately ` 3,205 billion in 2013 and
2018, respectively, from ` 903 billion in 2008, and out-patient revenues will grow at a CAGR of approximately 8%
between 2008 and 2018 to reach approximately ` 1,175 billion and approximately ` 1,745 billion in 2013 and 2018,
respectively, from ` 787 billion in 2008.

In-patient / out-patient market size (` bn)

In-patient CAGR (2008 - 18) – 14%

Out-patient CAGR (2008 - 18) – 8% 4,950

2,977
3,205
1,690
1,802
903
1,175 1,745
787

2008 2013P 2018P

Out-patient In-patient
Source: CRISIL Research Hospitals Annual Review published in August 2009.
Note: E – Estimated; P – Projected.

In terms of hospital infrastructure and manpower, India still lags behind several global parameters. India ranks
below other developing countries including China and Brazil in terms of both beds-to-population and physicians-to-
population ratios. According to the WHO World Health Statistics 2011, India‘s bed-to-population ratio is 9 for every
10,000 people, as compared to the global average of 29. Also, while India has one of the largest medical workforces
with over 660,000 doctors and over 1.4 million nurses and midwifery personnel, there is a major shortage of skilled
labour. India's ratio of physicians per 10,000 individuals is 6 (compared to the global average of 14) and ratio for
nurses and midwifery personnel per 10,000 individuals is 13 (compared to the global average of 29.7).

Beds per 10,000 people (2009)

41
34
31 29
24

China UK US Global Brazil India

Source: WHO World Health Statistics 2011.

The WHO has established norms for healthcare delivery. Most notably, the required bed-to-population ratio is
established at 1 bed per 300 individuals, or approximately 30 beds per 10,000 individuals. Over the next 5 years,
assuming a capital expenditure of Rs 2.5 million per bed excluding land cost, CRISIL research estimates that in

81
order to attain a ratio of 15 beds per 10,000 individuals, an investment of approximately Rs 1.7 trillion is required.
In order to attain the global benchmark for beds to population ratio, it is estimated that India will require an
investment of approximately Rs 6.4 trillion.

Investment requirements – bed density and funds

(beds / 10,000 people, Rs. trillion)
30

6.4
15
9

1.7

2008 By 2013 By 2013

Approximate Bed Density Investment Requirement by 2013

Source: CRISIL Research Hospitals Annual Review published in November 2010.

Future Outlook and Trends

According to CRISIL research, the growth in demand for healthcare services will be driven by a combination of
various factors including changing demographics, increasing income levels, greater health awareness, increasing
health insurance coverage and medical tourism.

Change in demographics

CRISIL research suggests that the population growth in India will increase the demand for additional beds
in future. India‘s population is predicted to grow from approximately 1.1 billion in 2009-10 to over 1.4
billion by 2026. This increase in population is on account of India‘s birth rate being 22.8 per 1,000 as
opposed to a death rate of 7.4 per 1,000 during 2008. The number of treatments required is therefore
expected to increase in tandem.

In addition, as a result of increasing life expectancy, the proportion of the population that is above 60 years
old is also expected to increase to over 12% from current levels of around 8%. As the requirement for
healthcare delivery amongst the senior citizens is high, this shift in demographics signals the need for
greater coverage of healthcare in the coming years.

Rising income levels

Although healthcare may be considered a non-discretionary expense, high-quality healthcare facilities

remains unaffordable for a large percentage of the population. However, over the next five years, the share
of households in the lowest income bracket (below Rs 100,000 per annum) is expected to decline from
approximately 55% in 2009-10 to approximately 38% by 2014-15. On the other hand, the share of
households in the above ` 200,000 per annum bracket is expected to increase from approximately 14% in
2009-10 to 26% by 2014-15, indicating a strong increase in the disposable incomes of households.

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 Income-wise household break-up

14%
26%
31%
36%

55%
38%

2009-10E 2014-15P
< Rs.100,000 p.a. < Rs.200,000 p.a. > Rs.200,000 p.a.

Source: CRISIL Research Hospitals Annual Review published in November 2010.

Note: E – Estimated; P – Projected.

Rising health awareness

With the rise in literacy levels across the country and growing awareness, CRISIL research predicts a
greater percentage of the population will recognize the need for quality preventive and curative healthcare.
This is likely to result in an increased demand for healthcare services as the hospitalization rate (percentage
of people who actually visit a hospital when unwell) will increase.

Changing disease profile

As a result of changing demographics (the most significant change being an increase in the percentage of
the population in the 30-60 age group, from approximately 32.3% in 2007 to approximately 40% by 2026),
and rising incomes (a greater percentage of households earning more than ` 200,000 per annum), CRISIL
research expects the disease profile of the country to change, in particular the incidence of lifestyle-related
diseases such as diabetes and hypertension to be high. The prevalence of lifestyle-related diseases is
expected to increase; consequently, the demand for healthcare services pertaining to such diseases such as
diagnostic facilities, surgical infrastructure and out-patient departments (―OPD‖) for regular checkups is
expected to increase.

CRISIL research estimated that in 2008, cardiovascular diseases, cancer and diabetes collectively
accounted for approximately 13.8% of all hospitalized cases. In terms of value, these three diseases
accounted for approximately 38.6% of in-patient revenues. According to CRISIL research, the incidence of
these three diseases will increase significantly in future as a result of a change in dietary habits and people
adopting a more sedentary lifestyle. These diseases are expected to account for approximately 17.5% and
approximately 19.9% of the hospitalized cases in 2012 and 2017, respectively.

83
 Hospitalized Cases by Diseases and Percentage of Market Size in 2008

Cardiac Cancer Diabetes

2008
No. of hospitalized cases (million) …………… 2.9 2.0 1.2
Percentage of hospitalized cases …………...... 6.5 4.5 2.8
Total in-patient market size (` in billions)…... 201 118 29
Percentage of market size ……………………. 22.3 13.1 3.2

2013 (Projected)
No. of hospitalized cases (million) …………… 5.2 3.1 2.3
Percentage of hospitalized cases …………….. 8.6 5.0 3.8
Total in-patient market size (` in billion) … 509 274 79
Percentage of market size ……………………. 28.1 15.2 4.4

2018 (Projected)
No. of hospitalized cases (million) …………… 8.3 4.2 3.4
Percentage of hospitalized cases …………….. 10.4 5.3 4.3
Total in-patient market size (` in billion) … 1030 519 163
Percentage of market size ……………………. 32.1 16.2 5.1
Source: CRISIL Research Hospitals Annual Review published in August 2009.

CRISIL research estimated that 45 million people suffered from cardiovascular diseases in 2008, an increase from
37 million in 2003. CRISIL research expects the number of people suffering from cardiovascular diseases to
increase purely as a result of population growth, people growing old (which make them more vulnerable to chronic
diseases) and lifestyle changes. CRISIL research also estimated that 3.7 million people suffered from cancer in one
form or the other in 2008.

According to the WHO, India is the host to the largest diabetic population in the world. Indians tend to contract
diabetes at a relatively young age of 45, which is about 10 years earlier than in the West. The prevalence of Type 2
diabetes is rising due to obesity, sedentary lifestyles and poor dietary habits. Type 2 diabetes occur mostly in adults
above the age of 40 and accounts for around 95% of all diabetic cases.

CRISIL research predicts that the number of people suffering from cardiovascular diseases will increase to 57.9
million in 2013 and 72.1 million in 2018. The prevalence of oncology cases is also predicted to increase to 4.0
million and 4.3 million in 2013 and 2018 respectively. The diabetic population, according to CRISIL research, is
predicted to grow at an alarming rate to reach 44.4 million and 49.4 million in 2013 and 2018, respectively.

In terms of revenue growth, in-patient revenues from cardiology, oncology and diabetes cases are predicated to grow
at a higher CAGR of approximately 18%, 16% and 19%, respectively, compared to the entire in-patient market,
which is predicted to grow at a CAGR of approximately 14% by 2018.

84
 No of hospitalized cases (mn) and In-patient market (Rs. bn)

In-patient Market
size 201 509 1,030 118 274 519 29 79 163

Market size CAGR 18% 16% 19%

(2008-18) 8.3
No. of Cases
5.2
4.2
(mn)
2.9 3.1 3.4
2.0 2.3
1.2

Cardiac Oncology Diabetes

2008 2013P 2018P
Source: CRISIL Research Hospitals Annual Review published in August 2009.
Note: P – Projected.

Health insurance coverage

According to CRISIL research, over 95% of India‘s private healthcare expenditure is paid for by out-of-
pocket expenditure as health insurance coverage is under 5%. As the penetration of health insurance
increases, healthcare is likely to become more affordable for a larger percentage of the population. As a
result, hospitalization rates (the percentage of times an individual actually visits a hospital when he/she
needs to) is expected to increase. In addition, health checkups, which form a mandatory part of health
insurance coverage, are also expected to increase, boosting the demand for an adequate healthcare services
system.

Medical tourism

Medical tourism has gained momentum over the years and India is fast emerging as a major medical tourist
destination. As governments across the globe and patients worldwide struggle with soaring healthcare
costs, the relatively low cost of surgery and critical care in India is drawing the attention of global
healthcare providers. These private healthcare players are collaborating with Indian tourism to tap the
potential of this burgeoning industry.

India is extremely competitive in healthcare costs as compared to the developed countries and other nations
in Asia. In addition, India has a pool of highly qualified doctors and support staff. The fact that India offers
advanced medical facilities in critical areas such as cardiology, joint replacement, orthopedics,
ophthalmology, organ transplants and urology adds to its competitive advantage. The presence of large
private hospital chains, whose hospitals are globally renowned, enhances India‘s status as an attractive
destination for medical tourism.

CRISIL research has reported that estimates suggest that 200,000 to 220,000 patients came to India in
2007, up from 10,000 patients in 2000. However, CRISIL research believes that this number is vastly
understated. This is because the number of patients is calculated based on the number of medical visas
issued. CRISIL research believes that a large number of people who come to India for treatments do not
come on medical visas but on general visas.

85
Stand-alone clinics to expand the reach of hospitals

According to CRISIL research, stand-alone clinics are an emerging business model in the Indian healthcare services
industry. The last 10-15 years have seen rapid addition of hospitals beds by large private players. However, these
additions have been largely confined to major cities across the country. Consequently, the bed density in Mumbai,
National Capital Region, Bangalore, Hyderabad, Chennai, Kolkata, Pune and Ahmedabad, amounted to
approximately 215,000 as of October 2010, thereby accounting for approximately 20% of the country-wide supply
of beds even though these cities constitute for only approximately 5-6% of the overall population. This uneven
distribution of beds is reflected in the fact that the average number of beds per 1,000 individuals in these cities is
3.2, over 3 times higher than the country-wide average of approximately 0.9.

The rapid increase in the addition of beds has led to intense competition. Consequently, players are now aiming to
expand their reach to smaller cities and towns.

In order to expand their reach, some of the large organized hospital chains have established stand-alone clinics
(providing only point of contact OPD and diagnostic facilities) in new markets as well as in markets where they are
already present. These clinics primarily serve as a means to expand the brand presence of the hospital chains in the
new markets, and in the case of established markets, these clinics serve three main purposes:

Ease the pressure on the OPD ward of the main hospital.

Increase the overall number of treatments.

Strengthen the hospital chain‘s brand presence.

Stand-alone pharmacies

According to CRISIL research, the hospitals and pharmaceuticals segments together constitute approximately 75%
of the total healthcare services industry in India. As is the case with almost all verticals within the healthcare
delivery industry, pharmacies are highly fragmented and this vertical is dominated by stand-alone units. In recent
years however, corporate presence in this segment has increased. Corporate players have a presence in two types of
pharmacies – in-house pharmacies (within the hospital premises) and stand-alone pharmacies. Pharmacies based in
hospitals have direct access to the hospital‘s patients and also require relatively low investments. In addition, there is
a healthy demand for high-margin surgical items at these hospital-based pharmacies, which boosts their profitability
as compared with the standalone pharmacies.

86
 BUSINESS

In this section, unless the context otherwise requires, “we”, “us” and “our”, includes our subsidiaries, joint
ventures and associates, and British American Hospitals Enterprises Limited, which is treated as an investment of
the Company for accounting purposes. See section titled “Business—Corporate Structure”.

Overview

We are one of the largest private healthcare services providers in India according to CRISIL, operating a wide
network of hospitals predominantly based in Asia. Our primary line of business is the provision of healthcare
services, through (i) hospitals, (ii) pharmacies, (iii) projects and consultancy services, and (iv) primary care clinics.
In addition, we provide medical business process outsourcing (―mBPO‖) services through one of our associates and
health insurance services through one of our joint venture companies. To enhance our service to our customers and
complement our business, we also provide the following services: telemedicine services, education and training
programs and research services.

The Company was founded by Dr. Prathap C. Reddy in 1979 and became a public listed company on the BSE in
1983 and was listed on the NSE in 1996. We are headquartered in Chennai and operate our business through the
Company, and its nine subsidiaries, seven joint ventures and four associates.

We have continuously invested in bed capacity creation and have increased the bed capacity under our management
from approximately 150 operational beds at the commencement of our hospital services business in 1983 to 8,717
operational beds in 54 hospitals located in India and overseas as of March 31, 2011. Of the 8,717 beds, 5,842 beds
are in 37 hospitals owned by us and 2,875 beds are in 17 hospitals under our management through operations and
management contracts.

We have a presence both in India and outside India, including the Republic of Mauritius, Bangladesh and Kuwait.
We have also recently signed a preliminary joint venture agreement with the Board of Trustees of the National
Social Security Fund, Tanzania and the Tanzanian Ministry of Health & Social Welfare, in connection with the
establishment of an advanced healthcare facility in the city of Dar es Salaam. With the objective of making high
quality healthcare services and advanced medical technology available in semi-urban and rural areas in India, we
started the ―Apollo REACH‖ initiative and we are currently in the process of establishing a network of smaller
hospitals with around 100 to 200 beds in Tier II and Tier III cities (each as defined below) in India.

We had a total employee strength of 30,640 (including employees of our subsidiaries, joint ventures and associates
only), including 1,761 doctors, 7,863 nurses, and 2,403 paramedical personnel, as of March 31, 2011. We also have
2,414 ―fee for service‖ doctors working in our hospitals. During fiscal 2011, hospitals owned by us provided care to
over 2.5 million patients.

We constantly seek to be in the forefront of the healthcare services industry by providing new services and
introducing specialized healthcare models. Seven of our hospitals have received accreditations from the Joint
Commission International, USA (―JCI‖) for meeting international healthcare quality standards for patient care and
organization management, and three of our hospitals have received accreditations from the National Accreditation
Board for Hospitals & Healthcare Providers (―NABH‖). Our healthcare facilities provide treatment for acute and
chronic diseases across primary, secondary, and tertiary care sectors. Our tertiary care hospitals provide advanced
levels of care in over 50 specialties, including cardiac sciences, oncology, radiology and imaging, gastroenterology,
neurosciences, orthopedics and critical care services. In addition, we have a focus on core specialties such as
cardiology, oncology, neurology, orthopedics, radiology and imaging and transplants, and we specialize in
minimally invasive surgery across various specialties.

We reported total revenues of ` 26,240 million, ` 20,587 million and ` 16,350 million in fiscal 2011, fiscal 2010 and
fiscal 2009, respectively. We report our revenues under the following business segments:

(i) healthcare services, which consists of hospitals, hospital-based pharmacies and projects and consultancy
services;

87
(ii) stand-alone pharmacy; and

(iii) others.

Our healthcare services segment contributed 73.5%, 75.3% and 78.8% of our total revenues in fiscal 2011, fiscal
2010 and fiscal 2009, respectively and our stand-alone pharmacy segment contributed 25.1%, 23.4% and 20.3% of
our total revenues in fiscal 2011, fiscal 2010 and fiscal 2009, respectively.

Our Competitive Strengths

We believe that the following competitive strengths distinguish us from our competitors.

Leading private healthcare services provider in India

We are a leading private healthcare services provider in India offering comprehensive end-to-end healthcare
services. Our primary line of business is the provision of healthcare services, through hospitals, pharmacies, projects
and consultancy services, and primary clinics. In addition, we provide mBPO services and health insurance services.
To complement our primary business, we also provide telemedicine services, education and training programs and
research services.

We have an established pan-India presence with a large network of 54 hospitals and 1,199 stand-alone pharmacies
spread across India as of March 31, 2011. Of the 54 hospitals, 37 hospitals are owned by us and 17 hospitals are
under our management through operations and management contracts. We believe our pan-India presence has
allowed us establish ―Apollo‖ as a healthcare services provider brand that is recognized across India. Our facilities
have received accreditations from various Indian and international accreditation agencies such as the JCI, the NABH
and the National Accreditation Board for Testing and Calibration Laboratories (―NABL‖). In addition, we have
received numerous awards. For the last four consecutive years (2007 – 2010), The Week magazine in India has
ranked our hospitals in Chennai and New Delhi as among the leading private sector hospitals in India. We were also
named ―Healthcare Retail Company of the Year‖ by Frost & Sullivan, a business research and consulting firm, in
2010.

We have developed a distributed access model to comprehensively serve the healthcare needs of patients in their
local communities through our network of multi-specialty hospitals and primary clinics. These multi-specialty
hospitals and primary clinics also support our super-specialty hospitals by referring patients who require more
sophisticated and advanced procedures and specialized care. This model has helped us to expand our reach and also
allow us to efficiently deploy our resources across our network and increase the quality of care.

Through our presence in various healthcare services and initiatives across the healthcare services delivery chain, we
believe that we have a competitive advantage and are able to benefit from the following:

Cost efficiencies through sharing of managerial and clinical resources;

Economies of scale and competitive prices from our suppliers and service providers through centralized
purchasing;

Access to qualified and trained medical resources through our educational initiatives; and

Access to a larger patient base through our pan-India presence in primary clinics, telemedicine and other
healthcare programs.

88
Clinical excellence

Since our first hospital commenced operations in 1983, we have been focused on providing high quality healthcare
services. We constantly strive for clinical excellence because we believe that it is a critical consideration for many
people when choosing their healthcare services provider. We have created a quality and care assessment and
management scorecard, the ―Apollo Clinical Excellence‖ program which we refer to as ―ACE @ 25‖, and have
implemented it throughout our network of hospitals. Through ACE @ 25, we aim to continuously assess the quality
of care and services received by our patients to ensure that we deliver consistently high quality service and achieve
clinical excellence throughout our network of hospitals. ACE @ 25 assesses performance based on 25 clinical
parameters, including average length of stay (―ALOS‖), coronary artery bypass surgery mortality rates, ALOS post
renal transplant and the survival rate of liver transplant patients one year after surgery. See section titled ―Business -
Ethical and Compliance Program‖ below.

Our hospitals follow well-defined quality and patient safety protocols and adhere to accepted clinical standards in
patient handling and care. A number of our facilities have been accredited by various Indian and international
accreditation agencies. Indraprastha Apollo Hospital was the first hospital in India to be accredited by the JCI and
six of our other hospitals have also been accredited by the JCI for meeting international healthcare quality standards
for patient care and organization management. In addition, three of our hospitals have been accredited by the
NABH.

We believe that a number of our hospitals have successfully performed more procedures than the minimum number
required internationally to be considered a reputed healthcare facility in that particular medical field. For instance, in
the field of cardiac sciences, our hospitals performed 9,095 percutaneous transluminal coronary angioplasties and
7,603 cardiac surgeries in fiscal 2011. Certain third party studies indicate that hospitals that perform high volumes of
certain procedures, such as cardiovascular surgery, major cancer resections and other high risk procedures, generally
produce better clinical results. These studies also indicate that such hospitals possess not just skillful surgeons but
also tend to make fewer technical errors with respect to procedures, and generally provide better care in all aspects,
including pre- and post-operative care.

Tradition of technology innovation and leadership

We continuously invest in medical technology and equipment and modernize our hospital facilities so as to offer
high quality healthcare services to our patients and expand our range of healthcare services. Over the last three
years, we have invested ` 2,703 million towards the purchase of new medical equipment for our hospitals.

We believe that we have been the first healthcare services provider to introduce many cutting-edge medical
technology and equipment in the Indian sub-continent, including the following:

G4 CyberKnife® Robotic Radiosurgery System, an advanced cancer treatment system, was first launched in
India at Apollo Specialty Hospital, Nandanam, Chennai, in March 2009.

Toshiba Aquillion ONE 320 slice dynamic multi-detector computed tomography (―CT‖) scanner, an
advanced diagnostic tool used in heart, brain and whole body scanning, was first launched at the Apollo
Heart Centre, Chennai, in September 2008.

Novalis Tx™ Radiotherapy and Radiosurgery system, one of the most precise, non-invasive and fastest
treatments available for cancerous and non-cancerous conditions of the entire body, was installed in each of
our hospitals in Hyderabad, Kolkata and New Delhi, in November 2009, March 2010 and September 2010,
respectively.

Philips Gemini TF Time of Flight positron emission tomography computed tomography (―PET-CT‖) 64
slice scan system, was first installed in India at Apollo Specialty Cancer Hospital, Chennai, in January
2009.

89
The availability of sophisticated medical equipment ensures that we are among the few healthcare services providers
in India who are able to offer advanced healthcare procedures, such as stereo-tactic radio surgery and bone marrow
transplants. Our hospital in Chennai has also commissioned the next generation of 3D electro-anatomical mapping
system, which will enable our doctors to accurately locate and treat electro-physiological disorders of the human
heart. In addition, Apollo Specialty Cancer Center, Chennai, was the first hospital in South India to install the digital
mammography with tomosynthesis (3D) system, which allows for faster and more accurate stereo-static biopsies to
be performed.

We consistently promote telemedicine as a method to provide healthcare solutions to patients in remote locations.
We launched the first rural telemedicine centre in India in 2000 to cater to a large segment of the population in
various parts of India and neighboring countries that do not have adequate access to healthcare services.

We believe that our investment in the latest and most advanced medical technology and equipment has enabled us to
attract renowned doctors from India and abroad to practice in our hospitals and has also made our hospitals the
preferred treatment destinations for patients from various countries around the world. We have dedicated teams in
place to constantly monitor technological innovations and medical developments globally to ensure that we have and
are kept up-to-date with the latest relevant technology and treatments in the industry.

Our strong brand value

We believe that the ―Apollo‖ brand is widely recognized in India by both healthcare professionals and patients. Our
reputation has helped us to attract well-known doctors and other healthcare professionals to our facilities, who in
turn draw more patients to our facilities. We believe that our strong track record in building long-term relationships
with our doctors and other medical professionals together with our focus on achieving and maintaining world-class
clinical outcomes have enabled us to build a strong brand name. We have received numerous awards which we
believe are a testimony to our strong brand value built over 27 years in the healthcare services industry. The
following are a few key awards that we have received over the past few years:

For the last four consecutive years (2007 - 2010), The Week magazine in India has consistently ranked our
hospitals in Chennai and New Delhi as among the leading private sector hospitals in India. A number of our
other hospitals have been ranked as leading hospitals in their respective cities. Our hospital in Chennai
(located at Greams Road) was ranked the ―Best Private Sector Hospital in the Country‖ for 2007, 2009 and
2010 while our hospitals in New Delhi and Kolkata were ranked among the top two hospitals in their
respective cities between 2007 to 2010.

Apollo Health City - Hyderabad is the first hospital in India to be recognized as the ―Best Medical Tourism
Facility for 2009-2010‖ by the Ministry of Tourism of India.

The ―Billion Hearts Beating‖ campaign, a corporate social initiative undertaken by the Company in
association with the Times of India Foundation to raise awareness of heart disease in the country, won the
―Best Marketing Campaign of the Year‖ award at the World Brand Congress 2010.

A special postage stamp in recognition of the Company‘s contribution towards the Indian healthcare sector
was released on November 2, 2009.

In 2009, our hospital in Hyderabad and Indraprastha Apollo Hospital won the Federation of Indian
Chambers of Commerce and Industry (―FICCI‖) Healthcare awards for Excellence in Patient Care and
Excellence in Healthcare Delivery. Our hospital in Hyderabad also bagged the FICCI Healthcare award for
Excellence in HR Practices in the same year.

The Company was featured in the world‘s top 50 Local Dynamos List compiled by global consultancy
firm, Boston Consulting Group, in 2008.

Named ―Healthcare Retail Company of the Year‖ by Frost & Sullivan, a business research and consulting
firm, in 2010.

90
 Awarded ―India‘s Most Preferred Hospital – Viewer‘s Choice‖ award at the India Healthcare Awards 2010
by ICICI Lombard and CNBC-TV18.

Strong relationships with doctors and other medical professionals

We believe that we are among the leading private healthcare services employers in India. One of the pillars of our
success is our huge talent pool (including our subsidiaries, joint ventures and associates only) of 4,175 doctors
(comprising 1,761 doctors employed by us and 2,414 ―fee for service‖ doctors) across more than 50 specialties,
7,863 nurses and 2,403 paramedical personnel, as of March 31, 2011. Many of our doctors have received
qualifications or training or work experience in the United Kingdom, Australia or the United States. In addition,
many of them are prominent members of the medical field having received accolades and awards, including the Dr.
B.C. Roy National award, and the Padma Bhushan and the Padma Shree awards, with certain of our doctors heading
national medical associations.

In addition to attracting doctors and other medical professionals to our facilities, we have a strong track record in
building long-term relationships with our doctors and other medical professionals. We believe that our commitment
to continuing education and training has helped us in attracting and retaining prominent and skilled doctors. We
have different customized training programs for our doctors, nurses, paramedical and management personnel,
including nursing colleges, technology schools, exchange programs with affiliated leading universities outside India,
that provide training in general as well as specialist skills including in patient care, intensive care, neonatal care,
surgery and communication.

Experienced and professional management team with domain expertise and strong execution track record

We benefit from an experienced management team which has made significant contributions to our growth and
which has a long and proven track record in the healthcare services industry. For instance, our Chairman, Dr.
Prathap C. Reddy, was conferred the Padma Vibhushan Award in 2010, the second highest civilian award in India,
in recognition of his contribution towards the Indian healthcare industry, by the Government of India. Our
management team is composed of directors with extensive experience in the healthcare services industry, as well as
doctors with both clinical and administrative experience. We believe that a professionally managed administration
with a commitment to patient care and high ethical standards enables us to operate our facilities efficiently while at
the same time providing quality care to our patients.

Our Business Strategy

Our mission is to continuously improve the quality of healthcare services provided to the communities we serve by
striving to bring healthcare services of international standards within the reach of every individual. We are
committed to the achievement and maintenance of excellence in education, research and healthcare for the benefit of
humanity. At the same time, we seek to generate strong financial performance and appropriate returns to our
shareholders through the execution of a strong business strategy.

We aim to achieve our mission and to grow our business by pursuing the following strategic goals:

Strengthen our presence in key strategic markets

We believe we have a dominant share of the hospital beds available in Chennai, New Delhi, Kolkata, Hyderabad,
Bangalore and Ahmedabad. We intend to continue to strengthen our presence and increase our market share in these
key strategic markets by establishing new healthcare facilities, including primary care clinics, and increasing bed
capacity at our existing hospitals. Currently, we have hospitals located in three (Chennai, New Delhi and Kolkata)
out of India‘s four key metropolitan cities and are in the process of establishing new hospitals in Mumbai. We
believe that these key metropolitan cities will continue to have a strong demand for high quality tertiary care
services such as cardiac surgeries, oncology services and orthopedic surgeries. By strengthening our presence in
these markets, we intend to increase our market share for such tertiary care services. In addition, we are expanding
the capacity of our existing hospitals in Hyderabad, New Delhi, Chennai and Bangalore. These projects and other
plans to establish new healthcare facilities in other parts of India are at various stages of implementation and are

91
expected to be completed over the next three years. We expect to increase bed capacity by around 2,400 additional
beds upon the completion of these projects. See section titled ―Business—Key Hospital Expansion Plans‖. We
also intend to increase the number of primary care clinics from 62 clinics as of March 31, 2011 to around 100 clinics
over the next few years. We are constantly evaluating new opportunities in our existing and new markets. Our
evaluation criteria include location, the demographics and revenue potential, and the cost of expanding or setting up
new facilities.

Focus on a portfolio of high value clinical specialties

We believe that a combination of factors, including changing demographics, increasing affluence of the Indian
population, greater health awareness, an increase in lifestyle-related diseases such as heart disease and diabetes,
increasing health insurance coverage and a growing medical tourism market, will lead to an increase in demand for
quality healthcare services, particularly tertiary healthcare services. We have therefore identified cardiology,
oncology, neurology, orthopedics, critical care and transplants as our key focus areas of our tertiary care hospitals.
We internally designate these focus areas as ―Centers of Excellence‖. Due to the complex nature of the treatments
involved, the medical procedures performed in the Centers of Excellence typically command relatively high prices.
These Centers of Excellence contributed approximately 60.0% of our in-patient revenues during each of fiscal 2011
and fiscal 2010. According to CRISIL, cardiac and cancer cases accounted for 22.3% and 13.1%, respectively, of in-
patient revenues for hospitals in India in 2008, and will increase to 32.1% and 16.2%, respectively, by end-2018.

To maximize our market share of the tertiary care procedures performed in each Center of Excellence, we plan to
undertake a number of initiatives to ensure that we provide high quality healthcare services and improve our clinical
outcomes, including:

Strengthening each Center of Excellence through the addition of experienced and skilled surgeons and
physicians.

Expanding each Center of Excellence practice area to provide comprehensive sub-specialties and treatment
services.

Continually investing in the latest medical technology and equipment so as to offer high quality healthcare
services to our patients.

Establishing well-defined clinical guidelines and protocols with a strong focus on clinical outcomes.

Integration of our network of hospitals to enable knowledge sharing and the adoption of best practices for
each Center of Excellence across the network through dedicated service line managers.

Focus on life enhancing procedures and elective surgeries

We believe that with increasing disposable incomes and health awareness, there is a growing demand for elective or
planned surgeries. Apart from our focus on Centers of Excellence, we also plan to focus on elective procedures to
capture this growing market and build a strong presence in the elective and life enhancing procedures market. Our
hospitals are well-equipped to offer various elective procedures like knee replacements, hip replacements, cosmetic
surgeries, dental services and other similar procedures. We intend to increase the volume of such procedures
performed in our hospitals by creating specialized centers for such procedures, recruiting more surgeons specializing
in such procedures and investing in the latest medical technology to improve our clinical outcomes in these areas.

Geographic expansion through setting up hospitals in Tier II and Tier III cities in India

We are in the process of establishing a network of hospitals under the ―Apollo REACH‖ initiative with the objective
of making high quality healthcare services and advanced medical technology available in semi-urban and rural
areas. Hospitals established under this initiative will have a capacity of around 100 to 200 beds, and will be located
in Tier II and Tier III cities in India. These hospitals will be a combination of new or acquired facilities as well as
expansion of some existing facilities. We believe that this will give patients in such locations greater access to high
quality healthcare services without having to travel to the Tier 1 cities. At the same time, these hospitals will allow

92
us to expand our network and penetrate different markets in the Tier II and Tier III cities.

We have already established Apollo REACH hospitals in Tier II cities, including Kakinada, Karaikudi, Karimnagar,
Bhubaneswar and Karur, and have put in place plans to establish four additional Apollo REACH hospitals across the
country. These projects are at various stages of implementation and are expected to be completed over the next three
years. See section titled ―Business—Key Hospital Expansion Plans‖. We have identified a number of Tier II and
Tier III cities across the country which is currently under-served in terms of healthcare services but have a sizable
population and spending potential. Based on our experience, capital costs per hospital bed in a Tier II or Tier III city
are generally lower compared to a Tier I city. As income levels in these markets rise, purchasing power will
accordingly increase; therefore, we expect our revenues generated from providing healthcare services in these
markets to increase further.

We generally consider a city in India with a population (i) over five million as a Tier I city, (ii) over one million as a
Tier II city, and (iii) between 500,000 to one million as a Tier III city, subject to other prevailing factors at the time
of determination, including the level of economic activity in the relevant city.

Improve operating efficiencies and profitability

We believe that maximizing operating efficiencies and profitability across our network is a key component of our
growth strategy. We intend to focus on the following key areas to improve our operating efficiencies and
profitability:

Improve average revenue per occupied bed per day

We seek to improve the average revenue per occupied bed per day through a combination of initiatives, including:

- Increase focus on high growth tertiary care areas. We continually focus on investing in the latest medical
technology, attracting skilled physicians and surgeons and developing our expertise in high growth tertiary
care areas to serve the increasing demand for sophisticated clinical care and procedures. By implementing
our strategy to focus on high growth Centers of Excellence and other technology and specialist skill-driven
clinical areas, we intend to improve our case mix and increase revenues per occupied bed per day.

- Reduction in ALOS. As a significant portion of in-patient revenues are derived from medical services
provided in the initial two to three days of a patient‘s stay in the hospital, we plan to reduce the ALOS at
our hospitals, thereby increasing patient turnover rate and the revenue per occupied bed per day, by
capitalizing on improvements in medical technology and focusing on minimally invasive surgeries, which
reduces surgical trauma to patients and patient recovery time.

Maximize efficiencies through greater integration, better supply chain management and human resource
development

We plan to maximize efficiencies at our hospitals and pharmacies through greater integration across our
network. Our hospitals and pharmacies are large consumers of drugs and medical consumables like stents,
implants, sutures and other surgical materials. To minimize costs and leverage on economies of scale, we
intend to focus on standardizing the type of medical and other consumables used across our network,
optimizing procurement costs, consolidating our suppliers and optimizing the use of medical consumables
by establishing guidelines for medical procedures across our network.

To improve the productivity of our employees, we plan to place greater emphasis on training our
employees in best practices and implement programs to provide incentives for performance. We have also
introduced an initiative to encourage our doctors to be more involved in administrative matters such as
scheduling surgeries and in the management of the hospitals as we believe that this will help to improve
clinical outcomes and service standards.

93
 Improve occupancy rates and equipment utilization at our hospitals

To improve occupancy rates and the utilization of key equipment and operating theatres at our hospitals in
Bhubaneswar, Bangalore, Ahmedabad and other hospitals, we plan to focus on preventive healthcare and
health screening programs, place greater emphasis on the delivery of tertiary care services, expand our
referral network and attract more medical value travelers.

Focus on medical value travelers

According to CRISIL, India is fast emerging as a major medical tourist destination. We believe that India is highly
competitive in terms of healthcare costs compared to other developed and developing countries, such as the United
States, the United Kingdom and Singapore. A number of our facilities have been accredited by various Indian and
international accreditation agencies such as the JCI, the NABH and the NABL, which we believe helps us to attract
medical value travelers. We intend to focus on attracting more medical value travelers from select markets including
those in the Middle East, Africa and Southeast Asia by increasing our marketing efforts in these regions. We believe
that medical value travelers will help to contribute to higher revenues per bed day and increase our profitability.

Focus on continued growth in stand-alone pharmacies market

We have increased the number of stand-alone pharmacies in our network to 1,199 stand-alone pharmacies as of
March 31, 2011 and the revenues from our stand-alone pharmacy segment contributed 25.1% of our total revenues
in fiscal 2011. We intend to continue growing this business segment through a measured roll-out of new stand-alone
pharmacies based on market demand, revenue potential and availability of high visibility locations. We also plan to
increase revenues generated by our existing stand-alone pharmacies through:

Improving the profitability of our existing stand-alone pharmacies by introducing generic and in-house
brand (private label) products which have better profit margins and increasing sales through the bulk
distribution of medical supplies and consumables to hospitals and other healthcare providers.

Improving operating efficiencies by implementing a centralized database and inventory management

system to track inventory and revenue collections across our stand-alone pharmacy network.

Improving our supply chain management by standardizing prices across our network and consolidating our
suppliers.

Monitoring the performance of our stand-alone pharmacies on an on-going basis and closing loss-making
and low-growth pharmacies.

History and Key Milestones

Our Company was founded by Dr. Prathap C. Reddy as a limited liability company under the Companies Act in
1979 and became a public listed company on the BSE in 1983 and was listed on the NSE in 1996. The Company
issued and listed 9,000,000 Global Depositary Receipts (each representing one equity share of the Company) on the
EuroMTF of the Luxembourg Stock Exchange in 2005. We operate our business through the Company, and its nine
subsidiaries, seven joint ventures and four associates.

The following are some of our key milestones since our inception:

In 1979, the Company was founded by Dr. Prathap C. Reddy.

In 1983, the first Apollo hospital was opened in Chennai.

By 1988, the Company expanded into Hyderabad.

In 1994, Apollo Specialty Hospital, a cancer treatment hospital was opened in Chennai.

94
In 1996, Indraprastha Apollo Hospital was opened in New Delhi.

In the late 1990s, the Company opened hospitals in Madurai and Visakhapatnam.

In 2000, the Company‘s first telemedicine facility, Apollo Aragonda, was started.

Between 2001 and 2004, Apollo Gleneagles hospital was opened in Kolkata, followed by the FirstMed
Hospital in Chennai, and hospitals in Mysore, Ahmedabad, Kakinada and Bilaspur. During this period,
Apollo Retail Pharmacy was also launched.

Between 2005 and 2010, the Company started the Imperial Hospital in Bangalore, the Apollo Children‘s
Hospital in Chennai, two Apollo REACH hospitals in Kakinada and Karimnagar and other hospitals in
Bhubaneshwar, the Republic of Mauritius, Lavasa and Dhaka, Bangladesh.

In 2007, the Company formed a joint venture with Munich Health Holding AG, a subsidiary of Munich Re,
and Apollo Energy Limited, to enter into the health insurance business.

In 2009, the Company launched the G4 CyberKnife® Robotic Radiosurgery System.

In 2010, the Company launched its 50 th hospital with 150 beds in Secunderabad. During this period, the
Apollo Cosmetics Clinics were also launched.

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Corporate Structure

The following chart sets forth our existing corporate structure and our percentage of equity interest in each entity as
of March 31, 2011.

APOLLO HOSPITALS ENTERPRISE LIMITED

Subsidiaries Joint Ventures Associates1

Unique Home Health Care Apollo Hospitals International Indraprastha Medical

Limited, Chennai (100%) Limited, Ahmedabad (50%)2 Corporation. Limited, New Delhi
(21.06%)

AB Medical Centers Limited, Apollo Gleneagles Hospital Family Health Plan Limited,
Chennai (100%) Limited, Kolkata (50%) Hyderabad (49%)

Samudra HealthCare Enterprises Apollo Gleneagles PET-CT Private Apollo Health Street Limited,
Limited, Kakinada (100%) Limited, Hyderabad (50%) Hyderabad (39.38%)3

Apollo Hospital (UK) Limited, Apollo Munich Health Insurance Stemcyte India Therapautics
United Kingdom (100%) Company Limited, Hyderabad Pvt. Limited, Chennai (13.05%)
(11.01%)

Apollo Health and Lifestyle Western Hospitals Corporation

Limited, Hyderabad (100%) Private Limited, Mumbai (40%)

Imperial Hospital & Research Quintiles Phase One Clinical Trials

Centre Limited, Bangalore (51%) India Private Limited, Hyderabad
(40%)

Pinakini Hospitals Limited, Apollo Lavasa Health Corporation

Nellore (74.94%) Limited, Lavasa (34.66%)

Apollo Cosmetic Surgical Centre

Private Limited, Chennai (61%)

Alliance Medicorp (India)

Limited, Chennai (51%)

__________
Note:

(1) British American Hospitals Enterprises Limited (Mauritius) (―BAHEL‖), formed in 2006 in association
with BAI Medical Centres Limited, was treated as an associate of the Company in fiscal 2009 and fiscal
2010. As of March 31, 2010, the Company had a 19.72% equity interest in BAHEL. In fiscal 2011, the
Company‘s effective equity interest in BAHEL was reduced to 10.51% and BAHEL ceased to be treated as
an associate of the Company. As of March 31, 2011, it is treated as an investment of the Company for
accounting purposes.

(2) We directly hold 8% equity interest and indirectly hold 42% equity interest through our wholly-owned
subsidiary Unique Home Health Care Limited

96
(3) We directly hold 38.69% equity interest and indirectly hold 0.69% equity interest through our wholly-
owned subsidiary Unique Home Health Care Limited

Our Services

Together with our subsidiaries, joint ventures and associates, we provide healthcare services through the following:

(i) hospitals;

(ii) pharmacies;

(iii) projects and consultancy services;

(iv) health insurance services; and

(v) other services, including primary clinics and mBPO services.

To support our businesses, we also provide the following services:

(a) telemedicine;

(b) education and training programs; and

(c) research.

Our total revenues were ` 26,240 million, ` 20,587 million and ` 16,350 million and our profit after minority
interest and share in associates were ` 1,839 million, ` 1,376 million and ` 1,025 million in fiscal 2011, 2010 and
2009, respectively.

We report our revenues under the following business segments:

(i) healthcare services, which consists of hospitals, hospital-based pharmacies and projects and consultancy
services;

(ii) stand-alone pharmacy; and

(iii) others.

Healthcare services

Hospitals

We are primarily a hospital services provider, with most of our hospitals providing a broad range of over 50
specialties, including cardiac sciences, oncology, nephrology, orthopedics, neurosciences, transplants, laboratory
services, radiology and imaging, maternity and day care, general surgery as well as diagnostic and critical care
services. We also provide outpatient services, including consultation for a range of ailments and preventive health
screenings. There are 24-hour pharmacies located within our hospital premises to cater to the patients of our
hospitals and the general public.

As of March 31, 2011, we had a capacity of 8,717 beds in 54 hospitals located in India and overseas. Of the 8,717
beds, 5,842 beds are in 37 hospitals owned by us and 2,875 beds are in 17 hospitals under our management through
operations and management contracts. See the section titled ―Management’s Discussion and Analysis of Financial
Condition and Results of Operations–Factors Affecting Results of Operations–Utilization rate of our
facilities‖ for certain statistics for the hospitals owned by us for each of the past three fiscal years.

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We have established Centers of Excellence in a variety of medical disciplines. A few key disciplines are described
below:

Cardiology. Since our inception, we have focused on the provision of cardiac services. We provide a
comprehensive range of cardiac services ranging from preventive programs to complicated surgeries. We
provide a range of diagnostic and therapeutic services and also offer sophisticated and cutting-edge
interventional cardiac procedures such as implanting cardioverter defibrillator and irradiation-
brachytherapy. In addition, we have a thoracic and cardiovascular surgery department which performs a
large number of cardiac surgeries with success rates comparable to international standards. By using
advanced medical equipment like the 320 slice CT scanner, we are also able to provide early detection and
management of cardiac disorders services for our patients.

Oncology. We offer a range of oncology treatments, including medical oncology (both conventional and
aggressive chemotherapy), surgical oncology (tumor removal), radiotherapy and cord blood stem cell
transplant. The oncology market in India is a fast growing sector and with the introduction of the PET-CT
scan system, G4 CyberKnife® Robotic Radiosurgery System and Novalis Tx™ Radiotherapy and
Radiosurgery system in our hospitals, we believe we are well placed to strengthen our position as a leading
integrated oncology service provider in the Indian private healthcare sector.

Neurosciences. We offer a comprehensive range of services to treat neurological diseases. Our hospitals are
equipped with the latest technology, including the 3T MRI and G4 CyberKnife ® Robotic Radiosurgery
System, enabling us to provide advanced treatments in this area. Our neurophysicians and neurosurgeons
treat patients requiring spinal surgeries, trauma care, stroke, brain tumors and other similar ailments. We
also have comprehensive neuro-rehabilitation facilities in our hospitals. JCI has also awarded our hospital
in Hyderabad a certificate of distinction for its Primary Stroke Program.

Orthopedics. We offer a range of orthopedic treatments, including complicated joint replacements,

microsurgeries, spine surgeries and deformity correction, and we have doctors trained in minimal invasive
surgery. We also provide pre-operative care and rehabilitation programs.

Critical Care Medicine. Our multi-disciplinary critical care centre caters to patients whose conditions are
life-threatening and who require comprehensive care and constant monitoring. Our critical care unit is
equipped with advanced facilities and is staffed by specialists including intensive and critical care nurses
providing comprehensive care and services 24 hours a day. We have neo-natal and pediatric intensive care
units specializing in the critical care of children from the time of birth till 18 years of age. We also offer 24-
hour emergency and trauma care units to attend to a variety of medical and surgical emergencies, including
poly-trauma, and we have a fleet of ambulances manned by paramedical personnel to provide effective pre-
hospital care. We have also established a national emergency network with ‗1066‘ as the emergency hotline
number.

Transplants. The Apollo Transplant Medicine Program is one of the leading providers of transplant
services across locations in India, including liver transplant expertise in New Delhi and Chennai and kidney
transplant expertise in Kolkata. In fiscal 2011, we successfully performed over 200 liver transplants and
over 500 renal transplants, making it one of the biggest transplant programs of its kind in the country and
the region. Our hospitals also manage one of the largest dialysis programs in the country with over 200
machines in operation and carrying out over 180,000 kidney dialysis a year. Apart from liver and kidney
transplants, our hospitals also perform heart, corneal and solid organ transplants.

In addition to the services described above, we also offer medical and surgical gastroenterology services, ear, nose
and throat services, obstetrics and gynecology, pediatrics, radiology and imaging services and other clinical
specialties.

Apollo REACH Hospitals. We are in the process of establishing a network of hospitals under the ―Apollo REACH‖
initiative with the objective of making high quality healthcare services and advanced medical technology available
in semi-urban and rural areas. Hospitals established under this initiative will have a capacity of around 100 to 200

98
beds, and will be located in Tier II and Tier III cities in India. We have already established Apollo REACH hospitals
in Tier II cities, including Kakinada, Karaikudi, Karimnagar, Bhubaneswar and Karur, and have put in place plans to
establish four additional Apollo REACH hospitals across the country. See section titled ―Business—Key Hospital
Expansion Plans‖.

Projects and Consultancy Services

Our projects and consultancy services business is among the leading healthcare consulting organizations in India.
We provide pre-commissioning consultancy services which include feasibility studies, infrastructure planning and
design advisory services (functional design and architecture review), human resource planning, recruitment and
training and medical equipment planning, sourcing and installation services. We also provide post-commissioning
consultancy services, which include management contracts (providing day-to-day operational support), franchising
and technical consultation (such as human resource planning and training and the establishment of medical and
administrative protocols). We provide these services to third party organizations globally for a fee.

Our international consultancy projects include providing operations management services for a tertiary care hospital
in Bangladesh and licensing the ―Apollo‖ brand name for use by a radiology and laboratory services department of a
large hospital in Kuwait.

Fees for our consultancy services are based on the scope of our services and expected length of relationship with the
client. Typically, pre-commissioning services are provided for 12 to 36 months whereas post-commissioning
services are typically provided over a seven-year term.

Stand-alone Pharmacies

We believe that our stand-alone pharmacy business is among the largest in India, with a network of 1,199 stand-
alone pharmacies as of March 31, 2011. We attribute the success of our stand-alone pharmacy business largely to
the brand value and recognition of the ―Apollo‖ brand. Our stand-alone pharmacies offer a wide range of medicines,
hospital consumables, surgical and health products and general ―over-the-counter‖ products and also offer services
such as prescription refilling, distribution of free health newsletters and bundled health insurance plans.

We operate stand-alone pharmacies on a 24-hour basis in various locations with high visibility and revenue
potential. Some of our stand-alone pharmacies also offer free home delivery to customers living within a five-
kilometer radius.

During fiscal 2010 and fiscal 2011, we focused on operational improvements in our stand-alone pharmacies and
implemented strategies such as (i) introducing generic and in-house brand (private labels) products which have
better profit margins and (ii) increasing sales through bulk distribution of medical supplies and consumables to
hospitals and other healthcare providers. The number of stand-alone pharmacies increased from 1,049 as of March
31, 2010 to 1,199 as of March 31, 2011, and stand-alone pharmacy revenues increased 36.5% to ` 6,583 million in
fiscal 2011 from ` 4,821 million in fiscal 2010.

Other Services

Primary care clinics

Through Apollo Health and Lifestyle Limited (―Apollo Health and Lifestyle‖), our wholly-owned subsidiary, we
provide primary healthcare services, such as clinical and diagnostic services. We initially provided such services
through franchised clinics and charged our franchisees a one-time fixed license fee and a periodic royalty fee. In
fiscal 2011, we changed our business model and predominately set up clinics through our own investment. As of
March 31, 2011, we had a total of 62 clinics and we plan to increase to around 100 clinics over the next few years.
Through our network of clinics, we aim to make quality healthcare services accessible to a larger cross-section of
the Indian population. Our clinics are equipped to provide a wide range of healthcare services, from basic to
advanced consultation and diagnostic tests. All of our clinics are equipped with a pharmacy and some of our clinics
also offer telemedicine facilities to provide medical expertise through second opinions from specialist doctors. See
section titled ―Business—Subsidiaries—Apollo Health and Lifestyle Limited‖.

99
Medical Business Processing Outsourcing

We offer mBPO services through Apollo Health Street Limited (―Apollo Health Street‖). Apollo Health Street
provides end-to-end medical outsourcing services, consisting primarily of revenue cycle management of clients‘
hospitals and professional services including medical coding, billing and records maintenance services and patient
claims management services, catering to the healthcare information needs of United States-based doctor groups,
hospitals and insurers. Apollo Health Street‘s facilities include two centers in India (Hyderabad and Chennai) and
one centre in New York, United States. See section titled ―Business—Associates—Apollo Health Street Limited‖.

Health Insurance Services

We entered the health insurance market through a joint venture (11.01% ownership by us) with Munich Health
Holding AG, a subsidiary of Munich Re and Apollo Energy Limited.

According to the Insurance Regulatory and Development Authority of India, health insurance was the second largest
general insurance segment in the country with 21.12% share of the total premium underwritten within India for
fiscal 2010.

During fiscal 2011, we increased the gross written premium from ` 1,147 million in fiscal 2010 to ` 2,835 million in
fiscal 2011.

Supporting Services

The foregoing core services are supported by various supporting services we provide to improve customer service
and facilitate superior performance of the foregoing core services.

Telemedicine

Our telemedicine facilities are managed by Apollo Telemedicine Networking Foundation (―ATNF‖) and were
launched in a village hospital at Aragonda in March 2000. Its operations include providing tele-consultations and
medical expertise through second opinions to locations where there is limited access to quality healthcare services.
To date, we have provided approximately 65,000 tele-consultations in various specialties to patients located as far as
6,500 miles away. We also use our telemedicine facilities to conduct continuing medical education programs for our
doctors and other medical professionals.

Education and Training Programs

We provide extensive education and training programs through Apollo Hospitals Education and Research
Foundation and Apollo Hospitals Educational Trust. Our primary objective in establishing, maintaining and
supporting educational institutions is to promote medical, paramedical and hospital management education and
training. Apollo Institute of Hospital Management offers a Master‘s degree in hospital management which has
provided training to more than 330 students. The Apollo School of Nursing and College of Nursing offers various
courses at different levels and provides training to nurses to equip them to serve in hospitals across India and
overseas. Around 750 nurses are expected to complete courses at these institutions during the current academic year.

Research

Our faculty members across various departments are engaged in a broad spectrum of research, including therapeutic
trials, investigation of disease pathogenesis and discovery-oriented basic science. Through Apollo Hospitals
Education and Research Foundation, we conduct global and domestic multi-centric trials in various medical fields
including oncology, cardiology, neurology, respiratory medicine, diabetology, vascular surgery, pediatrics,
pulmonology, orthopedics and rheumatology.

100
Our Markets

Ludhiana

Gurgaon Noida
Delhi
Bacheli

Agra
Bhagalpur
Ahmadabad

Indore Bilaspur Kolkata

Ranchi
Nasik
Mumbai, Byculla Bhilai Bhubaneswar
Belapur
Pune Karimnagar
Thane
Lavasa
Taranaka Hyderabad Vizag
Bellary
Kakinada
Margoa Kurnool
Raichur
Aragonda
Nellore
Hospital
Hospital owned
owned by by Apollo
AHEL Hospitals Enterprise Limited (―AHEL‖)
Chitoor Tirupathi
Bangalore Hospital owned by Subsidiary /
Ayanambakkam Hospital owned by subsidiary/joint
Associates / JVs of AHEL
venture/associate of AHEL
Belandur Chennai
Mysore Ranipet Tiruvannamalai
Trichy Thirukadaiyur
Hospital
AHEL managed
Affiliated by us
Hospitals
Calicut Karaikudi
Karur
Clinics
Primary/ Diagnostic Centres
care clinics
Madurai
Under Construction
Projects under construction

_____________
Note:

(1) This is only an indicative map showing our presence in various cities/towns in India.

We have an established pan-India presence with our large network of 54 hospitals, 1,199 stand-alone pharmacies
and 62 clinics spread across India as of March 31, 2011. Currently, we have hospitals located in three (Chennai,
New Delhi and Kolkata) out of India‘s four key metropolitan cities and are in the process of establishing new
hospitals in Mumbai. We are also expanding into Tier II and Tier III cities in India through establishing a network of
hospitals under the ―Apollo REACH‖ initiative. We have already established Apollo REACH hospitals in Tier II
cities, including Kakinada, Karaikudi, Karimnagar, Bhubaneswar and Karur, and have put in place plans to establish
four additional Apollo REACH hospitals across the country. These projects are at various stages of progress and are
expected to be completed over the next three years. We expect to roll out approximately 2,400 beds on the
completion of these projects. See section titled ―Business—Key Hospital Expansion Plans‖.

Our hospital-based pharmacies, while open to the general public, cater largely to the patients of the hospitals in
which they are located and our stand-alone pharmacies are located in high visibility locations of select cities and
towns. See section titled ―Business—Our Services—Healthcare services—Hospitals‖ and ―Business—Our
Services—Other Services—Primary care clinics‖.

We believe that our strong brand value and pan-India presence has made us widely recognized in India and overseas
and has helped to attract patients from abroad, most notably non-resident Indians, uninsured patients from developed
countries, patients from countries where healthcare is not government subsidized and patients from certain countries
in Africa, Middle East and Southeast Asia, where the quality of healthcare infrastructure is relatively poor.

We have an international presence through our projects and consultancy services business, where we have licensing

101
or service arrangements in place with projects located in the Republic of Mauritius, Bangladesh and Kuwait. We
have recently signed a preliminary joint venture agreement dated May 27, 2011 with the Board of Trustees of the
National Social Security Fund, Tanzania and the Tanzanian Ministry of Health & Social Welfare, in connection with
the establishment of an advanced healthcare facility in the city of Dar es Salaam.

Key Hospital Expansion Plans

The table below sets forth the locations of planned projects that we are currently implementing, which includes
establishing new hospitals or expanding the capacity of existing facilities. These projects are at various stages of
implementation and are expected to be completed over the next three years.

Location Estimated Completion Date Type of Hospital Estimated Number of New Beds
(Fiscal year)
Mumbai Cluster
Navi, Mumbai 2014 Super-specialty 350
Byculla, Mumbai 2014 Super-specialty 300
Thane 2013 Super-specialty 250
Sub-Total 900
Apollo REACH initiative
Nashik 2013 Apollo REACH 125
Aynambakkam 2013 Apollo REACH 200
Nellore 2013 Apollo REACH 200
Trichy 2014 Apollo REACH 200
Sub-Total 725
Others
Hyderabad (Expansion) 2012 Super-specialty 100
Hyderguda 2012 Super-specialty 175
New Delhi (Expansion) 2012 Super-specialty 136
Chennai (Expansion) 2013 Super-specialty 30
Vizag 2014 Super-specialty 300
Bangalore (Expansion) 2012 Super-specialty 52
Sub-Total 793
Total 2,418

Our expansion plans are based on management estimates. The actual date of completion and the actual number of
new beds to be rolled out on completion of each planned project may differ from the estimated dates or numbers set
out above due to various factors, including possible construction/development delays, defects or costs overrun,
delays in obtaining or receipt of governmental approvals, changes in the legislative and regulatory environment, our
ability to fund the planned projects, our results of operations, cash flows and financial condition, the availability of
financing on terms acceptable to us to fund such projects and other factors that are beyond our control. See the
section titled ―Risk Factors‖.

Risk Management and Internal Controls

We have a comprehensive risk management system covering various aspects of the business, including operational,
legal, treasury, regulatory and financial reporting.

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The Board of Directors has constituted a Risk Management Committee, headed by the Managing Director, which
reviews the probability of risk events that may adversely affect the operations and profitability of the Company and
suggest suitable measures to mitigate such risks. The executive management team reports to the Board of Directors
periodically on the assessment and minimization of such risks.

Risk Management Model

Risk Identification: Monitoring and identification of risks is carried out at regular intervals with the aim towards
improving the processes and procedures. This assessment is based on risk perception survey, business environment
scanning and inputs from shareholders.

Risk measurement and treatment: After risks have been identified, risk mitigation and solutions are defined, so as to
bring the risk exposure levels in-line to the risk appetite.

Risk reporting: We have an established Risk Council to deal with any reported risks. In addition, a quarterly risk
report is presented to our Risk Management Committee, which reviews the Enterprise Risk Management program to
assess the status and trends available on the material risks highlighted.

Internal control systems and their adequacy

We have an established internal control system to optimize the use and protection of assets, facilitate accurate and
timely compilation of financial statements and management reports, and ensure compliance with statutory laws,
regulations and company policies. We have also put in place an extensive budgetary and other control review
mechanisms pursuant to which the management regularly reviews actual performance with reference to the budgets
and forecasts.

Properties

The following table lists the key hospitals owned by us as of March 31, 2011:

Name & Location Year of Land – Building – Specialties Number of

Incorpor Owned / Owned / Beds
ation / Leased Leased
Commen
cement
Hospitals directly owned by the Company

1 Apollo Hospital, 1983 Owned Owned Super-specialty 583

Chennai
2 Apollo Specialty 1994 Partly owned Partly owned Super-specialty 279
Hospital,
Nandanam
3 Apollo Hospitals, 1988 Owned Owned Super- specialty 514
Hyderabad
4 Apollo Specialty, 1997 Leased Leased Super- specialty 205
Madurai
5 Apollo Hospital, 2001 Leased Leased Super- specialty 300
Bilaspur
6 Apollo BGS 2001 Leased Leased Super- specialty 200
Hospital, Mysore
7 Apollo Hospital, 2005 Owned Owned Multi-specialty 120
Kakinada
8 Apollo Hospitals, 2009 Leased Owned Super- specialty 290
Bhubaneswar

103
 Name & Location Year of Land – Building – Specialties Number of
Incorpor Owned / Owned / Beds
ation / Leased Leased
Commen
cement
9 Apollo Loga 2009 Leased Leased Multi-specialty 62
Hospital, Karur
10 Apollo Heart & 1999 Leased Leased Super- specialty 120
Kidney Hospital,
Vizag
11 Apollo Hospital, 2008 Owned Owned Multi-specialty 125
Karimnagar

Name & Location Year of Land – Building Name of Entity Specialties Number
Incorpor Owned / – Owned (Company’s of Beds
ation / Leased / Leased Shareholding
Commen Interest in such
cement Entity)

Hospitals indirectly owned through subsidiaries, joint ventures or associates

1 Apollo Hospital, 2007 Owned Owned Imperial Super- 297

Bangalore Hospital & specialty
Research
Centre Limited
(51%)
2 Apollo Hospital, 1996 Leased Owned Indraprastha Super- 648
New Delhi Medical specialty
Corporation
Limited
(21.06%)
3 Apollo Hospitals, 2003 Leased Owned Apollo Super- 300
Ahmedabad Hospitals specialty
International
Limited (50%)
4 Apollo Gleneagles 2002 Leased Owned Apollo Super- 460
Hospitals, Kolkata Gleneagles specialty
Hospital
Limited (50%)

In addition to the above, as of March 31, 2011, there are 17 hospitals with 2,875 beds under our management
through operations and management contracts.

Competition

We are one of the few nationwide providers of healthcare services in the private sector in India. The majority of our
competition is regional and includes players such as Fortis Healthcare Limited, Manipal Hospitals, Max Healthcare,
Care Hospitals and Sterling Hospitals. In addition, some of the hospitals that compete with us are owned by
Government agencies or non-profit entities supported by endowments and charitable contributions.

The number and quality of doctors associated with a hospital are important factors in a hospital‘s competitive
advantage and help to attract patients. We believe that doctors outside a hospital‘s network refer patients to a
hospital primarily on the basis of the quality of care and services the hospital provides to its patients, the location of
the hospital and the quality and availability of the hospital‘s facilities, equipment and employees. Other factors in a

104
hospital‘s competitive advantage include operational efficiency, the scope and breadth of healthcare services
provided, brand recognition and the success rate for its procedures.

We have been able to build a broad base of skilled medical professionals and we believe our commitment to
continuing education and training has helped us to reduce our attrition rates and build long-term relationships with
our doctors. We believe that maintaining and strengthening our human capital is critical to our success in the future.
We also believe that continuing to invest in the latest and most advanced medical technology and equipment will
help us to maintain and further improve our competitive position. We seek to strategically locate our hospitals in
areas with a large population base that require the services our hospitals provide.

In our stand-alone pharmacies business, we compete with other hospital-based pharmacies and stand-alone
pharmacies for customers. One of our main competitors in the stand-alone pharmacies business is Medplus Health
Services.

We believe our position as one of the leading healthcare services providers in India, commitment to clinical
excellence and technology innovation, strong brand value, strong relationships with doctors and other medical
professionals, and an experienced and professional management team with their domain expertise and strong
execution track record give us a competitive edge in the healthcare services industry.

Employees

As of March 31, 2011, 2010 and 2009, we had 30,640, 26,659 and 24,421 employees (including employees of our
subsidiaries, joint ventures and associates only), respectively, as follows:

Employees As of March 31,

2011 2010 2009
Doctors1 1,761 1,637 1,666
Executives 1,408 1,606 1,463
Nurses 7,863 6,603 6,288
Paramedical personnel 2,403 2,071 1,878
Support Services personnel 11,462 10,568 9,920
Administration 1,221 972 857
Others2 4,522 3,202 2,349
Total 30,640 26,659 24,421
__________
Notes:

(1) This data only includes doctors employed by the Company, and its subsidiaries, joint ventures and
associates and does not include the ―fee for service‖ doctors working in their hospitals. As of March 31,
2011, 2010 and 2009, the Company, and its subsidiaries, joint ventures and associates had 2,414 and 2,180
and 2,026 ―fee for service‖ doctors working in their hospitals, respectively. Doctors working under such
―fee for service‖ arrangements are not employees of the Company and are usually paid based on the
volume of and revenues generated from the consultations and treatments provided. In the case of newly
established hospitals or clinical practices for certain specialties, our ―fee for service‖ doctors may be paid a
guaranteed fixed sum in the initial months of their appointment. Once the hospital or clinical practice
becomes more established, we will review such fixed-fee arrangements and decide whether to pay these
―fee for service‖ doctors on a performance-linked basis instead.

(2) This includes non-hospital staff employed by Apollo Health Street, AMHICL (as defined below), UHHCL
(as defined below), Apollo Health and Lifestyle and Family Health Plan (as defined below).

Our employee costs are influenced by increasing employee compensation in India. Our employees are remunerated
at market rates.

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Our human resources team strives to align policies with business needs to create a performance driven culture. We
attempt to enhance performance through initiatives such as performance linked to rewards, a transparent and
consultative review process and building a high performance work system through self-managed teams. We have
been able to control attrition rates by conducting employee surveys and instituting feedback processes to assess
areas of improvement and developing and implementing programs, policies and practices like diversified training
and career planning, mentoring programs, entertainment, executive coaching, leadership development programs,
employee and management development programs. We have also introduced a reward and recognition scheme. In
2010, Apollo Health City, Hyderabad was ranked among India‘s Top 100 companies to work for by The Economics
Times & Great Place to Work Institute.

We consider our employee relations to be good and we have not experienced any work stoppages as a result of labor
disagreements in the last 15 years. While our hospitals in the non-unionized category experience union
organizational activity from time to time, we do not expect such efforts to materially affect our future operations.

Intellectual Property

We have registered the ―Apollo‖ name and logo and ―Apollo Hospitals‖, ―The Apollo Clinic‖, ―Apollo Pharmacy‖
and ―Apollo Health City‖ names as trademarks and the ―Apollo‖ name as a service mark, under the Trade Marks
Act, 1999, as amended.

Pursuant to an agreement dated April 5, 2001, we have authorized Apollo Health and Lifestyle to use the ―Apollo‖
name, logo and trademarks for the business activities of Apollo Health and Lifestyle, which includes sub-licensing
the ―Apollo‖ name, logo and trademarks to the franchisees of Apollo Health and Lifestyle‘s primary care clinics.

Ethical and Compliance Program

We have developed ACE @ 25, a quality and care assessment and management scorecard, and implemented it
throughout our network of hospitals. Through ACE @ 25, we aim to continuously assess the quality of care and
services received by our patients to ensure that we deliver consistently high quality service and achieve clinical
excellence throughout our network of hospitals. ACE @ 25 assesses performance based on 25 clinical parameters
including ALOS, coronary artery bypass surgery mortality rates, ALOS post renal transplant and the survival rate of
liver transplant patients one year after surgery. 25 of our hospitals have completed one year of reporting of clinical
parameters under ACE @ 25. An Apollo Clinical Audit Team of 15 auditors from 12 different locations was formed
to carry out the audit across our hospitals and review the data, methodology and definitions used by each of the
participating hospitals.

To stimulate academic and research activities across our network, we have implemented policies on academics and
research, including grants, citations and awards.

We have standardized our pain management policy, infection control policies, blood transfusion policy, radiation
policy and antimicrobial guidelines policy and implemented such policies throughout our hospitals.

Corporate Social Responsibility

We have undertaken several initiatives as part of our commitment to improving social welfare.

The following are examples of our recent initiatives:

The ―Billion Hearts Beating‖ campaign, a corporate social initiative undertaken by the Company in
association with the Times of India Foundation to raise awareness of heart disease in the country, won the
―Best Marketing Campaign of the Year‖ award at the World Brand Congress 2010.

We signed a memorandum of understanding with the Government of India to set up ―Central Government
Health Scheme – Apollo Dialysis Clinics‖ to provide specialized services to kidney patients enrolled under
the Central Government Health Scheme.

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 In support of ―SACH - Save A Child‘s Heart‖, we have performed around 2,500 cardiac surgeries on
underprivileged children with serious congenital heart diseases and borne the medical expenses related to
such surgeries.

Professional and General Liability Insurance

We maintain general liability insurance policies on our properties including hospitals, buildings, clinics, medical and
other equipment and fixtures, consumables and other inventories covering fire and other contingencies such as riot,
strike, flood, fire, other natural and accidental risks. We also have general liability coverage against personal
accident, group medical, fidelity, burglary and vehicle risks, which we believe are prudent for our business. We
maintain comprehensive insurance coverage which is provided by four state-owned Indian insurance companies and
certain private insurers with a total coverage of up to ` 25,023 million. Our insurance policies are renewable
annually.

We are subject to lawsuits, claims and legal actions by patients in the ordinary course of business. Accordingly, we
maintain a professional liability insurance cover to the extent of ` 750 million and paid an annual premium of
approximately ` 5.1 million for fiscal 2011. This insurance covers liability arising from doctors, consultants, nurses
and other professionals in providing medical care services.

We also maintain group medical insurance policy for employees and dependents relating to their hospitalization. In
addition, we have an accident insurance policy for employees and their dependents.

Health and Environmental Regulation and Initiatives

We are subject to extensive, evolving and increasingly stringent health and environmental laws and regulations
governing our services, processes and facilities. Some of these laws and regulations can broadly be described as
follows:

Healthcare laws (including the Indian Medical Council Act, 1956, Radiation Protection Rules, 1971,
Transplantation of Human Organs Act, 1994, Drugs and Cosmetics Act, 1940, the Drugs (Control) Act,
1950 and the Pharmacy Act, 1948).

Environmental laws (including the Air (Prevention and Control of Pollution) Act, 1981 and the Water
(Prevention and Control of Pollution) Act, 1974).

Safety laws (including the Hazardous Wastes (Management and Handling) Rules, 1989 and the Bio-
Medical Waste (Management & Handling) Rules, 1998).

Labor laws (including the Industrial Disputes Act, 1947 and the Workmen‘s Compensation Act, 1923).

The various laws and regulations applicable to us address, among other things, waste water discharges, the
generation, handling, storage, transportation, treatment and disposal of toxic or hazardous bio-medical materials and
waste, workplace conditions and employee exposure to such substances.

Subsidiaries

Apollo Health and Lifestyle Limited

Apollo Health and Lifestyle, which commenced its operations in 2002, is a wholly-owned subsidiary of the
Company providing primary healthcare services, such as clinical and diagnostic services. See section titled
―Business - Our Services - Other Services - Primary care clinics‖.

In fiscal 2011, Apollo Health and Lifestyle accounted for ` 154.43 million or 0.59% of our revenues.

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Unique Home Health Care Limited (“UHHCL”)

UHHCL is a wholly-owned subsidiary of the Company incorporated in 1995 which provides healthcare services,
including, doctor‘s consultation, nursing services, physiotherapy and medical equipment direct to patients‘ homes. It
also offers paramedical services in hospitals to critically ill patients.

In fiscal 2011, UHHCL accounted for ` 19.53 million or 0.07% of our revenues.

AB Medical Centers Limited (“AMC”)

AMC is a wholly-owned subsidiary of the Company incorporated in 1974. Under the terms of a lease agreement
dated March 31, 2009, AMC has leased its infrastructural assets to the Company to be used in the operation of the
FirstMed Hospital in Chennai which provides secondary care hospital services, for a lease term of three years at `
600,000 per month. Currently, AMC does not conduct any other business.

In fiscal 2011, AMC recorded ` 6.55 million in revenues.

Samudra HealthCare Enterprises Limited (“SHEL”)

SHEL is a wholly-owned subsidiary of the Company incorporated in 2003. SHEL operates a 120-bed multi-
specialty hospital at Kakinada. In fiscal 2011, SHEL accounted for ` 263.31 million or 1.0% of our revenues.

Apollo Hospital (UK) Limited (“AHUKL”)

AHUKL is a wholly-owned UK-based subsidiary of the Company incorporated in 2004 and has yet to commence its
operations.

Imperial Hospital & Research Centre Limited (“IHRCL”)

IHRCL is a 51% owned subsidiary of the Company in which the Company acquired a controlling interest pursuant
to a subscription-cum-shareholders agreement dated January 18, 2006. IHRCL owns and operates a 300-bed multi-
specialty hospital at Bengaluru. The Company has entered into an operations and management agreement with
IHRCL dated January 18, 2006, under which the Company will provide certain consultancy and management
services to IHRCL. In fiscal 2011, IHRCL accounted for ` 875.25 million or 3.34% of our revenues.

Pinakini Hospitals Limited (“PHL”)

PHL is a 74.94% owned subsidiary of the Company in which the Company acquired a controlling interest pursuant
to a share purchase agreement, dated June 18, 2008. As a part of its strategy to extend its network to the Tier II cities
in India, the Company intends to build a hospital in Nellore. In fiscal 2011, PHL has yet to commence its operations.

Apollo Cosmetic Surgical Centre Private Limited (“ACSPL”)

ACSPL is a 61% owned subsidiary of the Company in which the Company acquired a controlling interest pursuant
to a shareholders agreement dated September 1, 2009. ACSPL provides comprehensive treatments and surgeries for
a range of cosmetic enhancements through operating cosmetic surgical centers located in Chennai. In fiscal 2011,
ACSPL accounted for ` 14.65 million or 0.06% of our revenues.

Alliance Medicorp (India) Limited (“AMI”)

AMI is a 51% owned subsidiary of the Company in which the Company acquired a controlling interest pursuant to a
share purchase agreement dated December 23, 2008. AMI operates dialysis clinics in Chennai. In fiscal 2011, AMI
accounted for ` 102.32 million or 0.39% of our revenues.

108
Joint Ventures

Apollo Hospitals International Limited (“AHIL”)

AHIL is a 50:50 joint venture between the Company and Cadila Pharmaceuticals Limited (―CPL‖) pursuant to a
shareholders agreement dated April 13, 2006 entered into between the Company, UHHCL and CPL, and was
incorporated to cater to the healthcare needs of the western part of India. We directly hold 8% equity interest and
indirectly hold 42% equity interest through UHHCL. AHIL owns and operates a 320-bed multi-specialty hospital
and diagnostic centre in Ahmedabad. This hospital commenced its operations in 2004.

Our participating interest, including the investment of our wholly-owned subsidiary, UHHCL, in AHIL was valued
at ` 237.1 million as of March 31, 2011. As of March 31, 2011, AHIL had an issued share capital of ` 584.67
million and accumulated losses of ` 637.09 million. AHIL had losses after tax of ` 69.68 million in fiscal 2011. The
Company did not receive any dividends from AHIL in fiscal 2011.

In fiscal 2011, AHIL accounted for ` 421.78 million or 1.61% of our revenues.

Apollo Gleneagles Hospital Limited (“Apollo Gleneagles”)

Apollo Gleneagles is a 50:50 joint venture between the Company and Gleneagles Development Pte Limited
(―GDPL‖), a member of The Parkway Group, which was established to provide international quality healthcare
services in Kolkata and its neighboring regions. The Parkway Group, through its group companies, manages and
provides consultancy services to, hospitals and other healthcare facilities in countries including Singapore, Brunei,
Vietnam, Malaysia, Indonesia and India.

We acquired our equity interest in Apollo Gleneagles in 2002 and the hospital commenced its operations in 2003.
The hospital is a multi-specialty, fully equipped 425-bed hospital offering emergency care, ambulance and
diagnostic services to the West Bengal region.

We are party to a shareholders‘ agreement dated July 30, 2002 and supplemental agreement dated December 30,
2002, with GDPL in respect of Apollo Gleneagles which includes terms of a customary nature, including the right of
each shareholder to appoint three of six directors. The shareholders‘ agreement also restricts us from competing with
Apollo Gleneagles‘ business in the West Bengal area (although this restriction does not apply to certain existing
contracts that we have in place).

Our shareholding in Apollo Gleneagles is subject to a share pledge in favor of Housing Development Finance
Corporation Limited (―HDFC Limited‖) as security for the borrowings of Apollo Gleneagles. We have also given
HDFC Limited an undertaking not to dispose of our shareholding in Apollo Gleneagles or withdraw from the
management of Apollo Gleneagles in connection with this loan facility without their prior approval.

In fiscal 2011, Apollo Gleneagles accounted for ` 825.65 million or 3.15% of our revenues.

Apollo Gleneagles PET-CT Private Limited (“AGPCL”)

AGPCL commenced its operations in July 2005 and is a 50:50 joint venture between the Company and Parkway
Healthcare (Mauritius) Limited, a member of The Parkway Group pursuant to a shareholders agreement dated
March 26, 2005. AGPCL provides high-end medical diagnostic services through its PET-CT Radio Imaging Centre
in Hyderabad.

In fiscal 2011, AGPCL accounted for ` 31.37 million or 0.12% of our revenues.

Apollo Munich Health Insurance Company Limited (“AMHICL”)

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We own 11.01% equity interest in AMHICL, which was incorporated in 2006 as Apollo DKV Insurance Company
Limited and subsequently changed its name to AMHICL in 2009, in a joint venture with Munich Health Holding
AG (which currently owns 25.53% equity interest) and Apollo Energy Limited (which currently owns 63.46%
equity interest) pursuant to a joint venture agreement dated October 11, 2006. AMHICL‘s objective is to provide
comprehensive health insurance solutions for individuals as well as corporate houses and personal accident plans
and travel insurance for individuals, families and senior citizens. AMHICL obtained regulatory approval from the
Insurance Regulatory and Development Authority of India to undertake general insurance business in August 2007
and commenced its operations in November 2007.

In fiscal 2011, AMHICL accounted for ` 181.34 million or 0.69% of our revenues.

Western Hospitals Corporation Private Limited (“WHCPL”)

We own 40% equity interest in WHCPL which was formed as a joint venture pursuant to a shareholders agreement
dated January 24, 2007 entered into with Eleanor Holdings with the objective of promoting greenfield hospital
project-related initiatives in Maharashtra.

It has a paid up share capital of ` 180 million. In fiscal 2011, WHCPL did not earn any revenues.

Quintiles Phase One Clinical Trials India Private Limited (“QPL”)

QPL was formed as a 60:40 joint venture pursuant to a shareholders agreement dated January 27, 2009 entered into
with Quintiles, Mauritius Holdings Inc with the objective of conducting Phase 1 clinical trials, on behalf of
pharmaceutical companies, on a contractual basis in India.

It has a paid up share capital of ` 252 million. In fiscal 2011, QPL did not earn any revenues.

Apollo Lavasa Health Corporation Limited (“ALHCL”)

ALHCL was formed as a joint venture pursuant to a shareholders agreement dated September 21, 2007 entered into
with Lavasa Corporation Limited with the objective of setting up a healthcare city at Lavasa, a hill station near Pune.
We currently own 34.66% of ALHCL.

It has a paid up share capital of ` 11.62 million. In fiscal 2011, it accounted for ` 2.5 million or 0.01% of our
revenues.

Associates

Apollo Health Street Limited

Apollo Health Street, our associate in which we own a 39.38% equity interest as of March 31, 2011, offers
comprehensive mBPO services. See section titled ―Business—Our Services—Other Services—Medical Business
Processing Outsourcing‖ above. Apollo Health Street commenced its operations in 2000. We directly hold 38.69%
equity interest and indirectly hold 0.69% equity interest through UHHCL.

We are party to a shareholders agreement dated April 14, 2005, a restated shareholders agreement dated January 8,
2007 and a subscription agreement dated June 14, 2005, with Maxwell (Mauritius) Pte Ltd and Eliza Holdings in
respect of Apollo Health Street.

In fiscal 2011, Apollo Health Street had revenues of ` 4,476.33 million.

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Family Health Plan Limited (“Family Health Plan”)

Family Health Plan, our associate in which we own a 49% equity interest as of March 31, 2011, provides healthcare-
related third party administration (―TPA‖) services. PCR Investments Limited, one of our substantial shareholders,
owns 25% of Family Health Plan, with other substantial shareholders including Spectra Hospital Services Limited
(11%) and Citadel Health Limited (9.3%).

Family Health Plan commenced its operations in 1995. Family Health Plan is licensed by the Insurance Regulatory
and Development Authority of India. Family Health Plan is India‘s first International Organization for
Standardization (ISO) certified TPA.

In fiscal 2011, Family Health Plan had revenues of ` 292.18 million.

Indraprastha Medical Corporation Limited (“Indraprastha”)

We own 21.06% of Indraprastha, a listed company which owns and operates the Indraprastha Apollo Hospital which
commenced its operations in July 1996 and has become one of the largest corporate hospitals in Asia. It is the third
specialty tertiary care hospital we have set up and was established jointly with the Government of Delhi. As of
March 31, 2011, other major shareholders in Indraprastha included the Promoter Group (3.94%) and the President of
India (26.0%), with 49.00% of Indraprastha‘s shares being held by the public, which includes financial institutions
and corporations.

The hospital has capacity for 748 beds and has a comprehensive range of diagnostic, medical and surgical facilities.

In fiscal 2011, Indraprastha had revenues of ` 3,366.44 million.

StemCyte India Therapautics Private Limited (“SITPL”)

We own a 13.05% equity interest in SITPL pursuant to a shareholders agreement dated March 1, 2008 entered into
with, among others, the Company and StemCyte Inc. SITPL was incorporated in 2008 in association with StemCyte
Cyprus Limited (which holds 73.90% equity interest of SITPL) and Cadila Pharmaceuticals Limited (which holds
13.05% equity interest of SITPL).

SITPL‘s objective is to set up a state-of-the-art umbilical cord blood bank at Ahmedabad. SITPL will process and
store umbilical cord blood units that will be used to treat patients around the world.

In fiscal 2011, SITPL had revenues of ` 27.49 million.

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 BOARD OF DIRECTORS AND SENIOR MANAGEMENT

Directors

As per the Articles of Association and subject to the provisions of Section 252 of the Companies Act, the number of
Directors shall not be less than three and more than 20, unless otherwise determined by the Company in the general
meeting. At present, the Company has 14 Directors (excluding the alternate director) including five Executive
Directors and nine Non-Executive Directors.

At every Annual General Meeting of the Company, one-third of the Directors are liable to retire by rotation for the
time being or, if their number is not three or multiple of three, then the number nearest to one-third shall retire from
office. The Directors are not required to hold any of the Equity Shares to qualify to be a Director.

The following table provides information about the Directors as of the date of this Placement Document:

Sr. Name, Address, DIN, Term and Nationality Age Designation

No.
1. Dr. Prathap C. Reddy 79 Executive Chairman

Address: 19 Bishop Gardens

Raja Annamalaipuram
Chennai 600 028

DIN: 0003654
Term: Not liable to retire by rotation
Nationality: Indian

2. Preetha Reddy 53 Managing Director

Address: 5 Subba Rao Avenue

II Street, Nungambakkam
Chennai 600 006

DIN: 00001871
Term: For a period of five years from February 3, 2011 subject to
approval of the shareholders in the Annual General Meeting to be held
on July 22, 2011
Nationality: Indian

3. Suneeta Reddy 52 Joint Managing Director with

effect from June 1, 2011 subject
Address: 5 Subba Rao Avenue to approval of the shareholders
II Street, Nungambakkam at the annual general meeting to
Chennai 600 006 be held on July 22, 2011.

DIN: 0001873
Term: For a period of five years from February 3, 2011 subject to
approval of the shareholders in the Annual General Meeting to be held
on July 22, 2011
Nationality: Indian

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 Sr. Name, Address, DIN, Term and Nationality Age Designation
No.
4. Sangita Reddy 48 Executive Director, Operations

Address: H. No.8-2-674/B212
Road No. 13, Banjara Hills
Hyderabad 500 034

DIN: 0006285
Term: For a period of five years from February 3, 2011 subject to
approval of the shareholders in the Annual General Meeting to be held
on July 22, 2011
Nationality: Indian

5. Shobana Kamineni 50 Executive Director, Special

Incentives
Address: No.10-3-316-A
Masab Tank
Hyderabad 500 028

DIN: 0003836
Term: For a period of five years from February 1, 2010
Nationality: Indian

6. N. Vaghul 75 Independent Director

Address: Flat No.3

Sudharsan Apts. No.63
I Main Road, R.A Puram
Chennai 600 028

DIN: 00002014
Term: For a period of three years from July 26, 2010
Nationality: Indian

7. Habibullah Badsha 78 Independent Director

Address: New No.7 (Old No.3)

Leith Castle Street
Raja Annamalaipuram
Chennai 600 028

DIN: 0003678
Term: For a period of three years from July 26, 2010
Nationality: Indian

8. Deepak Vaidya 66 Independent Director

Address: 906, Maker Chambers V

Nariman Point
Mumbai 400 021

DIN: 00337276
Term: For a period of three years from August 26, 2009
Nationality: Indian

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 Sr. Name, Address, DIN, Term and Nationality Age Designation
No.
9. Rajkumar Menon 67 Independent Director

Address: No. 1-C Dev Apartments

1st Floor, New No. 5
Prithivi Avenue, 1st Street
Alwarpet
Chennai 600 018

DIN: 0002897
Term: For a period of three years from July 26, 2010
Nationality: Indian

10. Rafeeque Ahamed 64 Independent Director

Address: 10 Kothari Road

Nungambakkam High Road
Chennai 600 034

DIN: 00013749
Term: For a period of three years from August 26, 2009
Nationality: Indian

11. T.K. Balaji 63 Independent Director

Address: 34 Poes Gardens

Chennai 600 084

DIN: 00002010
Term: For a period of three years from July 26, 2010
Nationality: Indian

12. Khairil Anuar Abdullah 60 Independent Director

Address: KFH Asset Management Sdn Bhd

Level 18, Tower 2, Etiqa Twins
11 Jalan Pinang, P.O. Box 10103
50704 Kuala Lumpur
Malaysia

DIN: 00054217
Term: For a period of three years from July 26, 2010
Nationality: Malaysian

13. G. Venkatraman 67 Independent Director

Address: Flat No. 802

Chembur Gulmarg Co-operative Housing Society
R C Marg, Chembur Naka
Mumbai 400 071

DIN: 00010063
Term: For a period of three years from August 28, 2008
Nationality: Indian

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 Sr. Name, Address, DIN, Term and Nationality Age Designation
No.
14. Sandeep Naik 38 Non - Executive Director

Address: Apax Partners In Advisers Private Limited

2nd Floor, Devchand House, Shivsagar Estate
Dr Annie Besant Road, Worli
Mumbai 400 018

DIN: 02057989
Term: For a period of three years from July 26, 2010
Nationality: United States citizen

15. Michael Fernandes 42 Independent Director (Alternate

Director to Khairil Anuar
Address: Khazanah India Advisors Private Limited Abdullah)
17th Floor, Express Towers
Nariman Point
Mumbai 400 021

DIN: 00064088
Term: For a period of three years from January 30, 2009
Nationality: Indian

Brief Biographies

Dr. Prathap C. Reddy, 79, is the Executive Chairman of the Company. He is the founder of the Apollo Group,
India's first corporate hospital group. Dr. Reddy holds a Bachelor‘s degree in Medicine and Surgery from Stanley
Medical College, Madras and is a Fellow of the Royal College of Surgeons, Edinburgh. He practiced as a
cardiologist in USA before founding the Apollo Group. In recognition of his services, he was awarded with Padma
Bhushan in 1991 and the prestigious Padma Vibhushan award by the Government of India in 2009. Late Mother
Teresa awarded Dr. Reddy with the Citizen of the Year award for the year 1993-94. Dr. Reddy was also presented
with the Sir Nilrattan Sircar Memorial Oration Award for medical excellence by the Journal of the Indian Medical
Association in the year 1998. In the same year, he was also nominated by Business India as one of the top fifty
personalities who have made a difference to the country in the fifty years since Independence. He has been on the
Board since the year 1979.

Preetha Reddy, 53, is the Managing Director of the Company with effect from February 3, 2011 subject to approval
of the shareholders in the Annual General Meeting to be held on July 22, 2011. She received her Bachelor‘s degree
in Science in Chemistry from Madras University and a Master‘s degree in Public Administration from Annamalai
University. She was a chief executive officer of erstwhile Indian Hospitals Corporation Limited and has over 28
years of work experience. She has been instrumental in getting JCI accreditation for Apollo Hospitals, Greams
Road, Chennai. She plays a key role in the Apollo Group‘s corporate social responsibilities including spearheading
Save a Child‘s Heart aimed at providing economic succor to children from the economically under privileged
sections of society. She was awarded the outstanding personality award by the Indian Medical Association in 1999
and received the Good Samaritan Award from Rotary Club in 1999. Ms. Reddy has been conferred with a degree of
Doctor of Science (Honoris Causa) by Dr. MGR Medical University. She has been on the Board since the year 1989.

Suneeta Reddy, 52, has been appointed as the Joint Managing Director of the Company with effect from February
3, 2011 subject to approval of the shareholders at the annual general meeting to be held on July 22, 2011. She
focuses on corporate strategy in addition to funding initiatives of the Company. She received her Bachelor‘s degree
in Arts in Economics and Marketing. She also holds a Diploma in Financial Management from the Institute of
Financial Management and Research, Chennai and has completed the Owner/President Management Program at
Harvard Business School, Boston, USA. She was the joint managing director of erstwhile Indian Hospitals
Corporation Limited and has over 26 years of work experience. Ms. Reddy has spearheaded many initiatives in the

115
field of healthcare and hospitality and is an active member of industry bodies representing the healthcare sector. She
has held leadership positions including co-chairperson of Healthcare Sub Committee - Confederation of Indian
Industry and a member in National Committee on Healthcare. She is currently the chairperson of Aircel Cellular
Limited. She has been on the Board since the year 2000.

Sangita Reddy, 48, is the Executive Director (Operations) of the Company with effect from February 3, 2011
subject to approval of the shareholders in the Annual General Meeting to be held on July 22, 2011. She has the
responsibility of overseeing the operational activities and information technology initiatives of the Company. She
holds a Bachelor‘s degree in science from Women‘s Christian College. She also holds a Diploma in Hospital
Management conducted by Harvard University, Boston, USA. She was the managing director of erstwhile Deccan
Hospitals Corporation Limited and has over 25 years of work experience. She has also completed graduate courses
in Operations Research, Rutgers University, New Jersey. She received ―Young Manager of the year 1998‖ award
from Hyderabad Management Association and award for outstanding personalities from Jaycees. She was a member
of the Prime Minister‘s delegation to Malaysia organized by the Confederation of Indian Industries. She is a member
of Hyderabad Management Association, Aids Prevention Council, Indian Society for Training & Development,
Confederation of Indian Industries - Healthcare Committee, American Associate of Healthcare Executive and
Committee for Standardization of digital information to facilitate implementation of telemedicine systems using
information technology enabled services, Ministry of Information Technology, Government of India. She has been
on the Board since the year 2000.

Shobana Kamineni, 50, is the Executive Director (Special Initiatives) of the Company. She has the responsibility of
overseeing strategic initiatives planned by the Apollo Group. Ms. Kamineni is currently involved with the
pharmaceutical retailing, supply chain management, clinical trials, research and the Apollo Group‘s foray into
Health Insurance (Apollo Munich Health Insurance in collaboration with Munich Re). She holds a Bachelor‘s
degree in Economics and completed a course in Accelerated Hospital Management from Columbia University, USA
and has over 20 years of experience in the healthcare industry. Her experience has largely been in the sphere of
project management wherein she established most of the Apollo Group's large projects. Ms. Kamineni was the chair
person of Confederation of Indian Industries (Southern Region) and has also chaired the Confederation of Indian
Industries National Committee on Entrepreneurship. She has been on the Board since the year 2010.

N. Vaghul, 75, is an Independent Director of the Company. He holds a Bachelor‘s degree in Commerce (Honors)
from the University of Madras. He has over 50 years of experience in banking sector. He began his career in State
Bank of India and subsequently became the Executive Director of Central Bank of India. He was the Chairman of
ICICI from 1985 till 2009. During this period, he was instrumental in starting an investment bank, a commercial
bank, a venture capital company and an asset management company, as a part of Industrial Credit & Investment
Corporation of India. He was also responsible for promotion of India‘s first credit rating company CRISIL. In
recognition of his pioneering efforts, he was selected as the ―Business Man of the Year‖ in 1992 by Business India
and has been conferred the ―Lifetime Achievement Award‖ by Economic Times in 2006. He was given an award for
his contribution to Corporate Governance by the Institute of Company Secretaries in 2007. He was given the
Lifetime Achievement Award by the ―Ernst & Young Entrepreneur of the Year Award Program‖ in 2009. He was
awarded Padma Bhushan by the Government of India in 2009. He has been on the Board since the year 2000.

Habibullah Badsha, 78, is an Independent Director of the Company. He holds a Bachelor‘s degree in law from the
University of Madras and has obtained a Master‘s degree in Islamic History from Presidency College, Chennai. He
has previously served as senior central government standing counsel, public prosecutor, State of Tamil Nadu, special
prosecutor for customs, excise and enforcement and advocate general of Tamil Nadu. He has over 50 years of
experience including experience as senior central government standing counsel, public prosecutor, State of Tamil
Nadu, special prosecutor for customs, excise and enforcement and advocate general of Tamil Nadu and is currently
practicing as a senior counsel in the Madras High Court. He has been on the Board since the year 2001.

Deepak Vaidya, 66, is an Independent Director of the Company. He is qualified as a Fellow of the Institute of
Chartered Accountants (England and Wales) and holds a Bachelor‘s degree in Commerce from the Bombay
University. Mr. Vaidya is currently a consultant of Symphony partners (Asia) Private Limited. He is also a director
on the board of Apollo Gleneagles Hospitals Limited, Orchid Chemicals & Pharmaceuticals Limited and chairman
of Strides Arcolab Limited and Arc Advisory Services Limited. He has over 20 years of corporate experience in the
financial field in India and abroad. He has been on the Board since the year 2000.

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Rajkumar Menon, 67, is an Independent Director of the Company. He holds a Bachelor‘s degree in Science from
St. Nicholas College, Somerset, England and he is currently working as Chairman-cum-Managing Director of
Tokushu Menon Paper Manufacturing Company Limited. He has over 30 years of work experience in healthcare
sector. He has been on the Board since the year 1979.

Rafeeque Ahamed, 64, is an Independent Director of the Company. He holds a Bachelor‘s degree from the Madras
University. He is the chairman of Farida Group of Companies consisting of tanneries and footwear units. Mr.
Ahamed is also the chairman of Tamil Nadu State Council, Federation of Indian Chambers and Commerce &
Industry and president of All India Skins and Hides and Tanners Merchants Association. He has been awarded
Padma Shri by the Government of India. He has over 50 years of experience in leather industry. He has been on the
Board since the year 1979.

T.K. Balaji, 63, is an Independent Director of the Company. He holds a Bachelor‘s degree in Mechanical
Engineering and has completed Business Management Studies from Indian Institute of Management, Ahmedabad
where he was awarded a Gold Medal for outstanding scholastic performance. Currently, he is the Managing Director
of Lucas-TVS Limited. Mr. Balaji has had over 30 years of experience in the automotive industry and has served as
President of Automotive Component Manufacturers Association of India, as a member of Development Council for
Automobiles and Allied Industries and as a member of CII National Council. In recognition of his contribution to
the development of Automotive Component Industry, he was conferred a special award by the FIE Foundation of
Maharashtra. He has been on the Board since the year 2001.

Khairil Anuar Abdullah, 60, is an Independent Director of the Company. He holds a Bachelor‘s degree in
Economics from the University of Malaya and has obtained a Master‘s degree in business administration from
Harvard Business School, Boston, USA. Mr. Abdullah served with the Economic Planning Unit, Prime Minister‘s
Department, Malaysia in various positions including human resource development, econometrics, macro-economic
planning and application of information technology, development planning etc. A fellow of the Malaysian Institute
of Banks and a life member of the Malaysian Economic Association, he serves on the committee of the Harvard
Club Malaysia. Mr. Abdullah was appointed as the founding chairman of MESDAQ Berhad, Malaysia‘s securities
exchange for technology and growth companies till it merged with the Kuala Lumpur Stock Exchange in 2003. He
has over 39 years of experience including diverse range of government and corporate experience. He has been on the
Board since the year 2005.

G Venkatraman, 67, is an Independent Director of the Company. He holds a Bachelor‘s degree in Economics and
holds a Master‘s degree in Law from the University of Bombay. He has also completed certificated Associateship of
the Indian Institute of Bankers. He served with IDBI and retired as its Chief General Manager in November 2004
after 39 years of developmental banking experience. He has been on the Board since the year 2005.

Sandeep Naik, 38, is a Non-Executive Director of the Company and is a nominee of Apax Mauritius FDI One
Limited. He holds a Bachelor‘s degree in Technology in Instrumentation Engineering from University of Bombay
and a Master‘s degree in bio-medical engineering from Medical College of Virginia and a Masters degree in
management from Wharton School of Business, Pennsylvania, USA. Sandeep Naik works for Apax Partners, a
global private equity firm and is currently the Co-Head of the India office leading their investments in Healthcare,
Financial & Business Services and Retail and Consumer group. Prior to joining Apax Partners, he worked at
Medtronic, Mayo Clinic and McKinsey and also co-founded a medical device start-up, Infrascan. Mr. Naik joined
Apax Partners in 2004. He is also the co-founder of the India office of Apax Partners and manages their investments
in healthcare, financial and business services and retail & consumer group. He has over 15 years of experience in
finance sector. He has been on the Board since the year 2009.

Michael Fernandes, 42, is an Alternate Director to Khairil Anuar Abdullah. He holds a Bachelor‘s degree in
Science with Honors in Economics from St Xavier‘s College, Calcutta University and a post graduate diploma in
management from the Indian Institute of Management, Kolkata. He joined Khazanah Nasional as an Executive
Director, Investments Division in April 2008. He is the country head for India and also in charge of the healthcare
portfolio of Khazanah.

117
Relationship between our Directors

Other than those provided below, none of the Directors are related to each other:

Name of the Director Relationship with other Directors

Dr. Prathap C Reddy Father of Preetha Reddy, Suneeta Reddy, Sangita Reddy and Shobana Kamineni
Preetha Reddy Daughter of Dr. Prathap C Reddy and sister of Suneeta Reddy, Sangita Reddy and
Shobana Kamineni
Suneeta Reddy Daughter of Dr. Prathap C Reddy and sister of Preetha Reddy, Sangita Reddy and
Shobana Kamineni
Sangita Reddy Daughter of Dr. Prathap C Reddy and sister of Preetha Reddy, Suneeta Reddy and
Shobana Kamineni
Shobana Kamineni Daughter of Dr. Prathap C Reddy and sister of Preetha Reddy, Suneeta Reddy and
Sangita Reddy

Borrowing Powers of the Board

The Company has resolved by way of a resolution dated June 12, 2006 passed at the extraordinary general meeting
of the Company, that pursuant to the provisions of Section 293(1)(d) of the Companies Act, the Board is authorised
to borrow moneys from banks/financial institutions, subject to an absolute monetary limit of ` 20,000 million at any
given point in time.

Shareholding of Directors

The following table sets forth the shareholding of the Directors as of March 31, 2011:

Name of Directors Number of Equity Percentage of total Outstanding warrants

Shares shareholding of the
Company
Dr. Prathap C Reddy 3,159,300 2.53 6,366,164
Preetha Reddy 3,366,540 2.70 -
Suneeta Reddy 3,001,590 2.41 -
Sangita Reddy 4,972,508 3.99 -
Shobana Kamineni 2,189,952 1.76 -
Rafeeque Ahamed 55,900 0.04 -
Habibullah Badsha 10,806 0.01 -

Terms and Compensation of the Directors

Terms of appointment of the Executive Directors

Dr. Prathap C. Reddy has been appointed as the Executive Chairman not liable to retire by rotation under the terms
of the Articles of Association, with effect from December 5, 1979.

Dr. Preetha Reddy has been appointed as the Managing Director under the terms of the board resolution held on
November 9, 2010, for a term of five years from February 3, 2011 subject to approval of the shareholders in the
Annual General Meeting to be held on July 22, 2011.

Suneeta Reddy has been appointed as the Joint Managing Director under the terms of the board resolution held on
May 24, 2011, with effect from June 1, 2011, for a term of five years from February 3, 2011 subject to approval of
the shareholders in the Annual General Meeting to be held on July 22, 2011.

Sangita Reddy has been appointed as Executive Director, Operations under the terms of the board resolution held on

118
November 9, 2010, for a term of five years from February 3, 2011 subject to approval of the shareholders in the
Annual General Meeting to be held on July 22, 2011.

Shobana Kamineni has been appointed as Executive Director, Special Incentives under the terms of the shareholders
resolution dated July 26, 2010, for a term of 5 years from February 1, 2010.

The following tables set forth all compensation paid by the Company to the Executive Directors for the fiscal year
2011:

Name of Directors Remuneration Perquisites and Commission Total

(` million) Allowances (` million) (` million)
(` million)
Dr. Prathap C. Reddy 137.12 Nil Nil 137.12
Dr. Preetha Reddy 54.84 Nil Nil 54.84
Suneeta Reddy 34.27 Nil Nil 34.27
Sangita Reddy 13.71 Nil Nil 13.71
Shobana Kamineni 13.71 Nil Nil 13.71

Non-Executive Directors

All Non-Executive Directors are liable to retire by rotation. The following tables set forth all compensation paid by
the Company to Non-Executive Directors for the fiscal year 2011.

Name of Directors Commission Perquisites* Sitting Fees Total

(` million) (` million) (` million) (` million)
N. Vaghul 0.85 - 0.26 1.11
Habibullah Badsha 0.85 - 0.18 1.03
Deepak Vaidya 0.85 - 0.30 1.15
Rajkumar Menon 0.85 - 0.40 1.25
Rafeeque Ahamed 0.85 - 0.12 0.97
T.K. Balaji 0.85 - 0.14 0.99
Khairil Anuar Abdullah 0.85 - 0.10 0.95
G Venkatraman 0.85 - 0.34 1.19
Sandeep Naik 0.85 - 0.16 1.01
Michael Fernandes - - - -
Steven J Thompson* 0.73 - 0.04 0.77
*Ceased to be director with effect from February 11, 2011

Changes in the Directors

Name of the Director Date of change Reasons for change

Neeraj Bharadwaj October 29, 2009 Resignation
P. Obul Reddy January 28, 2010 Resignation
Sandeep Naik July 26, 2010 Regularized as the director at the
Annual General Meeting
Shobana Kamineni July 26, 2010 Regularized as the director at the
Annual General Meeting
Steven Thompson February 11, 2011 Resignation

Interest of Directors

Other than as disclosed in this Placement Document, as of March 31, 2011, there were no outstanding transactions
other than in the ordinary course of business undertaken by the Company, in which the Directors were interested
parties.

119
There are no existing or potential conflicts of interest between any duties owed to the Company by the Directors and
the private interests or external duties of the Directors. As part of their investment portfolio, certain of the Directors
and executive officers may from time to time hold direct or beneficial interests in securities of companies with
which the Company has engaged or may engage in transactions, including those in the ordinary course of business.
However, the Company does not believe that such holdings create a conflict of interest because transactions
typically engaged between the issuers of such securities and the Company is not likely to have a material effect on
the prices of such securities.

Organizational Chart of the Company

Key Managerial Personnel

The Company‘s key managerial personnel are as follows:

K. Padmanabhan, 59, is the Group President of the Company. He is responsible for finance and strategic initiatives
across the Apollo Group. Mr. Padmanabhan holds a Bachelor‘s degree in Commerce from Loyola College, Madras
University and a post graduate diploma in management in marketing and finance from the University of Bath,
United Kingdom. Mr. Padmanabhan was formerly vice president and chief executive officer of the Bicycles
Division of Tube Investments. He has a total work experience of 37 years. He has been employed with the Company
since the year 1996.

S. K. Venkataraman, 51, is the Chief Strategic Officer of the Company. He received his Bachelor‘s degree in
Applied Science from Madras University and is a qualified Chartered Accountant, company secretary and associate
member of the Insurance Institute of India. Mr. Venkataraman is responsible for strategic initiatives across the
Apollo Group. He served as the chief financial officer and the company secretary of the Company till April 2010,
having served as the senior general manager – finance of the Company from 1997 till 2002. He has a total work
experience of 26 years. He has been employed with the company since the year 1991.

Krishnan Akhileswaran, 36, is the Chief Financial Officer of the Company. He is responsible for the finance

120
function of the Company and its Subsidiaries. He holds a Bachelor's degree in Commerce and a Master‘s degree in
Management in Finance, both from the Bombay University. He is also a qualified Cost Accountant and Certified
Treasury Manager. Mr. Krishnan has around 15 years of experience (i) in finance; (ii) in planning, controlling,
mergers and acquisitions, accounting, monthly income statement, costing and investor relations and has worked in
various roles in organizations such as Firstsource Solutions Limited, Mahindra and Mahindra Limited and Leo
Burnett. He has been employed with the Company since the year 2010.

S. M. Krishnan, 42, is the General Manager (Project Finance) and the Company Secretary of the Company. He is
responsible for secretarial function, monitoring and reporting all aspects of projects undertaken by the Company. He
holds a Bachelor‘s degree in Commerce and is an associate member of the Institute of Chartered Accountants of
India, Institute of Company Secretaries of India and the Institute of Cost & Works Accountants of India. He has over
18 years experience in the areas of finance, costing, taxation, accounting and secretarial functions. He has a total
work experience of 19 years. He has been employed with the Company since the year 2010.

V. Satyanarayana Reddy, 51, is the Chief Executive Officer (Chennai Division) of the Company. He is responsible
for operation of the hospital in the Chennai region. He holds a Bachelor‘s degree in Agriculture from Dr. Panjabrao
Deshmukh Krishi Vidyapeeth and a Master‘s degree in Management in Personnel and Industrial Relations from
Annamalai University and a Master‘s degree in Hospital & Health Systems Management from Birla Institute of
Technology and Science, Pilani conducted by Tulane University, USA. Mr. Reddy was associated with a transport
firm prior to joining the Company. He has a total work experience of 26 years. He has been employed with the
Company since the year 1989.

Dr. K. Hariprasad, 47, is the Chief Executive Officer (Central Division) of the Company. He is responsible for
operations of the hospital in the Central region. Dr. Hariprasad received his Bachelor‘s in Medicine and Surgery
degree from Kasturba Medical College. Prior to holding the designation as aforesaid in the Company, he served as
the vice president - medical of the Company since 2003. He has previously served as our Consultant
Anaesthesiology and Critical Care and our Director of Emergency Services. He has a total work experience of 19
years. He has been employed with the Company since the year 1999.

Dr. Rupali Basu, 48, is the Chief Executive Officer – Eastern Region of the Company. She is responsible for
operations of the hospitals in the Eastern Region. Dr. Basu has received her Bachelor‘s degree in medicine and
Bachelor‘s degree in surgery from the Calcutta University. Prior to joining the Company, she was associated with
Wockhardt Hospitals. She has a total work experience of 19 years. She has been employed with the Company since
the year 2008.

Dr. K. Prabakar, 57, is the Chief Learning Officer of the Company. He is responsible for education initiatives
across the Apollo Group. Prior to that, he served as the Vice President (Human Resources) of the Company since
2002. Prior to that, he served as the Director (Human Resources) of the Company from 1997. Dr. Prabakar
received Bachelor‘s degree in Law, Diploma in Training and Development, Diploma in Administrative and Labour
Laws and Doctorate in Anthropology, Management (Inter-disciplinary) from Madras University and a Post Graduate
Diploma in Social Work. Prior to joining the healthcare industry, Dr. Prabakar gained experience in the plantation,
mines, textiles, engineering and banking industries. He has a total work experience of 34 years. He has been
employed with the company since the year 1986.

Jacob Jacob, 39, is the Chief People Officer of the Company. He is responsible for people initiatives across the
Apollo Group. Mr. Jacob received his Bachelor‘s degree in Business Management from SDM College of Business
Management, Mangalore and a Post Graduate Diploma in HRD from Academy of Human Resource Development,
Ahmedabad, (Joint Programme with T.A. Pai Management Institute) and Post Graduate Diploma in Management
from T.A. Pai Management Institute, Manipal. Prior to joining the Company, he has been associated with Oberoi
Realty Limited, Emirates Airline, Dubai, Feedback Reach Consultancy Services Limited and Core Healthcare
Limited. He has a total work experience of 12 years. He has been employed with the Company since the year 2010.

C. Sreethar, 52, is the Chief Operating Officer (Pharmacy) of the Company. He is responsible for Pharmacy
operations (Hospitals based) of the Company. Prior to holding the aforesaid designation, he served as the
Company‘s Senior General Manager (Pharmacy) from 2002 and General Manager (Pharmacy) prior to the aforesaid.
Mr. Sreethar received his Bachelor‘s degree in Commerce from S.V. Arts College, and a Diploma in Business

121
Management from Datamatics Corporation, Chennai. He has a total work experience of 32 years. He has been
employed with the Company since the year 1981.

P. B. Ramamoorthy, 56, is the Chief Operating Officer (Pharmacy) of the Company. He is responsible for
Pharmacy Operations (Retail based). He received his Bachelor‘s degree in Science from Sir Thyagaraya College,
University of Madras and a Master‘s degree in Business Administration from Madhurai Kamaraj University and a
Post Graduate Diploma in Purchase and Stores Management from AP Productivity Council. Prior to joining the
Company, he was associated with True Biscuits Limited. He has a total work experience of 32 years. He has been
employed with the Company since the year 1985.

Binod Samal, 42, is the Chief Technology Officer of the Company. He is responsible for driving all information
technology initiatives and projects of the Company. He received his Bachelor‘s degree in Technology from National
Institute of Technology, Kurukshetra, Harayana, a Post Graduate Diploma in Management from Indian Institute of
Technology, Roorkee and has completed a two year full time management program from S.P. Jain Institute of
Management and Research, Andheri, Mumbai and awarded Post graduate Diploma in Management. He joined
Marico Industries Limited around May 1995. He was primarily responsible for handling plant quality assurance,
vendor development, production planning and corporate quality assurance. He has a total work experience of 16
years. He has been employed with the Company since the year 2004.

Arvind Sivaramakrishnan, 36, is the Chief Information Officer of the Company. He is responsible for driving all
information technology initiatives and projects of the company. He received his Bachelor‘s degree in (i) Physics
from University of Madras; (ii) Technology in Electronics from Anna University and (iii) Project Management
Professional from Project Management Institute, USA and (iv) Certified Six Sigma Black Belt from American
Society of Quality, USA. Prior to joining the Company, Mr. Arvind was working with Computer Sciences
Corporation, USA and prior to that, he was associated with Ramco Systems. He has a total work experience of 12
years. He has been employed with the Company since the year 2011.

S. Sukumar, 61, is the Chief Executive Officer of the Company. He oversees the entire projects division and
provides leadership and sets in place procedures and systems for increased efficiency and in line with the corporate
goals of Apollo Hospitals Group. Mr. Sukumar received his Bachelor's Degree in Civil Engineering from the
University of Bhopal. Prior to joining the Company, he worked with DLF Limited as regional technical head
controlling mega residential projects of 12 million sq. ft in the South region in places like Chennai, Bengaluru,
Hyderabad and Cochin. He has a total work experience of 39 years. He has been employed with the Company since
the year 2011.

As on March 31, 2011, except as stated below, none of the Key Managerial Personnel hold Equity Shares or
warrants in the Company:

Name Number of Equity Shares Outstanding warrants

(as on March 31, 2011)
Mr. S.K. Venkataraman 2,050 Nil
Mr. K. Padmanaban 22 Nil

None of the Directors are related to any of the Key Managerial Personnel of the Company.

Changes in the Key Managerial Personnel

Name of the Key Designation Date of Joining Date of Change

Managerial Personnel
R Basil Executive President - January 20, 2010 March 31, 2011
Healthcare
C Chandrasekhar Group President - Marketing January 1, 2009 September 10, 2009
Dr. Pankaj S Mankad Chief Executive Officer October 19, 2009 May 7, 2011
S Venkatraman Chief Executive Officer - December 13, 2007 September 2, 2009
Projects
Dr. Shenoy Robinson Chief Operating Officer - June 16, 2008 May 6, 2010

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Name of the Key Designation Date of Joining Date of Change
Managerial Personnel
Special Projects
Pradeep Thukral Group Head - International August 18, 2008 June 8, 2009
Marketing
Shivaprakash Chief Operating Officer - August 6, 2008 May 12, 2010
Projects

Interest of the Key Managerial Personnel

Other than as disclosed in this Placement Document, as of March 31, 2011, there were no outstanding transactions
other than in the ordinary course of business undertaken by the Company in which the Key Managerial Personnel
were interested parties.

Corporate governance

The Company complies with all applicable corporate governance requirements, including the listing agreements
with the Stock Exchanges and the SEBI Regulations, constitution of the Board and committees thereof. The
corporate governance framework is based on an effective independent Board, separation of the supervisory role of
the Board from the executive management team and proper constitution of committees of the Board. The Board
functions either as a full Board or through various committees constituted to oversee specific operational areas. The
management provides the Board with detailed reports on the performance of the Company periodically.

As the Chairman of the Company is an Executive Director of the Company, at least half of the Board of Directors is
required to consist of independent directors, as required under the corporate governance norms provided in Clause
49 of the Listing Agreement. Currently, the Board consists of 14 Directors (excluding the alternate director) out of
which eight are Independent Directors.

The Board has held eight meetings in the fiscal year 2011.

Committees of the Board

In terms of Clause 49 of the Listing Agreement, the Company has four Board-level committees, namely: (i) Audit
Committee, (ii) Investors Grievance Committee, (iii) Remuneration and Nomination Committee, (iv) Investment
Committee; and (iv) Share Transfer Committee.

The Audit Committee

The Audit Committee consists of:

i. Deepak Vaidya, (Independent Director), Chairman;

ii. G. Venkatraman, (Independent Director); and
iii. Rajkumar Menon (Independent Director).

The Audit Committee is responsible for, among other things, oversight of the Company‘s financial reporting process
and the disclosure of its financial information, recommending to the Board the appointment, re-appointment and
removal of the auditor, reviewing the annual financial statements.

The Audit Committee has held five meetings in the fiscal year 2011.

The Remuneration and Nomination Committee

The Remuneration and Nomination Committee consists of:

i. N. Vaghul (Independent Director), Chairman;

ii. Deepak Vaidya (Independent Director);

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iii. G. Venkatraman (Independent Director);
iv. Sandeep Naik (Non-Executive Director); and
v. Rafeeque Ahamed (Independent Director).

The Remuneration and Nomination Committee considers and recommends, among other things, filling up of
vacancies in the Board and appointment of additional non-whole time Directors, appointment of whole time
Directors and Directors liable to retire by rotation, amount of commission and fees payable to the Directors.

The Committee has held two meetings in the fiscal year 2011.

Investment Committee

Investment Committee consists of:

i. N. Vaghul (Independent Director); Chairman

ii. Preetha Reddy (Managing Director);
iii. Suneeta Reddy (Joint Managing Director);
iv. T.K. Balaji (Independent Director); and
v. Deepak Vaidya (Independent Director),

The scope of the Investment Committee is to review and recommend the investment in new activities planned by the
Company.

The Investment Committee has held three meetings in the fiscal year 2011.

Investor’s/Shareholder’s Grievance Committee

Investor‘s/Shareholder‘s Grievance Committee consists of:

i. Rajkumar Menon (Independent Director), Chairman;

ii. Preetha Reddy (Managing Director); and
iii. Suneeta Reddy (Joint Managing Director).

The Investor‘s/Shareholder‘s Committee specifically looks into issues such as redressing of shareholders‘ and
investors' complaints such as transfer of shares, non-receipt of shares and non-receipt of declared funds.

The Investor‘s/Shareholder‘s Committee has held four meetings in the fiscal year 2011.

Share Transfer Committee

Share Transfer Committee consists of:

i. Dr. Prathap C Reddy, (Executive Chairman), Chairman;

ii. Rajkumar Menon (Independent Director); and
iii. Preetha Reddy (Managing Director).

The Share Transfer Committee has the powers to administer (i) transfer and transmission of shares; (ii) issue of
duplicate certificates; and (iii) demat/remat requests.

The Share Transfer Committee attends to the share transfers and other formalities once in a fortnight.

124
Policy on Disclosures and Internal Procedure for Prevention of Insider Trading

Regulation 12(1) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992,
as amended (the ―Insider Trading Regulations‖), applies to the Company and its employees and requires the
Company to implement a code of internal procedures and conduct for the prevention of insider trading. The
Company has implemented a code of conduct for prevention of insider trading in accordance with the Insider
Trading Regulations. S.M. Krishnan, General Manager - Project Finance and Company Secretary, has been
appointed to act as the compliance officer of the Company.

125
 PRINCIPAL SHAREHOLDERS

The shareholding pattern of the Company as on June 30, 2011 is detailed in the table below:

Sr. Category of Number of Total Number of Total shareholding as a Equity Shares pledged
No shareholder shareholders number of Equity Shares percentage of total or otherwise
Equity held in de number of Equity encumbered
Shares materialized Shares
form
% of % of Number of % No.
Equity Equity Equity of
Shares Shares Shares Equity
(A+B)1 (A+B+C) Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
(a) Individuals/ Hindu 32 23,546,314 20,133,768 19.20 18.88 10,122,172 42.99
Undivided Family
(b) Central Government/ 0 0 0 0.00 0.00 0 0.00
State Government(s)
(c) Bodies Corporate 6 17,905,124 17,873,924 14.60 14.36 14,318,000 79.97
(d) Financial Institutions/ 0 0 0 0.00 0.00 0 0.00
Banks
(e) Any Other (specify)
Any Other Total 0 0 0 0.00 0.00 0 0.00
Sub-Total (A)(1) 38 41,451,438 38,007,692 33.80 33.24 24,440,172 58.96
(2) Foreign
(a) Individuals (Non- 0 0 0 0.00 0.00 0 0.00
Resident Individuals/
Foreign Individuals)
(b) Bodies Corporate 0 0 0 0.00 0.00 0 0.00
(c) Institutions 0 0 0 0.00 0.00 0 0.00
(d) Any Other (specify)
Any Other Total 0 0 0 0.00 0.00 0 0.00
Sub-Total (A)(2) 0 0 0 0.00 0.00 0 0.00
Total Shareholding 38 41,451,438 38,007,692 33.80 33.24 24,440,172 58.96
of Promoter and
Promoter Group
(A)= (A)(1)+(A)(2)
(B) Public shareholding3
(1) Institutions
(a) Mutual Funds/ UTI 15 443,952 443,952 0.36 0.36 0 0.00
(b) Financial Institutions/ 9 7,536 3,640 0.01 0.01 0 0.00
Banks
(c) Central Government/ 1 323,708 323,708 0.26 0.26 0 0.00
State Government(s)
(d) Venture Capital 0 0 0 0.00 0.00 0 0.00
Funds
(e) Insurance Companies 7 3,485,919 3,485,919 2.84 2.80 0 0.00
(f) Foreign Institutional 101 38,072,067 38,072,067 31.04 30.53 0 0.00
Investors
(g) Foreign Venture 0 0 0 0.00 0.00 0 0.00
Capital Investors
(h) Any Other (specify)
Any Other Total 0 0 0 0.00 0.00 0 0.00
Sub-Total (B)(1) 133 42,333,182 42,329,286 34.52 33.95 0 0.00
(2) Non-institutions
(a) Bodies Corporate 626 1,792,385 1,754,085 1.46 1.44 0 0.00
(b) Individuals
(i) Individual 30,873 7,632,216 4,644,923 6.22 6.12 0 0.00
shareholders holding
nominal share capital
up to ` 1 lakh
(ii) Individual 12 401,205 260,555 0.33 0.32 0 0.00
shareholders holding
nominal share capital
in excess of ` 1 lakh

126
Sr. Category of Number of Total Number of Total shareholding as a Equity Shares pledged
No shareholder shareholders number of Equity Shares percentage of total or otherwise
Equity held in de number of Equity encumbered
Shares materialized Shares
form
% of % of Number of % No.
Equity Equity Equity of
Shares Shares Shares Equity
(A+B)1 (A+B+C) Shares
(c) Any Other (specify)
Trusts 13 117,970 260 0.10 0.09 NA NA
Directors & Their 6 91,606 91,606 0.07 0.07 NA NA
Relatives
Non Resident Indians 1,151 2,014,954 435,870 1.64 1.62 NA NA
Foreign Corporate 4 26,618,012 26,618,012 21.70 21.34 NA NA
Bodies
Clearing Member 79 47,713 47,713 0.04 0.04 NA NA
Hindu Undivided 365 131,030 131,030 0.11 0.11 NA NA
Families
Overseas Corporate 1 16,199 16,199 0.01 0.01 NA NA
Bodies
Sub-Total(B)(2) 33,130 38,863,290 34,000,253 31.69 31.16 0 0.00
Total Public 33,263 81,196,472 76,329,539 66.20 65.11 0 0.00
Shareholding (B)=
(B)(1)+(B)(2)
TOTAL(A)+(B) 33,301 122,647,910 114,337,231 100.00 98.35 24,440,172 20.09
(C) Equity Shares held by Custodians and against which Depository Receipts have been issued
C1 Promoter and 0 0 0 0.00 0 0.00
Promoter group
C2 Public 1 2062800 2062800 1.65 0 0.00
Total C=C1+C2 1 2062800 2062800 1.65 0 0.00
GRAND TOTAL 33,302 124,710,710 116,400,031 N.A. 100.00 24,440,172 20.09
(A)+(B)+(C)

Statement showing shareholding of persons belonging to the category ―Promoter and Promoter Group‖ as on June,
30, 2011 is detailed in the table below:

Sr. Name of the shareholder Total Equity Shares held Equity Shares pledged or
No otherwise encumbered
Number of Equity Equity Shares as a Number of As a % of
Shares percentage of total Equity percenta Grand
number of shares Shares ge Total
{i.e., Grand Total
(A)+(B)+(C)
indicated in
Statement at para
(I)(a) above}
1 Dr. Prathap C Reddy 3,159,300 2.53 0 0.00 0.00
2 Sangita Reddy 4,972,508 3.99 1,860,000 37.41 1.49
3 Preetha Reddy 3,366,540 2.70 2,860,000 84.95 2.29
4 Suneeta Reddy 3,001,590 2.41 2,594,000 86.42 2.08
5 Shobana Khamineni 2,189,952 1.76 2,158,172 98.55 1.73
6 Sucharitha P Reddy 2,741,678 2.20 100,000 3.65 0.08
7 Karthik Anand 220,600 0.18 0 0.00 0.00
8 Harshad Reddy 210,200 0.17 0 0.00 0.00
9 Sindhoori Reddy 517,600 0.42 490,000 94.67 0.39
10 Adithya Reddy 210,200 0.17 60,000 28.54 0.05
11 Upsana Kamineni 267,276 0.21 0 0.00 0.00
12 Puvansh Kamineni 212,200 0.17 0 0.00 0.00
13 Anushpala Kamineni 259,174 0.21 0 0.00 0.00
14 Anandith Reddy 230,200 0.18 0 0.00 0.00
15 Viswajith Reddy 222,300 0.18 0 0.00 0.00
16 Viraj Madhavan Reddy 168,224 0.13 0 0.00 0.00

127
 Sr. Name of the shareholder Total Equity Shares held Equity Shares pledged or
No otherwise encumbered
Number of Equity Equity Shares as a Number of As a % of
Shares percentage of total Equity percenta Grand
number of shares Shares ge Total
{i.e., Grand Total
(A)+(B)+(C)
indicated in
Statement at para
(I)(a) above}
17 P Obul Reddy 18,000 0.01 0 0.00 0.00
18 P Vijayakumar Reddy 1,332 0.00 0 0.00 0.00
19 Vishweswar Reddy 1,577,420 1.26 0 0.00 0.00
20 Anil Khamineni 20 0.00 0 0.00 0.00
21 PCR Investments Limited 17,859,124 14.32 14,318,000 80.17 11.48
22 Obul Reddy Investments 11,200 0.01 0 0.00 0.00
Limited
23 Apollo Health Association 31,200 0.03 0 0.00 0.00
24 Indian Hospitals 3,600 0.00 0 0.00 0.00
Corporation Limited
Total 41,451,438 33.24 24,440,172 58.96 19.60

Statement showing shareholding of persons belonging to the category ―Public‖ and holding more than 1% of the
total number of Equity Shares as on June 30, 2011 is detailed in the table below:

Sr. Name of the shareholder Number Equity Shares as a percentage of total

No. of Equity number of shares {i.e., Grand Total
Shares (A)+(B)+ (C) indicated in Statement
at para (I)(a) above}
1. Apax Mauritius FDI One Limited 14,094,238 11.30
2. Integrated (Mauritius) Healthcare Holdings 11,000,000 8.82
Limited
3. CLSA (Mauritius) Limited 8,550,000 6.86
4. Bisikan Bayu Investments(Mauritius) Limited 4,093,860 3.28
5. BNY Mellon Investment Funds Newton Oriental 3,000,000 2.41
Fund
6. Apax Partners Europe Managers Limited A/C 2,947,888 2.36
Apax Mauritius FII Limited
7. Emerging Markets Growth Fund Inc. 2,445,932 1.96
8. Munchener Ruckversicherungsgesllschaft 2,397,380 1.92
Akliengesellschaft In Munchen
9. LIC of India Money Plus 1,817,371 1.46
10. Citigroup Global Market Mauritius Private 1,518,583 1.22
Limited
11. BNY Mellon Asian Equity Fund 1,500,000 1.20
Total 53,365,252 42.79

Statement showing details of depository receipts (―DRs‖) as on June 30, 2011 is detailed in the table below:

Sr. Type of outstanding Number of Number of Equity Equity Shares underlying outstanding DRs as
No. DR (ADRs, GDRs, outstanding Shares underlying a percentage of total number of Equity Shares
SDRs, etc.) DRs outstanding DRs {i.e., Grand Total (A)+(B)+(C) indicated in
Statement at para (I)(a) above}
1. GDR 2,062,800 2,062,800 1.65
Total 2,062,800 2,062,800 1.65

128
Statement showing top 10 shareholders of the Company as on June 30, 2011 is detailed in the table below:

Sr. Name of the shareholder Number of Equity Shares as a percentage of total

No. Equity Shares number of shares
1 PCR Investments Limited 17,859,124 14.32
2 Apax Mauritius FDI One Limited 14,094,238 11.30
3 Integrated (Mauritius) Healthcare Holdings 11,000,000 8.82
Limited
4 CLSA (Mauritius ) Limited 8,550,000 6.86
5 Sangita Reddy 4,972,508 3.99
6 Bisikan Bayu Investments (Mauritius) Limited 4,093,860 3.28
7 Preetha Reddy 3,366,540 2.70
8 Dr. Prathap C Reddy 3,159,300 2.53
9 Suneeta Reddy 3,001,590 2.41
10 BNY Mellon Investment Funds Newton 3,000,000 2.41
Oriental Fund
Total 73,097,160 58.61

129
 ISSUE PROCEDURE

The following is a summary intended to present a general outline of the procedure relating to the application,
payment, Allocation and Allotment. The procedure followed in the Issue may differ from the one mentioned below
and the investors are assumed to have apprised themselves of the same from the Company or the Joint Book
Running Lead Managers. The investors are advised to inform themselves of any restrictions or limitations that may
be applicable to them. See the sections titled “Selling Restrictions” and “Transfer Restrictions”.

Qualified Institutions Placements

The Issue is being made to QIBs in reliance upon Chapter VIII of the SEBI Regulations. Under Chapter VIII of the
SEBI Regulations, a listed company in India may issue equity shares to QIBs, provided that:

equity shares of the same class, which are proposed to be allotted through qualified institutions placement, of
such company are listed on a stock exchange in India that has nation-wide trading terminals for a period of at
least one year as on the date of issuance of notice to its shareholders for convening the meeting; and

such company complies with the minimum public shareholding requirements set out in the listing agreement
with the stock exchange referred to above.

At least 10% of the Equity Shares issued to QIBs must be Allotted to Mutual Funds, provided that, if this portion, or
any part thereof to be Allotted to Mutual Funds remains unsubscribed, it may be Allotted to other QIBs. QIB has
been specifically defined under Regulation 2(1)(zd) of the SEBI Regulations.

Investors are not allowed to withdraw their Bids after the Bid/Issue Closing Date.

Additionally, there is a minimum pricing requirement under the SEBI Regulations. The Issue Price shall not be less
than the average of the weekly high and low of the closing prices of the related Equity Shares quoted on the stock
exchange during the two weeks preceding the relevant date.

The ―relevant date‖ referred to above, for the Allotment, will be the date of the meeting in which the Board or the
committee of Directors duly authorized by the Board decides to open the Issue and ―stock exchange‖ means any of
the recognized stock exchanges in which the Equity Shares of the same class are listed and on which the highest
trading volume in such Equity Shares has been recorded during the two weeks immediately preceding the relevant
date.

The Company has applied for and received the in-principle approval of the Stock Exchanges under Clause 24 (a) of
its Listing Agreements for the listing of the Equity Shares on the Stock Exchanges. The Company has also filed a
copy of this Placement Document with the Stock Exchanges.

The Equity Shares will be allotted within 12 months from the date of the shareholders‘ resolution approving the QIP.
The Equity Shares issued pursuant to the QIP must be issued on the basis of this Placement Document that shall
contain all material information including the information as specified in Schedule XVIII of the SEBI Regulations.
The Preliminary Placement Document and this Placement Document are private documents provided to select
investors through serially numbered copies and are required to be placed on the website of the concerned Stock
Exchanges and of the Company with a disclaimer to the effect that it is in connection with an issue to QIBs and no
offer is being made to the public or to any other category of investors. A copy of this Placement Document will be
filed with SEBI for record purposes within 30 days of the Allotment.

Pursuant to the provisions of Section 67(3) of the Companies Act, for a transaction that is not a public offering, an
invitation or offer may not be made to more than 49 persons.

130
The minimum number of allottees for each qualified institutional placement shall not be less than:

two, where the issue size is less than or equal to ` 2.5 billion; and

five, where the issue size is greater than ` 2.5 billion.

No single Allottee shall be Allotted more than 50% of the Issue size.

QIBs that belong to the same group or that are under common control shall be deemed to be a single Allottee.

In terms of Regulation 89 of the SEBI Regulations, the aggregate of the proposed qualified institutions placement
and all previous qualified institutions placements made in the same fiscal year shall not exceed five times the net
worth of the issuer as per the audited balance sheet of the previous fiscal year. The issuer shall furnish a copy of the
placement document to each stock exchange on which its equity shares are listed.

Equity Shares allotted to a QIB pursuant to the Issue shall not be sold for a period of one year from the date of
Allotment except on the floor of the Stock Exchanges.

The Equity Shares have not been and will not be registered under the Securities Act and may not be offered
or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities laws. Accordingly, the Equity
Shares are only being offered and sold (i) within the United States only to ―qualified institutional buyers‖ (as
defined in Rule 144A under the Securities Act and referred to in this Placement Document as ―US QIBs‖, for
the avoidance of doubt, the term US QIBs does not refer to a category of institutional investor defined under
applicable Indian regulations and referred to in this Placement Document as ―QIBs‖) in transactions exempt
from, or not subject to, the registration requirements of the Securities Act, and (ii) outside the United States
in reliance on Regulation S under the Securities Act.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other
jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such
jurisdiction, except in compliance with the applicable laws of such jurisdiction.

Any Bidder, directly or indirectly, representing Munich Health Holding AG, any of its affiliates or its nominees or
any persons related to Munich Health Holding AG, including whether such affiliates or persons are controlled by or
are in control of, Munich Health Holding AG, can not apply to the Issue.

Issue Procedure

1. The Company and the Joint Book Running Lead Managers shall circulate serially numbered copies of the
Preliminary Placement Document and the Application Form, either in electronic form or physical form, to
not more than 49 QIBs.

2. The list of QIBs and US QIBs to whom the Application Form is delivered shall be determined by the Joint
Book Running Lead Managers in consultation with the Company. Unless a serially numbered
Preliminary Placement Document along with the Application Form is addressed to a particular QIB,
no invitation to subscribe shall be deemed to have been made to such QIB. Even if such documentation
were to come into the possession of any person other than the intended recipient, no offer or invitation to
offer shall be deemed to have been made to such person.

3. QIBs may submit a Application Form, including any revisions thereof, during the Bid/Issue Period to the
Joint Book Running Lead Managers.

131
4. QIBs will be required to indicate the following in the Application Form:

a. Name of the QIB to whom Equity Shares are to be Allotted;

b. Number of Equity Shares Bid for;

c. Price at which they offer to apply for the Equity Shares, provided that the QIBs may also indicate
that they are agreeable to submit a Bid in respect of the Equity Shares at ―Cut-off Price‖ which
shall be any price as may be determined by the Company in consultation with the Joint Book
Running Lead Managers at or above the minimum price calculated in accordance with Regulation
85 of the SEBI Regulations (the ―Floor Price‖), which for the Issue, is ` 491.29; and

d. Depository account details to which the Equity Shares should be credited.

Note: The QIBs that are persons resident outside India will be eligible to subscribe to the Equity Shares
pursuant to the Issue and the Company has obtained an approval from the FIPB vide letter dated June 30,
2011 for undertaking the Issue.

5. Once a duly filled Application Form is submitted by a QIB, such Application Form constitutes an
irrevocable offer and cannot be withdrawn after the Bid/Issue Closing Date. The Bid/Issue Closing Date
shall be notified to the Stock Exchanges and the QIBs shall be deemed to have been given notice of such
date after the receipt of the Application Form.

An eligible Bid by a Mutual Fund shall first be considered for Allocation proportionately in the Mutual
Fund Portion. In the event that the demand is greater than 666,667 Equity Shares, Allocation shall be made
to Mutual Funds on a proportionate basis to the extent of the Mutual Funds Portion. The remaining demand
by Mutual Funds shall, as part of the aggregate demand by QIB Bidders, be made available for Allocation
proportionately out of the remainder of the QIB Portion, after excluding the Allocation in the Mutual Fund
Portion.

The Bids made by the asset management companies or custodian of Mutual Funds shall specifically state
the names of the concerned schemes for which the Bids are made. In case of a Mutual Fund, a separate Bid
can be made in respect of each scheme of the Mutual Fund registered with SEBI and such Bids in respect
of more than one scheme of the Mutual Fund will not be treated as multiple Bids provided that the Bids
clearly indicate the scheme for which the Bid has been made.

As per the current regulations, the following restrictions are applicable for investments by Mutual Funds:

No Mutual Fund scheme shall invest more than 10% of its net asset value in the equity shares or equity
related instruments of any company provided that the limit of 10% shall not be applicable for investments
in index funds or sector or industry specific funds. No Mutual Fund under all its schemes should own more
than 10% of any company‘s paid-up capital carrying voting rights.

Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or
maximum number of Equity Shares that can be held by them under applicable laws.

6. Upon receipt of the Application Form, the Company shall determine the final terms of the Equity Shares to
be issued in consultation with the Joint Book Running Lead Managers. On determination of the final terms
of the Equity Shares, the Joint Book Running Lead Managers will send the CAN to the QIBs who have
been Allocated Equity Shares. The dispatch of the CAN shall be deemed a valid, binding and irrevocable
contract for the QIBs to pay the Issue Price for the Equity Shares Allocated to such QIB. The CAN shall
contain details such as the number of Equity Shares allocated to the QIB and payment instructions
including the details of the amounts payable by the QIB for Allotment in its name and the Pay-In Date as
applicable to the respective QIB. Please note that the Allocation will be at the absolute discretion of the
Company and will be based on the recommendation of the Joint Book Running Lead Managers.

132
 Pursuant to receiving the CAN, each QIB shall be required to make the payment of the entire application
monies for Equity Shares indicated in the CAN at the Issue Price, through electronic transfer to the
designated bank account of the Company by the Pay-In Date as specified in the CAN sent to the respective
QIBs.

Upon receipt of the application monies from the QIBs, the Company shall Allot as per the details in the
CAN to the QIBs. The Company shall not Allot to more than 49 QIBs. The Company will intimate to the
Stock Exchanges the details of the Allotment.

7. The Company shall credit the Equity Shares into the beneficiary account with the Depository Participant of
the respective QIBs.

8. The Company shall then apply for the final trading and listing permissions from the Stock Exchanges.

9. The Equity Shares that have been credited to the beneficiary account with the Depository Participant of the
QIBs shall be eligible for trading on the Stock Exchanges only upon the receipt of final trading and listing
approvals from the Stock Exchanges.

10. Upon receipt of intimation of final trading and listing approval from the Stock Exchanges, the Company
shall inform the QIBs who have received an Allotment of the receipt of such approval. The Company shall
not be responsible for any delay or non-receipt of the communication of the final trading and listing
permissions from the Stock Exchanges or any loss arising from such delay or non-receipt. Final listing and
trading approvals granted by the Stock Exchanges are also placed on their respective websites. QIBs are
advised to apprise themselves of the status of the receipt of the permissions from the Stock Exchanges or
the Company.

Qualified Institutional Buyers

Only QIBs as defined in Regulation 2(1)(zd) of the SEBI Regulations, and not otherwise excluded pursuant to
Regulation 86(1)(b) of Chapter VIII of the SEBI Regulations, are eligible to invest.

Currently, under Regulation 2(1)(zd) of the SEBI Regulations, a QIB means:

Public financial institutions as defined in Section 4A of the Companies Act,

Scheduled commercial banks;
Mutual funds registered with SEBI;
Foreign institutional investors and sub-accounts registered with SEBI, other than a sub-account which is a
foreign corporate or foreign individual;
Multilateral and bilateral development financial institutions;
Venture capital funds registered with SEBI;
Foreign venture capital investors registered with SEBI;
State industrial development corporations;
Insurance companies registered with the Insurance Regulatory and Development Authority;
Provident funds with a minimum corpus of ` 250 million;
Pension funds with a minimum corpus of ` 250 million;
National Investment Fund set up by the Government of India;
Insurance funds set up and managed by the army, navy or air force of the Union of India; and
Insurance funds set up and managed by the Department of Posts, India.

Under Regulation 86(1)(b) of the SEBI Regulations, no Allotment shall be made, either directly or indirectly, to any
QIB who is a promoter or any person related to the Promoters.

133
For this purpose, any QIB who has all or any of the following rights shall be deemed to be a person related to the
promoters:
rights under a shareholders‘ agreement or voting agreement entered into with Promoters or persons related to
the Promoters;
veto rights; or
the right to appoint a nominee Director on the Board.

unless a QIB has acquired any of these rights in its capacity as a lender to the Company and such QIB does not hold
any Equity Shares in the Company.

The Company has obtained an approval from the FIPB vide letter dated June 30, 2011 for undertaking the Issue.

No single FII can hold more than 10% of the post Issue paid-up capital of the Company. In respect of an FII
investing in our Equity Shares on behalf of its eligible sub-accounts, the investment on behalf of each eligible sub
account shall not exceed 10% of the Company‘s total issued capital or 5% of the total issued capital of the Company
in case such eligible sub-account is a foreign corporate or an individual.

The aggregate FII holding in an Indian company cannot exceed 24% of the total issued capital of the Company.
However, with the approval of our Board and that of the shareholders by way of a special resolution, the aggregate
FII holding limit can be enhanced up to 100%. Pursuant to a resolution dated May 24, 2005 of the shareholders of
the Company, the FII holding limit in the Company has been increased to 74%.

The Company and the Joint Book Running Lead Managers are not liable for any amendment or modification
or change to applicable laws or regulations, which may occur after the date of this Placement Document.
QIBs are advised to make their independent investigations and satisfy themselves that they are eligible to
apply. QIBs are advised to ensure that any single application from them does not exceed the investment limits
or maximum number of Equity Shares that can be held by them under applicable law or regulation or as
specified in this Placement Document. Further, QIBs are required to satisfy themselves that their Application
Form would not eventually result in triggering a tender offer under the Takeover Code.

A minimum of 10 per cent of the Equity Shares in the Issue shall be Allotted to Mutual Funds. If no Mutual
Fund is agreeable to take up the minimum portion as specified above, such minimum portion or part thereof
may be Allotted to other QIBs by the Company.

Note: Affiliates or associates of the Joint Book Running Lead Managers who are QIBs may participate in the
Issue in compliance with applicable laws and may be allocated a higher number of Equity Shares on a
discretionary basis.

Application Form

QIBs shall only use the serially numbered Application Form supplied by the Joint Book Running Lead Managers in
either electronic form or by physical delivery for the purpose of making a Bid (including revision of Bid) in terms of
the Preliminary Placement Document.

By making a Bid (including the revision thereof) for the Equity Shares pursuant to the terms of the Preliminary
Placement Document, each QIB will be deemed to have made the following representations and warranties and the
representations, warranties and agreements made under the sections and paragraphs ―Notice to Investors –
Representation by Investors‖, ―Selling Restrictions‖ and ―Transfer Restrictions‖ of the Preliminary Placement
Document:

1. The QIB confirms that it is a QIB in terms of Regulation 2(1)(zd) of the SEBI Regulations, has a valid and
existing registration under the applicable laws in India (as applicable) and is eligible to participate in the Issue;

2. The QIB confirms that it is not a Promoter and is not a person related to the Promoters, either directly or
indirectly, and its Bid does not directly or indirectly represent the Promoter or Promoter Group or persons

134
 related to the Promoter;

3. The QIB confirms that it has no rights under a shareholders agreement or voting agreement with the Promoter
or persons related to the promoters, no veto rights or right to appoint any nominee director on the Board of the
Company other than that acquired in the capacity of a lender not holding any Equity Shares which shall not be
deemed to be a person related to the Promoter;

4. The QIB acknowledges that it has no right to withdraw its Bid after the Bid/Issue Closing Date;

5. The QIB confirms that if the Equity Shares are allotted pursuant to the Issue, the QIB shall not, for a period of
one year from Allotment, sell such Equity Shares so acquired otherwise than on the floor of any recognised
stock exchange in India;

6. The QIB confirms that the QIB is eligible to Bid and hold any of the Equity Shares so Allotted. The QIB further
confirms that the holding of the QIB, does not and shall not, exceed the permissible limits as per any applicable
regulations applicable to the QIB;

7. The QIB confirms that the Bids would not eventually result in triggering a tender offer under the Takeover
Code;

8. That to the best of its knowledge and belief together with other QIBs in the Issue that belong to the same group
or are under common control, the Allotment to the QIB shall not exceed 50% of the Issue Size. For the purposes
of this statement:

a. The expression ―belongs to the same group‖ shall be interpreted by applying the concept of ―companies
under the same group‖ as provided in sub-section (11) of Section 372 of the Companies Act; and

b. ―Control‖ shall have the same meaning as is assigned to it by clause (1)(c) of Regulation 2 of the Takeover
Code.

9. The QIB shall not undertake any trade in the Equity Shares credited to its beneficiary account until such time
that the final listing and trading approvals for the Equity Shares are issued by the Stock Exchanges.

QIBS WOULD NEED TO PROVIDE THEIR DEPOSITORY ACCOUNT DETAILS, THEIR

DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER
AND BENEFICIARY ACCOUNT NUMBER IN THE APPLICATION FORM. QIBS MUST ENSURE
THAT THE NAME GIVEN IN THE APPLICATION FORM IS EXACTLY THE SAME AS THE NAME
IN WHICH THE DEPOSITORY ACCOUNT IS HELD. FOR THIS PURPOSE, ELIGIBLE SUB
ACCOUNTS OF AN FII WOULD BE CONSIDERED AS AN INDEPENDENT QIB.

Demographic details such as address and bank account will be obtained from the Depositories as per the beneficiary
account details given above.

The submission of an Application Form by the QIBs shall be deemed a valid, binding and irrevocable offer for the
QIB to pay the Issue Price for the Equity Shares (as indicated by the CAN) and becomes a binding contract on the
QIB, upon issuance of the CAN by the Company in favour of the QIB.

Submission of Application Form

All Application Forms must be duly completed with information including the name of the QIB and the number of
the Equity Shares applied for. The Application Form shall be submitted to the Book Running Lead Manager either
through electronic form or through physical delivery at the following address:

135
Citigroup Global Markets India Enam Securities Private Limited Nomura Financial Advisory and
Private Limited 801/ 802, Dalamal Tower Securities (India) Private Limited
12th floor, Bakhtawar Nariman Point Ceejay House, Level 11, Plot F
Nariman Point Mumbai 400 021 Shivsagar Estate, Dr. Annie Besant
Mumbai 400 021 Tel: (91 22) 6638 1800 Road, Worli, Mumbai – 400 018
Tel: (91 22) 6631 9890 Fax: (91 22) 2284 6824 Tel: (91 22) 4037 4037
Fax: (91 22) 3919 7814 E-mail: [email protected] Fax: (91 22) 4037 4111
E-mail: [email protected] E-mail: project.pegasus-
[email protected]

The Joint Book Running Lead Managers shall not be required to provide written acknowledgement of the same.

Pricing and Allocation

Build up of the book

The QIBs subscribing to the Equity Shares shall submit their Bids (including the revision thereof) for the Equity
Shares, as applicable, within the Bid/Issue Period to the Joint Book Running Lead Managers.

Price discovery, terms and allocation

The Company, in consultation with the Joint Book Running Lead Managers, shall determine Issue Price which shall
be at or above the Floor Price to be determined in accordance with Chapter VIII of the SEBI Regulations.

After finalization of the Issue Price, the Company has updated the Preliminary Placement Document with such
details and has filed the same with the Stock Exchanges as this Placement Document.

Method of Allocation

The Company shall determine the Allocation in consultation with the Joint Book Running Lead Managers on a
discretionary basis and in compliance with Chapter VIII of the SEBI Regulations.

Application Forms received from the QIBs at or above the Issue Price shall be grouped together to determine the
total demand for each type of Equity Share. The Allocation to all such QIBs will be made at the Issue Price.
Allocation to Mutual Funds for up to a minimum of 10 per cent of the applicable Issue size shall be undertaken
subject to valid Bids being received at or above the Issue Price.

THE DECISION OF THE COMPANY AND THE JOINT BOOK RUNNING LEAD MANAGERS IN
RESPECT OF ALLOCATION SHALL BE BINDING ON ALL QIBs. QIBs MAY NOTE THAT
ALLOCATION IS AT THE SOLE AND ABSOLUTE DISCRETION OF THE COMPANY AND QIBS
MAY NOT RECEIVE ANY ALLOCATION EVEN IF THEY HAVE SUBMITTED VALID APPLICATION
FORMS AT OR ABOVE THE ISSUE PRICE. NEITHER THE COMPANY NOR THE JOINT BOOK
RUNNING LEAD MANAGERS ARE OBLIGED TO ASSIGN ANY REASONS FOR SUCH NON-
ALLOCATION.

All Application Forms duly completed along with payment and a copy of the PAN card or PAN allotment letter
shall be submitted to the Joint Book Running Lead Managers as per the details provided in the respective CAN.

CAN

Based on the Application Forms received, the Company and the Joint Book Running Lead Managers, in their sole
and absolute discretion, decide the list of QIBs to whom the serially numbered CAN shall be sent, pursuant to which
the details of the Equity Shares allocated to them and the details of the amounts payable for Allotment of such
Equity Shares in their respective names shall be notified to such QIBs. Additionally, the CAN will include details of

136
the relevant Escrow Bank Account into which such payments would need to be made, address where the application
money needs to be sent, Pay-In Date as well as the probable designated date (―Designated Date‖), being the date of
credit of the Equity Shares to the QIB‘s account, as applicable to the respective QIBs.

The eligible QIBs would also be sent a serially numbered Placement Document either in electronic form or by
physical delivery along with the serially numbered CAN.

The dispatch of the serially numbered Placement Document and the CAN to the QIB shall be deemed a valid,
binding and irrevocable contract for the QIB to furnish all details that may be required by the Joint Book Running
Lead Managers and to pay the entire Issue Price for all the Equity Shares Allocated to such QIB.

Company Account for Payment of Application Money

The Company has opened special bank accounts (the ―Escrow Bank Accounts‖) for the payment of entire amount
payable for the Equity Shares with the Escrow Agents in terms of two separate arrangements, one between the
Company, the Joint Book Running Lead Managers and Citibank N.A. and another between the Company, Enam
Securities Private Limited and Deutsche Bank A.G. Each QIB will be required to deposit the Issue Price, for the
Equity Shares allocated to it by the Pay-In Date with the relevant Escrow Agent as mentioned in the respective CAN
issued by a JBRLM.

If the payment is not made favouring the Escrow Bank Accounts within the time and in the manner stipulated in the
CAN, the Application Form and the CAN of the QIB are liable to be cancelled.

In case of cancellations or default by the QIBs, the Company and the Joint Book Running Lead Managers has the
right to reallocate the Equity Shares at the applicable Issue Price among existing or new QIBs at their sole and
absolute discretion, subject to the compliance with the requirement of ensuring that the Application Forms are sent
to not more than 49 QIBs.

Payment Instructions

The payment of application money shall be made by the QIBs to the relevant Escrow Bank Account identified in the
CAN, in the name of ―Apollo Hospitals - QIP Escrow Account‖ as per the payment instructions provided in the
CAN. Such CAN will also include instructions on the Escrow Agent to whom the relevant payment is to be made.

QIBs may make payment only through electronic fund transfer.

Designated Date and Allotment of Equity Shares

1. The Equity Shares will not be Allotted unless the QIBs pay the Issue Price to the relevant Escrow Bank
Account as stated above.
2. In accordance with the SEBI Regulations, Equity Shares will be issued and Allotment shall be made only in
the dematerialized form to the Allottees. Allottees will have the option to re-materialize the Equity Shares,
if they so desire, as per the provisions of the Companies Act and the Depositories Act.
3. The Company reserves the right to cancel the Issue at any time up to Allotment without assigning any
reasons whatsoever.
4. Post Allotment and credit of Equity Shares into the beneficiary account with the Depository Participant of
the QIB, the Company would apply for final listing and trading approvals from the Stock Exchanges.
5. In the unlikely event of any delay in the Allotment or credit of Equity Shares, or receipt of trading or listing
approvals or cancellation of the Issue, no interest or penalty would be payable by the Company.
6. The Escrow Agents shall not release the monies lying to the credit of the Escrow Bank Accounts to the
Company, until such time as the Company delivers to each Escrow Agent documentation regarding the
final approval of the Stock Exchanges, for the listing and trading of the Equity Shares.

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Submission to SEBI

The Company shall submit this Placement Document to SEBI within 30 days of the date of Allotment for record
purposes.

Other Instructions

Permanent Account Number or PAN

Each QIB should mention its PAN allotted under the I.T. Act. Applications without this information will be
considered incomplete and are liable to be rejected. It is to be specifically noted that applicants should not submit
the GIR number instead of the PAN as the Application Form is liable to be rejected on this ground.

Right to Reject Applications

The Company, in consultation with the Joint Book Running Lead Managers, may reject Bids, in part or in full,
without assigning any reasons whatsoever. The decision of the Company and the Joint Book Running Lead
Managers in relation to the rejection of Bids shall be final and binding.

Equity Shares in dematerialised form with NSDL or CDSL

The allotment of each of the Equity Shares in the Issue shall be only in dematerialized form (i.e., not in the form of
physical certificates but be fungible and be represented by the statement issued through the electronic mode).

1. A QIB applying for Equity Shares must have at least one beneficiary account with a Depository Participant
of either NSDL or CDSL prior to making the Bid.

2. Equity Shares allotted pursuant to the Issue to a successful QIB will be credited in electronic form directly
to the relevant beneficiary account (with the Depository Participant) of the QIB.

3. Equity Shares in electronic form can be traded only on the Stock Exchanges having electronic connectivity
with the Depositories. The Stock Exchanges have electronic connectivity with the Depositories.

4. The trading of each of the Equity Shares would be in dematerialized form only for all QIBs in the demat
segment of the respective Stock Exchanges.

5. The Company will not be responsible or liable for the delay in the credit of any of the Equity Shares due to
errors in the Application Form or otherwise on part of the QIBs.

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 PLACEMENT

Placement Agreement

The Joint Book Running Lead Managers have entered into a placement agreement with the Company dated July 14,
2011 (the ―Placement Agreement‖), pursuant to which the Joint Book Running Lead Managers have agreed to
manage the Issue and procure subscription for the Equity Shares to be placed with the QIBs, pursuant to Chapter
VIII of the SEBI Regulations.

The Placement Agreement contains customary representations and warranties, as well as indemnities from us and is
subject to termination in accordance with the terms contained therein.

Applications shall be made to list the Equity Shares issued pursuant to the Issue and admit them to trading on the
Stock Exchanges. No assurance can be given as to the liquidity or sustainability of the trading market for such
Equity Shares, the ability of holders of the Equity Shares to sell their Equity Shares or the price at which holders of
the Equity Shares will be able to sell their Equity Shares.

This Placement Document has not been, and will not be, registered as a prospectus with the RoC and, no Equity
Shares issued pursuant to the Issue will be offered in India or overseas to the public or any members of the public in
India or any class of investors, other than QIBs.

In connection with the Issue, the Joint Book Running Lead Managers (or their affiliates) may, for their own
accounts, subscribe to the Equity Shares or enter into asset swaps, credit derivatives or other derivative transactions
relating to the Equity Shares to be issued pursuant to the Issue at the same time as the offer and sale of the Equity
Shares, or in secondary market transactions. As a result of such transactions, the Joint Book Running Lead
Managers may hold long or short positions in such Equity Shares. These transactions may comprise a substantial
portion of the Issue and no specific disclosure will be made of such positions.

Affiliates of the Joint Book Running Lead Managers may purchase Equity Shares and be Allotted Equity Shares for
proprietary purposes and not with a view to distribute or in connection with the issuance of P-Notes.

The Joint Book Running Lead Managers and their affiliates may engage in transactions with and perform services
for the Company and its Subsidiaries, group companies or affiliates in the ordinary course of business and have
engaged, or may in the future engage, in commercial banking and investment banking transactions with the
Company and its Subsidiaries, group companies or affiliates, for which they have received compensation and may in
the future receive compensation.

Lock-up

The Company will not, for a period of 90 days from the date of this Placement Document, without the prior written
consent of the Joint Book Running Lead Managers, (A) directly or indirectly, issue, offer, lend, pledge, sell, contract
to sell or issue, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any Equity Shares or any securities convertible into or
exercisable or exchangeable for Equity Shares or publicly announce an intention with respect to any of the
foregoing, (B) enter into any swap or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, any of the economic consequences of ownership of the Equity Shares or any securities
convertible into or exercisable or exchangeable for Equity Shares or publicly announce an intention to enter into any
such transaction, whether any such swap or transaction described in clause (A) or (B) hereof is to be settled by
delivery of Equity Shares or such other securities, in cash or otherwise, or (C) deposit Equity Shares or any
securities convertible into or exercisable or exchangeable for Equity Shares or which carry the right to subscribe for
or purchase Equity Shares in depositary receipt facilities or enter into any transaction (including a transaction
involving derivatives) having an economic effect similar to that of a sale or a deposit of Equity Shares in any
depositary receipt facility, or publicly announce any intention to enter into any transaction.

139
The foregoing restrictions shall not apply to: (i) any issuance, sale, transfer or disposition of Equity Shares by the
Company to the extent such issuance, sale, transfer or disposition is required by Indian law; (ii) the Issue; and (iii)
all outstanding warrants, convertible instruments and depositary receipt representing underlying Equity Shares
issued by the Company prior to the date of the Final Placement Document.

Dr. Prathap C Reddy, Sucharitha P Reddy, Preetha Reddy, Suneeta Reddy, Shobana Khamineni, Sangita Reddy and
PCR Investments Limited have agreed that they will not, for a period of up to 90 days from the Closing Date (as
defined in the Placement Agreement), without the prior written consent of the Joint Book Running Lead Managers:

(i) (a) directly or indirectly, issue, offer, lend, pledge, sell, contract to sell or issue, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, any Equity Shares or any securities convertible into or exercisable or
exchangeable for Equity Shares (including, without limitation, securities convertible into or exercisable or
exchangeable for Equity Shares which may be deemed to be beneficially owned by the undersigned), or file
any registration statement under the U.S. Securities Act of 1933, as amended, with respect to any of the
foregoing or (b) enter into any swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, any of the economic consequences associated with the ownership of any of the
Equity Shares or any securities convertible into or exercisable or exchangeable for Equity Shares
(regardless of whether any of the transactions described in clause (a) or (b) is to be settled by the delivery
of Equity Shares or such other securities, in cash or otherwise), or (c) deposit Equity Shares with any other
depositary in connection with a depositary receipt facility or enter into any transaction (including a
transaction involving derivatives) having an economic effect similar to that of a sale or deposit of Equity
Shares in any depositary receipt facility or publicly announce any intention to enter into any transaction
falling within (a) to (c) above, whether any such transaction described in (a) to (c) above is to be settled by
delivery of Equity Shares, or such other securities, in cash or otherwise; provided, however, that the
foregoing restrictions do not apply to any sale, transfer or disposition of Equity Shares by the undersigned
to the extent such sale, transfer or disposition is required by Indian law; and

(ii) authorizes the Company to cause the transfer agent to decline to transfer and/or to note stop transfer
restrictions on the transfer books and records of the Company with respect to any Equity Shares and any
Equity Shares for which the undersigned is the record holder and, in the case of any such shares or
securities for which the undersigned is the beneficial but not the record holder, agrees to cause the record
holder to cause the transfer agent to decline to transfer and/or to note stop transfer restrictions on such
books and records with respect to such shares or securities.

The foregoing restrictions do not, however, apply to (a) any issuance of Equity Shares by the Company pursuant to
exchange of Convertible Instruments (as defined in the Placement Agreement) held by the Promoters; (b) any
transaction as a result of enforcement of existing pledges in effect on the Pledged Shares as of the date of the
Placement Agreement; (c) any inter-se transfer of Promoter Equity Shares between the Promoters, provided that the
lock-up shall continue for the remaining period with the transferee.

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 SELLING RESTRICTIONS

The distribution of this Placement Document and the offer, sale or delivery of the Equity Shares is restricted by law
in certain jurisdictions. Persons who come into possession of this Placement Document are advised to take legal
advice with regard to any restrictions that may be applicable to them and to observe such restrictions. This
Placement Document may not be used for the purpose of an offer or sale in any circumstances in which such offer or
sale is not authorised or permitted.

General

No action has been taken or will be taken that would permit a public offering of the Equity Shares to occur in any
jurisdiction, or the possession, circulation or distribution of this Placement Document or any other material relating
to the Company or the Equity Shares in any jurisdiction where action for such purpose is required. Accordingly, the
Equity Shares may not be offered or sold, directly or indirectly, and neither this Placement Document nor any
offering materials or advertisements in connection with the Equity Shares may be distributed or published in or from
any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and
regulations of any such country or jurisdiction. The Issue will be made in compliance with the applicable SEBI
Regulations. Each purchaser of the Equity Shares in the Issue will be required to make, or be deemed to have made,
as applicable, the acknowledgments and agreements as described under ―Transfer Restrictions‖.

Republic of India

This Placement Document may not be distributed directly or indirectly in India or to residents of India and any
Equity Shares may not be offered or sold directly or indirectly in India to, or for the account or benefit of, any
resident of India except as permitted by applicable Indian laws and regulations, under which an offer is strictly on a
private and confidential basis and is limited to eligible QIBs and is not an offer to the public. This Placement
Document is neither a public issue nor a prospectus under the Companies Act or an advertisement and should not be
circulated to any person other than to whom the offer is made.

Australia

This Placement Document is not a disclosure document within the meaning of the Corporations Act 2001 (Cth)
(―Corporations Act‖) and has not been lodged with the Australian Securities and Investments Commission.

No offer will be made under this Placement Document to investors to whom disclosure is required to be made under
Chapter 6D of the Corporations Act. Investors under this Placement Document represent and warrant that they are
―sophisticated investors‖ or ―professional investors‖ and not ―retail clients‖ within the meaning of those terms in the
Corporations Act.

No financial product advice is provided in this Placement Document and nothing in this Placement Document
should be taken to constitute a recommendation or statement of opinion that is intended to influence a person or
persons in making a decision to invest in the Equity Shares.

This Placement Document does not take into account the objectives, financial situation or needs of any particular
person. Before acting on the information contained in this Placement Document, or making a decision to invest in
the issue of the Equity Shares, investors should seek professional advice as to whether investing in the Equity Shares
is appropriate in light of their own circumstances.

Canada

The Equity Shares may not be offered or sold, directly or indirectly, in any province or territory of Canada or to or
for the benefit of any resident of any province or territory of Canada except pursuant to an exemption from the
requirement to file a prospectus in the province or territory of Canada in which the offer or sale is made and only by
a dealer duly registered under applicable laws in circumstances where an exemption from applicable registered
dealer registration requirements is not available.

141
European Economic Area

Each Book Running Lead Manager, severally and not jointly, has represented and warranted that, in relation to each
Member State of the EEA that has implemented the Prospectus Directive (each a ―Relevant Member State‖), it has
not made and will not make an offer of the Equity Shares to the public in that Relevant Member State, except that an
offer of the Equity Shares to the public in that Relevant Member State may be made at any time under the following
exemptions under the Prospectus Directive, if they have been implemented in that relevant member state:

(a) to legal entities which are qualified investors within the meaning of Article 2(1)(c) of the Prospectus
Directive;

(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD
Amending Directive, 150, natural or legal persons (other than qualified investors within the meaning of
Article 2(1)(c) of the Prospectus Directive), subject to obtaining the prior consent of the Book Running Lead
Managers for any such offer; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such
offer of Equity Shares shall result in a requirement for the publication by the Company or any Book
Running Lead Manager of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an ―offer of the Equity Shares to the public‖ in relation to any of
the Equity Shares in any Relevant Member State means the communication in any form and by any means of
sufficient information on the terms of the offer and the Equity Shares to be offered so as to enable an investor to
decide to purchase or subscribe for the Equity Shares, as the same may be varied in that Relevant Member State by
any measure implementing the Prospectus Directive in that Relevant Member State, and the expression ―Prospectus
Directive‖ means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to
the extent implemented in the Relevant Member State) and includes any relevant implementing measure in the
Relevant Member State and the expression ―2010 PD Amending Directive‖ means Directive 2010/73/EU.

Hong Kong

No Equity Shares may be offered or sold in Hong Kong, by means of this Placement Document or any other
document, other than (a) to ―professional investors‖ as defined in the Equity Shares and Futures Ordinance (Cap.
571) of Hong Kong (the ―SFO‖) and any rules made thereunder; or (b) in other circumstances which do not result in
the document being a ―prospectus‖ as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not
constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document
relating to the Equity Shares, which is directed at, or the contents of which are likely to be accessed or read by, the
public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) has been or will be
issued other than with respect to the Equity Shares which are or are intended to be disposed of only to persons
outside Hong Kong or only to ―professional investors‖ as defined in the SFO and any rules made thereunder.

Japan

The Equity Shares have not been and will not be registered under the Financial Instruments and Exchange Law of
Japan and may not be offered or sold, directly or indirectly, in Japan or to, or for the account or benefit of, any
resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other
entity organized under the laws of Japan) or to, or for the account or benefit of, any person for reoffering or resale,
directly or indirectly, in Japan or to, or for the account or benefit of, any resident of Japan, except (a) pursuant to an
exemption from the registration requirements of, or otherwise in compliance with, the Financial Instruments and
Exchange Law of Japan and (b) in compliance with any other relevant laws and regulations of Japan.

142
Kuwait

This Placement Document is not for circulation to the public in Kuwait. The Equity Shares have not been licensed
for offering in Kuwait by the Kuwait Capital Markets Authority or the Central Bank of Kuwait or any other relevant
Kuwaiti government agency. The offering of the Equity Shares in Kuwait on the basis of a private placement or
public offering is, therefore, restricted in accordance with Kuwait Decree Law No. 31 of 1990 (as amended) and
Law No. 7 of 2010 and the bylaws thereto (as amended). No private or public offering of the Equity Shares is being
made in Kuwait, and no agreement relating to the sale of the Equity Shares shall be concluded in Kuwait. No
marketing or solicitation or inducement activities are being used to offer or market the Equity Shares in Kuwait.

Qatar (excluding the Qatar Financial Centre)

This Placement Document and the offering of Equity Shares have not been, and shall not be: (a) lodged or registered
with, or reviewed or approved by, the Qatar Central Bank, the Qatar Financial Markets Authority, the Qatar
Financial Centre Regulatory Authority, the Ministry of Business and Trade or any other governmental authority in
the State of Qatar or in the Qatar Financial Centre (―QFC‖) or (b) authorized, permitted or licensed for offering or
distribution in Qatar or in the QFC, and the information contained in this Placement Document does not, and is not
intended to, constitute a public or general offer or other invitation in respect of securities in Qatar or in the QFC.
The Company is not regulated by any governmental authority in the State of Qatar or the QFC. The Company does
not, by virtue of this Placement Document, conduct any business in the State of Qatar or in or from the QFC. The
Company is an entity regulated under laws outside of the State of Qatar and the QFC. Accordingly, the Equity
Shares are not being, and shall not be, offered, issued or sold in the State of Qatar or in or from the QFC, and this
Placement Document is not being, and shall not be, distributed in the State of Qatar or in or from the QFC. The
offering, marketing, issue and sale of the Equity Shares and distribution of this Placement Document is being made
in, and is subject to the laws, regulations and rules of jurisdictions outside of the State of Qatar and the QFC. This
Placement Document is strictly private and confidential, and is being sent to a limited number of institutional and/or
sophisticated investors (a) upon their request and confirmation that they understand the statements above; and (b) on
the condition that it shall not be provided to any person other than the original recipient, and is not for general
circulation and may not be reproduced or used for any other purpose.

United Arab Emirates (including the Dubai International Financial Centre)

This Placement Document has not been, and is not intended to be, approved by the UAE Central Bank, the UAE
Ministry of Economy, the Emirates Securities and Commodities Authority or any other authority in the United Arab
Emirates (the ―UAE‖), or by the Dubai Financial Services Authority (the ―DFSA‖) or any other authority in the
Dubai International Financial Centre (the ―DIFC‖). It should not be assumed that any of the Company, the Joint
Book Running Lead Managers or any placement agent has received any authorization or licensing from the UAE
Central Bank or any other authorities in the UAE or the DIFC to sell or market the Equity Shares in the UAE or the
DIFC, or is a licensed broker, dealer or investment advisor under the laws applicable in the UAE or the DIFC, or
that it advises UAE or DIFC residents as to the appropriateness of investing in or purchasing or selling securities or
other financial products.

This Placement Document does not constitute a public offer of securities in the UAE under the UAE Commercial
Companies Law (Federal Law No. 8 of 1984)(as amended) or otherwise. This Placement Document is being
distributed to a limited number of selected institutional / sophisticated investors in the UAE: (a) upon their request
and confirmation that they understand that the Equity Shares have not been approved or licensed by or registered
with the UAE Central Bank or any other relevant licensing authorities or governmental agencies in the UAE; (b) on
the condition that this Placement Document will not be provided to any person other than the original recipient, is
not for general circulation in the UAE and may not be reproduced or used for any other purpose; and (c) on the
condition that no sale of securities or other investment products is intended to be consummated within the UAE. No
agreement relating to the sale of the Equity Shares is intended to be consummated in the UAE.

This Placement Document relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai
Financial Services Authority. This Placement Document is intended for distribution only to Persons of a type
specified in those rules. It must not be delivered to, or relied on by, any other Person. The Dubai Financial Services

143
Authority has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The
Dubai Financial Services Authority has not approved this document nor taken steps to verify the information set out
in it, and has no responsibility for it. The Equity Shares to which this Placement Document relates may be illiquid
and/or subject to restrictions on their resale. Prospective purchasers of the Equity Shares offered should conduct
their own due diligence on the Equity Shares. If you do not understand the contents of this document you should
consult an authorized financial adviser.

Singapore

This Placement Document has not been registered as a prospectus with the Monetary Authority of Singapore (the
―MAS‖). Accordingly, this Placement Document and any other document or material in connection with the offer or
sale, or invitation for subscription or purchase, of the Equity Shares may not be circulated or distributed, nor may
the Equity Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether
directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the
Securities and Futures Act, Chapter 289 of Singapore (the ―SFA‖), (ii) to a relevant person pursuant to Section
275(1), or to any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section
275, of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable
provision of the SFA.

Where the Equity Shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business
of which is to hold investments and the entire share capital of which is owned by one or more individuals,
each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each
beneficiary of the trust is an individual who is an accredited investor,

securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries‘ rights and interest
(howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has
acquired the Equity Shares pursuant to an offer made under Section 275 of the SFA except:

(1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any
person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

(2) where no consideration is or will be given for the transfer;

(3) where the transfer is by operation of law; or

(4) as specified in Section 276(7) of the SFA.

United Kingdom

Each of the Book Running Lead Managers has represented and warranted that (i) each Book Running Lead Manager
has only communicated or caused to be communicated and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial
Services and Markets Act 2000 (―FSMA‖)) received by it in connection with the issue or sale of the Equity Shares
in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and (ii) each Book Running
Lead Manager has complied and will comply with all applicable provisions of the FSMA with respect to anything
done by it in relation to the Equity Shares in, from or otherwise involving the United Kingdom.

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 TRANSFER RESTRICTIONS

Purchasers of the Equity Shares are not permitted to sell the Equity Shares Allotted, for a period of one year from
the date of Allotment except on the Stock Exchanges. Additional transfer restrictions applicable to the Equity Shares
are listed below.

Investors are advised to refer to the section titled ―Selling Restrictions‖ and consult their legal advisors prior to
making any resale, pledge or transfer of the Equity Shares and also.

Additional transfer restrictions applicable to the Equity Shares are listed below.

The Equity Shares have not been and will not be registered under the US Securities Act of 1933, as amended
(the ―Securities Act‖) and may not be offered or sold within the United States, except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and
applicable state securities laws. Accordingly, the Equity Shares are only being offered and sold (i) within the
United States only to ―qualified institutional buyers‖ (as defined in Rule 144A under the Securities Act and
referred to in this Placement Document as ―US QIBs‖, for the avoidance of doubt, the term US QIBs does not
refer to a category of institutional investor defined under applicable Indian regulations and referred to in this
Placement Document as ―QIBs‖) in transactions exempt from, or not subject to, the registration
requirements of the Securities Act, and (ii) outside the United States in reliance on Regulation S under the
Securities Act.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other
jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such
jurisdiction, except in compliance with the applicable laws of such jurisdiction.

Until the expiry of 40 days after the commencement of the Issue, an offer or sale of Equity Shares within the United
States by a dealer (whether or not it is participating in the Issue) may violate the registration requirements of the
Securities Act.

Equity Shares Offered and Sold within the United States

Each purchaser that is acquiring the Equity Shares issued pursuant to the Issue within the United States, by its
acceptance of this Placement Document and of the Equity Shares, will be deemed to have acknowledged,
represented to and agreed with the Company and the BRLMs that it has received a copy of this Placement Document
and such other information as it deems necessary to make an informed investment decision and that:

(1) the purchaser is authorised to consummate the purchase of the Equity Shares issued pursuant to the Issue in
compliance with all applicable laws and regulations;

(2) the purchaser acknowledges that the Equity Shares issued pursuant to the Issue have not been and will not be
registered under the Securities Act or with any securities regulatory authority of any state of the United
States and are subject to restrictions on transfer;

(3) the purchaser (i) is a US QIB, (ii) is aware that the sale to it is being made in a transaction exempt from or
not subject to the registration requirements of the Securities Act, and (iii) is acquiring such Equity Shares for
its own account or for the account of a qualified institutional buyer with respect to which it exercises sole
investment discretion;

(4) the purchaser is not an affiliate of the Company or a person acting on behalf of an affiliate;

(5) if, in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such Equity Shares, or any
economic interest therein, such Equity Shares or any economic interest therein may be offered, sold, pledged
or otherwise transferred only (A) (i) to a person whom the beneficial owner and/or any person acting on its
behalf reasonably believes is a US QIB in a transaction meeting the requirements of Rule 144A or (ii) in an

145
 offshore transaction complying with Rule 903 or Rule 904 of Regulation S under the Securities Act and (B)
in accordance with all applicable laws, including the securities laws of the States of the United States;

(6) the Equity Shares are ―restricted securities‖ within the meaning of Rule 144(a)(3) under the Securities Act
and no representation is made as to the availability of the exemption provided by Rule 144 for resales of any
such Equity Shares;

(7) the purchaser will not deposit or cause to be deposited such Equity Shares into any depositary receipt facility
established or maintained by a depositary bank other than a Rule 144A restricted depositary receipt facility,
so long as such Equity Shares are ―restricted securities‖ within the meaning of Rule 144(a)(3) under the
Securities Act;

(8) the purchaser understands that such Equity Shares (to the extent they are in certificated form), unless the
Company determines otherwise in accordance with applicable law, will bear a legend substantially to the
following effect:

THE EQUITY SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE ―SECURITIES
ACT‖) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE SELLER OR ANY PERSON
ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A UNDER THE SECURITIES ACT, OR (2) IN AN OFFSHORE TRANSACTION
COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES.

(9) the Company will not recognise any offer, sale, pledge or other transfer of such Equity Shares made other
than in compliance with the above-stated restrictions; and

(10) the purchaser acknowledges that the Company, the BRLMs, their respective affiliates and others will rely
upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees
that, if any of such acknowledgements, representations and agreements deemed to have been made by virtue
of its purchase of such Equity Shares are no longer accurate, it will promptly notify the Company, and if it is
acquiring any of such Equity Shares as a fiduciary or agent for one or more accounts, it represents that it has
sole investment discretion with respect to each such account and that it has full power to make the foregoing
acknowledgements, representations and agreements on behalf of such account.

All Other Equity Shares Offered and Sold in the Issue

Each purchaser that is acquiring the Equity Shares issued pursuant to the Issue outside the United States, by its
acceptance of this Placement Document and of the Equity Shares issued pursuant to the Issue, will be deemed to
have acknowledged, represented to and agreed with the Company and the BRLMs that it has received a copy of this
Placement Document and such other information as it deems necessary to make an informed investment decision
and that:

(1) the purchaser is authorised to consummate the purchase of the Equity Shares issued pursuant to the Issue in
compliance with all applicable laws and regulations;

(2) the purchaser acknowledges that the Equity Shares issued pursuant to the Issue have not been and will not be
registered under the Securities Act or with any securities regulatory authority of any State of the United States
and are subject to restrictions on transfer;

(3) the purchaser is purchasing the Equity Shares issued pursuant to the Issue in an offshore transaction meeting
the requirements of Rule 903 of Regulation S under the Securities Act;

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(4) the purchaser and the person, if any, for whose account or benefit the purchaser is acquiring the Equity Shares
issued pursuant to the Issue, was located outside the United States at the time the buy order for such Equity
Shares was originated and continues to be located outside the United States and has not purchased such Equity
Shares for the account or benefit of any person in the United Sates or entered into any arrangement for the
transfer of such Equity Shares or any economic interest therein to any person in the United States;

(5) the purchaser is not an affiliate of the Company or a person acting on behalf of an affiliate;

(6) if, in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such Equity Shares, or any
economic interest therein, such Equity Shares or any economic interest therein may be offered, sold, pledged
or otherwise transferred only (A) (i) to a person whom the beneficial owner and/or any person acting on its
behalf reasonably believes is a US QIB in a transaction meeting the requirements of Rule 144A or (ii) in an
offshore transaction complying with Rule 903 or Rule 904 of Regulation S under the Securities Act and (B) in
accordance with all applicable laws, including the securities laws of the States of the United States;

(7) the purchaser understands that such Equity Shares (to the extent they are in certificated form), unless the
Company determines otherwise in accordance with applicable law, will bear a legend substantially to the
following effect:

THE EQUITY SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE ―SECURITIES
ACT‖) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE SELLER OR ANY
PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, OR (2) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

(8) the Company will not recognise any offer, sale, pledge or other transfer of such Equity Shares made other than
in compliance with the above-stated restrictions; and

(9) the purchaser acknowledges that the Company, the BRLMs, their respective affiliates and others will rely
upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees
that, if any of such acknowledgements, representations and agreements deemed to have been made by virtue
of its purchase of such Equity Shares are no longer accurate, it will promptly notify the Company, and if it is
acquiring any of such Equity Shares as a fiduciary or agent for one or more accounts, it represents that it has
sole investment discretion with respect to each such account and that it has full power to make the foregoing
acknowledgements, representations and agreements on behalf of such account.

Each person in a Member State of the EEA which has implemented the Prospectus Directive (each, a ―Relevant
Member State‖) who receives any communication in respect of, or who acquires any Equity Shares under, the
offers contemplated in this Placement Document will be deemed to have represented, warranted and agreed to and
with each Underwriter and the Company that:

1. it is a qualified investor as defined under the Prospectus Directive; and

2. in the case of any Equity Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of
the Prospectus Directive, (i) the Equity Shares acquired by it in the placement have not been acquired on behalf
of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State
other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which
the prior consent of the Joint Book Running Lead Managers has been given to the offer or resale; or (ii) where
Equity Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified

147
 investors, the offer of those Equity Shares to it is not treated under the Prospectus Directive as having been
made to such persons.

For the purposes of this provision, the expression an ―offer of Equity Shares to the public‖ in relation to any of the
Equity Shares in any Relevant Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and the Equity Shares to be offered so as to enable an investor to decide to
purchase or subscribe for the Equity Shares, as the same may be varied in that Relevant Member State by any
measure implementing the Prospectus Directive in that Relevant Member State, and the expression ―Prospectus
Directive‖ means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to
the extent implemented in the Relevant Member State) and includes any relevant implementing measure in the
Relevant Member State and the expression ―2010 PD Amending Directive‖ means Directive 2010/73/EU.

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 THE SECURITIES MARKET OF INDIA

The information in this section has been extracted from publicly available documents from various sources,
including officially prepared materials from SEBI, the Stock Exchanges, and has not been prepared or
independently verified by the Company or the Joint Book Running Lead Managers or any of their respective
affiliates or advisors.

India has a long history of organized securities trading. In 1875, the first stock exchange was established in Mumbai.

Indian Stock Exchanges

Indian stock exchanges are regulated primarily by SEBI, as well as by the Government acting through the Ministry
of Finance, Capital Markets Division, under the SCRA and the SCRR. The SCRA and the SCRR along with various
rules, bye-laws and regulations of the respective stock exchanges, regulate the recognition of stock exchanges, the
qualifications for membership thereof and the manner, in which contracts are entered into, settled and enforced
between members of the stock exchanges.

SEBI is empowered to regulate the Indian securities markets, including stock exchanges and other intermediaries,
promote and monitor self-regulatory organizations and prohibit fraudulent and unfair trade practices. Regulations
concerning minimum disclosure requirements by public companies, rules and regulations concerning investor
protection, insider trading, substantial acquisitions of shares and takeovers of companies, buybacks of securities,
employee stock option schemes, stockbrokers, merchant bankers, underwriters, mutual funds, foreign institutional
investors, credit rating agencies and other capital market participants have been notified by the relevant regulatory
authority.

As of June 10, 2011, there are 20 recognized stock exchanges in India. Most of the stock exchanges have their own
governing board for self regulation. The BSE and the NSE together hold a dominant position among the stock
exchanges in terms of the number of listed companies, market capitalisation and trading activity.

With effect from April 1, 2003, the stock exchanges in India operate on a trading day plus two, or T+2, rolling
settlement system. At the end of the T+2 period, obligations are settled with buyers of securities paying for and
receiving securities, while sellers transfer and receive payment for securities. For example, trades executed on a
Monday would typically be settled on a Wednesday. In order to contain the risk arising out of the transactions
entered into by the members of various stock exchanges either on their own account or on behalf of their clients, the
stock exchanges have designed risk management procedures, which include compulsory prescribed margins on the
individual broker members, based on their outstanding exposure in the market, as well as stock-specific margins
from the members.

Listing

The listing of securities on a recognised Indian stock exchange is regulated by the applicable Indian laws including
the Companies Act, the SCRA, the SCRR, the SEBI Act and various guidelines and regulations issued by SEBI and
the listing agreements of the respective stock exchanges. SEBI also has the power to amend such listing agreements
and the bye-laws of the stock exchanges in India. The Securities Contracts (Regulation) (Amendment) Rules, 2010,
which came into force on June 4, 2010, requires that all listed companies must ensure a minimum level of public
shareholding at 25%. However, any listed company which had public shareholding below 25% prior to this
amendment is required to bring the public shareholding to the level of at least 25% by increasing its public
shareholding to the extent of at least five per cent per annum. Where the public shareholding in a listed company
falls below 25% at any time, such company is required to bring the public shareholding to 25% within a maximum
period of 12 months from the date of such fall. The SCRR also requires a company desirous of getting its securities
listed on a recognised stock exchange to offer and allot at least 25% of each class or kind of equity shares or
debentures convertible into equity shares issued by the company in terms of an offer document. The exception to
this rule is companies where the post issue capital of the company calculated at offer price is more than ` 40,000
million and the minimum equity shares or debentures convertible into equity shares offered and allotted to public by
such companies is 10%. However, in terms of the SCRR, such companies have to bring the public shareholding to
the level of at least 25% by increasing their public shareholding to the extent of at least five per cent per annum

149
beginning from the date of listing of the securities. Consequently, a listed company may be delisted from the stock
exchanges for not complying with the above-mentioned requirement. The Company is in compliance with this
minimum public shareholding requirement.

Delisting

SEBI has notified the SEBI (Delisting of Equity Shares) Regulations, 2009 (―Delisting Regulations‖) in relation to
the voluntary and compulsory delisting of securities from the stock exchanges. In addition, certain amendments to
the SCRR have also been notified in relation to delisting.

Index-Based Market-Wide Circuit Breaker System

In order to restrict abnormal price volatility in any particular stock, SEBI has instructed stock exchanges to apply
daily circuit breakers which do not allow transactions beyond a certain level of price volatility. The index-based
market-wide circuit breaker system (equity and equity derivatives) applies at three stages of the index movement, at
10%, 15% and 20%. These circuit breakers, when triggered, bring about a co-ordinated trading halt in all equity and
equity derivative markets nationwide. The market-wide circuit breakers are triggered by movement of either the
SENSEX of the BSE or the S&P CNX NIFTY of the NSE, whichever is breached earlier.

In addition to the market-wide index-based circuit breakers, there are currently in place individual scrip-wise price
bands of 20% movements either up or down. However, no price bands are applicable on scrips on which derivative
products are available or scrips included in indices on which derivative products are available.

The stock exchanges in India can also exercise the power to suspend trading during periods of market volatility.
Margin requirements are imposed by stock exchanges that are required to be paid by the stockbrokers.

BSE

Established in 1875, it is the oldest stock exchange in India. In 1956, it became the first stock exchange in India to
obtain permanent recognition from the Government under the SCRA. It has evolved over the years into its present
status as one of the premier stock exchange of India.

As of May 2011, the BSE had 1347 members. Only a member of the BSE has the right to trade in the stocks listed
on the BSE. As of May 2011, there were 5078 listed companies trading on the BSE (excluding permitted
companies).

NSE

The NSE was established by financial institutions and banks to serve as a national exchange and to provide
nationwide on-line satellite-linked screen-based trading facilities with electronic clearing and settlement for
securities including government securities, debentures, public sector bonds and units. It has evolved over the years
into its present status as one of the premier stock exchange of India. The NSE was recognised as a stock exchange
under the SCRA in April 1993 and commenced operations in the wholesale debt market segment in June 1994.

As of March 2011, the NSE had 1373 members. Only a member of the NSE has the right to trade in the stocks listed
on the NSE. As of May 2011, there were 1585 listed companies trading on the NSE (excluding permitted
companies).

Internet-based Securities Trading and Services

Internet trading takes place through order routing systems, which route client orders to exchange trading systems for
execution. Stockbrokers interested in providing this service are required to apply for permission to the relevant stock
exchange and also have to comply with certain minimum conditions stipulated under applicable law. The NSE
became the first exchange to grant approval to its members for providing internet-based trading services. Internet
trading is possible on both the ―equities‖ as well as the ―derivatives‖ segments of the NSE.

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Trading Hours

Trading on both the BSE and the NSE occurs from Monday through Friday, from 9.15 a.m. to 3.30 p.m IST
(excluding the 15 minutes pre-open session from 9.00 a.m. to 9.15 a.m. introduced recently). The BSE and the NSE
are closed on public holidays. The recognised stock exchanges have been permitted to set their own trading hours (in
cash and derivatives segments) subject to the condition that (i) the trading hours are between 9 a.m. and 5 p.m.; and
(ii) the stock exchange has in place risk management system and infrastructure commensurate to the trading hours.

Trading Procedure

In order to facilitate smooth transactions, the BSE replaced its open outcry system with BOLT facility in 1995. This
totally automated screen based trading in securities was put into practice nation-wide. This has enhanced
transparency in dealings and has assisted considerably in smoothening settlement cycles and improving efficiency in
back-office work.

NSE had introduced a fully automated trading system called National Exchange for Automated Trading or NEAT,
which operates on strict time/price priority besides enabling efficient trade. NEAT has provided depth in the market
by enabling large number of members all over India to trade simultaneously, narrowing the spreads.

Takeover Code

Disclosure and mandatory bid obligations for listed Indian companies under Indian law are governed by the specific
regulations in relation to substantial acquisition of shares and takeover. Once the equity shares of a company are
listed on a stock exchange in India, the provisions of the Takeover Code will apply to any acquisition of the
company‘s shares/ voting rights/ control. The Takeover Code prescribes certain thresholds or trigger points in the
shareholding a person or entity has in the listed Indian company, which give rise to certain obligations on part of the
acquirer. Acquisitions up to a certain threshold prescribed under the Takeover Code mandate specific disclosure
requirements, while acquisitions crossing particular thresholds may result in the acquirer having to make an open
offer of the shares of the target company. The Takeover Code also provides for the possibility of indirect
acquisitions, imposing specific obligations on the acquirer in case of such indirect acquisition.

Insider Trading Regulations

Specific regulations have been notified by SEBI to prohibit and penalize insider trading in India. An insider is,
among other things, prohibited from dealing in the securities of a listed company when in possession of unpublished
price sensitive information.

Depositories

The Depositories Act provides a legal framework for the establishment of depositories to record ownership details
and effect transfers in book-entry form. Further, SEBI framed regulations in relation to, among other things, the
formation and registration of such depositories, the registration of participants as well as the rights and obligations
of the depositories, participants, companies and beneficial owners. The depository system has significantly
improved the operation of the Indian securities markets.

Trading in derivatives is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended in February
2000 and derivative contracts were included within the term ―securities‖, as defined by the SCRA. Trading in
derivatives in India takes place either on separate and independent derivatives exchanges or on a separate derivative
segment of an existing stock exchange. The derivative exchange or derivative segment of a stock exchange functions
as a self regulatory organization under the supervision of SEBI. Derivatives products were introduced in phases in
India, starting with futures contracts in June 2000 and index options, stock options and stock futures in June 2001,
July 2001 and November 2001, respectively. SEBI, by a circular dated August 6, 2008 has issued guidelines on
exchange traded currency derivatives. The circular lays down the framework for the launch of exchange traded
currency futures in terms of eligibility norms for existing and new exchanges and their clearing corporations/
clearing houses, eligibility criteria for members of such exchanges/clearing corporations/ clearing houses, product
design, risk management measures, surveillance mechanism and other related issues. Trading in currency derivatives

151
started on August 29, 2008 at the NSE, on October 1, 2008 at BSE and on October 7, 2008 at MCX Stock Exchange
Limited.

152
 DESCRIPTION OF THE EQUITY SHARES

The following is information relating to the Equity Shares including a brief summary of the Memorandum and
Articles of Association and the Companies Act. Prospective investors are urged to read the Memorandum and
Articles of Association carefully, and consult with their advisers, as the Memorandum and Articles of Association
and applicable Indian law, and not this summary, govern the rights attached to the Equity Shares.

Authorised Capital

The authorised share capital of the Company is ` 1,100 million divided into 200,000,000 Equity Shares of ` 5 each
and 1,000,000 Preference Shares of ` 100 each.

Dividends

Under Indian law, a company pays dividends upon a recommendation by its board of directors and approval by a
majority of the shareholders at the annual general meeting of shareholders held within six months of the end of each
fiscal year. Under the Companies Act, unless the board of directors of a company recommends the payment of a
dividend, the shareholders at a general meeting have no power to declare any dividend. Subject to certain conditions
laid down by Section 205 of the Companies Act, no dividend can be declared or paid by a company for any fiscal
year except out of the profits of the company calculated in accordance with the provisions of the Companies Act or
out of the profits of the company for any previous fiscal year(s) arrived at as laid down by the Companies Act.
According to the Articles of Association, the amount of dividends shall not exceed the amount recommended by the
Board of Directors. Dividends are generally declared as a percentage of the par value. In addition, as is permitted by
the Articles of Association, the Board of Directors may declare and pay interim dividend as appear to it be justified
by the profits of the Company. Further, the Board may declare dividend in relation to any year by an extraordinary
general meeting in addition to what has already been declared in the last Annual General Meeting.

The Equity Shares issued pursuant to this Placement Document shall rank pari passu with the existing Equity Shares
in all respects including entitlements to any dividends that may be declared by the Company.

Capitalisation of Reserves and Issue of Bonus Shares

In addition to permitting dividends to be paid out of current or retained earnings as described above, the Companies
Act permits the board of directors, if so approved by the shareholders in a general meeting, to distribute an amount
transferred in the general reserves or surplus in its profit and loss account to its shareholders, in the form of fully
paid up bonus ordinary shares, which are similar to stock dividend. The Companies Act also permits the issue of
fully paid up bonus shares from a share premium account. These bonus ordinary shares must be distributed to
shareholders in proportion to the number of ordinary shares owned by them as recommended by the board of
directors. Any issue of bonus shares would be subject to SEBI Regulations.

As per the Articles of Association of the Company, upon resolution in the General Meeting, the Company may
capitalize and distribute amongst the shareholders any amount standing to the credit of the share premium account or
the capital redemption reserve account or any moneys, investment or other assets forming part of the undivided
profits including profits or surplus moneys arising from realization and from appreciation in value of any capital
assets of the Company standing to the credit of the general reserve or any reserve of the Company or any amounts
standing to the credit of the profit and loss account or any other fund of the Company.

Pre-emptive Rights and Alteration of Share Capital

Subject to the provisions of the Companies Act, the Company may increase its share capital by issuing new shares
on such terms and with such rights as it, by action of its shareholders in a general meeting may determine.
According to Section 81 of the Companies Act, such new shares shall be offered to existing shareholders listed on
the members‘ register on the record date in proportion to the amount paid up on those shares at that date. The offer
shall be made by notice specifying the number of shares offered and the date (being not less than 15 days from the
date of the offer) after which the offer, if not accepted, will be deemed to have been declined. After such date the

153
Board may dispose of the shares offered in respect of which no acceptance has been received, in such manner as
they think most beneficial to the Company. The offer is deemed to include a right exercisable by the person
concerned to renounce the shares offered to him in favour of any other person, provided that the person in whose
favour such shares have been renounced is approved by the Board of Directors in their absolute discretion.

Under the provisions of Section 81 (1A) of the Companies Act, new shares may be offered to any persons whether
or not those persons include existing shareholders, if a special resolution to that effect is passed by the Company‘s
shareholders in a general meeting or, where only a simple majority of shareholders present and voting has passed the
resolution, the Central Government‘s permission has been obtained.

The Articles of Association of the Company authorize it to increase its authorised capital by issuing new shares. The
Company may also alter its share capital by dividing its share capital into shares of larger amount or converting all
its paid up shares into stock and reconverting that stock into fully paid up shares of any denomination.

The Articles of Association provide that the Company, by an ordinary resolution passed at the general meeting, from
time to time, may consolidate or sub-divide its share capital and the resolution may provide that holders of shares
resulting from such sub-division shall have some special advantage as regards dividend, capital or otherwise as
compared with any other shares. The Company‘s Articles of Association also provide that if at any time the
Company‘s share capital is divided into different classes of shares, the rights attached to any one class (unless
otherwise provided by the terms of issue of the shares of that class) may be, subject to provisions of the Companies
Act, varied with the consent in writing of the holders of three-fourths of the issued shares of that class, or with the
sanction of a special resolution, passed at a separate meeting of the holders of the shares of that class-.

General Meetings of Shareholders

There are two types of general meetings of the shareholders:

(i) annual general meetings (―AGM‖); and

(ii) extra-ordinary general meetings (―EGM‖).

The Company must hold its Annual General Meeting within six months after the expiry of each fiscal year provided
that not more than 15 months shall elapse between the annual general meeting and next one, unless extended by the
Registrar of Companies at its request for any special reason for a period not exceeding three months. The Board of
Directors may convene an extraordinary general meeting of shareholders when necessary or at the request of a
shareholder or shareholders holding in the aggregate not less than one tenth of the Company‘s issued paid-up capital
(carrying a right to vote in respect of the relevant matter on the date of deposit of the requisition).

Written notices convening a meeting setting out the date, place and agenda of the meeting must be given to members
at least 21 days prior to the date of the proposed meeting. A general meeting may be called after giving shorter
notice if consent is received from all shareholders in the case of an Annual General Meeting, and from shareholders
holding not less than 95% of the Company‘s paid-up capital, in the case of any other meeting. Five members present
in person, shall constitute a quorum for a general meeting of the Company, whether annual or extra-ordinary.

A company intending to pass a resolution relating to matters such as, but not limited to, amendment in the objects
clause of the Memorandum, the issuing of shares with different voting or dividend rights, a variation of the rights
attached to a class of shares or debentures or other securities, buy-back of shares under the Companies Act, giving
loans or extending guarantees in excess of limits prescribed under the Companies Act, and guidelines issued under
the Companies Act, is required to obtain the resolution passed by means of a postal ballot instead of transacting the
business in the Company‘s general meeting. A notice to all the shareholders shall be sent along with a draft
resolution explaining the reasons therefore and requesting them to send their assent or dissent in writing on a postal
ballot within a period of 30 days from the date of posting the letter. Postal ballot includes voting by electronic mail.

154
Voting Rights

At a general meeting, upon a show of hands, every member holding shares and entitled to vote and present in person
has one vote. Upon a poll, the voting rights of each shareholder entitled to vote and present in person or by proxy is
in the same proportion as the capital paid up on each share held by such holder bears to the Company‘s total paid-up
capital. Voting is by a show of hands, unless a poll is ordered by the Chairman of the meeting The Chairman of the
meeting has a casting vote.

Ordinary resolutions may be passed by simple majority of those present and voting. Special resolutions require that
the votes cast in favour of the resolution must be at least three times the votes cast against the resolution.

A shareholder may exercise his voting rights by proxy to be given in the form required by the Company‘s Articles of
Association. The instrument appointing a proxy is required to be lodged with the Company at least 48 hours before
the time of the meeting. A proxy may not vote except on a poll and does not have a right to speak at meetings.

Convertible Securities/Warrants

The Company may issue debt instruments from time to time that are partly or fully convertible into Equity Shares
and/or warrants to purchase Equity Shares.

Employee Stock Option Plan

The Articles of Association authorize the Board of Directors for issuing shares for the purpose of the employee
stock option plan approved by the Remuneration and Nomination Committee.

Transfer of shares

Shares held through depositories are transferred in the form of book entries or in electronic form in accordance with
the regulations laid down by SEBI. These regulations provide the regime for the functioning of the depositories and
the participants and set out the manner in which the records are to be kept and maintained and the safeguards to be
followed in this system. Transfers of beneficial ownership of shares held through a depository are exempt from
stamp duty. The Company has entered into an agreement for such depository services with the National Securities
Depository Limited and the Central Depository Services India Limited. SEBI requires that the Company‘s shares for
trading and settlement purposes be in book-entry form for all investors, except for transactions that are not made on
a stock exchange and transactions that are not required to be reported to the stock exchange. The Company shall
keep a book in which every transfer or transmission of shares will be entered.

Pursuant to the listing agreement with the Stock Exchanges, in the event the Company has not effected the transfer
of shares within one month or where the Company has failed to communicate to the transferee any valid objection to
the transfer within the stipulated time period of one month, it is required to compensate the aggrieved party for the
opportunity loss caused during the period of the delay. The shares of the Company shall be freely transferable.
Under the listing agreement with the Stock Exchanges, notice of such refusal must be sent to the transferee within
one month of the date on which the transfer was lodged with the company. According to the Articles, any person
who becomes entitled to shares by reason of death, lunacy, bankruptcy or insolvency of a member shall be entitled
to the same dividend and other advantages to which he would be entitled if he was a registered member.

Liquidation Rights

Subject to the rights of creditors, of employees and of the holders of any other shares entitled by their terms of issue
to preferential repayment over the shares, in the event of a winding-up of the Company, the holders of the shares are
entitled to be repaid the amounts of capital paid up or credited as paid up on such shares or in case of a shortfall,
proportionately. All surplus assets after payments due to employees, the holders of any preference shares and other
creditors belong to the holders of the ordinary shares in proportion to the amount paid up or credited as paid up on
such shares, respectively, at the commencement of the winding-up.

155
 TAXATION

The Board of Directors

Apollo Hospitals Enterprise Limited
#19, Bishop Gardens
Raja Annamalaipuram
Chennai 600 028
Tamil Nadu

Dear Sirs,

Sub: Certification of statement of tax benefits in connection with the proposed Qualified Institutional
Placement (―QIP‖) of Apollo Hospitals Enterprise Limited (the ―Company‖) in accordance with Chapter
VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations 2009, as amended (the ―SEBI Regulations‖)

We, M/s S. Viswanathan, the Statutory Auditors of the Company, hereby report that the enclosed statement states
the possible tax benefits available to the Company having its registered office at #19, Bishop Gardens, Raja
Annamalaipuram, Chennai 600 028, Tamil Nadu and to the shareholders of the Company under the provisions of the
Income Tax Act, 1961, Wealth Tax Act, 1957, Gift Tax Act, 1958 presently in force in India as of date in
connection with the proposed QIP of the Company.

Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under
the relevant tax laws and their interpretations. Hence, the ability of the Company or its shareholders to derive the tax
benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company or its
shareholder faces in the future, the Company or its shareholders may or may not choose to fulfill.

The benefits discussed in the enclosed statement are not exhaustive nor are they conclusive. This statement is only
intended to provide general information and to guide the investors and is neither designed nor intended to be a
substitute for professional tax advice. A shareholder is advised to consult his/ her/ their own tax consultant with
respect to the tax implications of an investment in the equity shares particularly in view of the fact that certain
recently enacted legislation may not have a direct legal precedent or may have a different interpretation on the
benefits, which an investor can avail. Further, we have also incorporated the amendments brought out by the
Finance Act, 2011, where applicable. We do not express any opinion or provide any assurance as to whether:

the Company or its shareholders will continue to obtain these benefits in future; or
the conditions prescribed for availing the benefits have been / would be met with;
the revenue authorities/ courts will concur with the views expressed herein.

Our views are based on the existing provisions of law and its interpretations, which are subject to change from time
to time. We do not assume responsibility to update the views of such changes. The contents of the report are based
on information, explanations and representations obtained from the Company and on the basis of our understanding
of the business activities and operations of the Company.

This certificate is issued at specific request of the Company to be submitted to the Book Running Lead Managers.
The report enclosed with this certificate is intended solely for information and for the inclusion of the same in the
Preliminary Placement Document/this Placement Document or any other document in connection with the proposed
QIP and is not to be used, referred to or distributed for any other purpose.

For M/s S. Viswanathan

Chartered Accountants
FRN : 004770S
V.C.Krishnan
Partner Place: Chennai
Membership No. 022167 Date: 6th July, 2011

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ANNEXURE TO STATEMENT OF POSSIBLE DIRECT TAX BENEFITS AVAILABLE TO THE
COMPANY AND ITS SHAREHOLDERS

I. SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY AND IT’S SHAREHOLDERS

There are no special tax benefits available to Company and its shareholders.

II. GENERAL TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS:

A) To the Company
1) As per the Finance Act 2011, with effect from 1-4-2010, any capital expenditure incurred for setting up a new
hospital with minimum 100 bed capacity, will be allowed as a deduction u/s 35 AD of The Income Tax Act, 1961 in
the previous year in which operation commences.

2) Subject to Compliance of certain conditions laid down in Section 32 of the Income Tax Act, 1961 (I. T. Act) the
Company will be entitled to a deduction for depreciation in respect of tangible assets; intangible assets being in the
nature of know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights
of similar nature acquired on or after 1st day of April, 1998 at the rates prescribed under the Income Tax Rules,
1962;

3) Dividend income from shares, is exempt from income tax in accordance with and subject to the provisions of
section 10(34) read with Section 115-O or section 10(35), respectively, of the I. T. Act. As per the provisions of
Section 14A of the I. T. Act, no deduction is allowed in respect of any expenditure incurred in relation to such
dividend income to be computed in accordance with the provisions contained therein. Also, Section 94(7) of the I. T.
Act provides that losses arising from the sale/transfer of shares purchased within a period of three months prior to
the record date and sold/transferred within three months after such date, will be disallowed to the extent dividend
income on such shares are claimed as tax exempt.

4) Under section 10(38) of the I. T. Act, the long-term capital gains arising on transfer of securities, which are
chargeable to Securities Transaction Tax (―STT‖), are exempt from tax in the hands of the company. The STT will
be levied on purchase or sale of Equity Shares entered into in a recognised stock exchange in India. However, such
long term capital gain shall be taken into account in computing the book profit and income tax payable under section
115JB.

5) The Company will be entitled to amortise preliminary expenditure, being expenditure incurred on public issue of
shares under section 35D of the I. T. Act, subject to the limit specified therein.

6) As per the provisions of Section 112 of the I. T. Act, other long-term capital gains arising to the company are
subject to tax at the rate of 20% (plus applicable surcharge, education cess and secondary & higher education cess).
However, as per the Proviso to that section, the long-term capital gains resulting from transfer of listed securities
(not covered by section 10(36) and 10(38) of the I. T. Act), are subject to tax at the rate of 20% on long-term capital
gains worked out after considering indexation benefit (plus applicable surcharge, education cess and secondary &
higher education cess), which would be restricted to 10% of long-term capital gains worked out without considering
indexation benefit (plus applicable surcharge, education cess and secondary & higher education cess).

7) As per the provisions of section 111A of the I. T. Act, short-term capital gains arising to the company from
transfer of Equity Shares in any other company through a recognized Stock Exchange is subject to tax at the rate of
15% (plus applicable surcharge, education cess and secondary & higher education cess), if such a transaction is
subjected to STT. In accordance with and subject to the conditions specified in Section 54EC of the I. T. Act, the
company would be entitled to exemption from tax on long-term capital gain (not covered by Section 10(36) and
Section 10(38) of the I. T. Act) if such capital gain is invested in any of the long-term specified assets (herein the
manner prescribed in the said section) for investment made on or after 1st day of April 2007, the exemption would
be restricted to the amount which does not exceed Rupees Fifty Lacs during the fiscal year. If the new asset is
transferred or converted into money at any time within a period of three years from the date of its acquisition, the
amount of Capital Gains for which exemption is availed earlier would become chargeable to tax as long-term capital
gains in the year in which such new asset is transferred or converted into money. If only a portion of capital gain is

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so invested, the exemption is available proportionately. The bonds presently specified within this section are bonds
issued by National Highway Authority of India (NHAI) and Rural Electrification Corporation Limited (REC).

8) The Corporate Tax Rate for the Assessment Year 2011 – 2012 shall be 30% (plus applicable surcharge, education
cess and secondary & higher education cess).

9) As provided under section 115JB, the Company is liable to pay income tax at the rate of 18% (plus applicable
surcharge, education cess and secondary & higher education cess) on the Book Profit as per the provisions of section
115JB if the total tax payable as computed under the I. T. Act is less than 18% of its Book Profit as computed under
the said section.

10) Under Section 115JAA, credit shall be allowed of any Minimum Alternate Tax (MAT) paid under Section
115JB of the I. T. Act. Credit eligible for carry forward is the difference between MAT paid and the tax computed as
per the normal provisions of the I. T. Act. However, no interest shall be payable on the tax credit under this sub-
section. Such MAT credit shall be available for set-off up to 10 years succeeding the year in which the MAT credit
initially arose.

11) Under Section 115O, the domestic company will be allowed to set-off the dividend received from its subsidiary
company during the fiscal year against the dividend distributed by it, while computing the Dividend Distribution
Tax (DDT) if:

- the dividend is received from its subsidiary

- the subsidiary has paid the DDT on the dividend distributed
- the domestic company is not a subsidiary of any other company
Provided, that the same amount of dividend shall not be taken into account for reduction more than once.
For the purpose of this sub-section a company shall be a subsidiary of another company, if such other company
holds more than half in nominal value of the equity share capital of the company.

12) In accordance with and subject to the conditions specified under Section 80-IB(10) of the I. T. Act, the
Company is eligible for hundred percent deduction of the profits derived from development and building of housing
projects approved before 31 March, 2008, by a local authority subject to fulfillment of conditions mentioned therein.

13) Under section 24(a) of the I. T. Act, the Company is eligible for deduction of thirty percent of the annual value
of the property (i.e. actual rent received or receivable on the property or any part of the property which is let out).

14) Under section 24(b) of the I. T. Act, where the property has been acquired, constructed, repaired, renewed or
reconstructed with borrowed capital, the amount of interest payable on such capital shall be allowed as a deduction
in computing the income from house property. In respect of property acquired or constructed with borrowed capital,
the amount of interest payable for the period prior to the year in which the property has been acquired or constructed
shall be allowed as deduction in computing the income from house property in five equal instalments beginning with
the year of acquisition or construction.

B) To the Shareholders of the Company

Resident Members:

1) Dividend income of shareholders is exempt from income tax under section 10(34) read with Section 115-O of the
I. T. Act. As per the provisions of Section 14A of the I. T. Act, no deduction is allowed in respect of any expenditure
incurred in relation to such dividend income to be computed in accordance with the provisions contained therein.
Also, Section 94(7) of the I. T. Act provides that losses arising from the sale/transfer of shares purchased up to three
months prior to the record date and sold or transferred within three months after such date, will be disallowed to the
extent dividend income on such shares are claimed as tax exempt by the shareholders.

Any income arising from the transfer of Equity Share held for the period of 12 months or more and held as Capital
Asset is exempt under section 10(38), where the transaction of sale of such equity share is entered through
recognized Stock Exchange on or after 1-10-2004 and such transaction is chargeable to STT.

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2) Under section 54EC of the I. T. Act, 1961 and subject to the conditions and to the extent specified therein, long
term capital gain (in case not covered under section 10(38) of the I. T. Act) arising on the transfer of shares of the
Company will be exempt from capital gains tax if the capital gain is invested within a period of 6 months after the
date of such transfer for a period of at least 3 years in bonds issued by

a. National Highway Authority of India constituted under Section 3 of The National Highway Authority of India
Act, 1988;
b. Rural Electrification Corporation Limited, the Company formed and registered under the Companies Act, 1956;

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. The amount so
exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted within three
years from the date of their acquisition. For Investment made on or after 1st day of April 2007, the exemption would
be restricted to the amount which does not exceed Rupees Fifty Lacs during the fiscal year.

3) Under Section 54F of the I. T. Act and subject to the conditions and to the extent specified therein, long term
capital gains (in cases not covered under section 10(38) of the I. T. Act) arising to an individual or Hindu Undivided
Family (HUF) on transfer of shares of the Company will be exempt from capital gains tax subject to other
conditions, if the net sales consideration from such shares are used for purchase of residential house property within
a period of one year before or two year after the date on which the transfer took place or for construction of
residential house property within a period of three years after the date of transfer.

Such benefit will not be available if the individual or HUF

a) owns more than one residential house, other than the new residential house, on the date of transfer of the shares;
or

b) purchases another residential house within a period of one year after the date of transfer of the shares; or

c) constructs another residential house within a period of three years after the date of transfer of the shares; and

d) the income from such residential house, other than the one residential house owned on the date of transfer of the
original asset, is chargeable under the head ―Income from house property‖.

If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital
gain the same proportion as the cost of the new residential house bears to the net consideration shall be exempt. If
the new residential house is transferred within a period of three years from the date of purchase or construction, the
amount of capital gains on which tax was not charged earlier, shall be deemed to be income chargeable under the
head ―Capital Gains‖ of the year in which the residential house is transferred.

4) As per section 74 of the I. T. Act, short term capital loss suffered during the year is allowed to be set-off against
short-term as well as long term capital gain of the said year. Balance loss, if any, could be carried forward for eight
years for claiming set off against subsequent year‘s short - term as well as long-term capital gains. Long term capital
loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if any, could be
carried forward for eight years for claiming set off against subsequent year‘s long-term capital gains.

5) Under section 111A of the I. T. Act, capital gains arising to a shareholder from transfer of short terms capital
assets, being an equity share in the company, entered into in a recognized stock exchange in India will be subject to
tax at the rate of 15% (plus applicable surcharge, education cess and secondary & higher education cess) subject to
the fulfillment of conditions mentioned there in.

6) Under Section 112 of the I. T. Act and other relevant provisions of the I. T. Act, long term capital gains (not
covered under section 10(38) of the I. T. Act) arising on transfer of shares in the Company, if shares are held for a
period exceeding 12 months, shall be taxed at a rate of 20% (plus applicable surcharge, education cess and
secondary & higher education cess) after indexation as provided in the second proviso to Section 48 or at 10% (plus
applicable surcharge, education cess and secondary & higher education cess) (without indexation), at the option of
the Shareholders.

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Non Resident Indians/Members other than FIIs and Foreign Venture Capital Investors:

1. Dividend income of shareholders is exempt from income tax under section 10(34) read with Section 115-O of the
I. T. Act. As per the provisions of Section 14A of the I. T. Act, no deduction is allowed in respect of any
expenditure incurred in relation to such income which does not form part of total income under the Income Tax
Act, 1961. Also, Section 94(7) of the I. T. Act provides that losses arising from the sale/transfer of shares
purchased up to three months prior to the record date and sold or transferred within three months after such date,
will be disallowed to the extent dividend income on such shares are claimed as tax exempt by the shareholders.

2. Any income arising from the transfer of a long term capital asset (i.e. capital asset held for the period of 12
months or more) being an Equity Share in a company is exempt
under section 10(38), where the transaction of sale of such equity share is entered through recognized Stock
Exchange on or after 1-10-2004 and such transaction is chargeable to STT.

3. Tax on income from investment and long term capital gains (other than those exempt under section 10(38):

A non-resident Indian (i.e. an individual being a citizen of India or person of Indian Origin) has an option to be
governed by the provisions of Chapter XIIA of the I. T. Act Provisions Relating to certain incomes of Non-
Residents‖
a) Under section 115E of the I. T. Act, where shares in the company are subscribed for in convertible Foreign
Exchange by a non-resident Indian, capital gains arising to the non resident on transfer of shares held for a period
exceeding 12 months shall (in cases not covered under section 10(38) of the I. T. Act) be concessionally taxed at a
flat rate of 10% (plus applicable surcharge, education cess and secondary & higher education cess) without
indexation benefit but with protection against foreign exchange fluctuation under the first proviso to section 48 of
the I. T. Act.

b) Capital gain on transfer of Foreign Exchange Assets, not to be charged in certain cases

Under provisions of section 115F of the I. T. Act, long term capital gains (not covered under section 10(38) of the I.
T. Act) arising to a non-resident Indian from the transfer of shares of the company subscribed to in convertible
Foreign Exchange shall be exempt from income tax if the net consideration is reinvested in specified assets within
six months of the date of transfer. If only part of the net consideration is so reinvested, the exemption shall be
proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are
transferred or converted within three years from the date of their acquisition.
c) Return of income not to be filed in certain cases

Under provisions of section 115-G of the I. T. Act, it shall not be necessary for a non-resident Indian to furnish his
return of income if his only source of income is investment income or long term capital gains or both arising out of
assets acquired, purchased or subscribed in convertible foreign exchange and tax deductible at source has been
deducted there from.

d) Under section 115-I of the I. T. Act, a non-resident Indian may elect not to be governed by the provisions of
Chapter XII-A for any assessment year by furnishing his return of income under section 139 of the I. T. Act
declaring therein that the provisions of this Chapter shall not apply to him for that assessment year and if he does so
the provisions of this Chapter shall not apply to him, instead the other provisions of the I. T. Act shall apply.

Other Provisions

4. Under proviso to section 48 of the I. T. Act, in case of a non resident, in computing the capital gains arising from
transfer of shares of the company acquired in convertible foreign exchange (as per exchange control regulations),
protection is provided from fluctuations in the value of rupee in terms of foreign currency in which the original
investment was made. Cost indexation benefits will not be available in such a case.

5. Under section 54EC of the I. T. Act and subject to the conditions and to the extent specified therein, long term
capital gain (in case not covered under section 10(38) of the I. T. Act) arising on the transfer of shares of the

160
Company will be exempt from capital gains tax if the capital gain are invested within a period of 6 months after the
date of such transfer for a period of at least 3 years in bonds issued by

a. National Highway Authority of India constituted under Section 3 of The National Highway Authority of India
Act, 1988;
b. Rural Electrification Corporation Limited, the Company formed and registered under the Companies Act, 1956;
If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. The amount so
exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted within three
years from the date of their acquisition. For Investment made on or after 1st day of April 2007, the exemption would
be restricted to the amount, which does not exceed Rupees Fifty Lacs during the fiscal year.

6. Under Section 54F of the I. T. Act and subject to the conditions and to the extent specified therein, long term
capital gains (in cases not covered under section 10(38) of the I. T. Act) arising to an individual or Hindu Undivided
Family (HUF) on transfer of shares of the Company will be exempt from capital gains tax subject to other
conditions, if the sale proceeds from such shares are used for purchase of residential house property within a period
of one year before or two year after the date on which the transfer took place or for construction of residential house
property within a period of three years after the date of transfer.

Such benefit will not be available if the individual or Hindu Undivided Family
a) owns more than one residential house, other than the new residential house, on the date of transfer of the shares;
or

b) purchases another residential house within a period of one year after the date of transfer of the shares; or

c) constructs another residential house within a period of three years after the date of transfer of the shares; and

d) the income from such residential house, other than the one residential house owned on the date of transfer of the
original asset, is chargeable under the head ―Income from house property‖.

If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital
gain the same proportion as the cost of the new residential house bears to the net consideration shall be exempt. If
the new residential house is transferred within a period of three years from the date of purchase or construction, the
amount of capital gains on which tax was not charged earlier, shall be deemed to be income chargeable under the
head ―Capital Gains‖ of the year in which the residential house is transferred.

7. As per section 74 of the I. T. Act, short term capital loss suffered during the year is allowed to be set-off against
short-term as well as long term capital gain of the said year. Balance loss, if any, could be carried forward for eight
years for claiming set off against subsequent years short- term as well as long-term capital gains. Long term capital
loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if any, could be
carried forward for eight years for claiming set off against subsequent years long term capital gains.

8. Under section 111A of the I. T. Act, capital gains arising to a shareholder from transfer of short terms capital
assets, being an equity share in the company, entered into in a recognized stock exchange in India will be subject to
tax at the rate of 15% (plus applicable surcharge, education cess and secondary & higher education cess).

9. Under section 112 of the I. T. Act and other relevant provisions of the I. T. Act, long term capital gains (not
covered under section 10(38) of the I. T. Act) arising on transfer of shares in the company, if shares are held for a
period exceeding 12 months shall be taxed at a rate of 20% (plus applicable surcharge & education cess and
secondary & higher education cess) after indexation as provided in the second proviso to section 48. However,
indexation will not be available if the investment is made in foreign currency as per the first proviso to section 48
stated above, or it can be taxed at 10% (plus applicable surcharge & education cess and secondary & higher
education cess on income tax) (without indexation), at the option of assessee.

10. As per section 90(2) of the I. T. Act, the provisions of the I. T. Act would prevail over the provisions of the tax
treaty to the extent they are more beneficial to the Non Resident shareholder. Thus a non-resident shareholder can
opt to be governed by the beneficial provisions of an applicable tax treaty.

161
Foreign Institutional Investors (FIIs)

1. By virtue of section 10(34) of the I. T. Act, income earned by way of dividend income from domestic company
referred to in section 115O of the I. T. Act, are exempt from tax in the hands of the institutional investor.

2. In terms of section 10(38) of the I. T. Act, any long term capital gains arising to an investor from transfer of long-
term capital asset being an equity shares in a company would not be liable to tax in the hands of the investor if the
transaction is chargeable to STT.

3. Under section 111A of the I. T. Act, capital gains arising to FIIs from transfer of short terms capital assets, being
an equity share in the company, entered into in a recognized stock exchange in India will be taxed at the rate of 15%
(plus applicable surcharge, educational cess & secondary & higher education cess on income tax) as per section
115AD of the I. T. Act.

4. The income by way of short term capital gains (not referred to in section 111A of the I. T. Act) or long term
capital gains (not covered under section 10(38) of the I. T. Act) realized by FIIs on sale of shares in the company
would be taxed at the following rates as per section 115AD of the I. T. Act.:

- Short term capital gains 30% (plus applicable surcharge, education cess & secondary & higher education cess on
income tax)
- Long term capital gains 10% (without cost indexation) plus applicable surcharge, education cess and secondary &
higher education cess on income tax)
(Shares held in a company would be considered as a long-term capital asset provided they are held for a period
exceeding 12 months).

5. Under section 54EC of the I. T. Act and subject to the conditions and to the extent specified therein, long term
capital gain (in case not covered under section 10(38) of the I. T. Act) arising on the transfer of shares of the
Company will be exempt from capital gains tax if the capital gain are invested within a period of 6 months after the
date of such transfer for a period of at least 3 years in bonds issued by

a. National Highway Authority of India constituted under Section 3 of The National Highway Authority of India
Act, 1988;
b. Rural Electrification Corporation Limited, the Company formed and registered under the Companies Act, 1956;
If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. The amount so
exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted within three
years from the date of their acquisition. For Investment made on or after the 1st Day of April 2007, the exemption
would be restricted to the amount, which does not exceed Rupees Fifty Lacs during the fiscal year.

6. As per section 74 of the I. T. Act, short term capital loss suffered during the year is allowed to be set-off against
short-term as well as long term capital gain of the said year. Balance loss, if any, could be carried forward for eight
years for claiming set off against subsequent year‘s short- term as well as long-term capital gains. Long term capital
loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if any, could be
carried forward for eight years for claiming set off against subsequent year‘s long term capital gains.

7. As per section 90 of the I. T. Act, the provisions of the I.T. Act would prevail over the provisions of the tax treaty
to the extent they are more beneficial to the Non Resident shareholder. Thus a non-resident shareholder can opt to be
governed by the beneficial provisions of an applicable tax treaty.

8. Under section 196D (2) of the Act, no deduction of tax at source will be made in respect of income by way of
capital gain arising from the transfer of securities referred to in section 115AD.

162
Persons carrying on business in shares and securities

In accordance with the insertion of new Section 36(1) (xv) in the Finance Act 2008, STT paid in respect of taxable
securities transaction entered during the course of business will be available as deduction while computing the
taxable business income.

Mutual Funds

In accordance with section 10(23D), any income of:

(i) a Mutual Fund registered under the Securities and Exchange Board of India Act 1992 or regulations made there
under;
(ii) such other Mutual Fund set up by a public sector bank or a public financial institution or authorised by the
Reserve Bank of India subject to such conditions as the Central Government may, by notification in the Official
Gazette, specify in this behalf,
- will be exempt from income-tax.

Under the Wealth-tax Act, 1957

To the Company
Wealth Tax is applicable on the written down value of Motor cars (other than ambulances) of the Company @ 1%
p.a.

To the Share holders

Shares of the company held by the shareholder will not be treated as an asset within the meaning of section 2(ea) of
Wealth-tax Act, hence Wealth-tax Act will not be applicable.
Notes:
1. All the above benefits are as per the current tax laws as amended by the Finance Act, 2011. Any changes to the
Finance Act in whatever sort or form has not been considered.

2. The above Statement of possible tax benefits sets out the provisions of law in a summary manner only and is not a
complete analysis or list of all potential tax consequences.

3. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject to
any benefits available under the Double Taxation Avoidance Agreements (DTAA), if any, between India and the
country in which the non-resident has fiscal domicile.

4. The stated benefit will be available only to the sole/first named holder in case the shares are held by Joint holders.

5. In view of the individual nature of tax consequence, each investor is advised to consult his/her own tax advisor
with respect to specific tax consequences of his/her participation in this issue and we are absolved of any liability to
the shareholder for placing reliance upon the contents of this material.

163
 US FEDERAL INCOME TAXATION

The following discussion describes certain material US federal income tax consequences to US Holders (as defined
below) under present law of an investment in our Equity Shares. This summary applies only to investors that hold
our Equity Shares as capital assets (generally, property held for investment) and that have the US dollar as their
functional currency. This discussion is based on the tax laws of the United States as in effect on the date of this
Placement Document and on US Treasury Regulations in effect or, in some cases, proposed, as of the date of this
Placement Document, as well as judicial and administrative interpretations thereof available on or before such date.
All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the
tax consequences described below. This summary does not discuss any estate or gift tax consequences.

The following discussion does not deal with the tax consequences to any particular investor or to persons in special
tax situations such as:

banks, financial institutions or insurance companies;

real estate investment trusts or regulated investment companies;

broker-dealers;

traders that elect to mark-to-market;

tax-exempt entities;

persons liable for the alternative minimum tax;

US expatriates;

persons holding Equity Shares as part of a straddle, hedging, conversion or integrated transaction;

persons who acquired Equity Shares pursuant to the exercise of any employee share option or otherwise as
compensation;

persons that actually or constructively own 10% or more of the total combined voting power of all classes of
our voting stock; or

partnerships or pass-through entities, or persons holdings Equity Shares through such entities.

INVESTORS ARE URGED TO CONSULT WITH THEIR TAX ADVISORS REGARDING THE
APPLICATION OF THE US FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS
WELL AS THE STATE, LOCAL, NON-US AND OTHER TAX CONSEQUENCES TO THEM OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF EQUITY SHARES.

The discussion below of the US federal income tax consequences to ―US Holders‖ will apply to you if you are the
beneficial owner of Equity Shares and you are, for US federal income tax purposes,

an individual who is a citizen or resident of the United States;

a corporation (or other entity taxable as a corporation for US federal income tax purposes) created or organized
in the Unites States or under the laws of the United States, any State thereof or the District of Columbia;

an estate the income of which is subject to US federal income taxation regardless of its source; or

a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or

164
 more US persons for all substantial decisions or (2) has a valid election in effect under applicable US Treasury
regulations to be treated as a US person.

TO COMPLY WITH INTERNAL REVENUE SERVICE CIRCULAR 230, YOU ARE HEREBY NOTIFIED
THAT: (A) ANY DISCUSSION OF US FEDERAL TAX ISSUES CONTAINED OR REFERRED TO IN
THIS PLACEMENT DOCUMENT IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE
USED BY YOU, FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON YOU
UNDER THE UNITED STATES INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS WRITTEN
TO BE USED IN CONNECTION WITH THE PROMOTION OF MARKETING BY THE ISSUER OF THE
TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) YOU SHOULD SEEK ADVICE
BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

Dividends and Other Distributions on Equity Shares

Subject to the PFIC rules discussed below under ―—Passive Foreign Investment Company Considerations,‖ the
gross amount of any distributions (other than certain pro rata distributions, if any, of Equity Shares or rights to
acquire Equity Shares) we make to you with respect to your Equity Shares generally will be a foreign source
dividend includible in your income as ordinary income to the extent such distributions are paid out of our current or
accumulated earnings and profits (as determined under US federal income tax principles). To the extent that the
amount of the distribution exceeds our current and accumulated earnings and profits (as determined under US
federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Equity Shares, and
then, to the extent the amount of the distribution exceeds your tax basis in your Equity Shares, as capital gain. We
do not currently, and we do not intend to, calculate our earnings and profits under US federal income tax principles.
Therefore, a US Holder should expect that a distribution will be treated as a dividend even if that distribution would
otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. Dividends
will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received
from other US corporations.

Subject to applicable limitations, with respect to non-corporate US Holders (including individual US Holders) for
taxable years beginning before January 1, 2013, any dividends may be taxed at the lower capital gains rate
applicable to ―qualified dividend income,‖ provided (1) we are eligible for the benefits of we are eligible for the
benefits of a qualifying income tax treaty with the United States that includes an exchange of information program
or our Equity Shares are readily tradable on an established securities market in the United States, (2) we are neither a
passive foreign investment company nor treated as such with respect to you (as discussed below) for the taxable year
in which the dividend was paid and the preceding taxable year, and (3) certain holding period requirements are met.
You should consult your tax advisors regarding the availability of the lower rate for dividends with respect to our
Equity Shares.

The amount of any distribution paid in a foreign currency will be equal to the US dollar value of such foreign
currency on the date such distribution is actually or constructively received by a US Holder, regardless of whether
the payment is in fact converted into US dollars at that time. Gain or loss, if any, realized on the sale or other
disposition of such foreign currency generally will be US source ordinary income or loss. If the foreign currency is
converted into US dollars on the date of receipt, a US Holder generally should not be required to recognize foreign
currency gain or loss in respect of the dividend. The amount of any distribution of property other than cash will be
the fair market value of such property on the date of distribution.

Any dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are
taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes
of calculating the US foreign tax credit limitation generally will be limited to the gross amount of the dividend,
multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on
foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose,
dividends that we distribute generally will constitute ―passive category income‖ but could, in the case of certain US
Holders, constitute ―general category income.‖

165
You will not be able to claim a US foreign tax credit for any Dividend Distribution Tax (as defined above) payable
by the Company. The rules relating to the determination of the foreign tax credit are complex, and you should
consult your tax advisors regarding the availability of a foreign tax credit in your particular circumstances, including
the effects of any applicable income tax treaties. A US Holder that does not elect to claim a foreign tax credit with
respect to any foreign taxes for a given taxable year may instead claim an itemized deduction for all foreign taxes
paid in that taxable year.

Sale, Exchange or Other Disposition of Equity Shares

Subject to the PFIC rules discussed below under ―—Passive Foreign Investment Company Considerations,‖ upon a
sale or other disposition of Equity Shares, a US Holder will generally recognize a capital gain or loss for US federal
income tax purposes in an amount equal to the difference between the amount realized and such US Holder‘s tax
basis in such Equity Shares. If the consideration a US Holder receives for the Equity Shares is not paid in US
dollars, the amount realized will be the US dollar value of the payment received determined by reference to the spot
rate of exchange on the date of the sale or other disposition. However, if the Equity Shares are treated as traded on
an ―established securities market‖ and the US Holder is either a cash basis taxpayer or an accrual basis taxpayer that
has made a special election (which must be applied consistently from year to year and cannot be changed without
the consent of the Internal Revenue Service), such US Holder will determine the US dollar value of the amount
realized in a foreign currency by translating the amount received at the spot rate of exchange on the settlement date
of the sale. A US Holder‘s tax basis in its Equity Shares generally will equal the cost of such Equity Shares. If a US
Holder uses foreign currency to purchase Equity Shares, the cost of the Equity Shares will be the US dollar value of
the foreign currency purchase price determined by reference to the spot rate of exchange on the date of purchase.
However, if the Equity Shares are treated as traded on an established securities market and the US Holder is either a
cash basis taxpayer or an accrual basis taxpayer who has made the special election described above, such US Holder
will determine the US dollar value of the cost of such Equity Shares by translating the amount paid at the spot rate
of exchange on the settlement date of the purchase. Any such gain or loss will be treated as long-term capital gain
or loss if the US Holder‘s holding period in the Equity Shares at the time of the disposition exceeds one year. Long-
term capital gain of individual US Holders generally will be subject to US federal income tax at preferential rates.
The deductibility of capital losses is subject to significant limitations. Any gain or loss generally will be treated as
US source income or loss.

Because gains on a disposition of Equity Shares generally will be treated as US source income, the use of US
foreign tax credits relating to any Indian income tax imposed upon gains in respect of Equity Shares may be limited.
You should consult your tax advisors regarding the application of Indian taxes to a disposition of Equity Shares and
your ability to credit any Indian tax against your US federal income tax liability.

US Holders should also consult their tax advisors regarding the treatment of any foreign currency gain or loss
(which generally will be treated as US source ordinary income or loss) on any foreign currency received in a sale or
exchange of the Shares that is converted into US dollars (or otherwise disposed of) on a date subsequent to receipt.

Passive Foreign Investment Company Considerations

Based on the current and anticipated valuation of our assets, including goodwill, and composition of our income and
assets, we do not expect to be a PFIC for US federal income tax purposes for our current taxable year or in the
foreseeable future. However, the application of the PFIC rules is subject to uncertainty in several respects, and we
cannot assure you that we will not be a PFIC for any taxable year. Furthermore, because PFIC status is a factual
determination based on actual results for the entire taxable year, our US counsel expresses no opinion with respect to
our PFIC status and expresses no opinion with respect to our expectations contained in this paragraph. A non-US
corporation will be a PFIC for US federal income tax purposes for any taxable year if either:

at least 75% of its gross income is passive income; or

at least 50% of the average value of its gross assets (based on an average of the quarterly values of the assets
during a taxable year) is attributable to assets that produce passive income or are held for the production of
passive income.

166
For this purpose, we will be treated as owning our proportionate share of the assets and earning our proportionate
share of the income of any other corporation in which we own, directly or indirectly, more than 25% (by value) of
the stock. In applying this rule, while it is not clear, we believe the contractual arrangements between us and our
affiliated entities should be treated as ownership of stock.

A separate determination must be made after the close of each taxable year as to whether we were a PFIC for that
year. Because the value of our assets for purposes of the PFIC test will generally be determined by reference to the
market price of our Equity Shares, fluctuations in the market price of the Equity Shares may cause us to become a
PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC.

If we are a PFIC for any taxable year during which you hold Equity Shares, we generally will continue to be treated
as a PFIC with respect to you for all succeeding years during which you hold Equity Shares, unless we cease to be a
PFIC and you make a ―deemed sale‖ election with respect to the Equity Shares. If such election is made, you will
be deemed to have sold Equity Shares you hold at their fair market value on the last day of the last taxable year in
which we qualified as a PFIC, and any gain from such deemed sale would be subject to the consequences described
in the following two paragraphs. After the deemed sale election, your Equity Shares with respect to which the
deemed sale election was made will not be treated as shares in a PFIC unless we subsequently become a PFIC.

If we are a PFIC for any taxable year during which you hold Equity Shares, you will be subject to special tax rules
with respect to any ―excess distribution‖ that you receive and any gain you realize from a sale or other disposition
(including a pledge) of Equity Shares, unless you make a ―mark-to-market‖ election as discussed below.
Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you
received during the shorter of the three preceding taxable years or your holding period for the Equity Shares will be
treated as an excess distribution. Under these special tax rules:

the excess distribution or gain will be allocated ratably over your holding period for the Equity Shares,

the amount allocated to the current taxable year, and any taxable years in your holding period prior to the
first taxable year in which we became a PFIC, will be treated as ordinary income, and

the amount allocated to each other taxable year will be subject to the highest tax rate in effect for
individuals or corporations, as applicable, for each such year and the interest charge generally applicable to
underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to taxable years prior to the year of disposition or ―excess distribution‖
cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale or other
disposition of the Equity Shares cannot be treated as capital, even if you hold the Equity Shares as capital assets.

If we are treated as a PFIC with respect to you for any taxable year, to the extent any of our subsidiaries are also
PFICs or we make direct or indirect equity investments in other entities that are PFICs, you may be deemed to own
shares in such lower-tier PFICs that are directly or indirectly owned by us in that proportion which the value of the
Equity Shares you own bears to the value of all of our Equity Shares, and you may be subject to the adverse tax
consequences described in the preceding two paragraphs with respect to the shares of such lower-tier PFICs that you
would be deemed to own. You should consult your tax advisors regarding the application of the PFIC rules to any
of our subsidiaries.

A US Holder of ―marketable stock‖ (as defined below) in a PFIC may make a mark-to-market election for such
stock to elect out of the PFIC rules described above regarding excess distributions and recognized gains. If you
make a mark-to-market election for the Equity Shares, you will include in income for each year we are a PFIC an
amount equal to the excess, if any, of the fair market value of the Equity Shares as of the close of your taxable year
over your adjusted basis in such Equity Shares. You will be allowed a deduction for the excess, if any, of the
adjusted basis of the Equity Shares over their fair market value as of the close of the taxable year. However,
deductions are allowable only to the extent of any net mark-to-market gains on the Equity Shares included in your
income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain
on the actual sale or other disposition of the Equity Shares, will be treated as ordinary income. Ordinary loss

167
treatment will also apply to the deductible portion of any mark-to-market loss on the Equity Shares, as well as to any
loss realized on the actual sale or disposition of the Equity Shares, to the extent that the amount of such loss does not
exceed the net mark-to-market gains previously included for such Equity Shares. Your basis in the Equity Shares
will be adjusted to reflect any such income or loss amounts. If you make such an election, the tax rules that
ordinarily apply to distributions by corporations that are not PFICs would apply to distributions by the Company,
except that the lower applicable capital gains rate for ―qualified dividend income‖ discussed above under ―—
Dividends and Other Distributions on Equity Shares‖ would not apply.

The mark-to-market election is available only for ―marketable stock,‖ which is stock that is regularly traded on a
qualified exchange or other market, as defined in applicable US Treasury regulations. Our Equity Shares are listed
on the BSE and NSE. Under applicable US Treasury regulations, a ―qualified exchange‖ includes a foreign
exchange that is regulated by a governmental authority in the jurisdiction in which the exchange is located and in
respect of which certain other requirements are met. Because a mark-to-market election cannot be made for equity
securities in lower-tier PFICs that we own, a US Holder may continue to be subject to the PFIC rules with respect to
its indirect interest in any investments held by us that are treated as equity interests in a PFIC for US federal income
tax purposes. You should consult your tax advisors as to whether your Equity Shares would qualify for the mark-to-
market election, as well as the impact of such election on interests in any lower-tier PFICs.

Alternatively, if a non-US corporation is a PFIC, a holder of shares in that corporation may avoid taxation under the
PFIC rules described above regarding excess distributions and recognized gains by making a ―qualified electing
fund‖ election to include in income its share of the corporation‘s income on a current basis. However, you may
make a qualified electing fund election with respect to your Equity Shares only if we agree to furnish you annually
with certain tax information, and we currently do not intend to prepare or provide such information.

Under newly enacted legislation, unless otherwise provided by the US Treasury, each US Holder of a PFIC is
required to file an annual report containing such information as the US Treasury may require. If we are or become a
PFIC, you should consult your tax advisor regarding any reporting requirements that may apply to you.

You are strongly urged to consult your tax advisor regarding the application of the PFIC rules to your investment in
the Equity Shares.

Backup Withholding Tax and Information Reporting Requirements

Any dividend payments with respect to Equity Shares and the proceeds of a sale, exchange or redemption of Equity
Shares may be subject to information reporting to the US Internal Revenue Service and possible US backup
withholding, unless the conditions of an applicable exemption are satisfied. Backup withholding will not apply to a
US Holder who furnishes a correct taxpayer identification number and makes any other required certification or who
is otherwise exempt from backup withholding. US Holders that are required to establish their exempt status
generally must provide such certification on US Internal Revenue Service Form W-9. US Holders should consult
their tax advisors regarding the application of the US information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your
US federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup
withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required
information in a timely manner.

Additional Reporting Requirements

Certain US Holders who are individuals are required to report information relating to an interest in our Equity
Shares, subject to certain exceptions (including an exception for Equity Shares held in accounts maintained by
certain financial institutions). US Holders should consult their tax advisers regarding the effect, if any, of these rules
on their ownership and disposition of the Equity Shares.

168
 LEGAL PROCEEDINGS

The Company is subject to various legal proceedings from time to time, mostly arising in the ordinary course of its
business. As of the date of this Placement Document, except as disclosed hereunder, the Company is not involved in
any material governmental, legal or arbitration proceedings or litigation and the Company is not aware of any
pending or threatened material governmental, legal or arbitration proceedings or litigation relating to the Company
which, in either case, may have a significant effect on the performance of the Company.

The Company has seven proceedings in relation to medical negligence and seven proceedings in relation to taxation
involving the Company as of June 30, 2011 and to the extent quantifiable involve amounts equal to or more than ` 5
million each. Besides the above, the Company has other proceedings in relation to medical negligence and
proceedings in relation to taxation which to the extent quantifiable are individually below ` 5 million each.

169
 INDEPENDENT ACCOUNTANTS

The Company‘s current statutory auditors are M/s. S. Viswanathan, Chartered Accountants, who audited the
consolidated financial statements as of and for the fiscal years 2009, 2010 and 2011 which are included in this
Placement Document, are independent auditors with respect to the Company as required by the Companies Act and
in accordance with the guidelines issued by the Institute of Chartered Accountants of India.

170
 GENERAL INFORMATION

1. The Company had obtained its certificate of incorporation on December 5, 1979 under corporate
identification number of L85110TN1979PLC008035 under the provisions of the Companies Act and the
certificate of commencement of business on December 27, 1979. The corporate identification number of
the Company is L85110TN1979PLC008035. The Company is registered with the Registrar of Companies,
Tamil Nadu at Chennai. The registered office of the Company is situated at 19 Bishop Gardens, Raja
Annamalaipuram, Chennai 600 028.

2. The Issue was authorised and approved by the Board of Directors through resolution passed on December
9, 2010 and approved by the Company‘s shareholders through resolution passed in the extra ordinary
general meeting held on January 22, 2011.

3. The Company has received in-principle approvals dated July 13, 2011 and dated July 13, 2011 from the
BSE and the NSE respectively to list the Equity Shares on the Stock Exchanges.

4. Copies of the Memorandum and Articles of Association will be available for inspection during usual
business hours on any weekday between 10.00 a.m. to 1.00 p.m. (except public holidays), at the Registered
Office.

5. There has been no material adverse change in the financial or trading position of the Company and its
Subsidiaries taken together as a whole since March 31, 2011 and no material adverse change in the
financial position or prospects of the Company and its Subsidiaries taken together as a whole since March
31, 2011.

6. Except as disclosed in this Placement Document, the Company has obtained necessary consents, approvals
and authorisations required in connection with the Issue.

7. Except as disclosed in this Placement Document, there has been no material change in the Company‘s
financial condition since March 31, 2011, the date of the latest audited financial statements, prepared in
accordance with Indian GAAP, included herein.

8. Except as disclosed in this Placement Document, there are no legal or arbitration proceedings against or
affecting the Company or its assets or revenues, nor are the Company aware of any pending or threatened
legal or arbitration proceedings, which are, or might be, material in the context of the Issue.

9. The Company‘s statutory auditors, M/s S. Viswanathan, Chartered Accountants have audited the
consolidated financial statements for the fiscal years 2009, 2010 and 2011, and have consented to the
inclusion of their report in relation thereto in this Placement Document.

10. The Company is not aware of the existence of any natural or legal persons who/which, directly or
indirectly, severally or jointly, exercise or could exercise control over the Company other than its
Promoters.

11. No company in which the Company has a direct or indirect holding of more than 50% has acquired or is
holding the Equity Shares.

12. The Company confirms that it is in compliance with the minimum public shareholding requirements as
required under the terms of the Equity Listing Agreements with the Stock Exchanges.

13. The Floor Price for the Equity Shares under the Issue is ` 491.29 respectively which has been calculated in
accordance with Chapter VIII of the SEBI Regulations.

171
 SUMMARY OF SIGNIFICANT DIFFERENCES AMONG INDIAN GAAP, US GAAP AND IFRS

The Company's financial statements are prepared in conformity with Indian GAAP on an annual basis. No attempt
has been made to reconcile any of the information given in this Placement Document to any other principles or to
base it on any other standards.

The areas in which differences between Indian GAAP vis-à-vis IFRS and US GAAP could be significant to the
Company's consolidated balance sheet and consolidated statement of profit and loss are summarised below.
Potential investors should not construe the summary to be exhaustive or complete and should consult their own
professional advisers for their fuller understanding and impact on the financial statements set out in this Placement
Document.

Further, the Company has not prepared financial statements in accordance with IFRS or US GAAP. Accordingly,
there can be no assurance that the summary is complete, or that the differences described would give rise to the most
material differences between Indian GAAP, US GAAP and IFRS. In addition, the Company cannot presently
estimate the net effect of applying either IFRS or US GAAP on the results of the Company's operations or financial
position, which may result in material adjustments when compared to Indian GAAP.

The summary includes various IFRS, US GAAP and Indian GAAP pronouncements issued for which the mandatory
application dates are later than the date of this Placement Document. Indian GAAP comprises accounting standards
prescribed by the Companies (Accounting Standards) Rules, 2006 and certain provisions of Listing Agreements with
the stock exchanges of India. In certain cases, the Indian GAAP description also refers to Guidance Notes issued by
the Institute of Chartered Accountants of India that are recommendatory but not mandatory in nature.

SUBJECT IFRS US GAAP INDIAN GAAP

Historical cost Uses historical cost, but No revaluations. Uses historical cost, but
intangible assets, property property, plant and
plant and equipment (PPE) equipment may be
and investment property revalued. No
may be revalued. comprehensive guidance
Derivatives, biological on derivatives and
assets and certain biological assets.
securities must be
revalued.
Contents of financial Comparative two years' Similar to IFRS, except Balance sheet, profit and
statements — General balance sheets, income three years required for loss account, cash flow
statements, cash flow public companies for all statement, accounting
statements, changes in statements except balance policies and notes are
shareholders' equity and sheet where two years are presented for the current
accounting policies and provided. year, with comparatives
notes. for the previous year.
Public company:
Consolidated financial
statements along with the
standalone financial
statements.
For a public offering:
selected financial data for
the five most recent years
are required, adjusted to
the current accounting
norms and
pronouncements.
Statement of changes in The statement must be Similar to IFRS. The No separate statement
Shareholders' Equity presented as a primary information may be required. However, any
statement. included in the notes. changes to equity and

172
 SUBJECT IFRS US GAAP INDIAN GAAP
The statement shows reserve account are shown
capital transactions with in the schedules/notes
owners, the movement in accompanying the
accumulated profit and a financial statements.
reconciliation of all other
components of equity.
Changes in accounting Restate comparatives and Generally include effect in Include effect in the
policy prior-year opening the current year income income statement for the
retained earnings. statement through the period in which the change
recognition of a is made except as specified
cumulative effect in certain standards
adjustment. Disclose pro (transitional provision)
forma comparatives. where the change during
Retrospective adjustments the transition period
for specific items. resulting from adoption of
the standard has to be
adjusted against opening
retained earnings and the
impact needs to be
disclosed.
Contents of financial In general, IFRS has In general, US GAAP has Generally, disclosures are
statements — Disclosures extensive disclosure extensive disclosure not extensive as compared
requirements. Specific requirements. Areas where to IFRS and US GAAP.
items include, among US GAAP requires Disclosures are driven by
others: the fair values of specific additional the requirements of the
each class of financial disclosures include, among Companies Act and the
assets and liabilities, others; concentrations of accounting standards.
customer or other credit risk, segment
concentrations of risk, reporting, significant
income taxes and customers and suppliers,
pensions. use of estimates, income
Other disclosures include taxes, pensions, and
amounts set aside for comprehensive income.
general risks,
contingencies and
commitments and the
aggregate amount of
secured liabilities and the
nature and carrying
amount of pledged assets.
Revenue recognition — Based on several criteria, Revenue is generally Similar to IFRS.
General Criteria which require the realised or realisable and
recognition of revenue earned when all of the four
when risks and rewards revenue recognition
have been transferred and criteria are met:
the revenue can be persuasive evidence
measured reliably. of an arrangement
exists;

delivery has occurred

or services have been
rendered;

the seller's price to the

173
 SUBJECT IFRS US GAAP INDIAN GAAP
buyer is fixed or
determinable; and

collectibility is
reasonably assured.

US GAAP generally
requires title transfer prior
to revenue recognition and
provides extensive detailed
guidance for specific
transactions.
Depreciation and Allocated on a systematic Similar to IFRS. However, Depreciation is provided at
Amortisation basis to each accounting no revaluation of assets as the rates specified in
period over the estimated per US GAAP. Hence Schedule XIV. of the
useful life of the asset. there is no concept of Companies Act.
Estimated useful life depreciation on revalued Depreciation can also be
should be reviewed every value of assets. provided on estimated
year. Intangible assets with useful life of the assets,
indefinite life are not based on some technical
amortised but are tested evaluation of assets.
for impairment annually. however, such rates cannot
be less than the rates as
prescribed in schedule
XIV above. There is no
concept of indefinite life
intangible assets.
Depreciation on revalued
value of assets is allowed.
Foreign currency Transactions in foreign Similar to IFRS. Similar to IFRS, except for
transactions currency are accounted for the following:
at the exchange rate exchange difference
prevailing on the arising on
transaction date. Foreign repayment/restatemen
currency assets and t of liabilities incurred
liabilities are restated at prior to 1 April 2004
the year-end exchange for the purposes of
rates. acquiring fixed assets,
is adjusted in the
carrying amount of
the respective fixed
assets; and

exchange difference
arising on
repayment/restatemen
t of liabilities incurred
on or after 1 April
2004 but before 1
April 2011 for the
purposes of acquiring
fixed assets is
adjusted in the
carrying amount of

174
 SUBJECT IFRS US GAAP INDIAN GAAP
the respective fixed
assets.

The amounts so adjusted

are depreciated over the
remaining useful life of the
respective fixed assets.
Prior Period Items Material prior period Material prior period Adjust the error or
errors are corrected errors are corrected omission in the period in
retrospectively in the first retrospectively in the first which it is discovered and
financial statements issued financial statements issued corrected with appropriate
after their discovery. after their discovery. disclosure.
Extraordinary Items No concept of Disclosure of individual Extraordinary items of
Extraordinary items. extraordinary items; such size and nature that
including gains or losses requires separate
from the early disclosure to explain the
extinguishments of debt, if performance of the entity
material, net of taxes, is are disclosed separately,
made either on the face of on the face of the
the income statement or in statement of Profit & Loss
the notes, provided the A/c or in the notes,
total of all such items is provided the total of all
shown on the face of the such items is shown on the
income statement. face of the income
Disclosure of tax impact is statement. Exceptional
either on the face of items usually shown on the
income statement or in the face of the income
notes to financial statement or in the notes.
statements.
Provisions Record the provisions Similar to IFRS Rules for Similar to IFRS.
relating to present specific situations Discounting is not
obligations from past (including employee permitted.
events if outflow of termination costs,
resources is probable and environmental liabilities
can be reliably estimated. and loss contingencies).
Discounting required if Discounting required only
effect is material. when timing of cash flows
is fixed.
Employee The long term employee The long term employee The long term employee
Benefits/Retirement benefits are accounted for benefits are accounted for benefits are accounted for
Benefit on actuarial valuation on actuarial valuation on actuarial valuation
basis. Actuarial gains/ basis. Actuarial gains/ basis. Actuarial gains/
losses are subject to losses are subject to losses are fully recognized
corridor approach and corridor approach and in the year they accrue.
actuarial gains/ losses actuarial gains/ losses
beyond the corridor are beyond the corridor are
recognised over the recognised over the
average working life of the average working life of the
employees. However, employees.
Immediate recognition of
actuarial gains and losses
is permitted through other
comprehensive Income.
Contingent Assets A possible asset that arise Contingent assets are Similar to IFRS, except

175
 SUBJECT IFRS US GAAP INDIAN GAAP
from past events, and recognised, when realised, that certain disclosures as
whose existence will be generally upon receipt of specified in IFRS are not
confirmed only by the consideration. However, required.
occurrence or non- there are very strict rules
occurrence of one or more under FASB 5 that govern
uncertain future events not contingent gains. Usually
wholly within the entity's such gains are disallowed.
control. The item is
recognised as an asset
when the realisation of the
associated benefit such as
an insurance recovery, is
virtually certain.
Contingent liability A possible obligation An accrual for a loss Similar to IFRS.
whose outcome will be contingency is recognised Disclosure may be limited
confirmed only on the if it is probable (defined as compared to US GAAP
occurrence or non- likely) that there is a and IFRS.
occurrence of uncertain present obligation
future events outside the resulting from a past event
entity's control. It can also and an outflow of
be a present obligation that economic resources is
is not recognised because reasonably estimable. If a
it is not probable that there loss is probable but the
will be an outflow of amount is not estimable,
economic benefits, or the the low end of a range of
amount of the outflow estimates is recorded.
cannot be reliably Contingent liabilities are
measured. Contingent disclosed unless the
liabilities are disclosed probability of outflows is
unless the probability of remote.
outflows is remote.
Dividends Dividends are recorded as Similar to IFRS. Dividends are recorded as
liabilities when declared. provisions when proposed.
Deferred income taxes Use full provision method Deferred income tax assets Deferred tax assets and
(some exceptions), driven and liabilities are liabilities should be
by balance sheet determined using the recognised for all timing
temporary differences. balance sheet method. The differences subject to
Recognise deferred tax net deferred tax asset or consideration of prudence
assets if recovery is liability is based on in respect of deferred tax
probable. temporary differences assets. Where an enterprise
Deferred tax assets and between the book and tax has unabsorbed
liabilities are measured bases of assets and depreciation or carry
using tax rates that have liabilities, and recognises forward of losses under tax
been enacted or enacted changes in tax laws, deferred tax assets
substantively enacted by rates and laws. US GAAP should be recognised only
the balance sheet date. permits deferred tax assets to the extent that there is
to be recognised for any virtual certainty supported
operating loss carry by convincing evidence
forwards to the extent that that sufficient future
it is more likely than not taxable income will be
that they will be realised. available against which
A valuation allowance such deferred tax assets
should be recorded against can be realised.
deferred tax assets when it Unrecognised deferred tax
is determined that assets are reassessed at

176
SUBJECT IFRS US GAAP INDIAN GAAP
realisation of the deferred each balance sheet date
tax asset is less than more and are recognised to the
likely than not. extent that it is certain that
The FASB recently issued such previously
FIN 48, "Accounting for unrecognised deferred tax
Uncertainty in Income assets will be realised.
Taxes." FIN 48 which Deferred tax assets and
establishes the criteria than liabilities are measured
an individual tax position using tax rates that have
would have to meet for been enacted or
recognition in the financial substantively enacted by
statements. FIN 48 applies the balance sheet date.
to all tax positions that are
accounted for under FAS
109. The term tax position
includes, but is not limited
to the following:
a decision not to file a
tax return in a
jurisdiction

the allocation of
income between
jurisdiction

the characterization of
income in the tax
return

decision to exclude
taxable income in the
tax return

decision to classify a
transaction, entity, or
other position as tax-
exempt in the tax
return.

A separate measurement
step is to be taken to
determine the amount of
tax benefit to be recorded
for financial statement
purposes, but only if the
more-likely-than-not
recognition threshold is
met, and the recorded tax
benefit will equal the
largest amount of tax
benefit that is greater than
50% likely being realized
upon ultimate settlement
with a tax authority.

177
 SUBJECT IFRS US GAAP INDIAN GAAP
Functional currency Currency of primary Similar to IFRS. Does not define functional
definition economic environment in currency. Assumes an
which entity operates. entity normally uses the
currency of the country in
which it is domiciled in
presenting its financial
statements.
Financial currency - If indicators are mixed and Similar to IFRS; however, Does not require
determination functional currency is not no specific hierarchy of determination of
obvious, use judgement to factors to consider. functional currency.
determine the functional Generally the currency in Assumes an entity
currency that most which the majority of normally uses the currency
faithfully represents the revenues and expenses are of the country in which it
economic results of the settled. is domiciled in presenting
entity's operations by its financial statements. If
focusing on the currency a different currency is
of the economy that used, requires disclosure
determines the pricing of of the reason for using a
transactions (not the different currency.
currency in which
transactions are
denominated).
Earnings per share Use weighted average Similar to IFRS Similar to IFRS
diluted potential dilutive shares as
denominator for diluted
EPS.
Use 'treasury share'
method for share
options/warrants.
Post balance sheet events Adjust the financial Similar to IFRS Similar to IFRS. However,
statements for subsequent non-adjusting events are
events, providing evidence not required to be
of conditions at balance disclosed in financial
sheet date and materially statements but are
affecting amounts in disclosed in report of
financial statements approving authority e.g.
(adjusting events). Directors' Report.
Disclosing non- adjusting
events.

178
 SUBJECT IFRS US GAAP INDIAN GAAP
Related Party There is no specific The nature and extent of Similar to IFRS. The
Disclosures requirement in IFRS to any transactions with all scope of parties covered
disclose the name of the related parties and the under the definition of
related party (other than nature of the relationship related party could be less
the ultimate parent entity). must be disclosed, together than under IFRS or US
There is a requirement to with the amounts involved. GAAP.
disclose the amounts Unlike IFRS, all material Unlike IFRS, the name of
involved in a transaction, related party transactions the related party is
as well as the balances for (other than compensation required to be disclosed.
each major category of arrangements, expense
related parties. However, allowances and similar
these disclosures could be items) must be disclosed in
required in order to present the separate financial
meaningfully the statements of wholly-
"elements" of the owned subsidiaries, unless
transaction, which is a these are presented in the
disclosure requirement. same financial report that
includes the parent's
consolidated financial
statements (including
those subsidiaries).
Segment reporting Report primary and Report based on operating Similar to IFRS
secondary (business and segments and the way the
geographic) segments chief operating decision-
based on risks and returns maker evaluates financial
and internal reporting information for purposes
structure. of allocating resources and
Use group accounting assessing performance.
policies or entity Use internal financial
accounting policy. reporting policies (even if
accounting policies differ
from group accounting
policy).
Intangible Assets Requires that an intangible No ceiling used for Corresponding Rebuttable
asset be ammortised over determining useful life of presumption that the life of
its useful life. intangible asset. an intangible asset will not
exceed 10 years.

179
 FINANCIAL STATEMENTS

TO THE BOARD OF DIRECTORS OF APOLLO HOSPITALS ENTERPRISE LIMITED ON THE

CONSOLIDATED FINANCIAL STATEMENTS OF APOLLO HOSPITALS ENTERPRISE LIMITED.

We have audited the attached Consolidated Balance Sheet of Apollo Hospitals Enterprise Limited (the ―Company‖)
its Subsidiaries and jointly controlled entities (The Company, its Subsidiaries and jointly controlled entities
constitute the ―Group‖) as at 31st March 2011, 2010 and 2009 and also the Consolidated Profit and Loss Account
and the Consolidated Cash Flow Statement of the Group for the year ended on those dates annexed thereto and the
accompanying Notes and schedules (together comprising the ―Financial Statements) expressed in Indian Rupees.
The Consolidated financial statements include investment in associates accounted on the equity method in
accordance with Accounting Standard 23 (Accounting for Investments in Associates in Consolidated Financial
Statements) and the jointly controlled entities accounted in accordance with Accounting Standard 27 (Financial
Reporting of Interests in Joint Ventures) as notified under the Companies (Accounting Standards) Rules, 2006.
These financial statements are the responsibility of the management of Apollo Hospitals Enterprise Limited. Our
responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Generally Accepted Auditing Standards in India. These standards
require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are
prepared in all material aspects, in accordance with an identified financial reporting framework and are free of
material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statements. We believe that
our audit provides a reasonable basis for our opinion.

The financial statements of Subsidiaries (AB Medical Centres Limited, Apollo Health and Lifestyle Limited,
Samudra Healthcare Enterprises Limited, Imperial Hospitals and Research Centre Limited, Pinakini Hospitals
Limited, Apollo Hospital (UK) Limited, Apollo Cosmetic Surgical Centre Private Limited(for FY 2009-10 and FY
2010-11 only) and Alliance Medicorp (India) Limited(for FY 2010-11 only), Joint Ventures (Apollo Gleneagles
Hospitals Limited, Apollo Gleneagles PET CT Private Limited, Apollo Munich Health Insurance Company Limited,
Western Hospitals Corporation Private Limited, Quintiles Phase One Clinical Trials India Private Limited(for FY
2009-10 and FY 2010-11 only), Apollo Lavasa Health Corporation Limited(for FY 2009-10 and FY 2010-11 only)
and Apollo Hospitals International Limited) which in the aggregate represents total assets (net) as at 31 st March
2011 of ` 4684.25 Million (31st March 2010: ` 3178.09 Million and 31st March 2009: ` 2691.98 Million) and total
revenues (net) for the year ended on the respective dates of ` 5641.59 Million as of 31st March 2011 (31st March
2010: ` 3782.93 Million and 31st March 2009: ` 2718.89 Million) and of Associates (Indraprastha Medical
Corporation Limited, Apollo Health Street Limited, British American Hospitals Enterprise Limited(for FY 2008-09
and FY 2009-10 only), Family Health Plan Limited and Stemcyte India Therapautics Private Limited(for FY 2009-
10 and 2010-11 only)) which reflect the Group‘s share of profit of ` 83.77 Million for the year ended 31st March
2011 (31st March 2010: ` 39.09 Million and 31st March 2009: `115.24 Million) for the year, and upto 31 st March
2011 profit of ` 1347.34 Million(31st March 2010: ` 1141.55 Million and 31st March 2009: ` 1298.60 Million), is
subject to adjustment based on the observation of the independent auditor of Apollo Health Street Limited as
stated in clause (v)(a) of this Auditors Report and the profit for the year will be consequently less by ` 254.19
Million(31st March 2010: ` 257.16 Million, 31st March 2009: ` 271.96 Million )resulting in the Group’s share of
loss of ` 170.42 Million for the year ended 31st March 2011(31st March 2010: ` 218.07 Million, 31st March 2009:
` 156.72 Million ) and profit upto 31 st March 2011 will be less by ` 254.19 Million(31st March 2010: ` 257.16
Million, 31st March 2009: ` 271.96 Million ) , have been audited by other auditors whose reports have been
furnished to us, and in our opinion:

a) The effect of the impairment loss, if any which has been reported by the auditors of Apollo Health Street
Limited, an associate, has not been considered for the purpose of consolidation and no adjustment has
been made to the group share of Total assets as the auditors have not quantified the quantum of
impairment loss.

b) The Consolidated Financial Statements include the Group’s share of loss of ` 2.70 Million for the year
ended 31st March 2011 (31st March 2010: ` 0.83 Million) for the year, and upto 31st March 2011 profit

180
 of ` 8.82 Million (31st March 2010: ` 11.84 Million) of Stemcyte India Therapautics Private Limited, an
associate, is based only on the unaudited management report submitted to us.

c) Insofar as it relates to the amounts included in respect of the Subsidiaries, Joint Ventures and Associates
are based solely on the report of the other independent auditors (in the case of Unique Home Health Care
Limited audited by us).

d) We draw reference to Note 2(B)(3) of Schedule J of Consolidated Financial Statements regarding the
Company British American Hospitals Enterprise Limited which was considered as an associate for the
years ended on 31st March 2010 and 2009 and whose accounts have not been included as an associate for
the year ended 31st March 2011.

e) In the case of Apollo Health Street Limited, an associate, as discussed more fully in Note 29(l)(iv) of
Schedule J of Consolidated Financial Statements, the Company has not recorded mark-to-market losses
as at 31st March 2011, 2010 and 2009 on outstanding interest rate swaps executed by its overseas
subsidiary aggregating to ` 645.48 Million for the year ended 31st March 2011 (31st March 2010: `
651.69 Million and 31st March 2009: ` 597.72 Million) as required by the Institute of Chartered
Accountants of India’s announcement on derivatives, since in the opinion of management such swap
instruments were executed to hedge interest rates movements and loss as at the Balance Sheet date is
notional. Accordingly derivative expense is lower by Rs 645.48 Million for the year ended 31 st March
2011(31st March 2010: ` 651.69 Million and 31st March 2009: ` 597.72 Million) and the reported profit
is higher by ` 645.48 Million for the year ended 31st March 2011 (31st March 2010: ` 651,69 Million and
31st March 2009: ` 597.72 Million).

f) In the case of Apollo Health Street Limited, an associate, the financial statements do not include any
adjustments for impairment loss if any, on the carrying value of Goodwill paid on various acquisitions
made by the Company. Management on the basis of its estimates and projections of future cash flows
believes that the entire carrying value of Goodwill of ` 6917.08 Million as of 31st March 2011 (31st
March 2010: ` 6992.90 Million and 31st March 2009: ` 8174.90 Million) is recoverable in the ordinary
course of business. Based on our review of the projections and our understanding of the underlying
assumptions, we are unable to comment on appropriateness of the assumptions and consequently on the
achievability of the projected cash flows.

In the absence of any notification from the Central Government with respect to the Cess payable under Section
441(A) of the Companies Act, 1956, no quantification is made for all the Three years under review. Hence, no
opinion is given on cess unpaid or payable, as per the provisions of Section 227(3)(g) of the Companies Act, 1956.

For the year ended 31st March 2009, in the case of the Joint Venture Universal Quality Services LLC, Dubai, in the
absence of any business activity, the effect of the operations has not been included in the Consolidated Financial
Statements. The Company is in the process of being liquidated after obtaining necessary statutory permissions. The
whole of the amounts in the form of investments and advances, have been written off in 2004-05 the books of
Apollo Hospitals Enterprise Limited.

In the case of the Apollo Lavasa Health Corporation Limited, the Company has paid share application money for
which shares have been allotted to the Company subsequent to 31st March 2009. Therefore the accounts of Apollo
Lavasa Health Corporation Limited have not been in the Consolidated Financial Statements for the year ended 31 st
March 2009.

Subject to the matters specified in (v)(a), (v)(b) and read with our comments in paragraph (iv), (iv)(a) and (iv)(b)
above

a) We report that the Consolidated Financial Statements have been prepared by the Company‘s management
in accordance with the requirements of Accounting Standard 21, ‗Consolidated Financial Statements‘,
Accounting Standard 23, ‗Accounting for Investment in Associates in Consolidated Financial Statements‘
and Accounting Standard 27, ‗Financial Reporting of Interests in Joint Ventures‘ as notified under the
Companies (Accounting Standards) Rules, 2006.

181
b) Based on our audit and on consideration of the reports of other independent auditors on separate financial
statements and on the other financial information of the components, and to the best of our information and
according to the explanations given to us, we are of the opinion that the attached Consolidated Financial
Statements give a true and fair view in conformity with the accounting principles generally accepted in
India:

(a) In the case of the Consolidated Balance Sheet, of the State of Affairs of the Group as at 31st March
2011, 2010 and 2009 ;

(b) In the case of the Consolidated Profit and Loss Account, of the results of operations of the Group
for the years ended on those dates; and

(c) In the case of the Consolidated Cash Flow Statement, of the Cash Flows of the Group for the year
ended on those dates.

We are independent firm of Chartered Accountants with respect to the Company pursuant to the rules promulgated
vide Clause 4, Part I, The Second Schedule, The code of ethics of the Institute of Chartered Accountants of India
and within the meaning of the Companies Act, 1956.

This report is for inclusion in the Offer Document being issued by the Company in connection with the proposed
placement of Equity shares under Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009 as amended, and is not to be used, referred to or distributed for any
other purpose without our prior written consent.

17, Bishop Wallers Avenue (West) For M/s S Viswanathan

Mylapore, Chennai – 600 004 Chartered Accountants
Firm Registration No. 004770S

Place: Chennai
Date: 24th May 2011
V. C. Krishnan
Partner
Membership No.: 022167

182
 APOLLO HOSPITALS ENTERPRISE LIMITED

CONSOLIDATED BALANCE SHEET

` in million
Sl. Particulars Schedule As at As at As at
No 31.03.2011 31.03.2010 31.03.2009
` ` `
I SOURCES OF FUNDS
(1)Share holder's Funds:
(a) Share capital A 623.55 617.85 602.36
(b) Preferential issue of equity share warrants 685.07 - 77.10
Refer Clause 14 of Schedule (J)
(c) Reserves & Surplus B 17,521.53 15,786.24 13,878.54
(d) Capital Reserve on Consolidation 159.26 130.68 130.80
18,989.41 16,534.77 14,688.80

(2)Minority Interest 248.76 241.42 265.41

(3)Loan Funds:
(a)Secured Loans C 7,439.99 6,764.68 6,401.41
(b) Unsecured Loans D 2,144.76 2,367.29 304.49
9,584.75 9,131.97 6,705.90

(4 )Deferred Tax Liability 1,100.74 776.26 651.85

TOTAL 29,923.66 26,684.42 22,311.95

II APPLICATION OF FUNDS

(1)Goodwill on Consolidation 676.50 499.80 293.78

(2)Fixed Assets: F
(a) Gross Block 19,767.05 16,950.40 13,657.34
(b)Less depreciation 5,148.47 4,230.59 3,512.97
(c)Net Block 14,618.58 12,719.81 10,144.37
(d)Capital Work in progress 3,609.96 3,037.07 2,445.58
18,228.54 15,756.88 12,589.95

(2)Investments G 5,020.06 4,165.78 5,914.32

(3)Deferred Tax Asset 255.93 240.25 205.39

(4)Current Assets,Loans and advances H

(a ) Inventories 1,584.44 1,412.24 1,161.64
(b )Sundry Debtors 3,003.14 2,228.38 1,744.14
(c)Cash and bank balances 1,780.51 3,116.72 876.04
(d) Loans & Advances 5,729.90 5,237.66 3,663.10
12,098.00 11,995.00 7,444.92
Less :
Current Liabilities & Provisions E
(a)Liabilities 3,635.25 3,357.76 2,148.19
(b)Provisions 2,720.12 2,615.64 1,988.68
6,355.37 5,973.40 4,136.87

Net Current Assets 5,742.63 6,021.60 3,308.06

183
 Sl. Particulars Schedule As at As at As at
No 31.03.2011 31.03.2010 31.03.2009
` ` `

(5) Miscellaneous Expenditure to the extent not I - 0.12 0.46

written off or adjusted

TOTAL 29,923.66 26,684.42 22,311.95

Schedules 'A' to 'I' and notes in schedule (J) form part of the Balance sheet

184
 APOLLO HOSPITALS ENTERPRISE LIMITED

CONSOLIDATED PROFIT AND LOSS ACCOUNT

` in million
SCHEDULE 31.03.2011 31.03.2010 31.03.2009
` ` `
INCOME
(a) Income from Operations 24,636.56 19,206.51 15,310.73
Add: Share of Joint Ventures 1,416.94 1,058.14 831.33
(b) Other Income I 186.52 322.39 207.99

TOTAL 26,240.02 20,587.04 16,350.04

EXPENDITURE
(a) Operative Expenses II 13,886.42 10,725.99 8,728.01
(b) Payments and Provisions for Employees III 4,151.16 3,307.93 2,594.34
(c) Administration and Other Expenses IV 3,827.41 3,217.64 2,545.29
(d) Financial Expenses V 814.35 602.06 458.79
(e ) Preliminary Expenses 0.09 1.07 2.22
(f) Deferred Revenue Expenditure 5.72 6.41 5.31

TOTAL 22,685.15 17,861.09 14,333.96

PROFIT BEFORE DEPRECIATION & TAX 3,554.88 2,725.95 2,016.08

Less : Depreciation 941.70 749.51 632.17
PROFIT BEFORE EXTRAORDINARY ITEM & 2,613.18 1,976.44 1,383.91
TAX
Extraordinary item - - 40.19
PROFIT BEFORE TAX 2,613.18 1,976.44 1,343.72
Less :Fringe Benefit Tax - - 28.62
Less :Provision for Taxation - Current 580.42 582.69 483.53
Less :Provision for Taxation - Previous (13.58) 0.75 (0.04)
Less :Deferred Tax Liability 328.32 128.62 32.87
Less : Deferred Tax Asset (22.21) (35.91) (55.04)
PROFIT AFTER TAX 1,740.23 1,300.29 853.78
Less :Minority Interest (15.23) (36.30) (55.92)
PROFIT AFTER MINORITY INTEREST 1,755.46 1,336.59 909.70
Add :Share in Associates 83.77 39.09 115.24
PROFIT AFTER SHARE IN ASSOCIATES 1,839.22 1,375.68 1,024.94

Add :Surplus in Profit & Loss Account brought forward 520.69 399.34 594.26

AMOUNT AVAILABLE FOR APPROPRIATIONS 2,359.92 1,775.02 1,619.19

APPROPRIATIONS
Dividend 467.67 432.49 401.60
Dividend tax payable 75.87 71.83 68.25
Transfer to general reserve 1,000.00 750.00 750.00
Transfer to Debenture Redemption reserve 100.00 - -
Balance of profit in Profit & loss a/c 716.39 520.69 399.34

TOTAL 2,359.92 1,775.02 1,619.19

Earnings Per Share (Refer Clause 30 in Schedule J)

185
 SCHEDULE 31.03.2011 31.03.2010 31.03.2009
` ` `
Before Extraordinary Item
Basic earnings per share of face value ` 5/- (2009-10 : ` 14.84 11.15 8.82
5) each
Diluted earnings per share of face value ` 5/- (2009-10 : ` 14.37 11.10 8.51
5) each
After Extraordinary Item
Basic earnings per share of face value ` 5/- (2009-10 : ` 14.84 11.15 8.60
5) each
Diluted earnings per share of face value ` 5/- (2009-10 : ` 14.37 11.10 8.30
5) each

Schedules 'I' to 'V' and notes in Schedule (J) Form part of the Profit and Loss Account

186
Schedules to Consolidated Balance Sheet

31.03.2011 31.03.2010 31.03.2009

` ` `
SCHEDULE (A)
Share Capital
Authorized
200,000,000 Equity Shares of ` 5/- each 1,000.00 750.00 750.00

(2009-10 : 75,000,000 Equity Shares of ` 10/- each; 2008-09 : 75,000,000

Equity Shares of ` 10/- each)
10,00,000 Preference Shares of ` 100/- each 100.00 100.00 100.00
( 2009-10 : 1,000,000 Preference Shares of ` 100/-each; 2008-09 :
1,000,000 Preference Shares of ` 100/-each)
1,100.00 850.00 850.00
Issued
a) 125,243,728 Equity Shares of ` 5/-each 626.22 620.51 605.02
( 2009-10 : 62,051,368 equity shares of ` 10/- each; 2008-09 : 60,502,211
equity shares of ` 10/- each)
626.22 620.51 605.02
Subscribed and Paid up
b) 124,710,710 Equity Shares of ` 5/- each fully paid up 623.55 617.85 602.36
( 2009-10 : 61,784,859 Equity Shares of ` 10/- each fully paid up; 2008-
09: 60,235,702 Equity Shares of ` 10/- each fully paid up)
623.55 617.85 602.36

Notes:
Subscribed and paid up capital:

(a) Includes 1,836,596 Equity shares of ` 5/- each (2009 - 10 and 2008 - 09: 918298 Equity Shares of ` 10/- each)
fully paid up allotted on conversion of first 2 years interest on debentures, 20% on the face value of debentures
and 41,624,462 Equity shares of ` 5/- each (2009 - 10 and 2008 - 09: 20812231 Equity Shares of ` 10/- each)
fully paid up allotted to the shareholders of amalgamated companies for consideration other than cash
(b) Includes 4,159,860 Equity shares of ` 5/- each (2009 - 10 and 2008 - 09: 2079930 Equity Shares of ` 10/- each)
fully paid up allotted on preferential basis during the year 2004-05
(c) Includes 3,062,800 underlying Equity shares of ` 5/- each (2009-10 : 4663000 Equity Shares of ` 10/- each;
2008 - 09 : 4687800 Equity Shares of `10/- each) fully paid up, representing Global Depository Receipts issued
during the year 2005-06 (Refer Clause 13 of Schedule 'J')
(d) Includes 2,079,930 Equity shares of ` 5/- each full paid up (2009 - 10 and 2008 - 09: 1039965 Equity Shares of
` 10/- each) allotted during the year 2006-07 on conversion of Equity share warrants issued on preferential
basis during the year 2005-06
(e) Includes 14,094,238 Equity shares of ` 5/- each (2009 - 10 and 2008 - 09: 7047119 Equity Shares of ` 10/-
each) fully paid up were allotted to Apax Mauritius FDI One Limited during the year 2007 - 08 on preferential
basis
(f) Includes 3100000 Equity shares of ` 5 /-each (2009 - 10 and 2008 - 09: 1550000 Equity Shares of ` 10/- each)
fully paid up allotted during the year 2009-10 on conversion of Equity share warrants issued on preferential
basis during the year 2006-07
(g) Includes 3,098,314 Equity shares of ` 5 /-each (2009 - 10 and 2008 - 09: 1549157 Equity Shares of ` 10/- each)
fully paid up allotted during the year 2009-10 on conversion of Equity share warrants issued on preferential
basis during the year 2007-08
(h) Includes 1,140,992 Equity shares of ` 5 /-each fully paid up allotted during the year 2010-11 on conversion of
FCCBs worth US$ 7,500,000 issued to International Finance Corporation(IFC), Washington

Equity shares of face value of ` 10/- each subdivided into 2 shares of ` 5/- each on 3rd September 2010.

187
 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE (B)
Reserves & Surplus
A. CAPITAL RESERVE
(1)Capital reserve 17.85 17.85 17.85
(2) Profit on forfeited shares 0.41 0.41 0.41
B. CAPITAL FUND 2.61 2.61 2.61

C. CAPITAL REDEMPTION RESERVE 60.02 60.02 60.02

D. SECURITIES PREMIUM ACCOUNT:

As per last account 10,490.73 9,735.22 9,064.77
Add : Premium received during the year# 339.45 - -
Add : Premium received from Promoter's issue - 755.51 670.45
Add: Share Premium from Group Companies 418.84 467.52 188.05
11,249.02 10,958.25 9,923.28
E. GENERAL RESERVE
As per last account 2,749.03 1,999.03 1,249.03
Add: Transfer During the year 1,000.00 750.00 750.00
Add: Share of Associates 1,078.93 1,060.10 1,152.57
Add: Share of Profits / (loss) Subsidiaries 176.47 174.16 172.84
Add: Profit From Joint Venture 362.71 235.22 143.13
5,367.14 4,218.51 3,467.56
F. Foreign Currency Translation Reserve 0.02 0.05 0.02
G. Other Reserve
Fair value change Account 0.26 0.03 (0.37)
Investment Allowance Reserve 7.63 7.63 7.63
Foreign Exchange Fluctuation Reserve 0.19 0.19 0.19
Debenture redemption reserve 100.00 - -
Profit and Loss Account 716.39 520.69 399.34

Total 17,521.53 15,786.24 13,878.54

# Refer clause 10 of Schedule J

188
 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE (C)

SECURED LOANS
A. NON-CONVERTIBLE DEBENTURES
i) 10.3% Debentures 1,000.00 - -

B. LOANS AND ADVANCES FROM BANKS

( I ) Cash credit 111.04 91.48 219.11
(II ) Jammu & Kashmir Bank 269.72 270.09 270.09
(III) Indian Bank 609.52 904.76 1,000.00
(IV) Bank of India 761.90 952.38 1,000.00
(V) Canara Bank 1,503.60 2,160.00 2,160.00
(VI) Hire purchase Loans 3.19 0.05 9.53
(VII) Canara Bank 388.00 388.00 388.00
(VIII) Indian Overseas Bank 227.00 227.00 227.00
Add : Interest accrued and due - - 36.64

C. OTHER LOANS AND ADVANCES

IFC Loan (External Commercial Borrowings) 1,608.79 697.16 -

6,482.76 5,690.92 5,310.36

Add : Share of Joint Ventures 957.23 1,073.76 1,091.05

Refer clause 2 (C) (3) of Schedule J
Total 7,439.99 6,764.68 6,401.41

Refer clause 9 of schedule J for Details & security

189
 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE (D)
Unsecured Loans

i) FIXED DEPOSITS 570.14 498.50 130.99

ii) SHORT TERM LOANS AND ADVANCES:
a) From Banks 1,000.00 1,021.16 -
b) From Directors 0.18 0.18 11.18
OTHER LOANS AND ADVANCES

Foreign Currency Convertible Bonds 334.88 678.05 -

1,905.20 2,197.88 142.17

Add : Share of Joint Ventures 239.56 169.41 162.32

Refer clause 2 (C) (3) of Schedule J
Total 2,144.76 2,367.29 304.49

190
 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE (E)

Current Liabilities & Provisions :

A) Current Liabilities
(1)Acceptances 358.40 302.35 284.92

(2)Sundry Creditors *
a) For goods 1,165.75 986.04 466.50
b) For Expenses 268.78 499.14 256.87
c) For Capital Goods 129.56 173.61 57.13
d) For others 362.80 308.60 127.84
1,926.89 1,967.39 908.35
(3) Advances
a) Inpatient deposits 100.99 97.79 76.60
b) Rent 48.68 21.79 25.37
c) Others 2.03 13.61 24.27
151.70 133.19 126.25
(4) Investor Education and Protection Fund shall be credited by the
following:
a) Unpaid Dividend 18.28 16.36 15.18
b) Unpaid Deposits - 3.15 6.86

(5) Other liabilities

a)Tax Deducted at source 94.42 83.28 64.57
b)Retention money on capital contracts 0.96 1.38 1.70
c)Outstanding expenses 334.19 278.35 307.76
429.57 363.01 374.03
(6) Interest accrued but not due 65.84 46.98 11.34
2,950.68 2,832.43 1,726.93

Add : Share of Joint Ventures 684.57 525.33 421.26

Refer clause 2 (C) (3) of Schedule J
3,635.25 3,357.76 2,148.19

(B) Provisions
(a) For Taxation 2,102.18 2,067.02 1,480.83
(b) For Dividend 467.67 432.49 401.60
( c) Bonus 141.22 116.02 93.68
(d) Staff benefits - - 6.22
2,711.06 2,615.53 1,982.34

Add : Share of Joint Ventures 9.06 0.11 6.34

Refer clause 2 (C) (3) of Schedule J
2,720.12 2,615.64 1,988.68

Total 6,355.37 5,973.40 4,136.87

* Refer clause 35 of Schedule J

191
SCHEDULE F

FIXED ASSETS

SI. Name of the Assets Gross Block As at 31st March Depreciation Block As at 31st Net Block As at 31st March
No March
2011 2010 2009 2011 2010 2009 2011 2010 2009
Tangible Assets
1 Land 1,317.55 1,307.97 1,249.18 - - - 1,317.55 1,307.97 1,249.18
2 Building 3,884.41 3,450.50 2,251.34 371.23 317.56 251.83 3,513.19 3,132.93 1,999.51
3 Leasehold Building* 528.08 373.86 299.68 118.29 74.11 68.50 409.78 299.75 231.17
4 Medical Equipment &Surgical 6,828.48 5,902.13 4,868.72 2,394.02 2,009.12 1672.34 4,434.45 3,893.00 3,169.39
instruments
5 Electrical Installation &Generators 1,083.82 945.82 684.18 335.80 301.46 251.81 748.03 644.36 432.37
6 Airconditioning Plant 499.29 347.45 208.85 141.36 92.21 77.47 357.93 255.24 131.38
&Airconditioners
7 Office Equipment 905.13 745.48 565.60 424.58 334.66 272.32 480.55 410.82 293.27
8 Furniture & Fixtures 1,533.85 1,294.53 1,056.97 460.55 364.17 287.07 1,073.28 930.36 769.90
9 Fire Fighting equipment 34.00 32.73 18.79 5.58 4.76 4.45 28.42 27.97 14.34
10 Library 0.18 0.18 0.18 0.18 0.18 0.18 - - -
11 Boilers 1.87 1.87 1.87 1.12 1.00 1.00 0.75 0.87 0.87
12 Kitchen equipment 44.41 38.10 37.20 10.90 10.12 9.39 33.51 27.98 27.81
13 Refrigerators 30.82 27.80 24.88 6.97 6.09 5.32 23.85 21.71 19.56
14 Vehiles 315.15 228.84 207.37 105.65 86.81 72.56 209.50 142.03 134.81
15 Wind electric generator 26.85 26.85 26.85 11.60 10.32 8.55 15.25 16.53 18.30
Intangible Assets
1 Software 32.56 10.02 5.68 14.63 4.52 2.06 17.93 5.50 3.63
2 Trademark and concepts rights 29.10 29.10 29.10 6.40 6.40 6.40 22.70 22.70 22.70
1 78 1 78 1 78 1 78
Total 17,097.32 14,765.01 11,536.45 4,408.87 3,623.51 2,991.26 12,688.45 11,141.51 8,545.19
Less : Depreciaton Written Back - - - 0.28 0.28 0.28 0.28 0.28 0.28
Total 17,097.32 14,765.01 11,536.45 4,408.59 3,623.23 2,990.99 12,688.73 11,141.78 8,545.47
Share of Joint Ventures # 2,669.73 2,185.39 2,120.89 739.89 607.36 521.98 1,929.85 1,578.03 1,598.91
Total 19,767.05 16,950.40 13,657.34 5,148.47 4,230.59 3,512.97 14,618.58 12,719.81 10,144.37
Capital work in Progress"' * 3,609.96 3,037.07 2,445.58
Total 18,228.54 15,756.88 12,589.95

* Refer Clause 3D(v> of schedule I **Refer Clause 3F(b1 of schedule T # refer Clause 2fc1 3 of schedule 1

192
SCHEDULE (G)

Investments 31.03.2011 31.03.2010 31.03.2009

Description Numbers Book Numbers Book Numbers Book
Value Value Value
(` In (` In (` In
million) million) million)

Investment in Government
Securities
Current Investments(lower
of cost and market value)
A) Unquoted
National Savings Certificate 0.29 0.29 0.26

TRADE INVESTMENTS :
LongTerm Investments ( at
cost )
A) Quoted
In fully paid up Equity
Share Capital
ASSOCIATES

Indraprastha Medical 19,306,041 289.58 19,023,541 295.06 18,705,907 275.95

Corporation Limited fully
paid up of ` 10 each
Market Value as on
31.03.2011 ` 34.15/- per
share; Market Value as on
31.03.2010 ` 45.20/-;
Market Value as on
31.03.2009 - ` 28.67/-)
Goodwill on Acquisition = `
140,611,881/-; 31.03.2010:
` 121,734,543; 31.03.2009 -
`121,734,543

B) Unquoted

i) ASSOCIATES

Stemcyte India Therapautics 88,303 58.82 88,303 61.84 - -

Private Limited fully paid
up of ` 1 each
(Goodwill on Acquisition =
` 49,911,697/-; 31.03.2010
- ` 49,911,697)

ii )LONG TERM -
OTHERS :
British American Hospitals 1,393,079 203.82 1,393,079 135.10 1,393,079 194.17
Enterprise Limited fully
paid of 100 MUR each

193
 Investments 31.03.2011 31.03.2010 31.03.2009
Description Numbers Book Numbers Book Numbers Book
Value Value Value
(` In (` In (` In
million) million) million)
Kurnool Hospitals 157,500 1.73 157,500 1.73 157,500 1.73
Enterprises Limited fully
paid up of ` 10 each
FutureParking fully paid up 4,900 0.05 - - -
of ` 10 each
Health Super Hiway fully 200 0.00 -
paid up of ` 10 each
Health Super Hiway 406,514 22.00 -
Preference shares fully paid
up of ` 54.10 each

NON TRADE
INVESTMENTS :
LongTerm Investments ( at
cost )
A) Quoted

In fully paid up Equity

Share Capital
The Karur Vysya Bank 12,811 2.21 6,537 1.94 6,537 1.94
Limited fully paid up of ` 10
each
Market Value as on
31.03.2011 ` 399.05/. Per
Share; 31.03.2010 - `
460.35 per share and
31.03.2009 - ` 200.05 per
share
Cholamandalam DBS 1,000 0.16 1,000 0.16 1,000 0.16
Finance Limited fully paid
up of `10 each
Market Value as on
31.03.2011 Rs 174.90/. Per
Share; 31.03.2010 - `93.70
per share and 31.03.2009 -
` 25.55 per share
Carol Info Services Limited - - - - 5000 0.30
fully paid up of ` 10 each

i)Unquoted
DEBENTURES
* *Debentures of Apollo 3,682,725 589.24 3,682,725 589.24 - -
Health Street Limited
Optionally Redeemable
Convertible Debentures
fully paid up of `160 each
Debentures of Citi Corp 250 250.00
Finance (India) Limited
CFIL NCD Series 214 Non
Convertible Redeemable

194
 Investments 31.03.2011 31.03.2010 31.03.2009
Description Numbers Book Numbers Book Numbers Book
Value Value Value
(` In (` In (` In
million) million) million)
Debentures fully paid of `
10,00,000 each

ASSOCIATES :
Family Health Plan Limited 490,000 24.73 490,000 22.06 490,000 20.30
fully paid up of ` 10 each
(Capital Reserve on
Consolidation: `
4,245,685/-; 31.03.2010: `
4,245,685/-; 31.03.2009 :
`4,245,685)
* * Apollo Health Street 11,181,360 2,458.24 11,181,360 2,428.91 11,181,360 2,466.70
Limited fully paid up of `10
each
(Goodwill on Acquisition =
` 1,071,125,975/-;
31.03.2010: `
1,071,015,460; 31.03.2009 -
`1062,677,518)

OTHERS:
Sunrise Medicare Private 250,000 0.39 250,000 0.39 250,000 2.50
Limited fully paid up of `10
each

Unquoted
CURRENT INVESTMENT
- OTHERS :
Current Investment (lower
of cost and market value)
Certificate of Deposit -
HDFC Bank
Non-Cumulative Fixed 100.00
Deposits
OTHERS - MUTUAL
FUND
Reliance Income Fund 30,231 0.70 30,231 0.70 30,231 0.70
Retail Plan - Growth Plan -
Growth Option - face value
of ` 10 each
Net Asset Value as on
31.03.2011 ` 32.2872 per
unit; 31.03.2010 - `30.8515
per unit and in 31.03.2009 -
` 29.0575 per unit
Reliance Monthly Interval 14,006,385.75 140.13 - - - -
Fund Series II Institutional
dividend plan - face value of
` 10 each
Canara Robeco Floating 13,179,311 200.00 - - - -

195
 Investments 31.03.2011 31.03.2010 31.03.2009
Description Numbers Book Numbers Book Numbers Book
Value Value Value
(` In (` In (` In
million) million) million)
Rate Short term Growth
Fund face value of ` 10
each
HDFC FMP 100D March 18,000,000 180.00 - - - -
2011 (2) Dividend Series
XVII face value of ` 10 each
HDFC Quarterly Interval 8,995,233 90.00 - - - -
Fund - Plan C face value of
` 10 each
HDFC FMP 35D March 12,000,000 120.00 - - - -
2011 (2) face value of ` 10
each
DSP Black Rock Money 151,626 151.75 - - - -
Manager Fund -
Institutional Plan - Daily
Dividend face value of `
1,000 each
Reliance Income Fund - 11,546,810 150.00
Retail Plan - Quarterly
dividend Plan - face value
of ` 10 each
Reliance Fixed Time 75,000,000 750.00
horizon Fund VII-series 5
Institutional Dividend plan -
face value of ` 10 each
HDFC Cash Management 15,266,101 153.14
Fund -Treasury Advantage
Plan-Wholesale-Daily
Dividend, Option: Reinvest-
face value of ` 10 each
HDFC FMP 370D 50,000,000 500.00
March2008 (vii) (2) Whole
sale plan Growth payout
option - face value of ` 10
each
Canara Robeco Floating 25,000,000 250.00
Rate Short term Growth
Plan 2 (13 Months)- face
value of ` 10 each
Kotak FMP 13M series 4 25,000,000 250.00
Institutional Growth - face
value of ` 10 each

4. Advance for Investments

in shares
for various projects under 136.48 332.20 337.75
construction
4,670.32 3,869.61 5,705.60

Add: Share of Joint 349.74 296.16 208.71

196
 Investments 31.03.2011 31.03.2010 31.03.2009
Description Numbers Book Numbers Book Numbers Book
Value Value Value
(` In (` In (` In
million) million) million)
Ventures
Refer clause 2 (C) (3) of
Schedule J

Total Investments 5,020.06 4,165.78 5,914.32

# Formerly Imperial Cancer

Hospitals and Research
Centre Limited
## Formerly Apollo DKV
Insurance Company Limited
* Formerly Apollo
Gleneagles PET CT Limited
* * Formerly Apollo Health
Street Private Limited
Aggregate amount of
Quoted Investments
Market Value ` 291.95 297.15 528.34
664,588,430/- (31.03.2010 `
848,610,004/- and
31.03.2009 ` 799,066,131/-)
Aggregate amount of 4,591.63 3,536.42 5,048.22
Unquoted Investment
Advance for Investments in 136.48 332.20 337.75
shares
Total 5,020.06 4,165.78 5,914.32

The following Long Term Investment were purchased:

In 2010 – 11

1) 282,500 Equity shares of Indraprastha Medical Corporation Limited

2) 200 Equity Shares of Health Super Hiway
3) 406,514 Preference shares Health Super Hiway

The following Current Investment were purchased and sold

During 2010 – 11

1) 14,006,385.75 units - Reliance Monthly Interval Fund Series II Institutional dividend plan purchased during the
year
2) 13179311 units - Canara Robeco Floating Rate Short term Growth Fund purchased during the year
3) 18000000 units - HDFC FMP 100D March 2011 (2) Dividend Series XVII purchased during the year
4) 8995233 units - HDFC Quarterly Interval Fund - Plan C purchased during the year
5) 12000000 units - HDFC FMP 35D March 2011 (2) purchased during the year
6) 199,840.13 units of DSP BlackRock Money Manager Fund - Institutional Plan - Daily Dividend purchased
during the year, 1746.14 units cumulated during the year and 49,960.03 units sold during the year
7) 16,355,770.7248units of Kotak Liquid (Institutional Premium)-Daily Dividend Plan purchased during the year.
1,508.76 units cumulated during the year. 16,357,279.49 units sold during the year

197
8) 19,907,285.326units of Kotak Flexi Debt Scheme Institutional-Daily Dividend purchased during the year
54,906.19 units cumulated during the year 19,962,191.52 units sold during the year
9) 19,989,805.199 units purchased during the year. 1,868.35 units cumulated during the year. 19,991,673.553
units sold during the year)
10) 199,744.743 units of Reliance Money Management Fund Institutional Option-Daily Dividend plan purchased
during the year. 2,086.363 units cumulated during the year. 201,831.106 units sold during the year)
11) 12,565,632.99 units of Reliance Liquid Fund Cash plan daily dividend option purchased during the year.
12,017.18 units cumulated during the year. 12,577,650.17units sold during the year)
12) 47,008,386.36 units of HDFC Cash Management Fund-Savings Plan-Daily Dividend Reinvestment Option
purchased during the year. 5,126.71units cumulated during the year. 47,013,513.01 units sold during the year)
13) 36,885,877.854 units of HDFC Cash Management Fund-Treasury Advantage Plan purchased during the year.
323,282.4829 units cumulated during the year. 37,209,160.337 sold during the year)
14) 30,003,384.604 units of HDFC Short term Opportunities Fund Dividend Payout Option purchased during the
year.30,003,384.604 units sold during the year)
15) 82,581,912.33 units of HDFC Floating Rate Income fund Short term Plan purchased during the year.
40,075,201.73 units cumulated during the year. 122,657,114.0592 units sold during the year)
16) 19,978,024.173 units of AIG Treasury Fund Super Institutional Plan-Daily Dividend Reinvestment Option
purchased during the year. 270,151.081 units cumulated during the year. 20,248,175.254 units sold during the
year)
17) 10,000,000units of Canara Robeco InDigo quarterly dividend fund purchased during the year. 10,000,000units
sold during the year)
18) 1,999,558.098 units of ICICI Prudential Liquid Plan - Super Institutional- Daily Dividend Reinvestment Option
purchased during the year. 217.7 units cumulated during the year.1,999,775.798 units sold during the year)
19) 1,891,727.194 units of ICICI Prudential Flexible Income Plan Premium- Daily Dividend Reinvestment Option
purchased during the year. 17,144.005 units cumulated during the year 1,908,871.20 units sold during the year)

198
 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE (H)
Current Assets, Loans & Advances
A. CURRENT ASSETS

(1) Inventories (at cost)**

i) Medicines 1,238.02 1,060.88 858.35

ii) Stores, spares 56.41 68.52 47.65
iii) Lab Materials 14.30 26.36 16.66
iv) Surgical Instruments 147.26 144.04 103.16
v )Other Consumables 100.98 86.43 111.52
1,556.98 1,386.23 1,137.34
Add : Share of Joint Ventures 27.46 26.01 24.29
Refer clause 2 (C) (3) of Schedule J
1,584.44 1,412.24 1,161.64
(As taken, certified, and valued by management)
(2) Sundry Debtors
Refer clause 24 of schedule J
a) Debtors Outstanding for a period exceeding six months 960.28 422.05 567.58
Less : provision for Bad debts 24.95 13.49 5.59
b) Other debts 1,865.18 1,684.27 1,080.24
2,800.51 2,092.84 1,642.22
Add : Share of Joint Ventures 202.63 135.54 101.92
Refer clause 2 (C) (3) of Schedule J
3,003.14 2,228.38 1,744.14
(3) Cash and Bank Balances
a) Cash Balance on hand 51.57 35.92 34.04
b) Bank Balance:
(i) with schedule Banks :
a) On current account 1,008.19 1,752.01 515.07
b) On deposit account 519.85 1,126.68 141.65
(ii) with non-scheduled Banks : 10.30 46.26 1.95
1,589.91 2,960.87 692.71
Add : Share of Joint Ventures 190.61 155.85 183.33
Refer clause 2 (C) (3) of Schedule J
1,780.51 3,116.72 876.04
(B) Loans and Advances
Refer clause 24 of schedule J
(4) Advances:
i) For capital items 185.68 202.94 78.88
ii) To suppliers 407.76 124.32 64.80
iii) Other advances 1,472.57 1,501.93 1,075.14
iv) Staff advances 36.20 38.01 35.08
2,102.21 1,867.19 1,253.89
(5) Advance tax 1,586.53 1,754.76 1,239.43
(6) Deposits:
a) With Government 57.39 51.28 42.31
b) With others 718.90 611.86 508.37
776.29 663.14 550.68
(7) Prepaid expenses 88.62 70.84 63.83

199
 31.03.2011 31.03.2010 31.03.2009
` ` `
(8)Rent receivables 2.48 4.33 4.42
(9)Service charges receivables - 2.83 1.79
(10)Tax deducted at source 1,018.29 748.34 458.71
(11)Franchise Fees Receivable 11.10 6.57 4.08
(12)Royalty Receivable - - 2.14
5,585.52 5,117.99 3,578.98
Add : Share of Joint Ventures 144.38 119.66 84.12
Refer clause 2 (C) (3) of Schedule J
5,729.90 5,237.66 3,663.10

Total of Current Assets, Loans & Advances (A+B) 12,098.00 11,995.00 7,444.92

200
 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE (I)
Miscellaneous Expenditure
[To the extent not written off or adjusted)
(a) Deferred Revenue Expenditure - 0.12 0.22
(b) Preliminary Expenditure - - 0.24
- 0.12 0.46

201
Schedules to Consolidated Profit and Loss Account

` in million
Particulars 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE - I
OTHER INCOME
Interest earned 100.25 95.88 20.61
Dividend 18.84 94.66 146.72
Income from Treasury operations 11.77 31.35 11.29
Profit on sale of Investment 0.03 81.72 10.09
Profit on sale of Asset 0.13 0.60 0.32
Exchange gain 41.86 -
172.88 304.21 189.03
Add : Share of Joint Ventures 13.64 18.18 18.96
Refer clause 2 (C) (3) of Schedule J
TOTAL 186.52 322.39 207.99

202
 Particulars 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE - II
OPERATIVE EXPENSES
MATERIALS CONSUMED
Opening stock 1,389.76 1,106.23 800.86
ADD :
Purchases 12,907.32 10,051.86 8,186.39
Customs Duty 0.31 1.39 4.99
Freight Charges 11.85 17.33 10.58
14,309.24 11,176.81 9,002.83
LESS
Closing stock 1,556.98 1,386.23 1,086.12
12,752.27 9,790.58 7,916.72
Fees to Consultants - 6.37 4.15
Power & Fuel 429.05 343.92 285.62
House Keeping expenses 188.06 201.44 189.68
Water charges 44.81 38.68 33.82

13,414.18 10,380.99 8,429.99

Add : Share of Joint Ventures 472.24 345.00 298.02

Refer clause 2 (C) (3) of Schedule J
TOTAL 13,886.42 10,725.99 8,728.01

203
 Particulars 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE - III
PAYMENTS TO AND PROVISIONS FOR EMPLOYEES

Salaries& Wages 3,260.62 2,586.20 2,042.05

Contribution to Provident Fund 161.13 135.00 108.73
Employee State Insurance 23.14 17.79 13.46
Provision on retirement obligation 82.12 60.21 1.54
Staff Welfare expenses 188.27 174.50 146.29
Staff Education & Training 14.11 10.90 13.07
Bonus 141.22 116.00 94.14

3,870.61 3,100.60 2,419.28

Add : Share of Joint Ventures 280.55 207.33 175.06

Refer clause 2 (C) (3) of Schedule J
TOTAL 4,151.16 3,307.93 2,594.34

204
 Particulars 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE - IV
ADMINISTRATIVE & OTHER EXPENSES

Rent 797.45 679.18 546.76

Rates & Taxes 55.58 53.23 52.06
Printing & Stationery 163.82 162.22 151.04
Postage& Telegram 26.97 25.40 13.30
Insurance 37.85 34.07 27.90
Directors Sitting Fees 2.31 1.79 1.88
Advertisement, Publicity & Marketing 436.26 273.75 251.14
Travelling & Conveyance 220.69 173.20 176.30
Subscriptions 9.08 7.95 2.58
Security charges 69.79 55.59 44.82
Legal & professional fees 244.66 173.32 127.15
Continuing Medical Education & Hospitality Expenses 9.24 11.22 4.75
Hiring charges 39.24 30.09 31.55
Seminar expenses 4.18 2.33 4.69
Telephone expenses 79.49 72.03 69.84
Books & Periodicals 7.36 6.93 5.97
Miscellaneous Expenses 88.92 74.82 53.53
Investment Written off - 5.56 -
Bad Debts Written off 60.13 94.85 36.48
Provision for Bad Debts 14.24 7.89 4.62
Donations 13.64 4.05 5.90
Royalty paid 0.67 1.23 1.07
Repairs & Maintenance
i)Buildings 119.35 130.87 109.99
ii)Equipments 198.10 196.16 151.09
iii) Vehicles 26.14 20.51 20.35
iv) Office maintenance & others 175.81 112.14 96.69
Loss on sale of assets 31.84 20.14 16.77
Loss on sale of Current Investment 1.66 0.43 4.12
Outsourcing expenses 413.94 333.49 206.30

3,348.41 2,764.44 2,218.64

Add : Share of Joint Ventures 479.00 453.20 326.65

Refer clause 2 (C) (3) of Schedule J
TOTAL 3,827.41 3,217.64 2,545.29

205
 31.03.2011 31.03.2010 31.03.2009
` ` `
SCHEDULE V
FINANCIAL EXPENSES

a. Interest on
i)Fixed Loans 557.25 405.32 244.30
ii) Fixed Deposits 50.31 29.90 12.89
iii) Debentures 14.96 - -
b. Bank charges 37.16 31.94 32.72
c. Brokerage & commission 2.09 2.63 1.47
d. Foreign Exchange Loss 35.87 17.58 31.09

697.64 487.37 322.46

Add : Share of Joint Ventures 116.71 114.69 136.33

Refer clause 2 (C) (3) of Schedule J
TOTAL 814.35 602.06 458.79

206
 APOLLO HOSPITALS ENTERPRISE LIMITED

Consolidated Cash Flow Statement

` in million
31.03.2011 31.03.2010 31.03.2009
` ` `
A Cash Flow from operating activities
Net profit before tax and 2,613.18 1,976.44 1,383.91
extraordinary items

Adjustment for:
Depreciation 941.70 749.51 632.17
Profit on sale of assets (0.13) (0.60) 4.12
Profit on sale of investments (5.74) (81.72) (10.09)
Loss on sale of Investments 4.05 0.43 -
Loss on sale of assets 34.74 40.63 17.32
Interest paid 778.44 587.01 427.70
Foreign Exchange Loss (6.26) (7.91) 31.09
Misc. Exp. written off 5.81 7.48 6.71
Provision for bad debts 17.30 12.11 17.22
Dividend received (20.69) (103.94) (176.21)
Interest received (106.03) (104.77) (34.98)
Income from Treasury operations (11.77) (31.35) -
Bad debts written off 63.95 102.75 35.90
Liability & sundry balances Written (6.05) (2.61) (5.28)
back
1,689.32 1,167.02 945.68

Operating profit before working 4,302.51 3,143.45 2,329.59

capital changes

Adjustment for:
Trade or other receivables (919.51) (666.26) (502.22)
Inventories (165.83) (250.50) (297.94)
Trade payables 380.82 1,341.16 371.15
Others (338.31) (718.55) (360.39)
(1,042.83) (294.16) (789.39)
Cash generated from operations 3,259.68 2,849.29 1,540.19

Foreign Exchange (Loss)/Gain 6.26 7.91 (30.94)

Taxes paid (including Fringe Benefit (675.11) (864.71) (594.53)
Tax)
Adjustments for Misc. Exp. written (3.15) (6.23) (3.19)
off

Net cash from operating activities 2,587.67 1,986.26 911.53

B Cash flow from Investing activities

Purchase of fixed assets (Including (3,334.98) (3,938.43) (3,723.94)
Capital Work in Progress) #
Pre-operative expenses (53.99) (20.92) (5.89)
Purchase of investments (3,922.68) (3,052.14) (6,920.39)
Sale of investments 2,615.96 4,716.61 7,683.33

207
 31.03.2011 31.03.2010 31.03.2009
` ` `
Sale of fixed assets 178.07 46.70 85.71
Interest received 52.00 99.31 46.01
Dividend received 50.97 131.99 167.28
Cash flow before extraordinary item (4,414.65) (2,016.89) (2,667.88)
Extraordinary Item - - (40.19)
Net cash used in Investing activities (4,414.65) (2,016.89) (2,708.07)

C Cash flow from financing activities

Membership fees - - -
Proceeds from issue of share premium 35.03 818.39 783.35
Proceeds from issue of share capital 71.52 50.58 27.66
Proceeds from advance against share 685.31 14.52 -
capital
Proceeds from long term borrowings 1,949.50 2,716.86 1,410.34
Proceeds from short term borrowings 181.70 383.29 36.69
Repayment of finance/lease liabilities (1,254.54) (732.12) (113.06)
Interest paid (780.36) (613.33) (398.77)
Income from Treasury operations 11.77 31.35 -
Dividend paid (432.49) (401.60) (352.11)
Net cash from financing activities 467.44 2,267.94 1,394.09

Net increase in cash and cash (1,359.54) 2,237.31 (402.44)

equivalents
(A+B+C)
Cash and cash equivalents 3,140.06 879.42 1,278.49
(opening balance )
Cash and cash equivalents 1,780.52 3,116.73 876.05
(Closing balance )

Component of Cash and cash

equivalents
Cash Balances 55.37 38.94 37.16
Bank Balances*
i) Available with the company for day 1,706.87 3,058.27 816.85
to day operations
ii) Amount available in unpaid 18.28 19.52 22.04
dividend and unpaid deposit payment
accounts

Notes :
2. Figures in the bracket represents outflow
3. #Purchase of Fixed Asset includes and interest paid excludes ` 154.42 million (31.03.2010 ` 198.68 million
and 31.03.2009 ` 254.64 million) of interest capitalized.

208
Notes Forming Part of the Accounts.

Schedule (J)

Accounting Policies & Notes Forming Part of Consolidated Accounts of Apollo Hospitals Enterprise Limited,
its Subsidiaries, Associates and Joint Ventures.

1. BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention under accrual method of
accounting and as a going concern, in accordance with the Generally Accepted Accounting Principles
(GAAP) prevalent in India and the Mandatory Accounting Standards as notified under the Companies
(Accounting Standards) Rules, 2006 and according to the provisions of the Companies Act, 1956.
Apollo Hospital (UK) Limited

The financial statements have been prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law). Suitable accounting
policies are selected and applied consistently and judgments and estimates made are reasonable and
prudent. The financial statements have been prepared on a going concern basis unless it is inappropriate to
presume that the Company will continue in business.

Apollo Munich Health Insurance Company Limited

The financial statements have been prepared in accordance with generally accepted accounting principles
and practices followed in India and conform to the statutory requirements of the Insurance Act, 1938, The
Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor‘s
Report of Insurance Companies) Regulations 2002, orders and directions issued by IRDA in this regard,
The Companies Act, 1956 to the extent applicable and the accounting standards as notified under the
Companies (Accounting Standards) Rules, 2006 to the extent applicable. The financial statements have
been prepared on historical cost convention and on accrual basis as a going concern.

Quintiles Phase One Clinical Trials India Private Limited – F.Y - 2010-2011

The Company is a Small and Medium Sized Company (SMC) as defined in the General Instructions in
respect of Accounting Standards notified under the Companies Act,1956. Accordingly, the Company has
complied with the Accounting Standards as applicable to a Small and Medium Sized Company.

Western Hospitals Corporation Private Limited – F.Y - 2010-2011

The Company is a Small and Medium Sized Company (SMC) as defined in the General Instructions in
respect of Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006.
Accordingly, the Company has complied with the Accounting Standards as applicable to a Small and
Medium Sized Company.

Family Health Plan (TPA) Limited – F.Y - 2010-2011

The Company is a small and medium sized Company as defined in the General Instructions in respect of
Accounting Standards notified under the Companies Act, 1956. Accordingly, the Company has complied
with the Accounting Standards as applicable to a Small and Medium sized Company.

British American Hospitals Enterprise Limited – F.Y - 2008-2009 & F.Y - 2009-2010

The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) on historical cost basis. Family Health Plan (TPA) Limited.

209
2. BASIS OF CONSOLIDATION

The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21-
‗Consolidated Financial Statements‘, Accounting Standard 23-‗Accounting for Investment in Associates in
Consolidated Financial Statements‘ and Accounting Standard 27-‗Financial Reporting of Interests in Joint
Ventures‘, as notified under the Companies (Accounting Standards) Rules, 2006.

Apollo Hospitals Enterprise Limited

A. Investment in Subsidiaries

1. The Subsidiary Companies considered for the purpose of consolidation are:

Name of the Subsidiary Country of % of % of % of

Incorporation holding holding holding
As on As on As on
31.03.11 31.03.10 31.03.09
Unique Home Health Care Limited. India 100 100 100
AB Medical Centres Limited. India 100 100 100
##
Apollo Health and Lifestyle India 100 86.95 86.95
Limited.
Samudra Healthcare Enterprise India 100 100 100
Limited.
#
Imperial Hospital & Research India 51 51 51
Centre Limited
Apollo Hospital (UK) Limited United Kingdom 100 100 100
**Pinakini Hospitals Limited India 74.94 74.94 74.94
@@
Apollo Cosmetic Surgical India 61 66.91 -
Centre Private Limited
Alliance Medicorp (India) Limited India 51 - -
*ISIS Healthcare India Private India * * -
Limited
*Mera Healthcare Private Limited India * * -
@ @
Alliance Dental Care Private India - -
Limited

# Formerly Imperial Cancer Hospital & Research Centre Limited

## 100% subsidiary of Apollo Hospitals Enterprise Limited during the year.
* 100% subsidiary of Apollo Health and Lifestyle Limited.
@ Subsidiary of Alliance Medicorp (India) Limited.
@@ During 2008-09, shown under advance for investment. Shares allotted on October 7, 2009.
** Became subsidiary of Apollo Hospitals Enterprise Limited during 2008-2009.

2. Financial Statements of all the subsidiaries have been drawn upto 31st March of each year.

3. Minority Interest consists of their share in the net assets of the subsidiaries, as on the date of Balance Sheet.

4. The amount of Deferred Revenue Expenditure (attributable to the Parent Company) not written off at the
end of the fiscal year immediately preceding the date of acquisition of a Subsidiary Company has been duly
adjusted and the amount appearing as deferred revenue expenditure in the Balance Sheet are those
pertaining to the post acquisition period.

B. Investment in Associates:

1. The Associate Companies considered in the Consolidated Financial Statements are:

210
 Name of the Associate Country of Proportion of Proportion of Proportion of
Company Incorporation ownership ownership ownership
interest (%) as interest (%) as interest (%) as
on 31st March on 31st March on 31st March
2011 2010 2009
*Indraprastha Medical India 21.06 20.75 *20.40
Corporation Limited.
Family Health Plan India 49 49 49
Limited.
**Apollo Health Street India **39.38 **39.46 **45.50
Limited
#Stemcyte India India 13.05 13.05 -
Therapautics Private
Limited
@
British American Mauritius - 19.72 19.72
Hospitals Enterprises
Limited

* For the year ended 31st March 2009 Apollo Hospitals Enterprise Limited directly holds 18.25% in
Indraprastha Medical Corporation Limited and a further 2.15% through its wholly owned subsidiary
Unique Home Health Care Limited
** Apollo Hospitals Enterprise Limited directly holds 38.69% as of 31st March 2011; 38.77% as of 31st
March 2010 and 44.70% as of 31st March 2009 in Apollo Health Street Limited (formerly Apollo
Health Street Private Limited) and a further 0.69% as of 31st March 2011; 0.69% as of 31st March
2010 and 0.80% as of 31st March 2009 through its wholly owned subsidiary Unique Home Health
Care Limited
@
31st March 2009 - Apollo Hospitals Enterprise Limited had a stake of 26% in British American
Hospitals Enterprise Limited as on 31st December 2008, which is the date of latest available Balance
sheet used for consolidation purposes as per Clause 24 of Accounting Standard 23-―Accounting for
investments in Associates‖. The Company has reduced its stake in British American Hospitals
Enterprise Limited between 31st December 2008 and 31st March 2009 from 26% to 19.72%. The
Company has consolidated the accounts of British American Hospitals Enterprise Limited based on the
reduced stake as per Clause 15 of Accounting Standard 23-―Accounting for investments in Associates‖
issued by the Institute of Chartered Accountants of India.
# Shares were allotted on 18th July 2009.

2. The financial statements of all associates are drawn upto 31st March of each year. In the case of British
American Hospitals Enterprise Limited, the account is drawn upto 31 st December 2009 and 31st December
2008. The effect of significant events or transactions between the Company and British American Hospitals
Enterprise Limited that occurred between the date of the associate‘s financial statements and the
Company‘s consolidated financial statements has been considered in the preparation of consolidated
financial statements in accordance with Accounting Standard 23 ‗Accounting for Investment in Associates‘
issued by the Institute of Chartered Accountants of India.

3. The Board of Directors at its meeting held on 24 th April 2011 has approved divestment of the Company‘s
investment in British American Enterprise Limited, Mauritius. As approved by the board the shareholders
agreement will be replaced by operation management agreement and franchisee agreement with effect from
January 2011. Based on the clause 7 of Accounting Standard 23 (Accounting for Investments in Associates
in Consolidated Financial Statements) the management has excluded this Company being treated as an
associate for the year ended 31st March 2011.

4. In the case of Stemcyte India Therapautics Private Limited an associate, unaudited Management report has
been taken for consolidation.

211
C. Interests in Joint Ventures:

1. The following are jointly controlled entities.

Name of the Company Country of Proportion of Proportion of Proportion of

Incorporation ownership ownership ownership
interest (%) interest (%) interest (%)
as on 31st as on 31st as on 31st
March 2011 March 2010 March 2009
Apollo Gleneagles Hospitals India 50 50 50
Limited
#
Apollo Gleneagles PET – India 50 50 50
CT Private Limited
**Apollo Hospitals India **50.00 **50.00 **50.00
International Limited
Western Hospitals India 40 40 40
Corporation Private Limited
Apollo Munich Health India 11.01 16.71 20.12
Insurance Company
Limited*
***Apollo Lavasa Health India 34.66 6.77 -
Corporation Limited
##
Quintiles Phase One India 40 40 -
Clinical Trials India Private
Limited

# Formerly Apollo Gleneagles PET CT Limited.

* Formerly known as Apollo DKV Insurance Company Limited.
** Apollo Hospitals Enterprise Limited directly holds 8% as of 31st March 2011; 7.91% as of 31st March
2010 and 0.52% as of 31st March 2009 in Apollo Hospitals International Limited and a further 42% as
of 31st March 2011; 42.09% as of 31st March 2010 and 49.48% as of 31st March 2009 through its
wholly owned subsidiary Unique Home Health Care Limited.
*** Apollo Lavasa Health Corporation Limited has been considered as joint venture based on the substance
of the agreement between Apollo Lavasa Health Corporation Limited and Apollo Hospitals Enterprise
Limited. Shares were allotted on 12th May 2009.
## Entered into Joint Venture Agreement with Apollo Hospitals Enterprise Limited during 2009-10.

In respect of Universal Quality Services LLC, Dubai, in the absence of any business activity during the
years 2009-10 and 2008-2009, the effect of the operations has not been included in the Consolidated
Financial Statements. The Company is in the process of being liquidated after obtaining necessary Statutory
permissions. The whole of the amounts in the form of investments have been written off in the books of
Apollo Hospitals Enterprise Limited in the FY 2004-05.

In respect of Apollo Lavasa Health Corporation Limited, Apollo Hospitals Enterprise Limited has been
allotted shares subsequent to 31st March 2009 only and hence not been considered for the purpose of
consolidation in the Consolidated Financial Statements. The amount has been shown as advance for
investment in shares.

2. The Financial statements of all the Joint Ventures are drawn upto 31st March of each year.

3. The Group‘s interests in the Joint Ventures accounted for using proportionate consolidation in the
Consolidated Financial Statements are:

212
 ASSETS As at 31st March As at 31st March As at 31st March
2011 2010 2009
(` In million) (` In million) (` In million)
1.Net Fixed Assets 2,145.10 1,576.39 1,597.26
2. Capital Work-in-Progress 29.00 294.20 72.93
3.Investments 349.74 296.16 208.71
4.Current Assets, Loans and Advances
a) Inventories 27.46 26.01 24.29
b) Sundry Debtors 202.63 135.53 101.92
c) Cash and Bank Balances 190.61 155.86 183.33
d) Loans and Advances 144.38 119.66 84.12
5. Deferred Tax Asset 107.46 99.34 101.18
LIABILITIES
1.Secured Loans 957.23 1,073.76 1,091.05
2.Unsecured Loans 239.56 169.41 162.32
3.Current Liabilities and Provisions - - -
a) Liabilities 684.57 518.37 421.26
b) Provisions 9.06 7.07 6.34
4. Deferred Tax Liability 1.48 - -
- - -
INCOME

1.Income from Healthcare Services 1,416.94 1,058.14 831.33

2.Other Income 13.64 18.18 18.96
EXPENSE
1.Operating Expenses 472.24 345.00 298.02
2.Payment and provisions to employees 280.55 207.33 175.06
3. Administrative and other expense 479.00 453.20 326.65
4. Financial expense 116.71 114.69 136.33
5.Depreciation / Amortisation 139.12 117.90 110.90
6.Profit Before Taxation (57.04) (165.83) (196.67)
7.Provision for Taxation 3.80 2.66 2.09
(Including Deferred Tax Liability and - - -
Fringe Benefit Tax)
8.Deferred Tax Asset 9.82 - 1.55
9.Proft after taxation before minority (51.02) (168.50) (195.12)
interests
10.Minority interests - - -
11.Net Profit (51.02) (156.20) (195.12)

OTHER MATTERS

1. Contingent Liabilities 178.65 153.67 118.09

2. Capital Commitments 17.00 84.56 48.03

D. As far as possible the Consolidated Financial Statements are prepared using uniform accounting policies
for like transactions and other events in similar circumstances, and are presented in the same manner as the
Company‘s separate financial statements.

E. The effects arising out of variant accounting policies among the group Companies have not been calculated
and dealt with in the Consolidated Financial Statements since it is impracticable to do so. Accordingly, the
variant accounting policies adopted by the Subsidiaries, Associates and Joint Ventures have been disclosed
in the financial statements.

213
 Based on the Accounting Standard Interpretation (ASI) 15, the Company has not disclosed policies and
procedures which are common and that which do not affect the truth and fairness of the accounts.

F. The Company (AHEL) has been exempted from publishing the standalone accounts of all twelve of its
subsidiaries under section 212(1) of the Companies Act, 1956 for all the three years- FY 2010-11, 2009-10
& 2008-09. However, necessary disclosure under section 212(1) has been made.

G. The foreign operations of the Company are considered as non- integral foreign operations. Hence, the
assets and liabilities have been translated at the exchange rates prevailing on the date of Balance Sheet,
income and expenditure have been translated at average exchange rates prevailing during the reporting
period. Resultant currency exchange gain or loss is transferred to Foreign Currency Translation Reserve.

3. SIGNIFICANT ACCOUNTING POLICIES

A. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles
requires the management to make estimates and assumptions that affect the reported values of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the
reported revenues and expenses during the reporting period. Although these estimates are based upon
management's best knowledge of current events and actions, actual results could differ from the estimates.

B. Inventories

Apollo Hospitals Enterprise Limited

1. The inventories of all medicines, medicare items traded and dealt with by the Company are valued at cost.
In the absence of any further estimated costs of completion and estimated costs necessary to make the sale,
the Net Realisable Value is not applicable. Cost of these inventories comprises of all costs of purchase and
other costs incurred in bringing the inventories to their present location after adjusting for VAT wherever
applicable, applying the FIFO method.

2. Stock of provisions, stores (including lab materials and other consumables), stationeries and housekeeping
items are stated at cost. The net realisable value is not applicable in the absence of any further
modification/alteration before being consumed in-house only. Cost of these inventories comprises of all
costs of purchase and other costs incurred in bringing the inventories to their present location, after
adjusting for VAT wherever applicable applying FIFO method.

3. Surgical instruments, linen, crockery and cutlery are valued at cost and are subject to 1/3 write off wherever
applicable applying FIFO method. The net realisable value is not applicable in the absence of any further
modification/alteration before being consumed in-house. Cost of these inventories comprises of all costs of
purchase and other costs incurred in bringing the inventories to their present location.

4. Imported inventories are accounted for at the applicable exchange rates prevailing on the date of
transaction. (Also refer Note 12 in the Notes forming part of Accounts).

Alliance Medicorp (India) Limited – F.Y - 2010-2011

Inventories are stated at lower of cost or net realisable value. Cost of inventory comprises cost of purchase
of inventories. Net realisable value represents the estimated selling price less all estimated cost necessary to
complete the sale.

Apollo Gleneagles Hospitals Limited

Inventories are valued at lower of the cost or net realizable value. Costs have been calculated on first- in,
first- out basis. Items such as surgical instruments/tools etc. are charged out over a period of 36 months

214
 from the month of their purchase.

Indraprastha Medical Corporation Limited – F.Y - 2010-2011

(i) Inventories are valued at lower of cost and net realisable value.

(ii) The cost in respect of the items constituting the inventories has been computed on FIFO basis.

C. Prior Period Items and Extraordinary Items

Prior period items and extraordinary items are separately classified, identified and dealt with as required
under Accounting Standard 5 on ‗Net Profit or Loss for the Period, Prior Period Items and Changes in
Accounting Policies‘ as notified under the Companies (Accounting Standards) Rules, 2006

D. Depreciation and Amortisation:

i. Depreciation has been provided

a. On assets installed after 1st April 1987 on straight line method at rates specified in
Schedule XIV of the Companies Act, 1956 on single shift basis.

b. On assets installed prior to 2nd April 1987 on straight-line method at the rates equivalent
to the Income Tax rates.

ii. Depreciation on new assets acquired during the year is provided at the rates applicable from the
date of acquisition to the end of the fiscal year.

iii. In respect of the assets sold during the year, depreciation is provided from the beginning of the
year till the date of its disposal.

iv. Individual assets acquired for ` 5,000/- and below are fully depreciated in the year of acquisition.

Apollo Hospitals Enterprise Limited

v. Amortization:

a. The cost/premium of land and building taken on lease by the Company from Orient
Hospital, Madurai will be amortised over a period of 30 years though the lease is for a
period of 60 years.

The cost/premium of land and building taken additionally on lease by the Company at
Madurai is for a period of 9 years with an option to extend the lease by another 16 years.
The depreciation on the leasehold building is charged on a straight line basis with the
lease period being considered as 25 years.

For the year ended 31st March 2011 the Company has taken land in Karaikudi from
Apollo Hospitals Educational Trust on lease for a period of 30 years. The building
constructed on the lease land will be amortised over a period of 30 years. This is in
conformity with the definition of lease term as per Clause 3 of AS 19 ‗Leases‘ as notified
under the Companies (Accounting Standards) Rules, 2006.

b. A lease rental on operating leases is recognised as an expense in the Profit & Loss
Account on straight-line basis as per the terms of the agreement in accordance with
Accounting Standard 19 ‗Leases‘ as notified under the Companies (Accounting
Standards) Rules, 2006.

215
Apollo Cosmetic Surgical Centre Private Limited – F.Y - 2010-2011

Depreciation on fixed assets has been provided on ―Written Down Value‖ method as per Schedule
XIV of the Companies Act, 1956.

A.B. Medical Centres Limited

Depreciation on Fixed Asset purchased before December 1993 are provided on Straight Line
Method (on pro-rata basis) at the old rates prescribed in Schedule XIV of the Companies Act,
1956 and assets purchased after January 1994 are provided on Straight Line Method (on pro-rata
basis) at the new rates prescribed in Schedule XIV of the Companies Act,1956.

Apollo Health and Lifestyle Limited

Depreciation is provided using the straight-line method, pro rata for the period of use of the assets,
at annual depreciation rates stipulated in Schedule XIV to the Indian Companies Act, 1956, or
based on the estimated useful lives of the assets, whichever is higher, as follows:

Asset Rates of Rates of Rates of

Depreciation Depreciation Depreciation
as on 31st as on 31st as on 31st
March 2011 March 2010 March 2009
Furniture & Fittings 6.33% 6.33% 6.33%
Leasehold Improvements 20.00% 20.00% 20.00%
Leasehold Improvements – Furniture 6.33% 6.33% 6.33%
Office Equipment 4.75% 4.75% 4.75%
Air Conditioners 4.75% 4.75% 4.75%
Electrical Installation 4.75% 4.75% 4.75%
Computers & Software 16.21% 16.21% 16.21%
Broadband Connections 16.21% - -
Vehicles 9.50% - 20.00%
Medical Equipments 7.07% - -

Fixed Assets having an original cost less than ` 5, 000/- individually are fully depreciated in the
year of purchase or installation. For the years ended 31 st March 2010 and 31st March 2009 Assets
under finance lease are amortised over the useful life or lease term, as appropriate.

Alliance Medicorp (India) Limited – F.Y - 2010-2011

Depreciation is provided on Written down value method as per the rates prescribed in Schedule
XIV of the Companies Act, 1956.

Apollo Munich Health Insurance Company Limited

Depreciation on fixed assets is provided on straight line method (SLM) with reference to the
management‘s assessment of the estimated useful life of the asset or rates mentioned in Schedule
XIV to Companies Act, 1956, whichever is higher. The depreciation rates used are given below
Asset class Rates of Rates of Rates of
Depreciation Depreciation Depreciation
as on 31st as on 31st as on 31st
March 2011 March 2010 March 2009
Information Technology Equipment 25% 25% 25%
Computer Software 20% 20% 20%
Office equipments 25% 25% 25%
Furniture & Fixtures 25% or on the 25% or on the 25% or on the

216
 Asset class Rates of Rates of Rates of
Depreciation Depreciation Depreciation
as on 31st as on 31st as on 31st
March 2011 March 2010 March 2009
basis of lease basis of lease basis of lease
term of term of term of
premises, premises, premises,
whichever is whichever is whichever is
higher higher higher
Vehicles 20% 20% 20%
Media Films 33% 33% -

Assets individually costing up to ` 20,000/- are fully depreciated in the year of purchase.

Depreciation on assets purchased / disposed off during the year is provided on pro- rata basis with
reference to the date of addition / deletion.

Apollo Gleneagles Hospital Limited

Depreciation on fixed assets is provided for on straight line basis as follows:

(a) Hospital Buildings - at 3.33 %.

(b) Other Assets – As per Schedule XIV of the Companies Act, 1956.

Quintiles Phase One Clinical Trials India Private Limited – F.Y - 2010-2011

Depreciation on fixed assets is provided at the rates prescribed in Schedule XIV to the Companies
Act, 1956, or at the rates determined based on the useful life of the asset, as estimated by the
management, whichever is higher. Depreciation is provided based on the Straight Line Method.
The rates adopted for depreciation determined on the basis of useful life of fixed assets are as
follows:

Type of Asset Rate of Depreciation (p.a)

Furniture 15%
Computers 20%
Office Equipments 15%
Hospital Equipments 15%
Vehicles 20%

Fixed Assets Costing less than ` 5,000/- and mobile phones are depreciated fully in the year of
purchase.

Leasehold Improvements are amortised over the primary period of lease i.e 5 years.

Computer Software is amortised over a period of 4 years on Straight Line Method.

Family Health Plan Limited

Depreciation of fixed assets has been provided on written down value method at the rates
prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on new assets acquired
during the period has been provided at the rates applicable from the date of its acquisition to the
end of the fiscal year.

Apollo Health Street Limited

217
Depreciation and amortisation is provided using the Straight Line Method (―SLM‖), at the rates
based on useful lives of the assets estimated by Management or at the rates prescribed under
schedule XIV of the Companies Act, 1956 whichever is higher, as mentioned below:

F.Y - 2010-2011

Nature of the fixed assets Rates considered Schedule XIV Rates

Computers and computer equipment 16.21%
Office equipment 4.75%
Furniture and fixtures 6.33%
Vehicles 9.75%
Leasehold improvements Shorter of lease period and estimated
useful lives of such assets

Individual assets costing 5,000/- or less are fully depreciated in the year of purchase.

F.Y - 2009-2010

a. Depreciation and amortization is provided using the Straight Line Method (―SLM‖),
except as stated in the Note (b), at the rates based on useful lives of the assets estimated
by Management or at the rates prescribed under schedule XIV of the Companies Act,
1956 whichever is higher, as mentioned below:

Nature of the fixed assets Useful lives Rates Schedule

Considered XIV Rates
Computers and computer equipment 3 years 33.34% 16.21%
Office equipment 5 years 20% 4.75%
Furniture and fixtures 5 years 20% 6.33%
Vehicles 5 years 20% 9.75%
Leasehold improvements Shorter of lease period and estimated useful
lives of such assets

Individual assets costing 5,000/- or less are fully depreciated in the year of purchase.

During the year, Apollo Heath Street International has acquired certain second hand fixed
assets in the nature of computer equipment, office equipment and furniture and fixtures
for which the useful life is estimated as one year.

b. In the current year, three of the subsidiaries of the Company viz. Apollo Health Street
International, Zavata Incorporated and Zavata India Private Limited have re-estimated
useful lives and changed accounting policy for certain category of assets with effect from
April 1, 2009. The new rates and policy are as follows:

Description New Useful life Old Useful life

Computers 3 years 5 years
Vehicles 5 years 3-7.4 years
Furniture and Fittings 5 years 3-10.5 years

Had the Company continued to use the earlier basis of providing depreciation, the
depreciation for the current year would have been lower by ` 9.93 million, and profit and
net block for the current year would have been higher by ` 9.93 million.

218
F.Y - 2008-2009

(a) Depreciation and amortization is provided using the Straight Line Method (―SLM‖),
except as stated in the Note (b), at the rates based on useful lives of the assets estimated
by Management or at the rates prescribed under schedule XIV of the Companies Act,
1956 whichever is higher, as mentioned below:

Nature of the fixed assets Useful lives

Computers and computer equipment 3 years
Office equipment 5 years
Furniture and fixtures 5 years
Vehicles 5 years
Leasehold improvements Shorter of lease period and estimated
useful lives of such assets

Individual assets costing 5, 000/- or less are fully depreciated in the year of purchase.

(b) Depreciation on certain fixed assets of subsidiaries is provided at rates, which are
different from the rates used by the Parent Company. The name of the subsidiary,
estimate of useful life and quantum of assets on which different rates are followed are as
follows:

Asset Description AHSI Zavata Inc. ZIPL

Useful Net Useful Net Useful life Net
life Block life Block Block
Computers and 5 years 4.06 - - 5 years 15.47
computer equipment
Office equipment - - 3 years 1.70 7.4 years 0.56
Furniture and fixtures 7 years 1.33 3 years 8.69 10.5 years 7.99

(c) In the current year, one of the subsidiaries of the Company viz. Armanti Financial
Services LLC, has re-estimated useful lives and changed accounting policy for certain
category of assets with effect from April 1, 2008. The new rates and policy are as
follows:

Description New Useful life Old Useful life

Computers 3 years 6 years
Vehicles 5 years 7 years
Furniture and Fittings 5 years 10 years

Had the Company continued to use the earlier basis of providing depreciation, the
depreciation for the current year would have been lower by ` 11.46 million and profit
and net block for the current year would have been higher by ` 11.46 million.

Indraprastha Medical Corporation Limited

a. Depreciation is charged on straight line method at the rates prescribed under

Schedule XIV to the Companies Act, 1956 (considered the minimum rate) or
higher rates if the estimated useful life based on technological evaluation of the
assets are lower than as envisaged under Schedule XIV to the Companies Act,
1956. In case of additions and deletions during the year, the computations are on
the basis of number of days for which the assets have been in use. Assets costing
not more than ` 5, 000/- each individually have been depreciated in the year of
purchase.

219
 b. When impairment loss/ reversal is recognised, the depreciation charge for the
asset is adjusted in future periods to allocate the asset‘s revised carrying amount,
less its residual value (if any) on a systematic basis over its remaining useful
life.

Amortisation of Intangible Assets – F.Y - 2010-2011

(i) Intangible assets are amortised on straight line method over the estimated useful life of the asset.

(ii) The useful life of the intangible assets for the purpose of amortisation is estimated to be three
years.

British American Hospitals Enterprise Limited– F.Y - 2008-2009 and F.Y - 2009-2010

Depreciation is charged to the Income Statement so as to write off the cost or valuation of equipment. No
depreciation is charged on assets work-in-progress.

E. Revenue Recognition

Apollo Hospitals Enterprise Limited

a. Income from Healthcare Services is recognised on completed service contract method. The
hospital collections of the Company are net of discounts. Revenue also includes the value of
services rendered pending final billing in respect of in-patients undergoing treatment.

b. Pharmacy Sales are recognised when the risk and reward of ownership is passed to the customer
and are stated net of returns, discounts and exclusive of VAT wherever applicable.

c. Hospital Project Consultancy income is recognised as and when it becomes due, on percentage
completion method, on achievement of milestones.

d. Income from Treasury Operations is recognised on receipt or accrual basis whichever is earlier.

e. Interest income is recognised on a time proportion basis taking into account the amount
outstanding and the rate applicable.

f. Royalty income is recognised on an accrual basis in accordance with the terms of the relevant
agreement.

g. Dividend income is recognised as and when the owner‘s right to receive payment is established.

Apollo Health and Lifestyle Limited

F.Y - 2010-2011

The Company has recognized revenue as follows.

One Time License Fees:

With reference to Clinics the One Time License fee is recognized 70% on signing the MOU and 15% on
completion of 3 months from date of signing MOU and balance 15% on commencing of operation.

With Reference to Cradle the One Time License fee is recognized based on percentage of Completion
method.

220
Operating License Fee:

Operating License Fee is recognized as a percentage of the gross sales. For Clinics or Cradles which
became operational during the current year from the date of the commencement of its operations.

Owned clinics operational income:

Owned clinics are recognizing the revenues on basis of the services rendered on cash or on accrual basis
whichever is earlier

Corporate services Fee:

Corporate services fee is recognized on basis of the services rendered and as per the terms of the
agreement.

Other Incomes:

All other incomes are recognized on a pro-rata basis, based on the completion of work and as per the terms
of the agreement.

All the above incomes are recognized net of Service tax or VAT wherever applicable.

F.Y - 2009-2010

The Company has recognized revenue as follows.

One Time License Fee:

(A) With reference to clinics, the onetime license fee is recognized 70% on signing the MOU and 15%
on completion of 3 months from the date of signing MOU and the balance 15% on commencing of
operation.

(B) With reference to cradles, the onetime license fee is recognized based on percentage of completion
method.

Operating License Fee:

Operating License Fee income has been recognized based on the percentage of the gross sales of
operational clinics and for the clinics or cradles which became operational during the year from the date of
commencement till 31st March 2010.

F.Y - 2008-2009

The Company has recognized revenue as follows.

(A) With reference to the License fee, 100% on operational clinics. On others, on a pro-rata basis,
based upon progress of work and date of signing the agreements.

(B) Operating License Fee income has been recognized based on the percentage of the gross sales of
operational clinics and for the clinics opened during the year from the date of commencement till
31st March 2009.

Unique Home Health Care Limited

(i) Income from medical services is recognized net of payment to Medical staff.

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 (ii) Income from Hostel Receipts is recognized net of payment made towards Hostel Rent and Mess
Expenses and is accounted on accrual basis

Alliance Medicorp (India) Limited – F.Y - 2010-2011

Dialysis income is recognized as and when the related services are performed.

Other income is accounted on accrual basis except where receipt of income is uncertain.

Quintiles Phase One Clinical Trials India Private Limited – F.Y - 2010-2011 and F.Y – 2009-2010

Income from fixed deposits is recognised on a time proportion basis taking into account the amount
invested and the rate of interest.

Apollo Munich Health Insurance Company Limited

i. Premium

Premium (net of service tax) is recognized as income over the contract period or period of risk,
whichever is appropriate. Any subsequent revision or cancellation of premium is accounted for in
the year in which they occur.

ii. Commission on Reinsurance Premium

Commission on reinsurance ceded is recognized as income in the year of cession of reinsurance

premium.

Profit commission under reinsurance treaties, wherever applicable, is recognized inthe year of
final determination of the profits and as intimated by the reinsurer.

iii. Premium Deficiency

Premium deficiency is recognized whenever the ultimate amount of expected claims, related
expenses and maintenance costs exceeds related sum of premium carried forward to the
subsequent accounting period as reserve for unexpired risk.

iv. Reserve for Unexpired Risk

Reserve for unexpired risk represents that part of the net premium (premium net of reinsurance
ceded) attributable to the succeeding accounting period subject to a minimum amount of reserves
as required by Section 64V (1) (ii) (b) of Insurance Act, 1938.

v. Interest / Dividend Income

Interest income is recognized on accrual basis. Accretion of discounts and amortization of

premium relating to debt securities is recognized over holding /maturity period.

Family Health Plan Limited

The revenue from Third Party Agreement (TPA) operations is accounted in line with the wordings in the
mediclaim policy, which specifies the conditions under which the premium paid will be refunded, thereby
aligning the revenue recognition with the policy wordings.

All other streams of revenue are being recognized on accrual basis and prorated till the end of the fiscal
year. Income from Third Party Agreement (TPA) operations is recognized inclusive of applicable service
tax.

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 Indraprastha Medical Corporation Limited

(i) Revenue is recognized on accrual basis. Hospital revenue comprises of income from services
rendered to the out-patients and in-patients. Revenue also includes value of services rendered
pending billing in respect of in-patients undergoing treatment as of 31st March 2011; 2010 and
2009.

(ii) Under the ―Served from India Scheme‖ introduced by Government of India, an exporter of service
is entitled to certain export on foreign currency earned. The revenue in respect of export benefits is
recognized on the basis of foreign exchange earned during the year at the rate at which the said
entitlement accrues to the extent there is no significant uncertainty as to the amount of
consideration that would be derived and as to the ultimate collection.

Apollo Health Street Limited

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured. The Company recognises revenue from the last billing date to
the Balance Sheet date for work performed but not billed as unbilled revenues which are included in other
current assets.

The Company recognizes revenue on the following basis:

(a) Revenue cycle management services Fees for services are primarily based on percentage of net
collections on clients‘ accounts receivable. Revenue is recognised when the right to receive such
revenue is established.

(b) Professional services fees including medical coding and billing services on rendering of the
services based on the terms of the agreements/arrangements with the concerned parties.

(c) Time and material contracts Revenues are recognised on the basis of time spent and duly approved
by the respective customers.

(d) Software development and implementation Software development.

On the basis of software developed and billed, as per the terms of contracts based on miles tones
achieved under the percentage of completion method.

Software implementation-

On the completion of installation based on the terms of arrangements with the concerned parties.

(e) Interest Revenue is recognised on a time proportionate basis taking into account the amounts
outstanding and the rates applicable.

F. Fixed Assets

a. All Fixed Assets are stated at their original cost of acquisition less accumulated depreciation and
impairment losses are recognised where necessary (Also refer Clause N in the Notes forming part
of Accounts). Additional cost relating to the acquisition and installation of fixed assets are
capitalised. Wherever VAT is eligible for input availment, fixed assets are stated at cost of
acquisition after deduction of input VAT.

b. Capital work – in – progress comprises of outstanding advances paid to acquire fixed assets and
amounts expended on development/acquisition of Fixed Assets that are not yet ready for their
intended use at the Balance Sheet Date. Expenditure during construction period directly

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 attributable to the cost of assets on projects under implementation is included under Capital work-
in –progress, pending allocation to the assets.

c. Assets acquired under Hire Purchase agreements are capitalised to the extent of principal value,
while finance charges are charged to revenue on accrual basis.

d. Interest on borrowings for acquisition of Fixed Assets and related revenue expenditure incurred
for the period prior to the commencement of operations for the expansion activities of the
Company are capitalised.

British American Hospitals Enterprise Limited – F.Y - 2008-2009 and F.Y – 2009-2010

Equipments:

Recognition and Measurement:

Items are stated at cost less accumulated depreciation and any identified impairment losses. When parts of
an item of equipment have different useful lives, they are accounted for as a separate item (major
components) of equipment.

Subsequent Cost:

The cost of replacing part of an item of equipment are recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Company and its cost
can be measured reliably. The cost of the day to day servicing of equipment is recognised in profit or loss
as incurred.

Indraprastha Medical Corporation Limited – F.Y - 2008-2009

In respect of new/ major expansion of units, the indirect expenditure incurred during construction period up
to the date of commencement of business, which is attributable to the construction of the project, is
capitalised on various category of fixed assets on proportionate basis.

G. Transactions in Foreign Currencies

a. Monetary items relating to foreign currency transactions remaining unsettled at the end of the year
are translated at the exchange rates prevailing at the date of Balance Sheet. The difference in
translation of monetary items and the realised gains and losses on foreign exchange transactions
are recognised in the Profit & Loss Account in accordance with Accounting Standard 11 – ‗The
Effects of Changes in Foreign Exchange Rates (Revised 2003)‘, as notified under the Companies
(Accounting Standards) Rules, 2006 (Also refer Note 12 in the Notes forming part of Accounts).

b. Exchange differences arising on settlement or restatement of foreign currency denominated

liabilities borrowed for the acquisition of fixed assets, are recognised in the Profit and Loss
Account which is in accordance with Accounting Standard 11 ―The Effects of Changes in Foreign
Exchange Rates‖, (Also refer Note 12 in the Notes forming part of Accounts).

c. The use of foreign currency forward contract is governed by the Company‘s policies approved by
the Board of Directors. These hedging contracts are not for speculation. All outstanding derivative
instruments at close are marked to market by type of risk and the resultant profits/losses relating to
the year, if any, are recognised in the Profit and Loss Account. (Also refer Note 19 in the Notes
forming part of Accounts).

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Western Hospitals Corporation Private Limited – F.Y - 2009-2010 and F.Y – 2010 - 2011

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transaction.
Monetary items denominated in foreign currency are translated into rupees at the rates of exchange
prevailing on the date of the Balance Sheet. The gain/losses arising on restatement/settlement are dealt with
in the Profit and Loss Account.

Apollo Health Street Limited

Initial recognition:

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency
amount the exchange rate between the reporting currency and the foreign currency at the date of the
transaction.

Conversion:

Foreign currency monetary items are reported using the closing rate. Non – Monetary items which are
carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at
the date of transaction.

a. Exchange differences:

Exchange differences arising on the settlement of monetary items or on reporting Company‘s

monetary items at rates different from those at which they were initially recorded during the
period or reported in previous financial statements, are recognised as income or as expenses in the
period in which they arise except those arising from investments in non-integral operations.

Exchange differences arising on a monetary item that, in substance, form part of the Company's
net investment in a non-integral foreign operation is accumulated in a foreign currency translation
reserve in the financial statements until the disposal of the net investment, at which time they are
recognised as income or as expenses.

b. Forward Exchange Contracts not intended for trading or speculation purposes:

The premium or discount arising at the inception of forward exchange contracts is amortised as
expense or income over the life of the contract. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the exchange rates change. Any
profit or loss arising on cancellation or renewal of forward exchange contract is recognised as
income or as expense for the period.

c. Foreign Branch

The financial statements of an integral foreign operation are translated as if the transactions of the
foreign operation are those of the Company itself.

d. Foreign currency translation

The reporting currency for AHSL and its domestic subsidiary is the Indian Rupee. The
subsidiaries have been identified as non-integral operations as they accumulate cash and other
monetary items, incur expenses, generate income and arrange borrowings, substantially in their
local currency. Assets and liabilities, both monetary and non-monetary of overseas subsidiaries are
translated at the exchange rates as at the date of balance sheet. Income and expenses are translated
at the average exchange rate for the reporting period. Resultant currency translation exchange gain
or loss is carried as foreign currency translation reserve until the disposal of the net investment.

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 StemCyte India Therapautics Private Limited – F.Y - 2009-2010

a. Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign
currency amount the exchange rate between the reporting currency and the foreign currency the
exchange rate on the date of the transaction.

b. Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which
are carried in terms of historical cost denominated in a foreign currency are reported using the
exchange rate on the date of the transaction.

c. Exchange Differences

Exchange differences arising on settlement of monetary items not covered above, or on reporting
such items of Company at rates different from those at which they were initially recorded during
the period, are recognized as income or expense in the period in which they arise.

H. Investments

Investments are classified as current or long term in accordance with Accounting Standard 13 on
‗Accounting for Investments'

a. Long-term investments are stated at cost to the Company in accordance with Accounting Standard
13 on ‗Accounting for Investments'. The Company provides for diminution in the value of Long-
term investments other than those temporary in nature.

b. Current investments are valued at lower of cost and fair value. Any reduction to carrying amount
and any reversals of such reductions are charged or credited to the Profit and Loss Account.

c. On disposal of an investment, the difference between the carrying amount and net disposal
proceeds is charged or credited to the Profit and Loss Account.

d. In case of foreign investments,

i. The cost is the rupee value of the foreign currency on the date of investment.

ii. The face value of the foreign investments is shown at the face value reflected in the
foreign currency of that country.

Apollo Health and Lifestyles Limited – F.Y - 2010-2011

Investments are valued at Lower of Cost and Fair Value, Investment in Sunrise Medicare Private Limited
has been valued based on the Book value in the fiscal year 2010-11 and the present book value of the
investment is ` 0.39 million.

Apollo Munich Health Insurance Company Limited

Investments are made in accordance with the Insurance Act, 1938 and Insurance Regulatory &
Development Authority (Investment) Regulations, 2000, as amended from time to time. Investments are
recorded at cost including acquisition charges (such as brokerage, transfer stamps) if any, and exclude
interest paid on purchase.

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 Debt securities, including Government securities are considered as held to maturity and are stated at
historical cost adjusted for amortization of premium and/or accretion of discount over the maturity period
of securities on straight line basis. Listed and actively traded securities are measured at fair value as at the
Balance Sheet date. For the purpose of calculation of fair value, the lowest value of the last quoted closing
price of the stock exchanges is considered wherever the securities are listed. Unrealized gain/ losses due to
change in fair value of listed securities is credited / debited to ‗Fair Value Change Account‘. Investments in
Units of Mutual funds are stated at fair value being the closing Net Asset Value (NAV) at Balance Sheet
date. Unrealized gains/losses are credited /debited to the ‗Fair Value Change Account‘.

I. Employee Benefits

Short-term employee benefits (benefits which are payable within twelve months after the end of the period
in which the employees render service) are measured at cost.

Long-term employee benefits (benefits which are payable after the end of twelve months from the end of
the period in which employees render service), and post employment benefits (benefits which are payable
after completion of employment), are measured on a discounted basis by the Projected Unit Credit Method,
on the basis of annual third party actuarial valuations.

Defined Contribution Plan

The Company makes contribution towards Provident Fund and Employees State Insurance as a defined
contribution retirement benefit fund for qualifying employees.

The Provident Fund Plan is operated by the Regional Provident Fund Commissioner. Under the scheme, the
Company is required to contribute a specified percentage of payroll cost, as per the statute, to the retirement
benefit schemes to fund the benefits. Employees State Insurance dues are remitted to Employees State
Insurance Corporation.

Defined Benefit Plans

For Defined Benefit Plan the cost of providing benefits is determined using the Projected Unit Credit
Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial Gains or Losses are
recognised in full in the Profit and Loss Account for the period in which they occur.

a. Gratuity

The Company makes annual contribution to the Employees‘ Group Gratuity-cum-Life Assurance
Scheme of the ICICI and Life Insurance Corporation of India, for funding defined benefit plan for
qualifying employees and recognised as an expense. The Scheme provides for lump sum payment
to vested employees at retirement, death while in employment, or on termination of employment
of an amount equivalent to 15 days salary payable for each completed year of service, or part
thereof in excess of six months. Vesting occurs upon completion of five years of service. The
Company restricts the payment of gratuity to the class of employees of below the rank of General
Managers and to the limits specified in the payment of Gratuity Act, 1972. However the Company
complies with the norms of Accounting Standard 15.

b. Leave Encashment Benefits

The Company pays leave encashment Benefits to employees as and when claimed, subject to the
policies of the Company. The Company provides leave benefits through Annual Contribution to
the fund managed by HDFC Life.

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 Unique Home Health Care Limited

a. The Company is not covered by The Payment of Gratuity Act, 1972 since the number of
employees is below the statutory minimum as prescribed by the Act.

b. The Employees Provident Funds and Miscellaneous Provisions Act, 1952 is also not applicable to
the Company as the number of employees is below the statutory minimum.

c. The Employees State Insurance Act, 1948 is also not applicable to the Company as the number of
employees is below the statutory minimum.

d. The Company does not have any leave encashment scheme or sick leave policy.

Imperial Hospital & Research Centre Limited

(a) Gratuity: The Company has contribution towards a recognised Gratuity Fund. The contributions
are accounted on payments basis.

(b) Provident Fund: The Company is registered with the jurisdictional provident fund Commissioner
for provident fund benefits and is contributing to the fund as per prescribed law. The contributions
to the Provident fund are accounted on accrual basis.

(c) Leave Encashment Benefits: The Company pays leave encashment benefits to Employees as and
when claimed, subject to the policies of the Company.

Apollo Health Street Limited

a. Short term compensated absences are provided for based on estimates. Long term compensated
absences are provided for based on actuarial valuation made at each Balance Sheet date. The
actuarial valuation is done as per projected unit credit method.

b. Retention bonus is provided based on actuarial valuation made at the end of each year. The
actuarial valuation is done as per projected unit credit method.

c. Actuarial gains/losses are recognised in the Profit and Loss Account as they arise.

J. Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as
part of the cost of such asset. As per Accounting Standard 16 ‗Borrowing costs‘, a ―qualifying asset‖ is one
that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs
are expensed as and when incurred.

K. Segment Reporting

Identification of Segments

The Company has complied with Accounting Standard 17- ‗Segment Reporting‘ with Business as the
primary segment.

The Company operates in a single geographical segment, which is India, and the products sold in the
pharmacies, are regulated under the Drug Control Act, which applies uniformly all over the country. The
risk and returns of the enterprise are very similar in different geographical areas within the country and
hence there is no reportable secondary segment as defined in Accounting Standard 17.

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 Segment Policies

The accounting policies adopted for segment reporting are in line with the accounting policies adopted in
consolidated financial statements with the following additional policies for Segment Reporting:

i. Revenue and expenses have been identified to segments on the basis of their relationship to the
operating activities of the segment. Revenue and expenses, which relate to the enterprise as a
whole and are not allocable to segments on a reasonable basis, have been included under
―unallocable expenses‖.

ii. Inter segment revenue and expenses are eliminated.

The Company has disclosed this Segment Reporting in Consolidated Financial Statements as per para (4) of
Accounting Standard – 17- ‗Segment Reporting‘

L. Earnings per Share

In determining the earnings per share, the Company considers the net profit after tax before extraordinary
item and after extraordinary items and includes post - tax effect of any extraordinary items. The number of
shares used in computing the basic earnings per share is the weighted average number of shares outstanding
during the period. For computing diluted earnings per share, potential equity shares are added to the above
weighted average number of shares.

M. Taxation

i. Income Tax

Income tax is computed using the tax effect accounting method, where taxes are accrued in the
same period as and when the related revenue and expense arise. A provision is made for Income
Tax annually based on the tax liability computed after considering tax allowances and exemptions.

ii. Deferred Tax

The differences that result between the profit calculated for income tax purposes and the profit as
per the financial statements are identified and thereafter deferred tax asset or deferred tax liability
is recorded for timing differences, namely the differences that originate in one accounting period
and get reversed in another, based on the tax effect of the aggregate amount being considered.
Deferred tax asset are not recognized unless there is virtual certainty that sufficient future taxable
income will be available against which such deferred tax asset can be realized. The tax effect is
calculated on the accumulated timing differences at the beginning of this accounting year based on
the prevailing enacted or substantively enacted regulations.

iii. Fringe Benefit Tax

2009-2010

The Fringe Benefit Tax is provided in respect of benefits, defined under Section 115WB of the
Income Tax Act 1961, provided to the employees during this year at the prescribed rates. The
Advance Tax paid in respect of Fringe Benefit Tax for the Assessment Year 2010-11 has been
treated as Advance Tax paid for the assessment year 2010-11 vide Circular No. 2/2010 dated
January 29, 2010 due to the abolition of Fringe Benefit Tax with effect from the Assessment year
2010-11.

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2008-2009

Fringe Benefit Tax is provided in respect of benefits, defined under Section 115WB of the Income
Tax Act 1961, provided to the employees during this year at the prescribed rates. Fringe Benefit
Tax (FBT) payable under the provisions of section 115WC of the Income Tax Act, 1961, is in
accordance with the Guidance Note on ‗Accounting for Fringe Benefits Tax‘ issued by the
Institute of Chartered Accountants of India regarded as an additional income tax and considered in
determination of profits for the year.

Apollo Health Street Limited

Tax expense comprises current and deferred taxes. Current income tax is measured at the amount
expected to be paid to the tax authorities in accordance with the tax laws as applicable to the
respective consolidated entities. Deferred income taxes reflects the impact of current period timing
differences between taxable income and accounting income for the period and reversal of timing
differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted
at the balance sheet date. Deferred tax assets and deferred tax liabilities across various countries of
operation are not set off against each other as the Company does not have a legal right to do so.
Deferred tax assets are recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such deferred tax assets can be
realised. In situations where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual certainty supported by
convincing evidence that they can be realised against future taxable profits.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It
recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or
virtually certain, as the case may be that sufficient future taxable income will be available against
which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company
writes-down the carrying amount of a deferred tax asset to the extent that it is no longer
reasonably certain or virtually certain, as the case may be, that sufficient future taxable income
will be available against which deferred tax asset can be realised. Any such write-down is reversed
to the extent that it becomes reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that
the Company will pay normal income tax during the specified year. In the year in which the
Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in
accordance with the recommendations contained in guidance Note issued by the Institute of
Chartered Accountants of India, the said asset is created by way of a credit to the Profit and Loss
Account and shown as MAT Credit Entitlement. The Company reviews the same at each balance
sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is
no longer convincing evidence to the effect that Company will pay normal Income Tax during the
specified year.

British American Hospitals Enterprise Limited – F.Y 2009-2010 and F.Y 2008-2009:

Income tax expense comprises of current and deferred tax. Income tax expense is recognized in
profit or loss except to the extent that it relates to items recognized directly in equity, in which
case it is recognized in equity. Current tax is the expected tax payable on the taxable income for
the year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustments to tax payable in respect of prior year.

230
 Deferred tax is recognized using balance sheet method providing for temporary differences
between the carrying amount of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to
be applied to the temporary differences when they reverse based on the laws that have been
enacted or substantively enacted at the reporting date.

A Deferred tax asset is recognized to the extent that it is probable that future taxable profits will be
available against which temporary difference can be utilized. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realized.

StemCyte India Therapautics Private Limited – F.Y - 2009-2010

In terms of Accounting Standard 22 ‗Accounting for taxes on income‘, the Company has net
deferred tax asset, primarily comprising of unabsorbed depreciation under tax laws. However,
considering the majority of expenditure is of capital nature and which are not allowable otherwise,
the management is of the view that it is prudent not to recognize a deferred tax asset. Accordingly,
no deferred tax asset has been recognized in the financial statements.

N. Impairment

The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain if there is any
indication of impairment based on internal/external factors. An asset is treated as impaired based on the
cash generating concept at the year end, when the carrying cost of assets exceeds its recoverable value, in
terms of Para 5 to Para 13 of AS-28 ‗Impairment of Assets‘ as notified under the Companies (Accounting
Standards) Rules, 2006 for the purpose of arriving at impairment loss thereon, if any. An impairment loss is
charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The
impairment loss recognized in prior accounting periods is reversed if there has been a change in the
estimate of the recoverable amount.

British American Hospitals Enterprise Limited – F.Y - 2008-2009 and F.Y – 2009-2010

Financial Assets

A financial Asset is considered to be impaired if objective evidence indicates that one or more events have
had a negative effect on the estimated future cash flows of that asset.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference
between its carrying amount, and the present Value of the estimated future cash flows discounted at the
original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is
calculated by reference to its current fair value.
Individually significant financial assets are tested for impairment on an individual basis.
All impairment losses are recognized in Profit or loss. Any cumulative loss in respect of an available-for-
sale financial asset recognized previously in equity is transferred to profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the
impairment loss was recognized. For financial assets measured at amortized cost and available-for-sale
financial assets that are debt securities, the reversal is recognized directly in profit or loss. For available-
for-sale financial assets that are equity securities, the reversal is recognized directly in equity.

Non-financial asset

The carrying amounts of the Company‘s non financial assets, other than inventories, and deferred tax
assets, are reviewed at each reporting dates to determine whether there is any indication of impairment. If
any such indication exists then the asset‘s recoverable amount is estimated. In respect of other assets,
impairment losses recognized in prior period are assessed at each reporting date for any indications that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that

231
 the assets‘ carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortization, if no impairment loss had been recognized.

O. Bad Debts Policy

Apollo Hospitals Enterprise Limited

The Board of Directors approves the Bad Debt Policy, on the recommendation of the Audit Committee,
after the review of debtors every year. The standard policy for write off of bad debts is as given below
subject to management inputs on the collectability of the same.

Period % of write off

0-1 years 0%
1-2 years 25%
2-3 years 50%
Over 3 years 100%

Apollo Health Street Limited – F.Y - 2008-2009

The Company had a policy of providing in full for debtors outstanding for a period of more than one year
and in half for debtors outstanding for a period of more than six months as at Balance Sheet date. In the
current year, the Company revised its estimate to provide for only those debts that are outstanding for more
than a year as at Balance Sheet date. The impact of change in estimate is not material on current year
financial statements.

P. Miscellaneous Expenditure

Preliminary, Public Issue, Rights Issue Expenses and Expenses on Private Placement of shares are
amortised over 10 years.

Imperial Hospital & Research Centre Limited

Preliminary and pre-operative expenses are amortized over a period of 5 years.

Western Hospitals Corporation Private Limited

It is the Company‘s intention to capitalise/charge off the Pre-operative Expenses when commercial
operations begin, in accordance with the generally accepted accounting principles. Preliminary Expenses
will be written off fully in the year of commencement of commercial operations.

Apollo Health Street Limited

Cost incurred on raising funds are amortised equally over the period for which funds are acquired.

Apollo Gleneagles Hospital Limited – F.Y - 2008-2009

Balance of deferred revenue as on 01.04.04 has been expensed over originally contemplated period of 5
years.

Q. Intangible Assets

Apollo Hospitals Enterprise Limited

Intangible assets are initially recognised at cost and amortised over the best estimate of their useful life.
Cost of software including directly attributable cost, if any, acquired for internal use, is allocated /
amortised over a period of 36 months to 120 months.

Apollo Health and Lifestyle Limited

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 Trademark and Concept Rights:

The Company has entered into an agreement with Apollo Hospitals Enterprise Limited towards the usage
of ―Apollo‖ name by the Company for the franchisee clinics and also for the concept of franchisee mode of
business, for this the Company paid ` 29.10 million the Company has a policy of amortizing a fixed
proportion of this license amount each time a clinic comes into operation.

Imperial Hospital & Research Centre Limited

Intangible assets are initially recognized at cost and amortized over the best estimate of their useful life.
Cost of software including directly attributable cost, if any, acquired for internal use, is allocated/
amortized over a period of 5 years.

Indraprastha Medical Corporation Limited

Intangible Assets are stated at cost less accumulated amortization.

Amortisation of Intangible Assets:

Intangible assets are amortised on Straight – Line method over the estimated useful life of the assets. The
useful life of the intangible assets for the purpose of amortisation is estimated to be three years.

Apollo Health Street Limited

An intangible asset is recognised, where it is probable that future economic benefits attributable to the asset
will accrue to the enterprise and the cost can be measured reliably. Intangible assets are stated at cost less
accumulated amortisation. Goodwill arising on consolidation of acquired subsidiaries is carried at cost.

Cost of software is amortised on straight line basis over the stipulated license period and for software
without any stipulated license period over one to three years.

R. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the Company has a present obligation as a result of a past event and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.

Contingent liabilities are not provided for unless a reliable estimate of probable outflow to the Company
exists as at the Balance Sheet date. These are reviewed at each balance sheet date and adjusted to reflect the
current best management estimates. Contingent assets are neither recognised nor disclosed in the financial
statements.

S. Lease

a. Operating lease

Leases where the lessor effectively retains substantially all the risks and the benefits of ownership
of the leased assets are classified as operating leases. Operating lease payments are recognized as
an expense in the Profit and Loss Account on a straight line basis over the lease term.

b. Finance lease

Apollo Health Street Limited

Leases, which effectively transfer to the Company, substantially all the risks and benefits
incidental to ownership of the leased item, are capitalised at the lower of the fair value and present
value of the minimum lease payments at the inception of the lease term and disclosed as leased

233
 assets. Lease payments are apportioned between the finance charges and reduction of the lease
liability based on the implicit rate of return. Finance charges are expensed as incurred.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the
lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of
the asset or the lease term.

T. Membership Fees

Unique Home Health Care Limited

Non-repayable membership fee collected from patients are accounted as Capital Fund treating them as
Capital Receipts.

U. Share based payments

Apollo Health Street Limited

Employee compensation expenses, where applicable, in respect of stock options granted to the employees
are recognised over the vesting period of the option on straight line basis using intrinsic value method as
prescribed in ―Guidance Note on Accounting for Employee Share-based payments‖ issued by the Institute
of Chartered Accountants of India. Compensation cost relating to the Parent Company‘s options granted to
employees of the Company‘s subsidiary are accounted for in the books of the Parent Company.

V. Financial Instruments

British American Hospitals Enterprise Limited – F.Y - 2008-2009 and F.Y – 2009-2010

Financial assets and financial liabilities are recognized on the Company‘s Balance Sheet when the
Company has become a party to the contractual provisions of the instrument. These assets and liabilities
approximate their fair values.

The Company‘s accounting policies in respect of the main financial instruments are set out below.

Cash and cash equivalents:

Cash and cash equivalents include cash in hand and deposits held at call with banks with original maturities
of 3 months or less.

Share capital:

Ordinary shares are classified as Equity. Where the Company purchases its Equity Share capital (Treasury
shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is
deducted from Equity attributable to the Company‘s Equity holders until the shares are cancelled or
reissued. When such shares are subsequently reissued, any net consideration received, is included in Equity
attributable to the Company‘s Equity holders.

Other receivables are stated at cost less impairment.

Other payables are stated at cost.

Derivative Instruments:

Apollo Health Street Limited

As per the ICAI Announcement, accounting for derivative contracts, other than those covered under AS-11,

234
are marked to market on a portfolio basis, and the loss is charged to the income statement. Gains are
ignored.

W. Insurance-related Policies

Apollo Munich Health Insurance Company Limited

a. Reinsurance Premium

Reinsurance Premium on ceding of risk is accounted in the year in which risk commences and
over the period of risk in accordance with the treaty arrangements with the reinsurers. Unearned
premium on reinsurance ceded is carried forward to the period of risk and is set off against related
unearned premium. Premium on excess of loss reinsurance cover is accounted as per there
insurance arrangements.

b. Acquisition Cost of Insurance Contracts

Costs relating to acquisition of new and renewal of insurance contracts viz., commission, etc., are
expensed in the year in which they are incurred.

c. Advance premium

Advance premium represents premium received in respect of those policies issued during the year
where the risk commences subsequent to the Balance Sheet date.

d. Claims Incurred

Estimated liability in respect of claims is provided for the intimations received upto the year end
based on assessment made by Third Party Administrator (TPA), information provided by the
insured and judgment based on the past experience. Claims are recorded in the revenue account,
net of claims recoverable from reinsurers /co insurers to the extent there is a reasonable certainty
of realization. These estimates are progressively re-valued on availability of further information.

e. Claims incurred but not reported (IBNR) and claims incurred but not enough reported (IBNER)

IBNR represents that amount of claims that may have been incurred prior to the end of the current
accounting period but have not been reported or claimed. The IBNR provision also includes
provision, if any, required for claims incurred but not enough reported. IBNR and IBNER
liabilities are provided based on actuarial principles and certified by the Appointed Actuary. The
methodology and assumptions on the basis of which the liability has been determined has also
been certified by the Actuary to be appropriate, in accordance with guidelines and norms issued by
the Actuarial Society of India and in concurrence with the IRDA

f. Allocation of Investment Income

Investment income is apportioned to Profit & Loss Account and Revenue Account in the ratio of
average of shareholder‘s funds and policyholders funds at the end of each month.

g. Fair Value Change Account

‗Fair Value Change Account‘ represents unrealized gains or losses due to change in fair value of
traded securities and mutual fund units outstanding at the close of the year. The balance in the
account is considered as a component of shareholder‘s funds and not available for distribution as
dividend.

235
 h. Profit / Loss on Sale / Redemption of Investments

Profit or loss on sale / redemption of investments, being the difference between sale consideration
or redemption value and carrying value of investments is credited or charged to Profit and Loss
Account. The profit / loss on sale of investments include accumulated changes in the fair value
previously recognized in ‗Fair Value Change Account‘‘ in respect of a particular security

i. Long Term / Short Term Investments

Investments maturing within twelve months from the Balance Sheet date and investments made
with specific intention to dispose off within twelve months from the date of acquisition are
classified as short term investments. Other investments are classified as long term Investments.

4. RELATED PARTY DISCLOSURES:

A. List of Related Parties where control exists and other related parties with whom the Company had
transactions and their relationships:

S.No. Name of Related Parties Nature of Relationship

1 Dr. Prathap C Reddy

2 Smt. Preetha Reddy

3 Smt. Suneeta Reddy Key Management Personnel
4 Smt. Sangita Reddy
5 *Smt. Shobana Kamineni
#
7 Shri. P. Obul Reddy
8 *PCR Investments Limited
9 *Indian Hospitals Corporation Limited
#
10 Alliance Medicorp (India) Limited
11 Apollo Sindoori Hotels Limited
12 *PPN Power Generating Company Private
Limited
13 *Health Super Hiway Private Limited
1
14 Faber Sindoori Management Services Private
Limited
15 *Ashok Birla Apollo Hospitals Private Limited
16 Apollo Mumbai Hospital Limited
17 Lifetime Wellness Rx International Limited
18 *Apollo Clinical Excellence Solutions Limited
Enterprises over which Key Management
19 *PPN Holding Private Limited
Personnel are able to exercise significant
20 *Preetha Investments Private Limited
influence
21 PPN Power Generation (Unit II) Private Limited
22 *PDR Investments Private Limited
23 *TRAC India Private Limited
24 *PPN Holdings (Alfa) Private Limited
25 *Aircel Limited
26 Aircel Cellular Limited
27 *Dishnet Wireless Limited
28 *Apollo Infrastructure Project Finance Company
Limited
29 *Vasumathi Spinning Mills Limited
30 *Kalpatharu Infrastructure Development
Company Private Limited
@
31 Sindya Power Generating Company Private

236
S.No. Name of Related Parties Nature of Relationship
Limited
#
32 Sindya Aqua Minerals Private Limited
@
33 Sindya Holdings Private Limited
@
34 Sindya resources pte. Limited Singapore
@
35 Garuda Energy Private Limited
36 **Prescient Consulting India Private Limited
37 **FSM Lab Services Private Limited
38 **Sindya Securities & Investments Company
Private Limited
39 *Deccan Digital Networks Private Limited
40 *Kalpatharu Enterprises Private Limited
41 **Marakkanam Port Company Private Limited
@
42 Sirkazhi Port Private Limited
43 *Sindya Builders Private Limited
44 *Energy India Private Limited
#
45 Sindya Properties Private Limited
46 *KAR Auto Private Limited
#
47 Nippo Batteries Company Limited
#
48 Panasonic Carbon India Company Limited
#
49 Panasonic Home Appliances India Company
Limited
50 *Sindya Infrastructure Development Company
Private Limited
51 **Zodiac Travels Private Limited
52 **M/s. Apex Agencies
53 **Obul Reddy Investments Private Limited
54 **Keesara Plastics Private Limited Enterprises over which Key Management
55 **Safe Corrugated Containers Private Limited Personnel are able to exercise significant
56 *Associated Electrical Agencies influence
57 P. Obul Reddy & Sons
58 *Apex builders
59 *Apex Construction
60 *Kei Energy Private Limited
61 *Kamineni Builders Private Limited
62 *Primetime Recreations Private Limited
63 *Kiddy Concepts Private Limited
64 *Kei Vita Private Limited
65 *Kei Rajamahendri Resorts Private Limited
66 *KEI-RSOS Petroleum and Energy Private
Limited
67 *KEI-RSOS Shipping Private Limited
68 *Peninsular Tankers Private Limited
69 *Kei Health Highway Private Limited
70 Keimed Limited
71 Medvarsity Online Limited
72 *Spectra Clinical Laboratory
73 *Kamineni Builders
@
74 Universal Quality Services LLC
75 Apollo Health Resources Limited
2
76 Apollo Energy Company Limited
77 Health Net Global Private Limited
Key management personnel of Apollo
78 *Mr.Antony Jacob
Munich Health Insurance Company

237
 S.No. Name of Related Parties Nature of Relationship
Limited ##
# Holding Company of Western Hospitals
79 Eleanor Holdings, Mauritius
Corporation Private Limited
Significant Control (Apollo Hospital
80 Cadila Pharmaceuticals Limited
International Limited)
@
Apollo Hospitals Educations Research Significant Influence (Apollo Hospital
81
Foundation International Limited)
Holding Company of Apollo Gleneagles
82 **Gleneagles Developement Pte Limited (GDPL)
Hospital Limited
Subsidiary of Gleneagles Developement
83 **Gleneagles Management Services Pte Limited Pte Limited (GDPL) (Holding Company
of Apollo Gleneagles Hospital Limited)
84 Munchener Ruckversicherung Gesellschaft
Associates of Apollo Munich Health
85 *Emed Life Insurance Broking Services Limited
@ Insurance Company Limited##
86 Indo German Chamber of Commerce
@ Parent Company Company of Apollo
87 Lavasa Corporation Limited
Lavasa Health Corporation Limited
@
88 Full Spectrum Adventure limited
@ Fellow subsidiaries of Apollo Lavasa
89 My City Technology Limited
@ Health Corporation Limited
90 Reasonable Housing Limited
@ Ultimate Parent Company of Apollo
91 Hindustan construction Company limited (HCC)
Lavasa Health Corporation Limited
Parent Company of Quintiles Phase One
92 *Quintiles Mauritius Holding Inc
Clinical Trials India Private Limited
Ultimate Parent Company of Quintiles
93 *Quintiles Transnational, USA Phase One Clinical Trials India Private
Limited
@
94 Quintiles,Pacific,Inc.,USA
@ Subsidiaries of Quintiles Phase One
95 Quintiles,Limited,UK
@ Clinical Trials India Private Limited
96 Quintiles,East Asia Pte, Limited,Singapore
Significant Control (Alliance Medicorp
97 *Trinitron healthcare private limited
(India) Limited)
98 Family Health Plan Limited
99 Apollo Health Street Limited
100 Indraprastha Medical Corporation Limited Associates
101 *Stemcyte India Therapautics Private Limited
#
102 British American Hospitals Enterprise Limited
##
(Formerly Apollo DKV Insurance Company Limited)

* From 01.04.2010
** Only for FY 2009-2010
#
Upto 31.03.2010
@
From 01.04.2011
1
Significant Influence (Imperial)
2
Holding Company of Apollo Munich Health Insurance Company
3
Associate of Apollo Munich Health Insurance Company Limited

(` In million)
Sl Name of related Nature of Transaction Mar-11 Mar-10 Mar-09
No parties
1 Family Health Plan a) Receivables as at year end - - 1.03
Limited b) Transaction during the year - 4.13 -

238
Sl Name of related Nature of Transaction Mar-11 Mar-10 Mar-09
No parties
c) Payables as at year end 0.53 1.19 -
d) Premium Income 2.17 1.31 -
e) Claim Payments 2.38 0.24 -
f) TPA Fees 61.78 31.19 -
g) Reimbursement of Expenses - 3.17 -
2 Apollo Health Street a) Rent received 19.92 18.72 21.27
Limited b) Receivables as at year end - 5.24 7.91
c) Premium Income 0.66 - -
3 British American a) Receivables as at year end 0.00 - 45.26
Hospitals Enterprises b) Fees 0.00 76.52 45.60
Limited c) Reimbursement of Expenses - (31.25) 5.05
4 Indraprastha Medical a) Receivables as at year end 144.18 79.39 30.26
Corporation Limited b) Transaction during the year 0.12 0.00 -
c) Dividend Received 30.60 20.66 -
d) Pharmacy Income 1,052.02 926.10 834.95
e) Commission on Turnover 40.85 30.84 27.55
f) Payables as at year end - - -
g ) Reimbursement of expenses - 0.58 -
h) Payment for services rendered - 0.67 -
i) License Fees 9.48 9.48 8.70
j) Premium Income 26.19 20.03 -
k) Claim Payments 29.31 24.70 -
l) Expenses towards services 0.02 0.66 -
rendered
m) Advance premium received - 24.90 -
n) Deputation Charges 0.53 4.88 -
5 Stemcyte India a) Payable as at year end - 20.00 -
Therapautics Private b) Unsecured Loan 4.05 - -
Limited
6 Dr. Prathap.C.Reddy a) Remuneration paid 137.12 109.44 86.21
7 Smt. Preetha Reddy. a) Remuneration paid 54.85 43.78 34.49
8 Smt. Suneeta Reddy. a) Remuneration paid 34.28 27.36 21.55
9 Smt. Sangita Reddy. a) Remuneration paid 13.71 10.94 8.62
10 Smt. Shobana a) Remuneration paid 13.71 1.82 -
Kamineni b) Expenses towards services 4.80 4.80 -
rendered
11 Alliance Medicorp a) Receivables as at year end - 3.86 -
(India) Limited b) Advance for Investment - 50.00 10.00
12 Apollo Sindoori a) Payables as at year end 6.58 11.20 9.28
Hotels Limited b) Receivables as at year end - - -
c) Transactions during the year 133.24 141.57 129.25
d) F&B Services 27.71 2.92 (0.38)
e) Others - - 0.01
f) Other Debits - - 0.09
g) Reimbursement of Expenses 6.96 - -
13 Health Super Hiway a) Advance for Investment - 28.43 26.98
Private Limited b) Investment in Equity 24.01 2.01 -
c) Receivables as at year end 3.50 - -
d) Payables as at year end - 0.37 -
e) Consultancy Charges 2.32 - -
14 Faber Sindoori a) Payables as at year end 12.08 12.11 -
Management c) Transactions during the year 126.01 118.95 -

239
Sl Name of related Nature of Transaction Mar-11 Mar-10 Mar-09
No parties
Services Private d) Housekeeping services availed 54.74 12.14 -
Limited e) Reimbursement of Expenses 0.91 - -
f) Premium Income 2.00 - -
15 Lifetime Wellness Rx a) Payables as at year end 0.24 0.42 0.11
International Limited b) Payment for services rendered - 5.84 26.28
c) Transactions during the period 4.90 1.83 -
d) Expenses towards service rendered 1.83 4.01 -
16 Panasonic Home a) Receivables as at year end - 0.09 0.09
Appliances India
Company Limited
17 P. Obul Reddy & a) Payables as at year end 2.21 0.17 1.13
Sons b) Transaction during the year 13.88 17.50 18.90
c) Receivables as at year end - 0.14 0.05
d) Reimbursement of Expenses 0.12 - -
18 Keimed Limited a) Receivables as at year end - - 0.61
b) Payables as at year end 0.76 48.58 79.03
c) Pharmacy Income 0.31 - 0.14
d) Purchases 2,635.08 1,648.30 1,436.69
e) Transaction during the year - 31.24 -
19 Medvarsity Online a) Rent received 0.86 0.78 0.71
Limited b) Transaction during the year - 0.01 0.01
20 Nippo Batteries a) Payables as at year end - 0.61 -
Company Limited b) Transaction during the year - 1.27 -
c) Receivables as at year end - - 0.07
21 Apollo Health a) Receivables as at year end 11.75 11.77 11.77
Resources Limited b) Transaction during the year 0.31 0.11 -
22 Apollo Mumbai a) Receivables as at year end 6.23 6.13 4.73
Hospital Limited b) Pharmacy Income 3.12 - 5.28
c) Reimbursement of Expenses 8.88 12.98 10.10
23 Aircell Cellular a) Payables as at year end 0.88 0.20 -
Limited b) Transaction during the year 3.26 2.26 0.03
24 Dishnet Wireless a) Payables as at year end 0.14 0.06 -
Limited b) Transaction during the year 0.25 0.16 -
c) Expenses towards service rendered 1.42 - -
25 Cadila a) Payables as at year end 0.38 - -
Pharmaceuticals b) Transactions during the period 1.65 - -
Limited c) Unsecured Loan 109.26 10.23 -
26 Gleneagles a) Payables as at year end - 124.39 124.39
Development Pte b) Share Capital received during the - 100.00 30.00
Limited (GDPL) year
c) Outstanding - 546.76 446.76
27 Gleneagles a) Payables as at year end - 48.10 43.58
Management b) Transaction during the year - 4.45 -
Services Pte Limited
28 Quintiles Mauritius a) Share Capital issued 90.00 61.20 -
Holding Inc
29 Quintiles a) Payables as at year end 6.05 0.22 -
Transnational, USA b) Computer Supplies and 4.68 - -
Maintanance
c) Legal & Professional Fees 1.37 0.22 -
30 Health Net Global a) Payment for services rendered - 1.19 -
Private Limited b) Expenses towards for services 1.14 1.54 -

240
 Sl Name of related Nature of Transaction Mar-11 Mar-10 Mar-09
No parties
rendered
c) Premium Income 0.18 - -
31 Munchener a) Premium on cessions to re insurers 17.16 17.85 12.93
Ruckversicherung b)Re insurance commission earned - 0.05 3.26
Gesellschaft c)Losses recovered from re insurers 5.91 4.48 0.58
d) Payables as at year end 3.53 37.00 -
32 Emed Life Insurance a) Payables as at year end 0.00 3.14 -
Broking Services b) Payment for services rendered 2.61 10.06 -
Limited
33 Ashok Birla Apollo a)Advance for Investment 5.00 5.00 -
Hospitals Private
Limited
34 Lavasa Corporation a) Operating Income 4.50 - -
Limited b) Purchase of Fixed Assets 0.27 612.45 -
c) Inter Corporate Deposit Received 73.23 121.53 -
d) Inter Corporate Deposit Paid 73.56 0.22 -
e) Expenses towards services - 72.85 -
rendered
f) Interest paid on inter corporate 8.45 5.46 -
deposit
g) Project and other services received 3.87 124.58 -
h) Inter Corporate Deposit 48.36 48.69 -
outstanding
i) Interest Accured and due on above 11.03 3.43 -
j) Equity Share Capital 7.60 5.89 -
k) Payable as at year end 0.43 - -
35 Full Spectrum a) Operating Income 0.30 - -
Adventure Limited
36 My City Technology a) Purchase of Fixed Assets 1.39 - -
Limited
b) Payable as at year end 1.37 - -
37 Reasonable Housing a) Included in Loans & Advances 0.29 - -
Limited
38 Hindustan a) Included in Loans & Advances 0.33 - -
Construction
Company
39 Gulabchand a) Included in Loans & Advances 6.50 - -
Foundation
40 Mr.Antony Jacob a) Premium Income 0.01 - -
b) Expenses towards services 11.44 1.19 -
rendered
41 Apollo Hospitals a) Reimbursement of Expenses 0.77 - -
Education Research
Foundation
42 Trinitron Healthcare a) Purchase of Plant & Machinery 1.87 - -
Private Limited b) Purchase of Consumables 0.17 - -

5. Contingent Liabilities

a. Claims against the Group not acknowledged as debts- ` 511.62 million in FY 2010-11, ` 436.45
million in FY 2009-2010 and ` 928.87 million in FY 2008-2009.

241
b. Estimated amount of contracts remaining to be executed on capital account not provided for on
account of the expansion cum diversification programme of the Group ` 8,230.69 million in FY
2010-11, ` 4,542.70 million in FY 2009-2010 and ` 6,098.16 million in FY 2008-2009.

c. Export obligation to be fulfilled by the Group in the next eight years on availing of concessional
excise duty on imports under 3% EPCG Scheme to the extent of eight times the duty saved,
amounts to ` 1,404.38 million in FY 2010-11, ` 905.45 million in FY 2009-2010 and ` 884.19
million in FY 2008-2009. The amount of duty saved for the year ended 31st March 2011 was `
52.18 million for the year ended 31st March 2010 was ` 37.00 million and for the year ended 31st
March 2009 was ` 65.52 million.

d. (i) Letters of credit related to the Group opened by various banks in favour of foreign
suppliers for consumables, spares, medicines and medical equipments amounts to `
145.03 million in FY 2010-11, ` 175.50 million in FY 2009-2010 and ` 312.03 million in
FY 2008-2009.

(ii) Bank Guarantees for the Group as on- 31st March 2011 is ` 217.57 million as on 31st
March, 2010 is ` 224.76 million and as on 31st March, 2009 is ` 168.57 million.

(iii) Corporate Guarantees with respect to the Parent Company:

(` In Million)
Particulars In As at 31st As at 31st As at 31st
Favour March March March
of 2011 2010 2009
By Apollo Hospitals Enterprise IDBI 50 50 50
Limited on behalf of Apollo Hospitals
International Limited
IDFC 157.5 157.5 157.5
TOTAL 207.5 207.5 207.5

e. Apollo Hospitals Enterprise Limited

 The Company filed a Special Leave Petition on 6th May 2008 before the Honourable
Supreme Court against the judgement of the Divisional Bench of the Madras High Court
dated 10th March 2008 allowing the reopening of the assessment for Assessment Year
2000-01 and disallowing the claim for set off of the unabsorbed depreciation. The Special
Leave Petition has been admitted by the Honourable Supreme Court on 15th May 2008.
The Assessment Officer completed the assessment and raised a demand of ` 136.76
million which has since been stayed by the Honourable Supreme Court in its order dated
16th June 2008. This amount has been treated as a contingent liability for all the three
years ended 31st March 2009, 31st March 2010 and 31st March 2011.

 The Company has to pay a sum of ` 5.31 million by way of Redemption premium to
International Finance Corporation (IFC), Washington as on 31st March 2011 if the FCCB
conversion option is not exercised by IFC. On 9th December 2010, the Company
converted FCCBs equivalent to $ 7.5 million into 1.14 million equity shares of ` 5 each.
For the balance $ 7.5 million the Company has not received any Conversion request from
IFC, so the same has not been provided in the books and has been treated as a contingent
liability (Also refer Note 10 in the Notes forming part of Accounts).

 The estimated customs duty guarantees given by the Company in favour of the Assistant
Collector of Customs, pending receipt of customs duty exemption certificates amounts to
` 99.70 million in FY 2010-11, ` 99.70 million in FY 2009-2010 and ` 99.70 million in
FY 2008-2009.

242
  This is subject to the result of writ petition pending in the Madras High Court with
respect to the Chennai Hospital division ` 73.71 million in FY 2010-11, ` 73.71 million
in FY 2009-2010 and ` 73.71 million in FY 2008-2009.

 Application has been made for duty exemption certificates by the erstwhile Indian
Hospitals Corporation Limited (Pharmaceutical division), which is pending with the
Government. The estimated customs duty is ` 14.83 million in FY 2010-11, ` 14.83
million in FY 2009-2010 and ` 14.83 million in FY 2008-2009.

 The Company has executed bonds in favour of the President of India to the extent of `
11.16 million in FY 2010-11, ` 11.16 million in FY 2009-2010 and ` 11.16 million in FY
2008-2009 pending its application for receipt of customs duty exemption certificates
from the Government.

 Demand raised by Deputy Commissioner of Commercial Taxes (Enforcement) for VAT

payable on the sale of Food and Beverages to the Patients, against which the Company
has preferred an appeal with the Joint Commissioner of Commercial Taxes (Appeals)
Mysore is ` 2.27 million in FY 2010-11, ` 1.27 million in FY 2009-2010 and ` 1.27
million in FY 2008-2009.

 Additional liability for payment of sales tax on work orders pursuant to court proceedings
between contractors and the State governments amounts to ` 0.21 million in FY 2010-11,
` 0.21 million in FY 2009-2010 and ` 0.21 million in FY 2008-2009.

 In respect of the claim for sales tax made by the Commercial Tax Department for ` 1.65
million in FY 2010-11, ` 1.01 million in FY 2009-2010 and ` 1.04 million in FY 2008-
2009 for the various assessment years, the matter is under contest.

Apollo Health and Lifestyle Limited

The Company had received a Show cause notice from VAT authorities claiming that Franchise Services
come under the scope of VAT and issued an Assessment Order for payment of ` 0.31 million. For rest of
India services they assessed CST of ` 12.6 million for the period from 01st April 2005 till 31st March
2008.

The Company followed appeal procedures within Commercial Tax Assessing Authorities and filed a
petition in AP High Court for CST and Court has issued a stay order, and directed AHLL to remit 5.6
million in 30 days.

The Company moved to the Supreme Court and filed a Special Leave Petition (SPL) by challenging the AP
High Court Order. Supreme Court rejected the SPL since the issue is pending with AP High Court.

The Company has remitted ` 5.6 million. As per the AP High Court Order before the due date.

The deputy Commissioner appeals partly allowed the appeal and directed the CTO for the reassessment.

Apollo Munich Health Insurance Company Limited

(` in million)
Particulars As at 31st As at 31st As at 31st
March 2011 March 2010 March 2009
Guarantees given by or on behalf of the 2.10 1.30 1.30
Company

243
 Particulars As at 31st As at 31st As at 31st
March 2011 March 2010 March 2009
Statutory demands / Liabilities in dispute, not 16.66 15.23 -
provided for
Others* 82.70 91.80 -

* Represents amount payable on cancellation of service contract.

Indraprastha Medical Corporation Limited

FY 2010-11

In respect of other matters ` 45.64 million (Previous Year FY 2009-10: Nil)

Apollo Health Street Limited

FY 2010-11

• City of Chicago has raised a claim for US$ 1.86 million (` 83.05 million) [including US$ 0.83
million (` 37.06 million) for legal and consultants fees] against Health Receivables Management
Inc. for indemnification of loss as per the Professional Service Agreement. Management has
challenged the claim raised and strongly believes that the claim is not sustainable and there would
be no liability on this account. However, during the period, on a conservative basis the Group has
made a provision of US$ 0.31 million (` 14.13 million), which is treated as an exceptional item.

• One of the employees of the Company‘s subsidiary, AHSL has filed a Worker‘s compensation
claim against the aforesaid subsidiary. Further, she has also named AHSL as a defendant in a
lawsuit between her and the subsidiary‘s landlord. AHSL may be required under the lease
agreement to indemnify the landlord for the claim. However, the matter is still under discovery
stage and the amount is unascertainable. Management has challenged both these claims raised and
believes that these claims are not sustainable and there would be no material future liability.

• Two employees of the Company‘s Subsidiary, AHSL have filed complaint against the subsidiary
for denying them with opportunity for equal employment and discrimination. Management is
currently investigating the matter and believes that liability, if any, would not be material

* Against the above, ZIPL, has made payments amounting to ` 11.70 million (31st March 2010 `
11.70 million) under protest.

FY -2009-2010

Performance Security issued to Commissionerate of Health Medical Services & Medical

education/ Health and family welfare Department, Government of Gujarat is Rs 0.64 million (FY
2008-09: ` 0.64 million).

St Anthony Health Center (SAHC) has filed claim for US$ 11.80 million (INR 532.65 million)
(FY 2008-09: US$ 11.80 million (INR 601.21million)) against the Zavata Inc for damages
suffered by SAHC for breach of certain terms and condition of the agreement by the Company.
The Company believes as per the agreement claim is capped at maximum liability of US$ 3.2
million (INR 144.45 million) (FY 2008-09: US$ 3.2 million (INR 163.04 million)). Any terms and
conditions of the agreement have not been breached. However, on a conservative basis, a
provision of US$ 1.2 million (FY 2008-09: INR 56.90 million) has been made during the year.

FY -2008-2009

244
 Accordis Incorporated has received a notice dated 6 th April 2009, from Internal Revenue
Services(IRS) which asserts an outstanding tax liability of US$ 2.29 million (INR 116.67 million)
for the tax period ending 31st December 2006. Accordis Incorporated has been acquired by Zavata
Inc commencing September 26, 2006, pursuant to which the employees of the Accordis Inc were
transferred to Zavata Inc payroll and the payroll processing from November 2006 was done
through Zavata Inc payroll service provider and necessary forms and returns for the employees
were filed with the department. Further, the Payroll service provider of Accordis Inc also
erroneously filed the forms and returns with the IRS for the fourth Quarter and for the year ending
2006, based on which the IRS determined the above liability. Zavata Inc has submitted relevant
documents to IRS to support the above facts. The Company has obtained a legal opinion based on
which it believes that the matter would be resolved in its favour and as such no liability in this
regard has been provided.

Family Health Plan Limited

The Commissioner of Customs, Central Excise and service tax – Hyd.-II Commisionerate vide adjudication
order number 08/2008 –Adjn- ST dated 24th March 2008 levied a penalty under section 76 of the Finance
Act towards delayed remittance of Service tax payable (Amount of penalty not quantified). The Company
has preferred appeal against the above order with the Honourable Customs, Excise and Service tax
Appellate Tribunal (South Zonal Bench) – Bangalore and got the appeal admitted and also got the stay
order from the Honourable Court for pre-deposit of penalty. The matter is sub-judice, awaiting final
hearing.

The Company received a Show Cause Notice from the Income Tax Department during the fiscal year 2009-
10 towards payment of TDS on payments made to hospitals on behalf of Insurance Companies along with
the interest for the period of six preceding fiscal years based on the CBDT Circular No.08 of November
2009 and amount not quantified.

The Company has gone on appeal against the Show Cause Notice from the Income Tax Department and
also the CBDT Circular No.08 of November 2009 at Chennai High Court for applicability of TDS on
payments made to hospitals. The same is admitted and granted Stay of Operations of Show Cause Notice
and also that of CBDT Circular.

6. The Parent Company has pledged its 20.77 million shares in Apollo Gleneagles Hospitals Limited as a
security for the loan advanced by IDFC and HDFC to Apollo Gleneagles Hospitals Limited.

7. Capital Work –in-Progress comprises amounts spent on assets under construction and directly related pre-
operative expenses. The amount of interest included in capital work in progress in FY 2010-11 is ` 325.02
million ;FY 2009-10: ` 170.60 million)*.

* Includes Interest on Borrowings Capitalised for the year ended 31st March 2011 is ` 154.42 million
(31st March 2010: ` 198.68 million).

8. Details of utilization of funds received on preferential allotment of equity share warrants. FY 2010-11

` In million
A Funds Received through Preferential Issue
Opening Balance as on 1st April 2010 -
Amount received from the Promoter during the year 685.07
Total Funds Received 685.07
B Particulars of Utilisation
Capital Expenditure & Working Capital 298.02
Balance lying as Investment in mutual funds and fixed
deposits 387.05
Total 685.07

245
9. Capital commitments

FY 2008-09

British American Hospital Enterprise Limited

The Company has contracted a loan of MUR 211 Million (` 352 Million) from Banque Des
Mascareignes for the purchase of additional plant and equipment. As at 31st December, 2008 part
of the loan amounting to MUR 75 Million (` 125 Million) has been disbursed at 11.25% interest
per annum.

The Company has contracted another loan of MUR 100 Million (` 167 Million) from The
Mauritius Leasing Company to finance the purchase of various medical equipments. An amount of
MUR 3.13 million (` 5.22 million) was disbursed as at 31st December 2008. The loan bears
interest rate at 4.5% p.a, repayable over a period 9 years.

10. Arbitration Award

FY 2008-09

The Arbitration award against the Company was enforced by a party in Dubai based on the settlement
between the parties. The claim made by the party in Dubai to the extent of ` 40.19 million was settled
during the year.

11. Details of Secured Loans and Security

a. Indian Bank

Loan from Indian Bank is secured by way of:

Hypothecation to the bank by way of First Charge of inventory of goods, produce and
merchandise, vehicles, plant & machinery, consumer durables which are now in the possession of
the Parent Company and/or to be purchased out of the bank‘s loan, book debts, outstanding
monies, recoverable claims, bills, contracts, engagements, securities, investments and rights.

Pari passu charge on the Fixed Assets of the Company existing and future along with Bank of
India, Canara Bank, Debenture Trustee and International Finance Corporation, Washington.

b. Bank of India

Loan from Bank of India is secured by way of Pari passu charge on the Fixed Assets of the Parent
Company existing and future along with Indian Bank, Canara Bank, Debenture Trustee and
International Finance Corporation, Washington.

c. Canara Bank

The loan is secured by way of pari passu Charge on the Fixed Assets of the Parent Company
existing and future along with Indian Bank, Bank of India, Debenture Trustee and International
Finance Corporation, Washington.

d. Bank of Bahrain and Kuwait BSC.

FY 2008-09:

246
 Loan from Bank of Bahrain and Kuwait BSC has been repaid during the year FY 2008-09.

e. International Finance Corporation (IFC) (External Commercial Borrowings)

The Parent Company has been sanctioned a sum of US$ 35 million from International Finance
Corporation (IFC), Washington by way of External Commercial Borrowings (ECB). The
Company has withdrawn a sum of 15 million US$ as of 31st March, 2010 and the full amount of
US$ 35 million as of 31st March 2011 on the above loan. The ECB loan is secured by way of pari
passu First ranking Charge on the entire movable plant and machinery and equipment including all
the spare parts and all other fixed assets such as furniture, fixtures, fittings, installations, vehicles,
office equipments, computers and all other fixed assets owned by the Company (excluding
immovable property), both present and future belonging or hereafter belonging to or at the
disposal of the Company. The Loan is repayable in 15 equal Semi-annual Instalments starting
from 15th September 2012.

Pari passu charge in favour of IFC over the immovable assets of the Company; such Pari passu
charge ensuring atleast a cover of 1.25 times the value of outstanding principal amount of the loan.

f. 10.3% Non Convertible Debentures

FY 2010-11

The Parent Company has issued 500 Nos. 10.3% Non Convertible Debentures of ` 1 million each
on 28th December 2010 and 500 Nos. 10.3% Non Convertible Debentures of ` 1 million each on
21st March 2011 to Life Insurance Corporation of India.

The Debentures are secured by way of pari passu Charge on the Fixed Assets of the Company
existing and future along with Indian Bank, Bank of India, Canara Bank and International Finance
Corporation, Washington; such Pari passu charge ensuring atleast a cover of 1.25 times the value
of outstanding principal amount of the loan.

g. Cash Credit facilities from Banks are secured by hypothecation of inventories and book debts, and
a second charge on fixed assets of the Parent Company.

h. The Parent Company‘s Fixed Deposit Receipts amounting to ` 45.95 million in FY 2010-11, `
24.44 million in FY 2009-2010 and ` 21.54 million in FY 2008-2009 are under lien with the
bankers for obtaining Letters of credit and Bank Guarantee.

Apollo Health Street Limited

Term loan as at 31st March 2011 is secured by following assets of the entire group:

(a) all equity interests held and/or beneficially owned by the Group member in any member of the
Group from time to time, provided that no such Group member shall be obligated to pledge or
create security over more than 65% of the equity interests (or, if a lesser amount, 65% of the
voting equity interests) in any restricted foreign subsidiary;

(b) all financial indebtedness owing to the Group from any obligor, any member of the Group or any
Affiliate thereof from time to time;

(c) all of the Group's rights and interests in any account from time to time (and any balance standing
to the credit thereof from time to time), and any cash and cash equivalents from time to time;

(d) all of the Group's rights and interests in any real property from time to time;

(e) all of the Group's rights and interests in any tangible movable property from time to time;

247
 (f) all of the Group's rights and interests in any investment interests (other than those referred to in
paragraph (a) above) or any goodwill of or uncalled capital of the Group from time to time;

(g) all of the Group's rights and interests in any intellectual property (including, without limitation,
any registered intellectual property, and any intellectual property pending registration) from time
to time;

(h) all of the Group's rights and interests in any book and/or other debts and/or monetary claims and
any proceeds thereof from time to time;

(i) all of the Group's rights and interests in any insurance and/or insurance policy from time to time;
and

(j) by way of a security assignment, floating charge or other appropriate means of security) all of the
Group's other assets and undertakings (including, without limitation, inventory) from time to time;

1. The Parent Company has issued Foreign Currency Convertible Bonds (FCCBs) to International Finance
Corporation (IFC), Washington, to the value of US$ 15 million on 28th January 2010. These bonds are
convertible into Equity Shares based on the rupee dollar parity exchange rate at any time before the end of
Final Repayment date. On 9th December 2010, the Company converted FCCBs equivalent to $ 7.5 million
into 1.14 million equity shares of ` 5 each. The underlying number of Equity shares as on 31st March 2011
is 1.10 million Equity shares is based on the exchange rate ($1 = ` 44.65) and if the option is not exercised,
the Loan shall be repayable in full in two approximately equal semi-annual instalments commencing from
the Final Repayment Date by way of redemption of such number of FCCBs in respect of which IFC has not
exercised its Conversion option.

2. Employee Benefits

The following Companies in the group have complied with Accounting Standard 15 ‗Employee Benefit‘ as
notified under the Companies (Accounting Standards) Rules, 2006.

Apollo Hospitals Enterprise Limited

Samudra Healthcare Enterprises Limited

Apollo Health and Lifestyle Limited

Apollo Lavasa Health Corporation Limited

Apollo Gleneagles Hospital Limited

Apollo Gleneagles Pet-Ct Private Limited

Quintiles Phase One Clinical Trials India Private Limited

Apollo Hospitals International Limited

Apollo Munich Health Insurance Company Limited

Apollo Health Street Limited

Family Health Plan (TPA) Limited

248
 Indraprastha Medical Corporation Limited

In consideration of Accounting Standard Interpretation (ASI) 15 ―Notes to the Consolidated Financial

Statements‖ the information relating to the above given in the separate financial statements of Parent
Company or other companies in the Group is not disclosed.

Apollo Hospitals Enterprise Limited

Particulars as at 31st March as at 31st March as at 31st March

2011 2010 2009
Gratuity Earned Gratuity Earned Gratuity Earned
Leave Leave Leave
Assumptions
Discount Rate 8.00% 8.00% 8.00% 8.00% 7.50% 7.50%
Rate of Increase in Salaries 6.00% 8.00% 6.00% 8.00% 7.50% 11.00%
Mortality pre- retirement LIC 1994-96 Ultimate
Disability Nil Nil Nil Nil Nil Nil
Attrition 23.00% 23.00% 23.00% 23.00% 23.00% 23.00%
Estimated rate of return on plan 8.00% 8.00% 8.00% 8.00% 7.50% 7.50%
assets
Investment details on plan assets 100% of the plan Assets are invested on debt instruments

` in million
Particulars as at 31st March 2011 as at 31st March 2010 as at 31st March 2009
Gratuity Earned Total Gratuity Earned Total Gratuit Earne Total
Leave Leave y d
Leave
Present Value of 150.26 91.06 241.32 165.91 121.99 287.90 171.28 125.00 296.28
Obligation as on 1st
April, 2010
Interest Cost 11.96 7.12 19.08 13.18 9.62 22.80 12.71 9.24 21.95
Current Service 20.24 10.64 30.88 18.64 9.45 28.09 12.66 12.63 25.29
Cost
Benefit Paid (1.52) (4.22) (5.74) (2.25) (3.56) (5.81) (3.52) (3.65) (7.17)
Actuarial (gain) / 6.65 (6.55) 0.10 (45.22) (46.44) (91.66) (27.22) (21.23) (48.45)
Loss on obligation
Present Value of 187.59 98.05 285.64 150.26 91.06 241.32 165.91 121.99 287.90
Obligation as on
31st March, 2011

Change in plan
assets
Fair Value of Plan 139.50 74.39 213.89 118.29 61.12 179.41 116.83 71.45 188.28
Assets as on 1st
April, 2010
Expected return on 12.52 5.98 18.50 10.31 5.42 15.73 8.82 4.97 13.79
plan assets
Contributions 30.00 40.00 70.00 30.00 - 30.00 - - -
Benefits paid (1.52) (4.22) (5.74) (2.25) - (2.25) (3.52) (3.65) (7.17)
Actuarial gain / (6.95) (41.00) (47.95) (16.85) 7.85 (9.00) (3.84) (11.65) (15.49)
(loss)
Fair Value of Plan 173.55 75.15 248.70 139.50 74.39 213.89 118.29 61.12 179.41
Assets as on 31st
March, 2011

Reconciliation of
present value of the
obligation and the
fair value of the
plan assets

249
 Particulars as at 31st March 2011 as at 31st March 2010 as at 31st March 2009
Gratuity Earned Total Gratuity Earned Total Gratuit Earne Total
Leave Leave y d
Leave
Fair value of the 187.59 98.05 285.64 150.26 91.06 241.32 165.91 121.99 287.90
defined benefit
obligation
Fair value of plan (173.55) (75.15) (248.70 (139.50) (74.39) (213.89) (118.29) (61.12) (179.41)
assets at the end of )
the year
Liability / (assets) 14.04 22.90 36.94 10.76 16.67 27.43 47.62 60.87 108.49
Unrecognised past - - - - - - - - -
service cost
Liability / (assets) 14.04 22.90 36.94 10.76 16.67 27.43 47.62 60.87 108.49
recognised in the
balance sheet

Gratuity & Leave

Encashment cost
for the period
Service Cost 20.24 10.64 30.88 18.64 9.45 28.09 12.66 12.63 25.29
Interest Cost 11.96 7.12 19.08 13.18 9.62 22.80 12.71 9.24 21.95
Expected return on (12.52) (5.98) (18.50) (10.31) (5.42) (15.73) (8.82) (4.97) (13.79)
plan assets
Actuarial (gain) / 13.60 34.46 48.06 (28.37) (54.29) (82.66) (23.39) (9.58) (32.96)
loss
Past Service Cost - - - 54.45 49.99 104.44 - - -
Net gratuity cost 33.28 46.24 79.52 47.59 9.35 56.94 (6.84) 7.32 0.48
Investment details
of plan assets
100% of the plan
assets are invested
in debt instruments
Actual return on 5.57 (35.02) (29.45) (6.54) 13.27 6.73 4.98 (6.68) (1.70)
plan assets

Alliance Medicorp (India) Limited

The Company is not statutorily liable for paying any Long term employee benefits.

Alliance Dental Care Private Limited

Contribution to Gratuity Funds: During the year, the Company has recognized an amount of ` 0.30 million
in the Profit and Loss Account based on 15 days salary for every completed year of service of the employee
with the Company based on actuarial valuation provided by Life Insurance Corporation of India. The
defined benefit obligations recognized at the Balance Sheet amounts to ` 066 million.

14. Foreign Exchange Gain/Loss:

Apollo Hospitals Enterprise Limited

a) The Foreign Exchange loss (the difference between the spot rates on the date of the transactions,
and the actual rates at which the transactions are settled) is amounting to ` 8.87 million in FY
2010-11; ` 15.05 million in FY 2009-10; ` 31.09 million in FY 2008-09.

b) The Foreign Exchange gain arising out of the restatement of the monetary items as on 31 st March
2011 is ` 14.51 million; as on 31st March 2010: ` 22.20 million. The above Exchange differences
have been adjusted to the Profit and Loss Account, which is in conformity to the Accounting
Standard 11 on ‗Accounting for the effects of changes in Foreign Exchange rates‘ as notified
under the Companies (Accounting Standards) Rules, 2006.

250
15. Leases

Finance Lease:

a. Apollo Health Street Limited

Fixed assets include vehicles, computers and computer equipment, office equipment, furniture and
fixtures and leasehold improvements obtained on finance lease arrangements. The finance lease
term is for a period of eighteen to seventy two months. There is no escalation clause in any of the
lease agreements. Some leases have purchase and renewal clauses. There are no restrictions
imposed by lease arrangements. The minimum lease payments due are as under:

Particulars 31-Mar-11 31-Mar-10 31-Mar-09

Total minimum lease payments at the year end 10.06 25.70 41.12
Less: Unearned finance income 0.38 2.66 5.62
Present value of total minimum lease payments 9.67 23.04 34.99
[Rate of Interest 0% to:
11.49% for FY 2010-11
13.47% for FY 2008-09 & FY 2009-10]
Not later than one year [Present value 9.84 14.63 16.38
` 9.45 million as on 31st March 2011,
` 12.55 million as on 31st March 2010 and
` 12.92 million as on 31st March 2009 respectively]
Later than one year but not later than 5 years 0.22 11.07 24.75
[Present value ` 0.22 million as on 31st March 2011,
` 10.49 million as on 31st March 2010 and
` 22.07 million as on 31st March 2009 respectively]

b. British American Hospitals Enterprise Limited.

FY 2009-10

Particulars Payments Interest Principal Payments Interest Principal

31.12.2009 31.12.2009 31.12.2009 31.12.2008 31.12.2008 31.12.2008
Less than MUR 23.15 14.66 8.49 0.23 0.10 0.13
one year ` 0.38 0.17 0.21 0.38 0.17 0.21
Between MUR 0.90 0.09 0.70 0.90 0.09 0.70
one and five ` 1.50 0.15 1.17 1.50 0.15 1.17
years
More than MUR 55.92 7.47 48.46 - - -
five years ` 89.71 11.98 77.73 - - -

Non- cancellable Operating Leases:

Lease payments recognised in the Profit and Loss Account is ` 797.45 million in FY 2010-11; `
679.18 million in FY 2009-10 and ` 736.36 million in FY 2008-09).

Minimum Lease Payments 31st March 31st March 31st March

2011 2010 2009
(`) (`) (`)
Not later than one year 565.68 611.17 453.89
Later than one year and not 1,226.16 1,206.97 1,068.89
later than five years

251
 Minimum Lease Payments 31st March 31st March 31st March
2011 2010 2009
(`) (`) (`)
Later than five years 1,734.52 1,821.60 1,522.69

Lease agreements are renewable for further period or periods on terms and conditions mutually
agreed between the lessor and lessee.

Variations/Escalation clauses in lease rentals are made as per mutually agreed terms and
conditions by the lessor and lessee.

Apollo Gleneagles Hospitals Limited

The cost of leasehold land has not been amortised over the period of lease is intended to be
renewed on the expiry of the stipulated period.

The Company has certain cancellable operating lease arrangements for residential accommodation
and use of certain medical equipment with tenure extending upto one year. Form of certain lease
arrangements include option for renewal on specified terms and conditions and payment of
security deposit etc. Expenditure incurred on account of operating lease rentals during the year and
recognised in the profit & loss account amounts to ` 9.14 million in FY 2010-11; ` 12.34 million
in FY 2009-10, ` 8.54 million in FY 2008-09.

16. Preferential Issue of Warrants

FY 2010-11

The Parent Company has issued and allotted 1.54 million equity warrants convertible into equity shares of
nominal value of ` 10/- each at premium of ` 761.76 per share on 12th June 2010 to Dr. Prathap C Reddy,
one of the promoters of the Company on a preferential allotment basis. The issue price is at minimum price
of Rs 771.76 fixed in accordance with the guidelines for preferential issues of the Securities Exchange
Board Of India (Issue of Capital and Disclosure Requirements) Regulations 2009. Accordingly the
promoter has paid 25% of the consideration @ 771.76 per warrant on the date of allotment. The Balance
75% is payable on the exercise of option for conversion within 18 months of date of allotment. Consequent
to the splitting of one ` 10 equity share into two ` 5 equity shares the warrants outstanding as on 31st
March 2011 is 3.09 million.

The Parent Company has issued and allotted 3.27 million equity warrants convertible into equity shares of
nominal value of ` 5/- each at premium of ` 467.46 per share on 5th February 2011 to Dr. Prathap C
Reddy, one of the promoters of the Company on a preferential allotment basis. The issue price is at
minimum price of ` 472.46 fixed in accordance with the guidelines for preferential issues of the Securities
Exchange Board Of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. Accordingly
the promoter have paid 25% of the consideration @ 472.46 per warrant on the date of allotment. The
Balance 75% is payable on the exercise of option for conversion within 18 months of date of allotment.

FY 2009-10

The 1.54 million Share warrants issued to Dr. Prathap C. Reddy on 19th October 2007 was converted into
1.54 million Equity shares of ` 10/-each fully paid up at a price of ` 497.69 per Equity share including
premium of ` 487.69/- per Equity Share on 18th April 2009.

FY 2008-09

The 1.55 million equity share warrants issued to Ms. Sangita Reddy during the year 2006-08 at the
minimum price of ` 442.55/-as fixed in accordance with the guidelines for preferential issues of the

252
 Securities and Exchange board of India (Disclosure and Investor Protection) Guidelines 2000 has been
converted into Equity shares of ` 10/- each fully paid on 22nd August 2008.

17. Issue of Global Depository Receipts

The Parent Company had issued 9 million Global Depository Receipts with two way fungibilty during the
year 2005-06. Total GDR‘s converted into underlying Equity Shares for the year ended on 31st March 2011
is 3.13 million, on 31st March 2010 is 0.02 million and on 31 st March 2009 is 0.17 million. The total GDR‘s
converted upto 31st March 2011 is 7.46 million, upto 31st March 2010 is 4.33 million and upto 31st March
2009 is 4.31 million. Consequent to the splitting of shares into ` 5 shares the total converted Global
Depository Receipts converted to shares as on 31st March, 2011 is 14.93 million.

18. Non-Convertible Debentures

FY 2008-09

The Parent Company has invested in Non-Convertible Debentures of Citicorp Finance (India) Limited.
These Debentures are secured by way of mortgage and charge over movable financial assets and
immovable assets as identified by the Company.

19. Impairment

Apollo Hospitals Enterprise Limited

During the year 2002-03, on a review of fixed assets, certain selected medical equipments were identified
and impaired. For the current year, on a review as required by Accounting Standard 28 ‗ Impairment of
Assets‘, the management is of the opinion that no impairment loss or reversal of impairment loss is
required, as conditions of impairment do not exist.

Apollo Gleneagles Hospital Limited

The Company runs a diagnostic Centre (the Centre), independent of its Hospital and therefore, both the
Hospital as well as the Centre has been considered by the Management as two separate Cash Generating
Units (CGUs) for the purpose of determination of impairment in value of fixed assets. As required by
Accounting Standard 28 on ‗ Impairment of Assets‘ the Company has carried out an assessment at the
Balance Sheet date for ascertaining indications ,if any, of further impairment loss/ reversal of impairment
loss recognized in earlier years. In view of the Management no such indications exist as on 31st March
2011.

20. Directors travelling included in travelling and conveyance amounts to ` 20.54 million for FY 2010-11, `
6.58 million for FY 2009-10 and ` 8.39 million for FY 2008-09.

21. Deferred Tax

The deferred tax for the year recognized in the Profit and Loss Account of the group comprises:

(` In million)
Particulars 2010-11 2009-10 2008-09
Deferred Tax Liability for the year 328.32 128.62 53.99
Deferred Tax Asset for the year 22.21 35.91 67.69

The accumulated deferred tax liability / (asset) of the group comprises:

(` In million)
Particulars 2010-11 2009-10 2008-09

253
 Particulars 2010-11 2009-10 2008-09
On account of depreciation 1,014.91 760.07 401.63
On account of Deferred Revenue Expenditure (69.63) (39.05) (1.97)
(Deferred Tax Asset)
On account of unabsorbed losses and depreciation (205.98) (185.00) (109.36)
(Deferred Tax Asset)
On account of 35AD 195.52 - -

(Deferred Tax Asset/Liabilities have not been considered with respect to Associates)

Alliance Medicorp (India) Limited

The Net Deferred Tax Asset, on account of Carry forward losses and Unabsorbed Depreciation is not
recognized in the books of accounts, on prudence.

Apollo Munich Health Insurance Company Limited

(Formerly Apollo DKV Insurance Company Limited)

The Company has carried out its deferred tax, computation in accordance with the mandatory Accounting
Standard, AS-22 – Taxes on Income issued by the Institute of Chartered Accountants of India. There has
been a net deferred tax asset amounting to ` 877.83 million for FY 2010-11, ` 639.47 million for FY 2009-
10 and ` 348.20 million for FY 2008-09 on account of accumulated losses. However, as a principle of
prudence, the Company has not recognized deferred tax assets in the financial statements for the year ended
31st March 2011.

Apollo Gleneagles Hospital Limited

FY 2009-10 and FY 2008-09

Company has significant amount of carried forward unabsorbed losses and depreciation under the Income
Tax Act, 1961. However, as a matter of prudence net deferred tax assets of ` 68.66 million (FY 2008-09: `
74.69 million) has not been recognized in the accounts.

22. External Commercial Borrowings

Apollo Hospitals Enterprise Limited

FY 2009-10

International Finance Corporation has granted a External Commercial Borrowings of US$ 35 million
during the FY 2009-10. During the year 09-10 the Company has drawn a sum of US$15 million of the
sanctioned amount of US$ 35 million and the Company had entered into a forward contract with HDFC
Bank for draw down and hedged the loan for interest rate and foreign currency fluctuation risk. The tenure
of this derivative contract matches with the tenure of the loan outstanding as of 31st March 2010. Gain/loss
on these are accounted for in the Profit and Loss Account is ` 31.35 million (as on 31st March 2009: Nil).

FY 2010-11

For the year ended 31st March 2011, the Company has drawn full US$ 35 million of the sanctioned amount
of US$ 35 million and the Company has entered into Currency Cum Interest Rate Swap (CCIRS) with
HDFC Bank in India rupee and hedged the loan for interest rate and foreign currency fluctuation risk. The
derivative contract is secured by a second charge on the immovable assets of the Company to the extent of
` 110Crores. The tenure of this derivative contract matches with the tenure of the loan outstanding as on
31st March 2011.

Gain/loss on Forward Contract during the year ended 31st March 2011 accounted for in the Profit and Loss

254
 Account is ` 11.77 million (` 31.35 million during the year ended 31st March 2010).

23. Apollo Health Street Limited

Reversal of Impairment losses

FY 2010-11

Impairment losses

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of
impairment based on the internal/external factors. An impairment loss is recognised wherever the carrying
amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset‘s net
selling price and its value in use. In assessing value in use, the estimated future cash flows are discounted to
their present value at the weighted average cost of capital. After impairment, depreciation is provided on
the revised carrying amount of the asset over its remaining useful life.

A previously recognised impairment loss is increased or reversed depending on changes in circumstances.

However the carrying value after reversal is not increased beyond the carrying value that would have
prevailed by charging usual depreciation if there was no impairment.

FY 2009-10

Impairment losses

During the year 09-10, Apollo Health Street Limited has resumed the construction work at the land and
project officer of SIPCOT has intimated general manager of SIPCOT that construction activity is in
progress and the Apollo Health Street Limited would commence operations by April 2010. Since the
conditions giving rise to impairment loss no longer exists, the entire impairment loss recognised during the
previous year amounting to ` 48.23 million has been reversed and credited to profit and loss account during
the current year.

FY 2008-09

a. Impairment losses

During the year, Apollo Health Street Limited had recognised impairment loss in respect of capital
expenditure incurred at Chennai project. The impairment loss was recognised as the commercial
activity as required by State Industrial promotion corporation of Tamil Nadu (SIPCOT)
(Government authority) was not commenced by June 2008.

b. Initial Public Offering

The Company has incurred certain expenditure during the current year and previous year on Initial
Public Offering (IPO) process undertaken in India. The Company filed Draft Red Herring
Prospectus with stock exchanges; however IPO was subsequently withdrawn due to poor stock
market conditions. Based on legal opinion, the Company has adjusted all expenses other than
filing fees incurred in connection with proposed issue against securities premium account.

24. Sundry Debtors, Loans and Advances:

Confirmations of balances from Debtors, Creditors and for Deposits are yet to be received in a few cases
though the Group has sent letters of confirmation to them. The balances adopted are as appearing in the
books of accounts of the Group.

Sundry Debtors represent the debt outstanding on sale of pharmaceutical products, hospital services and

255
 project consultancy fees and is considered good. The Group holds no other securities other than the
personal security of the debtors.

Advances and deposits represent the advances recoverable in cash or in kind or for value to be realised. The
amounts of these advances and deposits are considered good for which the Group holds no security other
than the personal security of the debtors.

25. Prior period items

Apollo Health Street Limited

FY 2009-10

The erstwhile partners of Armanti Financial Services LLC sold their entire stake to Apollo Group effective
August 1, 2006. The terms of the securities purchase agreement dated July 31, 2006 (including
supplemental agreements thereto) required the acquirer to pay contingent consideration up to US$ 15
million. During the FY 2008-09, the Company vide an amendment dated September 14, 2007 determined
the final additional consideration to be US$ 11.17 million (` 569.37 million). The amount has been
recorded as goodwill. A deferred payment liability of US$ 2.33 million (` 105.33 million) has been
converted into unsecured loan during this year. Per terms of agreement, the erstwhile partners have an
option to demand payment of loan including interest or convert it into equity shares of Apollo Heath Street
Limited based on an agreed formula upon occurrence of triggering event. Triggering event is earlier of
September 15, 2015, date of change of control of AHSL, date of repayment/refinancing of term loan or
public issue of securities by Apollo Heath Street Limited.

Imperial Hospital & Research Centre Limited:-FY-2010-11

The following expenses/items of prior periods totalling to ` 0.34 million have been debited to Profit and
Loss Account.

(` In million)
S.No. Nature of Expense/ Item Amount(`) Account head Debited
1 Laboratory material 0.09 Material
2 Professional Charges 0.01 Property Establishment
3 Repairs and maintenance 0.01 Engineering
4 Standees 0.01 Material
5 Linen & Uniform 0.21 Material
Grand total 0.34

26. Power Generation

The Electricity charges incurred in respect of the Parent Company is net of ` 6.94 million in FY 2010-
2011; ` 7.47 million in FY 2009-10 and ` 8.08 million in FY 2008-09 [units qualified KWH – 1.39 million
in FY 2010-2011; 1.59 million in FY 2009-10 and 1.61 million in FY 2008-09, being the rebate received
from TNEB for Wind Electric Generators owned & run by the Company.

27. The Parent Company has been exempted by the Ministry of Corporate Affairs, vide Order No: 46/115/2011
for 2011, No:46/66/2010 for 2010, 46/69/2009 for 2009 CL III, from publishing the quantitative particulars
as per Para 3(ii)d of Part II of Schedule VI of the Companies Act, 1956 with respect to the total value of
turnover, purchases, goods traded, sales, consumption of raw materials etc., for each year and hence the
same is not disclosed for this fiscal year.

In the case of Indraprastha Medical Corporation Limited, materials consumed are of varied nature and
include items of food, beverages, medical consumables etc., Therefore it is not feasible to give the details
as required under part II of Schedule VI to the Companies Act, 1956.

256
28. In the process of acquiring Apollo Gleneagles Hospitals Limited (AGHL) in Kolkata, Apollo Hospitals
Enterprise Limited had initially invested ` 30 million [` 5 million towards equity and ` 25 million to
discharge other liabilities of AGHL, erstwhile Duncan Gleneagles Hospital Limited (DGHL)] to acquire
50.26% holding in the DGHL (subsequently reduced to 49%, now increased to 50%). AGHL assigned an
unsecured debt of ` 176 million existing in its books to Apollo Hospitals Enterprise Limited. As a measure
of prudence, this amount is not recognized as an advance or investment in the books of Apollo Hospitals
Enterprise Limited currently and will be accounted for as and when the amount(s) are received.

29. General Information

a) Apollo Hospitals Enterprise Limited

(i) The hospital collections of the Company are net of discounts of ` 37.09 million for FY-
2010-11, ` 60 million for FY-2009-10 and ` 20.52 million for FY-2008-09.

(ii) On review of the operations of setting up the Hospital in Noida, the Company has re-
assigned the lease agreement between itself and the lessor to its associate, Indraprastha
Medical Corporation Limited by extinguishing its rights and privileges in the original
lease deed dated 27th October 2001.

(iii) Unrealised amounts on project development and pre-operative project expenses incurred
at Bilaspur Hospital amounting to ` 56.62 million are included in advances and deposits
account. The above expenses incurred on project will be amortised over the balance lease
period of 9 years. The balance yet to be amortised as on 31 st March 2011 is ` 28.31
million ` 31.46 million as on 31st March 2010 and ` 34.60 million as on 31st March 2009

b) In case of Unique Home Healthcare Limited in FY-2009-10 and FY-2008-09 and in case of
Western Hospitals Corporation Private Limited in FY-2009-10 the Company is still in the process
of appointing the whole time Managing Director as per sec. 269 of the Companies Act, 1956.

c) Pinakini Hospitals Limited-FY 2009-10

During the year the Company has settled a claim of APIDC towards the overdue interest of ` 5
million on the term loans sanctioned and fully repaid under One Time Settlement Scheme. The
entire amount of ` 5 million has been written off as expense as the same was not accounted in the
earlier years.

d) Western Hospitals Corporation Private Limited-FY-2008-09

The Company was incorporated on 16th October 2006. The Company has not commenced its
commercial operations as at 31st March 2009. Hence no profit & loss account has been prepared.
Instead a schedule of preoperative expenses has been prepared.

Joint Venture with Birla Wellness and Healthcare Private Limited

On 21st January 2008, the Company has entered into a 50:50 Joint Venture agreement with Birla
Wellness and Healthcare Private Limited to set up a joint venture Company, namely, Ashok Birla
Apollo Hospital Private Limited, for setting up a super specialty hospital facility with a capacity of
200 beds in Thane, Maharashtra. In this regard, as per the JV agreement, the Company has to
initially contribute an amount of ` 100 million towards the share capital. No amounts were
contributed by the Company to this proposed joint venture as at 31 st March 2009. However,
subsequent to the year end, an amount of ` 5 million has been contributed towards Share capital
during April 2009.

257
e) Apollo Cosmetic Surgical Centre Private Limited-FY 2010-11

Number of employees of the Company who are in receipt of or entitled to received emoluments
amounting in the aggregate to ` 0.20 million or more per month or ` 2.40 million per annum
including perquisites is NIL.

f) A.B. Medical Centers Limited -FY 2010-11

As the Company‘s main business is running of hospital the provisions regarding disclosure of
information on Licensed Capacity, Installed capacity, Production and Sales particulars do not
applicable.

The Share capital includes a sum of ` 0.90 million allotted for consideration other than cash.

g) g) Apollo Gleneagles Hospital Limited

In view of the nature of activities carried out by the Company, it is not practicable to furnish
quantitative and other details other than those given above in respect of consumption, purchase,
sales as required in terms of Para 3, 4C and 4D of Part II of Schedule VI of the Companies Act,
1956.

The Company runs a diagnostic centre (the centre) independent of its hospital and therefore both
the hospital as well as the centre has been considered by the management as two separate cash
generating units (CGUs) for the purpose of determination of impairment in value of fixed assets.
As required by Accounting Standard 28 on ‗Impairment of Assets‘, the Company has carried out
an assessment at the Balance Sheet date for ascertaining indications, if any, of other impairment
loss/reversal of impairment loss recognised in earlier years. In view of the management no such
indications exist as on each year

Buildings of ` 18.93 million (Net) in FY-2010-11; and ` 19.17 million (Net) in FY-2009-10; and
` 19.59 million (Net) in FY-2008-09 pertaining to diagnostic center at Gariahat include the cost of
land pending allocation ascertainment of cost attributable there against.

In the opinion of the Board of Directors, unless otherwise stated, the current assets and loans and
advances have the value at least equal to the amount at which these are stated in the balance sheet,
if realized in the ordinary course of the business, and adequate provisions for all known liabilities
have been made and are not in excess of the amount reasonably required in this respect.

Certain debit and credit balances including debtors, creditors including deposits and loans and
advances etc. are subject to confirmation and reconciliation and consequential adjustments, if any,
arising therefrom.

Plant and Machinery includes ` 2.61 million being contribution towards cost of service line
(owned by electricity service provider), which is amortised on straight line basis over a period of
36 months.

The Company has substantial accumulated losses at the year end. However these accounts have
been prepared on the assumption that it will be able to continue as a going concern considering the
financial and technical support from its promoters, expected growth in its performance and
profitability in future years.

h) Quintiles Phase One Clinical Trials India Private Limited-FY 2010-11

The Company is in process of appointing whole-time secretary as required under section 383A of
the Companies Act, 1956.

258
i) Apollo Health & Lifestyle Limited-FY 2008-09

Contrary to Clause (A) of policy E (Apollo Health & Lifestyle Limited) regarding 100%
recognition of license fees on operational clinics, the Company in the year under review has
recognized an income of ` 2.03 million from unexpired obligations account. This amount being
part of non refundable license fee for non-operational clinics now being time barred is recognized
as income.

j) Apollo Munich Health Insurance Company Limited

(i) Encumbrances

The Company has all the assets within India. All the assets of the Company are free from
any encumbrances except deposits in banks amounting to Rs 1.30 million.

(ii) Commitments made and outstanding for:

(` In million)
Particulars As at 31st As at 31st As at 31st
March 2011 March 2010 March 2009
Loans Nil Nil Nil
Investments Nil Nil Nil
Fixed Assets 3.92 2.93 11.58

(iii) Claims, less reinsurance paid to claimants:

(` In million)
Class of In India Outside India
Business As at 31 st
As at As at As at 31st As at 31st As at 31st
March 31st 31st March March March
2011 March March 2011 2010 2009
2010 2009
Miscellaneous 828.75 497.64 166.64 3.33 3.46 0.36

(iv) Age-wise breakup of claims outstanding:

act(` In million)
Class of Outstanding for more than six Outstanding for six months or
Business months less
As at As at As at As at As at As at
31st 31st 31st 31st 31st 31st
March March March March March March
2011 2010 2009 2011 2010 2009
Miscellaneou 10.14 1.15 0.14 109.50 104.30 50.12
s

(v) Claims Settled and remaining unpaid for a period of more than six months:

(` In million)
Class of Business As at 31st As at 31st March As at 31st March
March 2011 2010 2009
Miscellaneous Nil Nil Nil

259
(vi) Premium less reinsurance written during the year:

(` In million)
Class of Outstanding for more than six Outstanding for six months or
Business months less
st st
As at 31 As at As at As at 31 As at As at
March 31st 31st March 31st 31st
2011 March March 2011 March March
2010 2009 2010 2009
Miscellaneous 2,286.66 992.43 414.25 nil nil nil

No premium income is recognized on ―varying risk pattern‖ basis.

(vii) Extent of risk retained and reinsured:

(` In million)
Class of Risk Retained Risk Reinsured
Business As at As at As at As at As at As at
31st 31st 31st 31st 31st 31st
March March March March March March
2011 2010 2009 2011 2010 2009
Miscellaneous 81% 87% 85% 19% 13% 15%

(viii) Value of Contracts in relation to Investments:

(` In million)
Particulars As at 31st March As at 31st As at 31st
2011 March 2010 March 2009
(`) (`) (`)
Purchase where deliveries Nil Nil 20.00
are pending
Sales where payments are Nil Nil Nil
overdue

(ix) All the investments held by the Company are performing assets.

(x) The Company does not have any investment property.

(xi) The investments as at period-ending 31st March 2011, 31st March 2010 and 31st March
2009 have not been allocated to Policy Holders & Shareholders accounts since the same
are not earmarked separately.

(xii) The historical cost of investments in mutual funds which have been valued on fair value
basis is ` 164.19 million for FY-2011, ` 92.62 million for FY-2010, 47.42 million for
FY-2009.

(xiii) Investments made pursuant to section 7 of Insurance Act, 1938, are as follows-FY 2010-
11 & FY 2009-10

(` In million)
Particulars As at 31st March As at 31st March
2011 2010
6.25% GOI CDSS 02-01-2018 74.13 73.27
6.01% GOI CDSS 25-03-2028 5.31 5.24

260
 Particulars As at 31st March As at 31st March
2011 2010
95% GOI CDSS 28-08-2032 19.46 19.42
8.20% GOI CDSS 15-02-2022 2.01 2.01
8.33% GOI CDSS 07-06-2036 1.00 1.00
Total 101.89 100.93

These investments are in the constituent subsidiary general ledger account with Axis
Bank Limited.

(xiv) Expenses relating to outsourcing, business development and marketing support are given
below:

(` In million)
Operating expenses Year ended 31st Year ended 31st Year ended 31st
March 2011 March 2010 March 2009
Outsourcing Expenses 197.16 134.99 86.25
Marketing Support 188.94 171.95 101.52
Business Promotion 65.12 83.96 20.11

(xv) Sector wise business

Disclosure of Sector wise business based on gross direct written premium (GWP) is as
under:

(` In million)
Business Year ended 31st March 2011 Year ended 31st March 2010 Year ended 31st March 2009
Sector GWP No. of % of GWP No. of % of GWP No. of % of
(` ) Lives GWP (` ) Lives GWP (` ) Lives GWP
Rural 154.43 14,715 5.46% 45.36 46,441 3.96% 0.29 1,041 0.06%
Social 5.07 27,893 0.18% 14.81 36,344 1.29% 0.30 207 0.06%
Urban 2,667.35 1,054,183 94.36% 1,086.43 484,733 94.75% 480.86 516,838 99.88%

(xvi) Disclosure of Fire and Marine Revenue accounts:

As the Company operates in single business segment viz. Miscellaneous Insurance

Business, the reporting requirements as prescribed by IRDA with respect to presentation
of Fire and Marine Insurance revenue accounts are not applicable.

(xvii) Summary of Financial Statements is provided as under:

(` In million)
S. Particulars 2010-2011 2009-2010 2008-2009
No.

Operating Results:

1 Gross Premium Written 2,834.63 1,146.69 489.79

- - -
2 Net Earned Premium Income 1,487.39 699.58 216.39
- - -
3 Income from Investments (net) 66.96 30.02 9.62

4 Other Income - - -
- - -

261
 S. Particulars 2010-2011 2009-2010 2008-2009
No.
5 Total Income 1,554.35 729.59 226.01

6 Commission (Net of Reinsurance) 1,777.42 105.64 35.90

7 Brokerage 53.42 52.16 33.65

8 Operating Expenses 1,332.59 983.04 723.78

9 Claims Incurred 921.54 597.36 247.29

10 Operating Profit/Loss (877.20) (956.44) (780.96)

11 Total Income under Shareholders 82.87 59.46 62.72

Account

12 Profit /(Loss) before tax (794.33) (896.98) (718.24)

13 Provision for Tax (0.08) - (3.59)

14 Profit/(Loss) after tax (794.41) (896.98) 721.83

Miscellaneous:

Policy holders‘ Account: Not applicable being Non – Life Insurance

15 Total Fund Co.
Total Investments
Yield on investments

16 Shareholders‘ Account: Not applicable being Non – Life Insurance

Total Fund Co.
Total Investments
Yield on investments

17 Paid Up Equity Capital 1,962.00 1,293.00 1,073.70

- - -
18 Net Worth 1,050.70 895.44 960.44
- - -
19 Total Assets 3,600.01 1,914.21 1,453.94
- - -
20 Yield on total investments 0.08 0.09 0.11

21 Earnings Per Share (`) (5.66) (8.11) (7.09)

22 Book value per Share(`) 5.36 6.80 (8.95)

23 Total Dividend Nil Nil Nil

24 Dividend Per share Nil Nil Nil

(xviii) Accounting Ratios are provided as under:

262
 Performance Ratios 2010-2011 2009-2010 2008-2009
(in times) (in times) (in times)

Gross Premium Growth Rate 2.47 2.34 16.51

Gross Premium to Shareholders Funds Ratio 2.70 1.28 0.51

Growth Rate of Shareholders Funds 1.17 0.93 1.33

Net Retention Ratio 0.81 0.87 0.85

Net Commission Ratio 0.08 0.11 0.09

Expenses of Management to Gross Direct 0.47 0.86 1.5

Premium

Combined Ratio 0.90 1.35 1.89

Technical Reserves to Net Premium Ratio 0.69 0.70 0.73

Underwriting Balance Ratios (0.38) (0.96) (1.89)

Operating Profit Ratio (0.34) (0.90) (1.73)

Liquid Assets to Liability Ratio 0.31 0.15 0.79

Net Earnings Ratio (0.35) (0.90) (1.74)

Return on Net Worth (0.76) (1.00) (0.75)

Reinsurance Ratio 0.19 0.13 0.15

k) Indraprastha Medical Corporation Limited

(i) The appeal filed by the Company against assessment of property tax by MCD, has been
decided by the Additional District Judge, Delhi on 17th April 2004 remanding the case to
MCD for reassessment on the basis of directions set out in the said order.

During the quarter ended 31st March 2011, assessment was carried out by MCD and as
per assessment order; an amount of ` 61.56 million is assessed as property tax liability up
to 31st March 2004. The provision made in the books upto 31 st March 2004 was ` 83.69
million. This has resulted in writing back of provision to P&L Account amounting to `
22.13 million.

Further the Company has provided ` 3.46 million for the year ended 31st March 2011; `
2.97 million as of 31st March 2010 and 31st March 2010 against property tax liability for
the period ended each year as per unit area method of calculating the property tax.

(ii) Under the terms of the agreement between the Government of NCT of Delhi and the
Company, the Hospital project of the Company has been put up on the land belonging to
Government of NCT of Delhi. The Government of NCT of Delhi is committed to meet

263
 the expenditure to the extent of ` 154.78 million out of IMCL Building fund account
(funds earmarked for the period) together with the interest thereon for construction of
definite and designated buildings while the balance amount of the cost of the building
will be borne by the Company. As at 31 st March 2011; 31st March 2010 & 31st March
2009, the aforesaid fund, together with interest thereon amounting to ` 192.36 million
have been utilized towards progress payments to contractors, advances to contractors,
payments for materials, etc. The ownership of the building between Government of NCT
of Delhi and the Company will be decided at a future date keeping in view the lease
agreement.

(iii) FY-2010-11 & FY 2008-09:

The Company had filed application for determination of question of law under section 84
of the Delhi Value Added Act, 2004 (VAT) before the Commissioner, Trade and Taxes,
Delhi (CTT) regarding the applicability of VAT to the hospital, inter alia, in respect of
medicines and consumables administered by the hospitals in the course of medical
treatment to its patients.

The CTT has vide its order dated 17th March 2006 in this regard held that VAT would be
applicable to the hospitals in respect of the aforesaid. The Company has preferred an
appeal against aforesaid order of the CTT before Delhi VAT Tribunal. The matter is now
pending before the Delhi VAT Tribunal.

(iv) FY-2010-11 AND FY- 2009-10

On a Public Interest Litigation (PIL) regarding free treatment in the hospital the Hon‘ble
Delhi High Court vide its order dated 22nd September 2009 has held that free treatment
provided by the hospital as per the terms of lease deed with Government of National
Capital Territory of Delhi shall be inclusive of medicines and consumables. In response
to the said order the Company filed a Special Leave Petition in the Hon‘ble Supreme
Court for appropriate directions with a prayer to for stay the judgment of the Hon‘ble
Delhi high court. The Hon‘ble Supreme Court has admitted the Special Leave Petition
and passed an interim order on 30 th November 2009. In pursuance of the interim order,
the Hospital is charging for medicines & medical consumables from patients referred by
the Govt. of Delhi for free treatment in Hospital.

(v) FY-2010-11

There was a fire in oncology department on 3 rd May 2010 and a medical equipment
suffered extensive damage. The said equipment was insured at reinstatement value. The
compensation of ` 98.51 million received in this regard in the current year form the
insurance Company has been utilized for the purchase of new medical equipment. The
written down value of the medical equipment as at 31 st March 2010 was ` 55.56 million
and written down value on the date of loss was ` 54.78 million. The excess of claim
received from the insurance Company over the written down value of the asset as
appearing in Profit and Loss Account has been shown as compensation received (net) in
other income.

l) Apollo Health Street Limited-

i) Zavata Incorporated had entered into an agreement on December 28, 2007 with Saint
Anthony Health center (SAHC) to purchase certain accounts receivables for US$ 6
million (` 270.84 million) in FY-2009-10 and US$ 6 million (` 305.70 million )in FY-
2008-09. During the year Zavata Incorporated had filed a law suit against SAHC stating
that accounts receivables delivered by SAHC could never reasonably have been valued at
US$ 6million (` 270.84 million) in FY-2009-10, US$ 6million (` 305.70 million) in FY-

264
 2008-09 and has claimed the deference between US$ 6 million (` 270.84) (` 270.84
million) in FY-2009-10, US$ 6million (` 305.70 million) in FY-2008-09 and realizable
value of accounts receivable at the time they were delivered. The Company is carrying
US$ 2.54 million (` 111.04million) in FY-2009-10 and US$ 2.54 million (`
129.41million) in FY-2008-09 and as receivable in the books. Based on a legal opinion,
the Company believes to obtain a judgment against SAHC and as such no provision has
been made in the books of accounts.

(ii) Employee stock option plan

(A) Employee stock option plan 2005

The Company had instituted an employee stock plan in the fiscal year 2005-06
and had granted stock options to certain employees. The shareholder and Board
of Directors approved the plan on 14th April 2005. The options vest over a
period of three years and would be settled by issue of fully paid equity shares.
During the year on 19th April 2010 exercise period was changed to either
10years from the vesting date or upon issuance of Initial Public Offer (IPO)
whichever is earlier from a period of 5 years from date of vesting.

a) Key features of Employee stock option plan

Grant date 14th April 2005

Exercise price 10
Exercise period 5 years from date of vesting
Vesting Date Number of options
schedule of 31st 31st 31st
outstanding March March March
2011 2010 2009
30th 17,300 17,300 28,700
September
2005
31st March 700 5,500 17,100
2006
31st March 48,000 56,400 65,400
2007
31st March 19,400 33,000 36,000
2008
85,400 112,200 147,200

Stock options:

31st March 31st March 31st March 2009

2011 2010
Outstanding at the 112,200 147,200 151,400
beginning of the year
Granted during the - - -
year
Forfeited/ surrendered 2,000 3,200 1,800
during the year
Exercised during the 24,800 31,800 2,400
year
Expired during the - - -
year

265
 31st March 31st March 31st March 2009
2011 2010
Exercisable at the end 85,400 112,200 147,200
of the year
Outstanding at the end 85,400 112,200 147,500
of the year
Weighted average * 2.01 years 2.84
remaining contractual
life

* 10 years from date of vesting or IPO whichever is earlier

b) Pricing of option

Particulars 31st March 31st March 31st March

2011 2010 2009
Fair value of option 1.9 2.53 2.53
at grant date
Option pricing model Black Scholes Black Scholes Black
used Model Model Scholes
Model
Inputs to the model:
a) Average share 160 10 10
price
b) Exercise price 10 10 10
c) Expected 0% 0% 0%
volatility- Unlisted
Company
d) Risk free 8% 6% 6%
interest rate
e) Weighted 5 years 5 years 5 years
average option life

The Company accounts for compensation cost in respect of its stock options
using intrinsic value method. Had the Company accounted for its stock options
using the fair value method, the employee compensation expense for the year
ended 31st March 2011 would have been higher by ` 0.16 million 31st March
2010 and 31st March 2009 is Nil and the profit for the year ended 31st March
2011 have been lower by ` 0.16 million 31st March 2010 and 31st March 2009 is
Nil.

(B) Employee stock option plan 2006

The Company instituted employee stock option plan 2006. The shareholders and
the board of directors approved the plan on 20 th October 2006 which provided
for the issue of 1,100,850 stock options to certain employees. The scheme
follows a graded vesting schedule over a period of three years and would be
settled by issue of fully paid equity shares. During the year on 19 th April 2010
exercise period was changed to either 10 years from the vesting date or upon
issuance of Initial Public Offer (IPO) whichever is earlier from a period of 5
years from date of vesting.

266
a) Key features of employee stock option plan

Date Number of options

31st March 31st March 31st March
2011 2010 2009
19th October 358,990 391,863 398,287
2007
19th October 186,548 188,326 194,542
2008
19th October 283,435 284,310 320,170
2009
828,973 864,499 912,999

Stock options:

31st 31st 31st March

March March 2009
2011 2010
Outstanding at the 864,499 912,999 1,051,887
beginning of the year
Granted during the year - - -
Forfeited/ surrendered 1,751 48,500 136,387
during the year
Exercised during the 33,775 - 2,500
year
Expired during the year - - -
Exercisable at the end of 828,973 864,499 592,829
the year
Outstanding at the end of 828,973 864,499 912,999
the year
Weighted average * 3.43 years 4.47 years
remaining contractual
life

* 10 years from date of vesting or IPO whichever is earlier

b) Pricing of option

Particulars 31st March 31st March 31st March

2011 2010 2009
Fair value of option at 32.7 32.7 32.7
grant date
Option pricing model Black Black Scholes Black
used Scholes Model Scholes
Model Model
Inputs to the model:
a) Average share price 160 108 108
b) Exercise price 98 98 98
c) Expected volatility - 0% 0% 0%
Unlisted Company
d) Risk free interest 7.50% 6.81% 6.81%
rate

267
 Particulars 31st March 31st March 31st March
2011 2010 2009
e) Weighted average 5 years 4 years 4 years
option life

The Company accounts for compensation cost in respect of its stock options
using intrinsic value method. Had the Group accounted for its stock options
using the fair value method, the employee compensation expense for the year
ended would have been higher by ` 7.49 million as of 31st March 2011, ` 0.53
million as of 31st March 2010 and ` 2.37 million as of 31st March 2009 and the
profit for the period would have been lower by ` 7.49 million as of 31st March
2011, ` 0.53 million as of 31st March 2010 and ` 2.37 million as of 31st March
2009.

(C) Employee stock option plan 2006 - Plan II

The Company instituted employee stock option 2006 - Plan II. The shareholders
and the board of directors approved the plan on 16th March 2007 which provided
for the issue of 97,350 stock options to certain employees. The options vest over
a period of three years and to be settled by issue of fully paid equity shares.
During the year on 19th April 2010 exercise period was changed to either 10
years from the vesting date or upon issuance of Initial Public Offer (IPO)
whichever is earlier from a period of 5 years from date of vesting.

a) Key features of employee stock option plan

Grant date 16th March 2007

Exercise 154
price
Exercise 5 years from date of vesting
period
Vesting Date No of options
schedule of 31st March 31st 31st March
outstanding 2011 March 2009
2010
15th March 4,920 4,920 5,560
2008
15th March 9,840 9,840 11,120
2009
15th March 34,440 34,440 38,920
2010
49,200 49,200 55,600

Stock options:

31st March 31st March 31st March

2011 2010 2009
Outstanding at the 49,200 55,600 75,950
beginning of the
year
Granted during the - - -
year
Forfeited/ - 6,400 20,350
surrendered during

268
 31st March 31st March 31st March
2011 2010 2009
the year
Exercised during - - -
the year
Expired during the - - -
year
Exercisable at the 49,200 49,200 16,680
end of the year
Outstanding at the 49,200 49,200 55,600
end of the year
Weighted average * 4.56 years 5.56 years
remaining
contractual life

* 10 years from date of vesting or IPO whichever is earlier

b) Pricing of option

The Company accounts for compensation cost in respect of its stock

options using intrinsic value method. Had the Group accounted for its
stock options using the fair value method, the employee compensation
expense for the year ended would have been higher by ` 0.20 million as
of 31st March 2011; ` 0.01 million as of 31st March 2010 and ` 0.76
million as of 31st March 2009 the profit for the period would have been
lower by ` 0.20 million as of 31st March 2011; ` 0.01 million in March
2010 and ` 0.20 million as of 31st March 2009.

(D) Apollo Employees – Accelerated stock option plan

The Company instituted Apollo Employees – Accelerated stock option plan. The
shareholders and the board of directors approved the plan on 20 th July 2007
which provided for the issue of 325,000 stock options. The options vest over a
period of one month and are to be settled by issue of fully paid equity shares.
During the FY-2010-11 on 19th April 2010 exercise period of the opinion was
revised from ` 250 to ` 160.

Grant date 20th July 2007

Exercise price 160
Exercise period 5 years from date of vesting
Vesting schedule of outstanding options 30 days from date of grant

a) Key features of employee stock option plan

31st March 31st March 31st March

2011 2010 2009
Outstanding at 298,484 298,484 324,500
the beginning of
the year
Granted during - - -
the year
Forfeited/ - - -
surrendered
during the year
Exercised during - - -

269
 31st March 31st March 31st March
2011 2010 2009
the year
Expired during - - -
the year
Exercisable at the 298,484 298,484 298,484
end of the year
Outstanding at 298,484 298,484 298,484
the end of the
year
Weighted average 1.40 years 2.32 years 3.32 years
remaining
contractual life
Outstanding at 298,484 298,484 324,500
the beginning of
the year
Granted during - - -
the year
Forfeited/ - - 26,016
surrendered
during the year
Exercised during - - -
the year
Expired during - - -
the year
Exercisable at the 298,484 298,484 298,484
end of the year
Outstanding at 298,484 298,484 298,484
the end of the
year
Weighted average 1.40 years 2.32 years 3.32 years
remaining
contractual life

b) Pricing of option

Particulars 31st March 31st March 31st March

2011 2010 2009
Fair value of 21.92 18.52 18.52
option at grant
date
Option pricing Black Black Black Scholes
model used Scholes Scholes Model
Model Model
Inputs to the
model:
a) Average share 160 250 250
price
b) Exercise price 160 250 250
c) Expected 0% 0% 0%
volatility -
Unlisted
Company
d) Risk free 6.50% 8.00% 8.00%

270
 Particulars 31st March 31st March 31st March
2011 2010 2009
interest rate
e) Weighted 2.34 years 1 year 1 year
average option
life

The Company accounts for compensation cost in respect of its stock options
using intrinsic value method. Had the Group accounted for its stock options
using the fair value method, the employee compensation expense for the year
ended would have been higher by ` 6.54 million as of 31st March 2011 ; ` Nil
as of 31st March 2010 and ` Nil as of 31st March 2009 and the profit for the
period would have been lower by ` 6.54 million as of 31st March 2011; ` Nil as
of 31st March 2010 and ` Nil 31st March 2009.

(E) Employee stock option plan 2007

The Company instituted employee stock option 2007. The shareholders and the
board of directors approved the plan on 14 th August 2007 which provided for the
issue of 297,000 stock options to certain employees. The options vest over a
period of three years and to be settled by issue of fully paid equity shares.

a) Key features of employee stock option plan

Grant date 14th August 2007

Exercise price 154
Exercise period 5 years from date of vesting
Vesting schedule
of outstanding
Options Date No of options
31st 31st 31st
March March March
2011 2010 2009
13th - 85,000 127,000
August
2008
13th - 85,000 85,000
August
2009
13th - - 85,000
August
2010
- 170,000 297,000

Stock options:

31st 31st 31st

March March March
2011 2010 2009
Outstanding at the 170,000 297,000 297,000
beginning of the year
Granted during the year - - -
Forfeited/ surrendered 170,000 127,000 -
during the year

271
 31st 31st 31st
March March March
2011 2010 2009
Exercised during the - - -
year
Expired during the year - - -
Exercisable at the end of - 170,000 127,000
the year
Outstanding at the end of - 170,000 297,000
the year
Weighted average - 3.87 years 5.23 years
remaining contractual
life

b) Pricing of option

Vesting date
13th August 13th August 13th August
2008 2009 2010
Fair value of option at 117.97 127.75 136.81
grant date
Option pricing model Black Black Black
used Scholes Scholes Scholes
Inputs to the model:
a) Average share price 250 250 250
b) Exercise price 154 154 154
c) Expected volatility - 0% 0% 0%
Unlisted Company
d) Risk free interest rate 8% 8% 8%
e) Weighted average 2 years 3 years 4 years
option life

The Group accounts for compensation cost in respect of its stock

options using intrinsic value method. Had the Group accounted for its
stock options using the fair value method, the employee compensation
expense for the year ended would have been higher by ` Nil as of 31st
March 2011; ` 1.38 million as of 31st March 2010 and ` 3.55 million
as of 31st March 2009 and the profit for the period would have been
lower by ` Nil as of 31st March 2011; ` 1.38 million as of 31st March
2010 and ` 3.55 million as of 31st March 2009.

(F) Proforma disclosures:

The Guidance Note on ‗Accounting for employee share based payments‘

(‗Guidance Note‘) issued by ICAI establishes financial accounting and reporting
principles for employees share based payment plans. The Guidance Note applies
to employee share based payments, the grant date in respect of which falls on or
after 1st April 2005. The Group follows the intrinsic value method to account
compensation expense arising from issuance of stock options to the employees.
Had compensation cost been determined under the fair value approach described
in the Guidance Note, using the Black Scholes pricing model, the Group‘s net
income/(loss) and basic and diluted earnings per share (as restated) would have
been reduced to the proforma amounts as set out below:

(` In Million)

272
 31st March 31st March 31st
2011 2010 March
2009
Consolidated Net profit/(loss) as 48.47 84.95 147.27
reported
Less: Employee stock (14.40) 0.84 (6.69)
compensation expense
Pro forma consolidated net 34.07 85.79 140.58
profit/(loss)
Basic EPS(`)
-As reported 1.68 3.13 5.89
-Proforma 1.18 3.36 5.62
Diluted EPS(`)
-As reported 1.66 3.08 5.22
-Proforma 1.16 3.11 4.99

(iii) Fringe Benefit on stock options:-FY-2008-09

Finance Act 2007 requires payment of Fringe Benefit Tax (FBT) on stock option benefits
provided to employees. FBT is payable on the date when stock option is exercised by the
employees based on the fair market value on the date of vesting. Management has
computed FBT expense of ` 0.10 million (31st March 2008: ` 4.07 million) for the
current year allotments. However, as the money is recoverable from the employees, no
provision has been made in the books.

(iv) Derivative instruments

a) Interest rate swap:

i) The Company‘s subsidiary, Apollo Health Street Inc. had certain open
interest rate swaps arrangements with banks, which were entered into
solely for the purpose of hedging against interest rate fluctuations on
certain long term borrowings of about US$ 94.15 million as of 31st
March 2011; US$ 96.15 million as of 31st March 2010 and US$ 110
million as of 31st March 2009 with those banks. As on the Balance
Sheet date, a ―Mark to Market‖ valuation of the outstanding swaps
indicates a notional loss of about US$ 15.31 million approximately `
683.47 million as of 31st March 2011;US$ 15.67 million
approximately ` 707.34 million as of 31st March 2010 and US$ 11.68
million approximately ` 597.72 million as of 31st March 2009.
Management believes that the mark to market loss is notional in nature.
However, as a measure of abundant precaution it had accrued US$ 0.85
million (approximately ` 38 million) as of 31st March 2011 and US$
1.2 million (approximately ` 55.65 million) as of 31st March 2010
towards the fixed premiums payable defined in the loan restructuring
agreement, in case mark to market amount continues to be negative.

Management strongly believes that no provision is required to be made

for the Mark to Market loss of ` 645.47 million in FY-2011-10; `
651.69 million in FY-2009-10 and ` 597.72 in FY-2008-09 as at the
date of balance sheet each year since:

The swap arrangements are purely for hedging purposes and

not intended to be used for trading or speculative purposes;

273
 The loss on Balance Sheet date is entirely notional in nature,
and does not require to be paid or settled as on that date;

Being in the nature of interest rate hedge, the MTM on swaps

are likely to have little or no impact on reported results over
the period of the contracts.

ii) Details of other outstanding derivatives

i) Forward contracts
(` In Million)
Particulars of Purpose 31- 31- 31-
derivatives Mar-11 Mar- Mar-
10 09
Forward Hedge Sell Sell
contracts against US$ US$
outstanding as expected 9.25 6 Nil
at Balance receivables million* million
Sheet date
Range Hedge - Sell Nil
forward against US$
contracts expected 0.5
outstanding as receivables million
at Balance
Sheet date

*Out of above US$ 725,720 represents hedge against inter –

Company receivables.

ii) Options-FY-2010-11

A. An ex-employee of the subsidiary, Apollo Health

Street Inc. has an option to put back 85,000 shares of
AHSL held by him to AHSI at price of US$ 8.94 per
share. The price will increase by 10% per annum
from August 2009.

B. During the current period, the Company has entered

into an interest rate option for one year starting on
29th August 2012 for hedge against their US$-LIBOR
based interest liability. As per the arrangement, if the
US$ Libor is above 5.50% p.a., the Company
receives differential between the three months Libor
and 5.50% p.a. The notional amounts are as follows:

Period Notional
From (and To (but Amount(in million)
including) excluding)
29-Aug-12 29-Nov-12 91.10
29-Nov-12 28-Feb-13 89.42
28-Feb-13 29-May-13 86.78
29-May-13 29-Aug-13 84.13

iii) Interest rate swaps outstanding as at the Balance Sheet date:

274
 The Company‘s subsidiary AHSI has entered into interest rate
swaps to hedge its risks associated with interest rate
fluctuations and the details of the same are mentioned below:

31st March 2011

a) Hedge against exposure to variable interest outflow on loans.

Receive LIBOR plus spread of 2.75% and pay as per the terms mentioned below:

Notional Amount Period Rate

(` In million) From(and including) To(but excluding)
108.75 29-May-09 29-Aug-09 1.25%
96.15 29-Aug-09 29-May-10 1.25%
96.15 29-May-10 29-Nov-10 6.25%
94.15 29-Nov-10 28-Feb-11 6.25%
94.05 28-Feb-11 29-May-11 9.25%
93.96 29-May-11 29-Aug-11 9.25%
93.81 29-Aug-11 29-Nov-11 9.25%
93.67 29-Nov-11 29-Feb-12 9.25%
93.23 29-Feb-12 29-May-12 9.25%
90.78 29-May-12 28-Aug-12 9.25%

31st March 2010

Hedge against exposure to variable interest outflow on loans.

Receive LIBOR plus spread of 2.75% and pay as per the terms mentioned below:

Notional amount Period Rate

(`) From (and including) To (but excluding)
108.75 29-May-09 29-Aug-09 1.25%
96.15 29-Aug-09 29-May-10 1.25%
96.15 29-May-10 28-Feb-11 6.25%
96.05 28-Feb-11 29-May-11 9.25%
95.96 29-May-11 29-Aug-11 9.25%
95.81 29-Aug-11 29-Nov-11 9.25%
95.67 29-Nov-11 29-Feb-12 9.25%
94.23 29-Feb-12 29-May-12 9.25%
92.78 29-May-12 29-Aug-12 9.25%

31st March 2009

a) Hedge against exposure to variable interest outflow on loans

The Company has entered into interest rate swaps to hedge its risks associated with interest rate
fluctuations and the details of the same are mentioned below:

Receive LIBOR plus spread of 2.75% and pay as per the terms mentioned below:

31st March 2009 31st March

2008
Payment rate %

275
 From 29-Feb- 29-May-08 to From 29-
2009 to 28-Feb-09 Nov-07 to 28-
termination May-08
date
If LIBOR is less than or equal to 3.10% - - 5.10% plus
spread of
2.75%
If LIBOR is less than or equal to barrier 5.10% plus 5.10% plus -
spread of spread of 2.75%
3.75%
If LIBOR is greater than 3.10% and less - - LIBOR plus
than or equal to 6.25% spread of
2.75%
If LIBOR is greater than barrier and less LIBOR plus LIBOR plus LIBOR plus
than or equal to 5.25% spread of spread of 2.75% spread of
3.75% 2.75%
If LIBOR is greater than 6.25% - - 6.25% plus
spread of
2.75%
If LIBOR is greater than 5.25% 5.25% plus 5.25% plus -
spread of spread of 2.75%
3.75%
Notional amount and barrier Schedule:
From (and including) To (but Notional Barrier
excluding) Amount
29-Feb-08 29-Aug-08 2.20%
40.00
29-Aug-08 29-Nov-08 2.00%
39.44
28-Nov-08 28-Feb-09 2.00%
38.88
27-Feb-09 28-May-09 2.00%
38.23

b) Hedge against exposure to variable interest outflow on loans.

31st March 2009 31st March 2008

Pay: fixed rate of
7.6% from 20th
September 2007
Pay: fixed rate of 7.6% from 20th September 2007 to to August 29,
August 29, 2008 and 8.10% thereafter 2008
and and
Receive: LIBOR
plus spread of
Receive: LIBOR plus spread of 2.75%. 2.75%.
Notional Amt
(US$ In
From (and including) To (but excluding) Million)
20-Sep-07 29-Aug-08 22.50
29-Aug-08 28-Nov-08 17.19
28-Nov-08 27-Feb-09 16.87
27-Feb-09 28-May-09 16.50

276
c) Hedge against exposure to variable interest outflow on loans.

Receive LIBOR plus spread of 2.75% from BOI and pay BOI as per the terms mentioned below:

31st March 2009 31st March

2008
Payment rate %
From From 29- From 29-
Nov-2007 Nov-2007
to to
29-Aug-2009 to 29-Aug-08 29-Aug-08
termination date
If LIBOR is less than or equal to 3.10% 5.10% plus 5.10% plus 5.10% plus
spread of 3.00% spread of spread of
2.75% 2.75%
If LIBOR is greater than 3.10% and less than LIBOR plus LIBOR plus LIBOR plus
or equal to 6.25% spread of 3.00% spread of spread of
2.75% 2.75%
If LIBOR greater than 6.25% 6.25% plus 6.25% plus 6.25% plus
spread of 3.00% spread of spread of
2.75% 2.75%

Notional Amount:

From (and including) To (but excluding) Notional Amt

(US$ In Million)
29-Nov-07 29-Aug-08 40.00
29-Aug-08 29-Nov-08 34.44
29-Nov-08 28-Feb-09 33.88
28-Feb-09 28-May-09 33.23

d) Hedge against exposure to variable interest outflow on loans.

31st March 2009 31st March 2008

th
Pay: fixed rate of 7.6% from 20 Pay: fixed rate of 7.6% from 20th September 2007
September 2007 to termination date to termination date

and and

Receive: LIBOR plus spread of 2.75%. Receive: LIBOR plus spread of 2.75%.
From (and including) To (but excluding) Notional Amt (US$ In million)
20-Sep-07 29-Aug-08 22.50
29-Aug-08 28-Nov-08 22.18
28-Nov-08 27-Feb-09 21.87
27-Feb-09 28-May-09 21.50

(i) Particulars of unhedged foreign currency exposure

277
As at 31st March 2011

US$ Closing rate Amount

(in million)
Sundry creditors 297,988 44.65 13.31
Cash balances 431,863 44.65 19.28

GBP Closing rate Amount

(in million)
Sundry debtors 19,732 71.93 1.42
Cash balances 1,576 71.93 0.11

EUR Closing rate Amount

(in million)
Sundry debtors 4,000 63.24 0.25

As at 31st March 2010

US$ Closing rate Amount

(in million)
Sundry creditors 72,696 45.14 3.28
Unbilled revenue 125,665 45.14 5.67
Cash balances 75,373 45.14 3.40

GBP Closing rate Amount

(in million)
Sundry debtors 19,732 68.03 1.34
Sundry creditors 20,716 68.03 1.41
Cash balances 15,028 68.03 1.02

EUR Closing rate Amount

(in million)
Sundry debtors 4,000 60.56 0.24

31st March 2009

US$ Closing rate Amount

(in million)
Sundry debtors 1,964,889 50.75 708.80
Sundry creditors 303,077 51.19 28.81
Cash balances 31,024 50.75 1.57

GBP Closing rate Amount

(in million)
Sundry debtors 19,732 72.51 1.43
Sundry creditors 24,765 73.83 1.83
Cash balances 1,883 72.51 0.14

EUR Closing rate Amount

278
 (in million)
Sundry debtors 24300 67.1 1.63
Sundry creditors 2627 68.32 0.18

m) British American Hospitals Enterprise Limited- Upto FY-2009-10

Financial instruments and associated risks:

Associated risks:

The main risks arising from the Company‘s financial instruments are as follows:

1. Credit risk

2. Liquidity risk

3. Market risk (which includes currency risk and interest rate risk)

The Directors‘ reviews and agreed policies for managing each of these risks which are
summarized below:

Credit risk:

The Company takes on exposure to credit risk, which is the risk that a counterparty
will be unable to pay amounts in full when due. Financial assets which potentially
subject the Company to concentrations of credit risk consist principally of bank balances
and trade receivables. Cash balances are held in a number of reputable financial
institutions. Accordingly, the Company has no significant concentration of credit risk.

The Company‘s exposure to credit risk is also influenced mainly by the individual
characteristics of each customer. In this regard, management has established a
credit policy under which each new credit customer is analysed individually for
creditworthiness before the Company‘s terms and conditions are offered. The
Company‘s review is based on the financial capacity of the customer and other factors.

Transactions with related parties are made at arms' length, on normal commercial
terms and in the normal course of business.

The Company‘s exposure to credit risk is limited to the carrying amount of financial
assets recognized at 31 December 2009, as summarised below:

ASSETS 31-Dec-09 31-Dec-08

MUR(in INR(in MUR(in INR(in
millions) millions) millions) millions)
Trade and other receivables 13.37 21.45 - -
Amount due from related 126.79 203.39 - -
parties
Cash and cash equivalents 5.23 8.39 19.12 31.86
Total 145.39 233.23 19.12 31.86

Liquidity risk:

279
Liquidity risk is the risk that the Company will not be able to meet its financial
obligations as they fall due. The Company‘s approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Company‘s reputation.

The Company ensures that they have sufficient cash on demand to meet its
expected operational expenses for a period of 60 days, including the servicing of any
financial obligations. This excludes the potential impact of extreme circumstances which
cannot be reasonably predicted, for example, natural disasters.

The maturity profile of the Company‘s financial liabilities based on contractual

cash flows is summarised as follows. The contractual cash flows approximate the
carrying amounts.

Particulars Less than one year Between one & five More than five years
years
MUR INR MUR INR MUR INR
(in (in (in (in (in (in
millions) millions) millions) millions) millions) millions)
As at
31.12.2009
Trade and 203.82 326.96 - - -
Other
payables
Amounts due 565.82 907.68 - -
to related
parties
Secured - - 337.29 541.07 295.23 473.60
borrowings
Debentures - - - - 212.00 340.09
Interest 6.35 10.18 - - - -
accrued on
debentures
Redeemable 7.07 11.34 34.73 55.71 269.08 431.65
preference
shares
Dividends on - - - - 22.78 36.55
cumulative
redeemable
preference
shares
Obligation 8.49 13.62 90.77 145.61 48.46 77.73
under finance
lease
As at
31.12.2008
Trade and 437.56 729.27 - - - -
Other
payables
Amounts due 3.13 5.22 - - - -
to related
parties
Borrowings 0.08 0.13 - - - -
Obligation 0.13 0.21 0.70 1.17 - -
under finance
lease

280
Market risk:

Market risk embodies the potential for both loss and gains and includes interest
rate risk and currency risk.

Interest rate risk:

The Company‘s income and operating cash flows are substantially independent of
changes in market interest rates. The Company‘s only other significant interest- bearing
financial assets and liabilities are cash at bank, interest bearing borrowings and
obligations under finance lease. Interest income and expense may fluctuate in amount, in
particular due to changes in interest rates.

Particulars 31-Dec-09 31-Dec-08

Carrying Amount Carrying Amount
MUR INR MUR INR
(in (in (in (in
millions) millions) millions) millions)
Fixed rate instruments:
Financial assets 5.23 8.39 19.12 30.67
Variable rate instruments:
Financial liabilities (1,141.41) (1,831.03) (75.00) (120.31)

Sensitivity analysis

The following table illustrates the sensitivity of loss to a reasonably possible change in
interest rates of +/-1%. A 1% basis point increase or decrease is used and represents
management‘s assessment of the reasonably possible charge in interest rate. The
calculations are based on the financial instruments held at that date and which are
sensitive to changes in interest rates. All other variables are held constant. The table
below depicts the movement in loss given an increase of 1% in the interest rate
over one year.

Currency Risk:

Particulars 31-Dec-09 31-Dec-08

Increase/(decr Effect on profit after Increase/(decr Effect on profit after
ease) in tax ease) in tax
interest rate % MUR(in INR(i interest rate % MUR(in INR(i
millions) n millions) n
millio millio
ns) ns)
Interest 1 11.41 18.31 1 0.75 1.25
expense
-1 (11.41) (18.31) -1 (0.75) (1.25)

The Company is exposed to the risk that the exchange rate to the currencies listed below
that may change in a manner which have some material effect on the reported values of
the Company‘s assets and liabilities which are denominated in these currencies.

Particulars Financial Financial Financial Financial

Assets 2009 Liabilities 2009 Assets Liabilities
2008 2008
US$(in millions) 0.84 207.53 0.87 -
INR(in millions) 1.34 332.92 1.46 -
MUR(in millions) 143.67 1,894.34 18.24 516.52

281
 Particulars Financial Financial Financial Financial
Assets 2009 Liabilities 2009 Assets Liabilities
2008 2008
INR(in millions) 230.47 3,038.87 30.41 860.88
EUR(in millions) 0.88 - - -
INR(in millions) 59.32 - - -

Sensitivity analysis

The following table indicates the approximate change in the Company‘s profit/ loss and
equity in response to reasonable possible changes in the foreign exchange rates to which
the Company has significant exposure at the balance sheet date. The Company is mainly
exposed to the US$ and has limited exposure to the EURO.

A 10% increase and decrease in the US$/EURO against the relevant foreign currency is
the sensitivity rate used when reporting foreign currency risk internally to key
management personnel and represents management's assessment of the reasonably
possible change in foreign exchange rates.

Particulars 31-Dec-09 31-Dec-08

Increase/( Effect on profit or Increase/(decre Effect on profit or
decrease) loss/equity ase) in foreign loss/equity
in foreign MUR INR exchange rates MUR INR(in
exchange (in (in millions) % (in millions)
rates % millions) millions)
US$ 10 20.66 33.15 10 0.09 0.15
-10 (20.66) (33.15) -10 (0.09) (0.15)
EUR 10 0.09 0.14 10 - -
-10 (0.09) (0.14) -10 - -

The sensitivity analysis has been determined assuming that the change in foreign
exchange rates had occurred at the balance sheet date and had been applied to the
Company‘s exposure to currency risk for financial instruments in existence at that date,
and that all other variables, in particular interest rates, remain constant.

The stated changes represent management‘s assessment of reasonably possible changes in

foreign exchange rates over the period until the next annual balance sheet date. Results of
the analysis as presented in the above table represent the effects on the Company‘s
reserves measured in foreign currencies, translated into United States dollars at the
exchange rate ruling at the balance sheet date.

The analysis is performed on the same basis for 2008.

Fair values of financial assets and liabilities

At 31 December 2009, the carrying amounts of financial assets and financial liabilities
shown on the statement of financial position represent or approximate their fair values.

(Amount in Million)
Particulars 31-Dec-09 31-Dec-08
Carrying Fair values Carrying Fair values
amount (US$) amount (US$)
(US$) (US$)
Financial assets
Trade and other receivables 13.37 13.37 56.13 56.13
Amounts due from related 126.79 126.79 - -
parties

282
 Particulars 31-Dec-09 31-Dec-08
Carrying Fair values Carrying Fair values
amount (US$) amount (US$)
(US$) (US$)
Cash and cash equivalents 5.23 5.23 19.12 19.12
Total 145.39 145.39 75.25 75.25
Financial liabilities - - - -
Secured borrowings 632.51 632.51 75.00 75.00
Debentures 212.00 212.00 - -
Interest accrued on 6.35 6.35 - -
debentures
Redeemable preference 310.88 310.88 - -
shares
Dividends on redeemable 22.78 22.78 - -
preference shares
Obligations under finance 147.72 147.72 0.83 0.83
lease
Amounts due to related 565.82 565.82 3.13 3.13
parties
Trade and other payables 203.82 203.82 437.56 437.56
Total 2,101.87 2,101.87 516.52 516.52

Capital Risk Management

The Company‘s objectives when managing capital are to safeguard the Company‘s
ability to continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optional capital structure to reduce the
cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount
of dividends paid to shareholders, return on capital to shareholders, issue new shares or
sell assets to reduce debt.

The Company monitors capital on the basis of the gearing ration. This ratio is calculated
as net debt divided by total capital. Net debt is calculated as total borrowings (including
current and non current borrowings) less cash and cash equivalents. Total capital is
calculated as equity as shown in the balance sheet plus net debt.

Particulars 2009 2009 2008 2008

MUR(in INR(in millions) MUR(in INR(in
millions) millions) millions)
Total 1,332.24 2,137.15 75.83 126.38
borrowings
Net debt 1,326.94 2,128.65 56.71 94.52
Total equity 509.31 817.03 643.64 1,072.76
Total capital 1,836.25 2,945.68 700.35 1,167.28
Gearing ratio 72.50% 10.80%

n) Family Health Plan Limited- FY 2008-09

The expenditure on the development of leasehold assets represents expenditure incurred

by the Company towards interior and temporary structure in the leased accommodation.
The same is being written off over the primary period of lease.

283
 Float fund closing bank balances as on 31.03.09 in various float fund accounts jointly
with FHPL and respective insurance companies is ` 12.50 million (Previous Year ` 13.50
million) has been considered in the books for the purpose of accounting as balances held
in trust.

30. Earnings per Share

(` In Million)
Particulars 31st March 2011 31st March 2010 31st March 2009
Profit before extraordinary items 1,839.22 1,375.68 1,051.47
attributable to equity shareholders (Amount
` ) (A1)
Weighted Average Equity Shares 123,922,957 123,425,413 119,256,884
outstanding during the year (Nos) - (B1)
Basic Earnings Per Share before extra- 14.84 11.15 8.82
ordinary item - (A1/B1)
Diluted Earnings before extraordinary items 1,845.25 1,375.68 1,051.47
attributable to equity shareholders (Amount
` ) (A2)
Foreign Currency Convertible Bond issued 1,107,025 2,241,480 -
(C1)*
Weighted Average Equity Shares 128.00 123.96 123.57
outstanding for Diluted Earnings Per Share.
(Nos) - (D1)
Diluted Earnings Per Share before extra- 14.37 11.1 8.51
ordinary item - (A2/D1)
Profit after extraordinary items attributable 1,839.22 1,375.68 1,024.94
to equity shareholders (Amount `) (A)
Weighted Average Equity Shares 123,922,957 123,425,413 119,256,884
outstanding during the year (Nos) - (B)
Basic Earnings Per Share after extra- 14.84 11.15 8.59
ordinary item - (A/B)
Diluted Earnings after extraordinary items 1,845.25 1,375.68 1,024.94
attributable to equity shareholders (Amount
` ) (A2)
Foreign Currency Convertible Bond issued 1,107,025 1,120,740 -
(C)*
Weighted Average Equity Shares 128,003,621 123,956,604 123,569,718
outstanding for Diluted Earnings Per Share.
(Nos) - (D)
Diluted Earnings Per Share after extra- 14.37 11.1 8.29
ordinary item - (A2/D)

* The Company has issued Foreign Currency Convertible Bonds (FCCBs) to International Financial
Corporation (IFC), Washington convertible to Equity shares at the option of IFC during the year 2009-
10. The Bonds are convertible at any time during the tenure of the loan. To comply with the
requirements of Accounting Standard-20 (Earnings Per Share) the underlying number of Equity shares
equivalent to 1.10 million in FY-2010-11 and 1.12 million in FY-2009-10 (computed on the basis of
exchange rates prevailing as on the date of 31st March each year ) have been considered for the
purpose of computing potential number of Equity Shares.

31. Income Tax

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 Apollo Hospitals Enterprise Limited

In respect of the Income Tax claims of ` 400.84 Million in FY-2011-10; ` 264.87 Million FY-2009-10 and
` 296.81 million in FY-2008-09 by the Income Tax Department, the amount is under contest.

Provision for taxation is determined after availing concession under Section 35AD of The Income
Tax Act 1961.

32. National Saving Certificates shown under investments are pledged with the Chief Ration Officer,
Government of Andhra Pradesh.

33. Consolidated Segment Reporting

(` in Million)
Particulars 31st March 31st March 31st March
2011 2010 2009
2. Segment Revenue
( Net sales / Income from each Segment )
a) Hospitals 19,295.00 15,511.00 12,884.00
b) Retail Pharmacy 6,614.00 4,850.00 3,345.00
c) Others 362.00 255.00 144.00
Sub – Total 26,271.00 20,616.00 16,373.00
Less :
Intersegment Revenue 31.00 29.00 23.00
Net sales / Income from operations 26,240.00 20,587.00 16,350.00
3. Segment Results
( Profit / ( Loss ) before Tax and interest from
each segment )
a) Hospitals 3,802.00 3,075.00 2,398.00
b) Retail Pharmacy (43.00) (158.00) (223.00)
b) Others (71.00) (139.00) (173.00)
Sub – Total 3,689.00 2,778.00 2,002.00
Less :

(i) Interest ( Net ) 814.00 602.00 459.00

(ii)Other un-allocable expenditure net of
un-allocable income 261.00 200.00 159.00
Profit Before Tax and Extraordinary item 2,613.00 1,976.00 1,384.00
Less: Extra Ordinary Item - - 40.00
Profit Before Tax 2,613.00 1,976.00 1,344.00
Less :
(i) Current tax 567.00 583.00 484.00
(ii) Tax for earlier years (net) 0.00 1.00 0.00
(iii) Deferred tax liability 328.00 129.00 33.00
(iv) Fringe Benefit tax - - 29.00
Add:
Deferred Tax Asset 22.00 (36.00) (55.00)
Profit After Tax before Minority Interest 1,740.00 1,300.00 854.00
Less : Minority Interest (15.00) (36.00) (56.00)
Add : Share of Associates' Profits 84.00 39.00 115.00
Net Profit Relating to the Group 1,839.00 1,376.00 1,025.00
4. Segment assets
a) Hospitals 29,657.00 26,946.00 21,356.00

285
 Particulars 31st March 31st March 31st March
2011 2010 2009
b) Retail Pharmacy 2,423.00 1,999.00 1,563.00
c) Others 1,151.00 575.00 974.00
Total 33,231.00 29,520.00 23,893.00
Unallocated Corporate Assets 2,378.00 2,637.00 2,261.00
Goodwill on consolidation 677.00 500.00 294.00
Deferred Tax Asset 0.00 - -
Miscellaneous Expenditure - - -
Total Assets as per Balance Sheet 36,286.00 32,658.00 26,449.00
5. Segment liabilities
a) Hospitals 13,216.00 12,548.00 9,017.00
b) Retail Pharmacy 208.00 188.00 66.00
c) Others 315.00 219.00 212.00
Total 13,738.00 12,955.00 9,295.00
Unallocated Corporate Liabilities 2,209.00 2,150.00 1,548.00
Shareholder‘s Funds 18,989.00 16,535.00 14,689.00
Minority Interest 249.00 241.00 265.00
Deferred Tax Liability 1,101.00 776.00 652.00
Total Liabilities as per Balance Sheet 36,286.00 32,658.00 26,449.00
6. Segment capital employed
a) Hospitals 26,279.00 23,585.00 19,372.00
b) Retail Pharmacy 2,215.00 1,811.00 1,497.00
c) Others 328.00 512.00 792.00
Total 28,823.00 25908.00 21,661.00
7. Segment capital expenditure incurred
a) Hospitals 2,533.00 3133.00 1,674.00
b) Retail Pharmacy 174.00 240.00 323.00
c) Others 77.00 37.00 25.00
Total 2,784.00 3,410.00 2,022.00
8. Segment Depreciation
a) Hospitals 852.00 677.00 583.00
b) Retail Pharmacy 74.00 56.00 39.00
c) Others 16.00 16.00 11.00
Total 942.00 750.00 633.00
9. Segment Non-cash expenditure (excluding
Depreciation)
a) Hospitals 5.00 5.00 7.00
b) Retail Pharmacy 1.00 2.00 -
c) Others - - -
Total 6.00 7.00 7.00

34. Change in Authorised share capital

Western Hospitals Corporation Limited

The Shareholders of the Company have passed a resolution at the Extraordinary General Meeting held on
17th December 2008, for increasing the Authorised Share Capital of the Company from 50 million Equity
Shares of Rs 10 each aggregating to ` 500 million to 100 million Equity Shares of ` 10 each aggregating to
` 1,000 million. However, the Company has not filed the required forms for increasing the Authorised
Share Capital with the Registrar of Companies (ROC) as at 31st March 2011 along with the amended
Memorandum of Association for giving effect to the aforesaid change, for approval/confirmation from the
ROC. Hence, the Authorised Share Capital of the Company as at 31 st March 2011 continues to be reflected
as ` 500 million.

286
 Apollo Munich Health Insurance Limited

The Authorised Share Capital of the Company has increased to ` 1.30 million (130,000 shares of ` 10
each) from ` 1.20 million (120,000 shares of ` 10 each) during the year 2009- 10.

Apollo Hospitals International Limited

The Authorised Share Capital of the Company has increased to ` 600 million (60,000,000 shares of ` 10
each) from ` 450 million (45,000,000 shares of ` 10 each) during the year 2009- 10.

35. Details of Sundry Creditors under Current Liabilities are based on the information available with the Parent
Company regarding the status of Suppliers as defined under the ‗Micro, Small and Medium Enterprises
Development Act, 2006. The amount due to Micro, Small and Medium Enterprises for the fiscal year ended
31st March 2011 is ` 48.76 million (31st March 2010: ` 153.26 million, 31st March 2009: Nil). No interest
in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006 or otherwise has
either been paid or payable or accrued and remaining unpaid as at 31st March 2011.

36. The figures relating to British American Hospitals Enterprise Limited, Mauritius are translated to Indian
Rupees. The exchange rate adopted for conversion of assets and liabilities for the year ended 31 st March
2010 is ` 1.60418/MUR, which is the closing rate as on 31 st December 2009 and for the year ended 31 st
March 2009 is ` 1.66670/MUR as on 31st December 2008. Income and Expenses for the above period are
converted using the average rate, which is ` 1.63544/MUR for the year ended 31st March 2010 and `
1.5495/MUR for the year ended 31st March 2009.

37. Figures of the current year and previous year have been rounded off to the nearest million.

38. Where disclosures have not been made by Subsidiaries, Associates or Joint Ventures in their independent
Notes, the figures relate to those of the Parent Company alone.

287
As per our report annexed For and on behalf of the Board
of Directors

For M/s. S Viswanathan S M Krishnan Dr. Prathap C Reddy

Chartered Accountants Company Secretary Executive Chairman
Firm Registration No.: 004770S

Preetha Reddy
V C Krishnan Managing Director
Partner
(Membership No: 22167)
17, Bishop Wallers Avenue (West)
CIT Colony, Mylapore, Chennai 600004 Suneeta Reddy
Joint Managing Director
Place: Chennai
Date: 24th May 2011

288
 DECLARATION

The Company certifies that all relevant provisions of Chapter VIII read with Schedule XVIII of the SEBI
Regulations have been complied with and no statement made in this Placement Document is contrary to the same.
The Company further certifies that all the statements in this Placement Document are true and correct.

Signed by:

Preetha Reddy
Managing Director

Date: July 18, 2011

Place: Chennai

289
 APOLLO HOSPITALS ENTERPRISE LIMITED
Registered Office
19 Bishop Gardens
Raja Annamalaipuram
Chennai 600 028
Tamil Nadu
JOINT BOOK RUNNING LEAD MANAGERS
Citigroup Global Markets India Enam Securities Private Limited Nomura Financial Advisory and
Private Limited 801/ 802, Dalamal Tower Securities (India) Private Limited
12th floor, Bakhtawar Nariman Point Ceejay House, Level 11, Plot F
Nariman Point Mumbai 400 021 Shivsagar Estate, Dr. Annie Besant
Mumbai 400 021 Tel: (91 22) 6638 1800 Road, Worli
Tel: (91 22) 6631 9890 Fax: (91 22) 2284 6824 Mumbai – 400 018
Fax: (91 22) 3919 7814 E-mail: [email protected] Tel: (91 22) 4037 4037
E-mail: [email protected] Fax: (91 22) 4037 4111
E-mail: project.pegasus-
[email protected]
DOMESTIC LEGAL ADVISOR
TO THE COMPANY
Luthra & Luthra, Law Offices
10th Floor, Tower 2B
One Indiabulls Centre
Jupiter Mills Compound
Lower Parel
Mumbai 400 013
DOMESTIC LEGAL ADVISOR TO THE
JOINT BOOK RUNNING LEAD MANAGERS

Amarchand & Mangaldas & Suresh A. Shroff & Co.

Peninsula Chambers, Peninsula Corporate Park
Ganpatrao Kadam Marg, Lower Parel
Mumbai 400 013

INTERNATIONAL LEGAL ADVISOR TO THE

JOINT BOOK RUNNING LEAD MANAGERS

Latham & Watkins LLP

9 Raffles Place
#42-02 Republic Plaza
Singapore 048619

AUDITORS TO THE COMPANY

M/s S. Viswanathan
Chartered Accountants
No.17, Bishop Wallers Avenue (West)
Mylapore, Chennai 600 004