Directors Report of Goodwill Hospital & Research Centre Ltd.

Mar 31, 2011

The Directors have pleasure in presenting the 11th Annual Report along with the Audited Statement of Accounts of the company for the financial year ended 31st March, 2011.

THE HEALTHCARE INDUSTRY - AN OVERVIEW

The health industry has emerged as one of the most challenging sectors as well as one of the largest service sector industries in India with estimated revenue of US$35 billion; it constitutes 5.2% of India's GDP and employs 4 million people. The Indian health industry is expected to grow at 15% per annum to US$78.6, reaching 6.1% of GDP and employing 9 million people by 2012.It is expected to become a US$ 280 billion industry by 2020.

The Healthcare Sector in India comprises of hospitals and allied sectors such as diagnostics and pathology, medical equipments and supplies, medical tourism and private medical insurance. During the period 2000-09, the sector has registered a growth of 9.3%. The share of private expenditure as to the total expenditure on health has grown from about 60% to almost 80% over the last decade.

BUSINESS OVERVIEW

We are engaged in running a multi specialty hospital at Noida under the brand Ojjus Medicare, with a super specialty focus on core areas such as Neurology and Neuro surgery, Cardioiogy and Cardiac surgery and Orthopaedics with emphasis on Joint Replacements and Sports Injuries. We also provide healthcare services in area of Minimally Invasive surgeries, Mother & Child Care, Paediatrics, Diagnostic, Critical Care Medicine, Oncology, Gynaecology & Obstetrics, Nephrology, Dermatology, Gastroenterology, Dental and Eye car, etc.

SUBSIDIARY COMPANY

Ojjus Fidelity Healthcare Private Limited ("Ojjus Fidelity") , is wholly owned subsidiary of our Company. Ojjus Fidelity is in the process of setting up a hospital at Faridabad on an area of land measuring 16,935 sq. mtrs. in sector 8 Urban Estate Faridabad at an estimated cost of 22,700 lakhs. The total construction area of the hospital is proposed at 3.92 lakh sq. ft. The hospital is proposed to be a super specialty for oncology & rehabilitation and neurology & neurosurgery with 700 beds. Ojjus Fidelity is in the process of achieving financial closure.

FINANCIAL RESULTS

There had been significant improvements in operation of the Company. Details of financial results for the year under review along with the figure for the previous year are as follows: -

(Amount in Lacs)

31.03 2011 31.03.2010

Net Sales/ Income from Operations 5353.39 2289.67

Other Income 4.90 1.33

Total Income 5358.29 2291.00 Profit before Interest,

Depreciation & Tax 3850.25 1712.21

Less: Interest 451.74 374.63

Depreciation 1082.89 781.00

Profit before Tax 2315.62 556.58

Less: Prior Period Expenses Nil .21 Provisions for current Year

Income Tax 722.04 281.60

Net Profit after Tax 1593.58 274.77 Add: Balance carried from

Profit & Loss A/C 396.40 121.63 Less: Provisions for earlier

year Taxation Nil Nil

Net Profit after tax and adjustments 1989.98 396.40

Dividend Nil Nil

Transfer to General Reserve Nil Nil

Balance Carried to Balance Sheet 1989.98 396.40

EPS (Basic) 19.93 5.50

Diluted 19.93 5.50

REVIEW OF OPERATIONS

Revenue for Financial Year 2010-2011 stood at Rs. 53,53,39,178 gross profit before depreciation, interest and tax but after prior period items stood at Rs. 38,50,25,509 and profit after tax was Rs. 15,93,57,566.

Your company has achieved substantial increase in Turnover and Profit after Tax than compared to last year. These were achieved mainly due to increase in revenue from Gamma Knife Procedures /Treatments as Gamma Knife has been widely accepted and known on Pan Asia basis for its availability at Your Hospital, also the revenue from other procedures/ treatments i.e. orthopedics, neuro and cardiac surgeries /treatments, Thereby, also leading to increase in sale of medicines.

your Hospital has been able to achieve this because of increase in number of beds and the strength of the in-house experienced medical professional has improved. your company has performed very well despite of several constraints. The company projects to increase its turnover and profit by 50% in the next year also. Your company continued to strengthen its position in this rapidly -growing market and also added more super specialties i.e. Knee Replacement, Cardiac Intervention, Cardiac Surgeries and Neuro Surgeries.

DIVIDEND & TRANSFER TO RESERVES

As Company is going for expansion of the Hospital & is in the process of opening other branches in NCR & others areas, so it needs to conserve its resources. Your directors have decided to not provide dividend for the year & no amount has been transferred to reserves during the year under review.

SHARE CAPITAL

Authorised Share Capital:

During the period under review, your Company has increased the authorized share capital from Rupees Five Crores to Rupees Twenty Five Crores.

Issued and Paid Up Share Capital

During the period under review, your Company has allotted 40,00,000 equity shares of Rs. 10 each to Ojjus Medicare Private Limited, the holding company, at a price of Rs. 10 per share. After the allotment, the Issued and Paid up Share Capital of the Company stood increased from Rs. 5,00,00,000 (Rupees Five Crores Only) to Rs.9,00,00,000 (Rupees Nine Crores Only).

PUBLIC ISSUE

Pursuant to the approval of the members in their extra ordinary general meeting, the Company has filed with SEBI the Draft Red Herring Prospectus dated January 21, 2011 for their comments and observation. The details of total estimated funds requirement is as follows:

Particulars Amount (Rs. lakhs)

Setting up of Diagnostic Centre at Faridabad 1,643.67

Establishment of Polyclinics 3,274.20

Repayment / Prepayment of loan facilities 1,000

General Corporate Purposes [.]

Expenses for the issue [.]

Total [.]

DEPOSITS

During the year under review Company has not accepted deposits from the public.

DIRECTORS

The Board consists of executive and non-executive directors including independent directors who have with and varied experience in different discipline of corporate functioning. Shri Kuldeep Rai Chawla was appointed as Non-Executive Director by the Board w.e.f 10.01.2011 and Shri Ram Avtar Poddar, Shri Vijendra Jain, Shri Rajeev Anand, Fr. Jose Alarico, Shri Vinod Kumar Grover were appointed as Non-Executive Independent Directors on 18.01.2011 to broad base the Board and to comply with the requirement of clause 49 of the listing agreement. The Company has received a notice in writing from members signifying the candidature of Shri. Kuldeep Rai Chawla, Shri Ram Avtar Poddar, Shri Vijendra Jain, Shri Rajeev Anand, Fr. Jose Alarico and Shri Vinod Kumar Grover for the office of the director of the company. Shri Kuldeep Rai Chawla Shri Rat. Avtar Poddar, Shri Vijendra Jain, Shri Rajeev Anand, Fr. Jose Alarico , Shri Vinod Kumar Grover ail are independent director and the Board recommend their. appointment.

Mrs. Namrata Chawla was appointed as Managing Director of the Company and Mr. Sandeep Singhania and Mr. Amanveer Singh were appointed as Whole Time Director of the Company.

In accordance with the provisions of the Companies Act, 1956 and pursuant to Article no. 138 of Articles of Association of the Company, Mr, Harvansh Chawla would retire at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

AUDIT COMMITTEE

The Audit Committee was constituted by our Board in their meeting held on January 18. 2011 in accordance with the requirements of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement- The Audit Committee presently comprises of:

S. Name of Member Designation Remarks No.

1. Mr. Ram Avtar Poddar Chairman Independent Director

2. Mr. Sandeep Singhania Member Executive Director 3. Fr. Joso Alarico Carvalho Member Independent Director Our Company Secretary is the Secretary to the Committee.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT. TECHNOLOGY ABSORPTIONS

As regards to disclosure under Section 217(1 )(e) of the "Companies Act, 1956 read with Rule 2 of the Companies Disclosure of particulars relating to conservation of Energy & Technology absorption are not applicable in this year.

FOREIGN EXCHANGE EARNINGS & OUT GO

The information pertaining to foreign exchange earning and out go are contained in the notes to the accounts.

PARTICULARS OF EMPLOYEES PURSUANT TO PROVISION OF SEC. 217(2A)|iii) OF EMPLOYEES RULE 1975

There were no employees whose particulars were There were no employees whose particulars were covered under section 217(2A) (a) of the Companies Act, 1956 read with the Companies (particulars of employees) rules 1975.

DIRECTOR'S RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 your directors state that:-

A. All the applicable accounting standards have been followed while preparing the annual accounts.

B. The directors have adopted such accounting policies that are reasonable and prudent and applied them consistently for the judgment and estimates that are reasonable and prudent to as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31st March 2011 and of the profit of the company for the year.

C. The director shavetaken proper and sufficient care for the maintenance of adequate record in accordance with the provision of the companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

D. The directors have prepared the annual accounts on the going concern basis.

CORPORATE GOVERNANCE

In view of the Company going public and our endeavor to adopt the best governance and disclosures practice, the Company has taken initiative to comply with the requirements of the Clause 49 of the Listing Agreement with Stock Exchanges.

AUDITORS

M/s. Chandiok & Guliani, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting: The Company has received letter from them to the affect that their appointment, if made, would be within the limits prescribed U/s 224(1 B) of the Companies Act, 1956. M/s. Chandiok & Guliani, Chartered Accountants, is required to be re-appointed as Statutory Auditors of the Company at the ensuing Annual General Meeting. Their appointment has also been recommended by the Audit Committee.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the overwhelming cooperation and assistance received from investors, customers, business associates, bankers, vendors as well as regulatory and governmental authorities and look forward to have continued support in all future endeavors of the company.

Your directors also place on record the appreciation of the services rendered by the employees through their dedication, hard work and commitment and look forward for continued support.

Your Directors also take this opportunity to express sincere thanks to the medical fraternity and patients for their continued co-operation, patronage and trust reposed in the Company and its health services.

For and on behalf of the Board

Harvansh Chawla Namrata Chawla

Director Managing Director

Place: New Delhi

Dated: 09.05.2011