MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDUSTRY STRUCTURE & DEVELOPMENT:
The India economic boom has been characterized by a few sectors which have been front
runners and few which have benefited from it. One such sector is Healthcare. The striking
feature about the Indian Healthcare sector is that it has the potential to grow at a much
faster rate in the foreseeable future with the encouraging initiatives taken by the Govt,
and the private sector.
The Indian healthcare sector provides various 'pockets of opportunity'.
Medical infrastructure forms the largest portion of the Healthcare pie. The current bed
per thousand population ratio for India stands at 1.03 as against an average 4.3 of
comparable countries like China, Korea and Thailand. The Indian healthcare infrastructure
is likely to reach a bed to thousand-population ratio of 1.85 and in a best-case scenario,
a ratio of 2 by 2012. Out of the total about 896,500 beds will be added by the private
sector with a total investment of 69.7 Billion US$ (Rs 222,000 Crores) over the next six
years. However, the gains are commensurate in this capital intensive industry, since the
revenues generated by private hospitals in the year 2012 will be to the tune of US$ 35.9
Billion (Rs. 161,440 Crores) growing at a CAGR of 15%.
Telemedicine / E-Health:
In India, only about 27 per cent of the population lives in urban areas, while a
sizeable 73 per cent of the population is rural. Hence telemedicine offers exciting
opportunities offering quality healthcare solutions to remote locations of the country.
Telemedicine is one such innovative technology, if used effectively it can double
utilization of scarce human resources.
Health insurance has the potential to show fantastic top line growth. Premiums grew
133% for private players. The Health insurance sector will grow to US$ 3.8 billion (Rs
17,100 Cr) in collected premiums by 2012 as compared to US$ 711 Million (Rs 3,199 Cr) in
Medical Value Travel:
The attraction of high quality healthcare facilities at competitive costs has been
instrumental in a large number of foreign arrivals to access healthcare services in India.
Medical value travel is poised to grow at 22% annually. With hospitals moving in for
quality accreditations like NABH & ISO and tie-ups between insurance players and
hospitals, this sector has the potential to be a latent growth driver. A percentage of
high end beds will provide treatment to medical tourists and the estimated value of the
industry will reach US$ 1.48 billion (Rs. 6,678 Cr) by 2012 from its current size of US$
450 Million (Rs. 2025 Cr).
Indian hospitals are fast becoming the first choice for an increasing number of foreign
tourists. India's growing reputation as a major medical tourism destination is attracting
more and more visitors from Gulf countries followed by UK & USA with many travel
agents now offering packages combining treatment with a vacation.
Indian healthcare BPOs are gaining momentum due to spiraling healthcare costs,
unbearable squeeze on margins, process inefficiencies, acute talent shortage in healthcare
establishments of US and Europe. Outsourcing healthcare business processes to Indian
service providers can result in substantial cost savings. The types of services being
offered by Healthcare BPOs in India include Data capture, Documentation, Commercial,
Administration, Human Resources and Customer Care Services.
The global clinical trials have the potential of becoming a US $ 1 billion (Rs. 4,500
crores) industry by 2010. The segment has . the potential for considerable growth
following requisite Govt, policies inputs and effective utilization of large Govt,
infrastructure and support to contract research organizations (CROs).
Apart from above this sector provides ample opportunities in holistic medicine, growth
in vaccine market, retail pharma market, home health, day care diagnostic/ surgery centres
and ambulatory care services viz. air lifting of patients.
The Government of India is focusing its attention to healthcare as the priority sector
and has been taking number of initiatives which includes public-private partnership
models, Medical Visa to foreign tourists, reduction in custom duties on life saving
medical equipments and clinical drugs and various health insurance schemes for the poor
and needy and increased FDI limit from 26% to 51%.
The biggest challenge today for Indian Healthcare Sector is shortage of quality medical
talent ranging from doctors, nurses, technicians and even healthcare administrators. The
new entrants in healthcare field in their efforts to establish their base, offers huge
compensation to trained and experienced staff. This high attrition rate affects hospital
top & bottom line of their working results. Further healthcare is a capital intensive
business with long gestation period. Real estate and project cost with high cost of rare
funds plays an important role in determining the viability of any new project and at the
same time to retain competitive edge in the existing setup, the company has to make
continuous investments in improving its infrastructure and hi-end technology, within its
The future of healthcare industry looks bright and promising keeping in view the
initiatives taken by both private players and government sector. According to report by
KPMG, the Indian Healthcare sector is predicted to touch $ 14.2 billion by 2012 at annual
growth rate of 5.8% from 2009, due to rising income levels, high populations, change in
the illness pattern in the country.
NMC has been continuously striving hard to improve the quality of healthcare services
and providing customer centric services to-the utmost satisfaction and well being of the
patients. The thrust has always been to make the hospital as centre of excellence with a
most comfortable experience for patients. In this context, NMC has been renovating its
entire infrastructure and introducing modern trends of healthcare delivery systems at the
The company is engaged in the healthcare business, which in context of Accounting
Standard 17 issued by the Institute of Chartered Accountants of India is considered the
only business segment.
Risks & Concerns:
NMC believes and recognizes risk as an intrinsic part of the business which can be well
managed with planned strategy. Risk posed by the entry of large multinational hospital in
the region and the competition to a great extent is being taken care of by providing
quality and affordable healthcare services in a most humane environment. The internal risk
management issues viz. infection control, waste management and emergencies are dealt with
utmost care. The hospital has been taking adequate measures for maintaining safe-working
conditions for employees, equipments and property related risks are handled through
NMC has always been in the forefront of providing quality healthcare continual
improvement and technological upgradation, ensuring maximum satisfaction and health of the
patients. NMC is also fully committed to provide eco-friendly environment thereby
complying with all applicable environmental legislations and regulations.
Internal Control Systems & Their Adequacy:
To ensure internal controls, the company has appointed independent firm of chartered
accountants for reviewing the effectiveness of operations, systems and procedures. In
addition the audit committee of the Board of Directors reviews, advises and suggests
internal auditors to continuously improve upon on their reporting process to ensure
compliance of various rules and regulations.
Financial operations versus operational performance
During the year under report, the company has recorded turnover of Rs. 2504.54 Lacs as
compared to turnover of Rs. 2375.84 Lacs for the previous year ended 31s1 March
2008, thereby recording 5.42% increase in turnover. During the year under review, profit
before interest, depreciation and taxation was Rs.729.86 Lacs as compared to Rs. 676.31
Lacs in the previous year ended 31sl March 2008 thereby recording 7.92%
increase. The company has earned net profit of Rs. 144.61 Lacs in the current year as
compared to the net profit of Rs. 119.58 Lacs in the previous year ended 31sl
March 2008. The diagnostic business of the company has marginally increased during the
year under report.
Human Resource Management is an important and focused area for the company.
The success of the organization depends on the utmost satisfaction of human needs,
ideas and their fulfillment to achieve company's objectives. The company also lays
emphasis on identifying and developing talent in the organization with a view to retain
them and imparting further training to those capable of handling additional
responsibilities recruits and train talented manpower enabling it to achieve its goals in
effective and efficient manner.
The Management Discussion and Analysis Report contain forward looking statements based
on data and information available with the company. These statements are subject to
certain risks and uncertainties. Actual results may differ materially from those expressed
in the statements as important factors could influence the company's operations such as
government policies, global/local, political and economic development, risk inherent to
the company's growth and such other factors.
For and on behalf of the Board
BRIG R.S. CHAUDHRI
Date: September 2, 2009
Place: New Delhi