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Notes to Accounts of Fortis Malar Hospitals Ltd.

Mar 31, 2015

1. Corporate information

Fortis Malar Hospitals Limited (''the Company'') was incorporated in the year 1989 to set up, manage and operate a multi-specialty hospital and it commenced its commercial operations in the year 1992. The Company is a subsidiary of Fortis Hospitals Limited.

2. Basis of preparation,

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013 (''the Act''), read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year except the change in accounting policy explained below.

Note B:

Shares held by holding/ ultimate holding company and /or their subsidiaries/ associates Of the above :

11,752,402 Equity Shares (Previous year - 11,752,402 equity shares) are held by Fortis Hospitals Limited , the holding company.

Note C: Details of shareholders having more than 5% interest in the Company

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31,2015, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 0.50 per share (March 31,2014 : Rs. 0.50 per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3 Segment reporting

Primary Segment

The Company is engaged in providing health care services, which in the context of Accounting Standard 17 (Segmental Information) is considered as the only business segment. Accordingly, no separate segmental information has been provided herein.

Secondary Segment - Geographical Segment

The Company operates in India and therefore mainly caters to the needs of the domestic market. Therefore, there are no reportable geographical segments.

4 Capital and other commitments

At March 31, 2015, the Company has capital commitments of Rs. 8,393,299 (March 31, 2014 : Rs. 517,500) towards purchase of assets.

5 a. Contingent liabilities

31 March 2015 31 March 2014

Claims against the Company not acknowledged as debts (in respect of compensation demanded 80,249,842 81,892,872 by the patients / their relatives for negligence).

b. Litigation

1) Matters of litigation, if any, the outcome of which in the opinion of Management is considered probable thereby requiring provision, have been provided for under the requirements of Indian GAAP.

2) Amount mentioned in Note 6(a) above represents compensation demanded by the patients/their relatives for negligence and are pending with various Consumer Disputes Redressal Commissions. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognized in the financial statements.

6 The Company does not have any foreign currency exposure as at March 31, 2015 and March 31, 2014. The Company does not have any outstanding derivative instruments as at March 31, 2015 and March 31,2014.

7 Gratuity

The Company has a defined benefit gratuity plan, whereby the employees are entitled to gratuity benefit on the basis of last salary drawn and completed number of years of service.

The following table summarises the components of net benefit expense recognised in the statement of profit and loss and the fund status and amounts recognised in the balance sheet

The principal assumptions used in determining gratuity and post-employment medical benefit obligations for the Company''s plans are shown below:

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other related factors, such as supply and demand in the employment market.

The Company expects to contribute Rs. 3,672,000 to gratuity in the next year (March 31, 2014: Rs. 1,965,000).

The fund is 100% administered by Life Insurance Corporation of India ("LIC"). The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Amounts for the current and previous four years are as follows:

8 Employee stock option plans

The Company provides share-based payment schemes to its employees. The relevant details of the scheme and the grant are as given below.

Malar Employee Stock Option Plan 2008 (Scheme) was approved by the board of directors of the Company on 31st July 2008/28th May 2009 and by shareholders in the annual general meeting held on 29th September, 2008 /21st August 2009. The following are some of the important conditions to the scheme:

Vesting Plan

- 25% of the option shall vest on the completion of 12 months from the grant date.

- 25% of the option shall vest on the completion of 24 months from the grant date.

- 25% of the option shall vest on the completion of 36 months from the grant date.

- 25% of the option shall vest on the completion of 48 months from the grant date.

Exercise Plan

There shall be no lock in period after the options have vested. The vested options will be eligible to be exercised on the vesting date itself. Notwithstanding any provisions to the contrary in this plan the options must be exercised before the end of the tenure of the plan.

Effective Date

The plan shall be deemed to have come in to force on the 21 August 2009 or on such other date as may be prescribed by the board of directors of the Company subject to the approval of shareholders of the company in general meeting.

The details of activity under the Scheme are summarized below:

The weighted average remaining contractual life for the stock options outstanding as at 31 March 2015 is 1.75 years (31 March 2014: 2.75 years). The range of exercise prices for options outstanding at the end of the year was Rs. 10. (31 March 2014: Rs. 10).

No stock options were granted during the current year or the previous year. The weighted average fair value of stock options at the last grant date was Rs. 13.45. The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:

The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

The Company measures the cost of ESOP using the intrinsic value method. Had the Company used the fair value model to determine compensation, its profit after tax and earnings per share as reported would have changed to the amounts indicated below:

9 Related Party Disclosures

9.1. Related parties where control exists

Relationship Name of the related Party

Ultimate Holding Company Fortis Healthcare Limited

Holding Company Fortis Hospitals Limited

Subsidiary Company Malar Stars Medicare Limited

14.2. Related parties with whom transactions have taken place during the year

Relationship Name of the related party

Ultimate Holding Company Fortis Healthcare Limited

Holding Company Fortis Hospitals Limited

Key Management Personnel Mr.V.Vijayarathna (Whole-time Director) (resigned from July 26 2014)

Mr Raghunath P (Whole time Director) (with effect from July 26, 2014)

Mr. Akshaya Kumar Singh (Chief Financial Officer)

Mr. Sumit Goel (Company Secretary)

Subsidiary Company Malar Stars Medicare Limited

Enterprises under common control Fortis Health Management Limited Lalitha Healthcare Private Limited Super Religare Laboratories Limited 10 Operating lease payments

Operating lease agreements have been entered in to by the Company with respect to office premises and medical equipment All lease commitments are cancellable. The total lease payments made during the year are as follows:

11 Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under The Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the current year and previous year.

12 Expenditure on Corporate Social Responsibility (CSR)

For the year ended March 31, 2015 the Company has incurred expenditure of Rs. 1.18 lakhs as compared to expenditure required to be spent under section 135 of the Act of Rs. 25.94 lakhs resulting in a shortfall of Rs. 24.76 lakhs.

13 Previous year''s figures have been regrouped where necessary to conform to the current year''s classification.


Mar 31, 2014

1. Corporate information

Fortis Malar Hospitals Limited (''the Company'') was incorporated in the year 1989 to set up, manage and operate a multi specialty hospital and it commenced its commercial operations in the year 1992. The Company is a subsidiary of Fortis Hospitals Limited.

2. Basis of preparation,

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (''Indian GAAP''). The Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in India, mandatory accounting standards notified under the Companies (Accounting Standards) Rules,2006, (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated 4 April 2014, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.

3. Interest Income

During the year ended March 31, 2013, Interest income aggregating Rs. 35,327,891, earned on Inter Corporate Deposit placed out of advance money received from Fortis Health Management Limited (''FHML'') towards sale of the ''Clinical Establishment Business'' (''CEB'') upto October 16, 2012, being the effective date of transfer of the CEB has been disclosed as an exceptional item and the related interest income aggregating Rs.26,537,424 pertaining to the period subsequent to October 16, 2012 has been included as part of other income.

4. Sale of Clinical Establishment Business

The Shareholders of the Company had approved vide resolution dated July 18, 2011, the transfer / sale / disposal of Hospital Infrastructure Undertaking including Out Patient Department business and radio diagnosis equipments (''Hospital Infrastructure Undertaking'') on a Going Concern Basis through slump sale to any one of the Affiliates / Group Company / Companies under the same management for a consideration of an amount not less than Rs. 600,000,000. Accordingly, the net assets of Rs. 2,308.93 lakhs of the clinical establishment business have been transferred as a going concern on a slump sale basis effective October 17, 2012 for an aggregate consideration of Rs. 7,000 lakhs. The net profit aggregating Rs. 3,132.59 lakhs (net of tax expense of Rs. 1,007.47 lakhs) arising from the sale of the said business has been disclosed as an ''extraordinary item''.

The Company has entered into a Hospital and Medical Services Agreement (HMSA) with Fortis Health Management Limited (FHML), whereby, the Company has engaged FHML to provide the clinical establishment services including the radiology and the out-patient consultation services on behalf of the Company.

5. Segment reporting

Primary Segment

The Company is engaged in providing health care services, which in the context of Accounting Standard 17 (Segmental Information) is considered as the only business segment. Accordingly, no separate segmental information has been provided herein.

Secondary Segment - Geographical Segment

The Company operates in India and therefore mainly caters to the needs of the domestic market. Therefore, there are no reportable geographical segments.

6. Capital and other commitments

At March 31, 2014, the Company has capital commitments of Rs 517,500 (Previous year Rs. 2,139,502) towards purchase of assets.

7. Contingent liabilities

31 March 2014 31 March 2013 Rs . Rs .

Claims against the Company not acknowledged as debts (in respect of compensation demanded by the patients 81,892,872 72,323,252 / their relatives for negligence).

The cases are pending with various Consumer Disputes Redressal Commissions. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognized in the financial statements.

8. Employee stock option plans

The Company provides share-based payment schemes to its employees. During the year ended March 31, 2014, an employee stock option plan (ESOP) was in existence. The relevant details of the scheme and the grant are as below.

Malar Employee Stock Option Plan 2008 (Scheme) was approved by the board of directors of the Company on 31st July 2008/28th May 2009 and by shareholders in the annual general meeting held on 29th September, 2008 /21st August 2009. The following are some of the important conditions to the scheme:

Vesting Plan

* 25% of the option shall vest on the completion of 12 months from the grant date.

* 25% of the option shall vest on the completion of 24 months from the grant date.

* 25% of the option shall vest on the completion of 36 months from the grant date.

* 25% of the option shall vest on the completion of 48 months from the grant date.

Exercise Plan

There shall be no lock in period after the options have vested. The vested options will be eligible to be exercised on the vesting date itself. Notwithstanding any provisions to the contrary in this plan the options must be exercised before the end of the tenure of the plan.

Effective Date

The plan shall be deemed to have come to in force on the 21 August 2009 or on such other date as may be prescribed by the board of directors of the Company subject to the approval of shareholders of the company in general meeting.

9. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006 There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under The Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the current year and previous year.

10. Previous year''s figures have been regrouped where necessary to conform to the current year''s classification.


Mar 31, 2013

1. Corporate information

Fortis Malar Hospitals Limited („the Company-) was incorporated in the year 1989 to set up, manage and operate a multi specialty hospital and it commenced its commercial operations in the year 1992. The Company is a subsidiary of Fortis Hospitals Limited.

2. Basis of preparation,

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India („Indian GAAP-). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3 Interest Income

Interest income aggregating Rs. 35,327,891, earned on Inter Corporate Deposit placed out of advance money received from Fortis Health Management Limited (''FHML'') towards sale of the ''Clinical Establishment Business'' (''CEB'') upto October 16, 2012, being the effective date of transfer of the CEB has been disclosed as an exceptional item and the related interest income aggregating Rs.26,537,424 pertaining to the period subsequent to October 16, 2012 has been included as part of other income.

4 Sale of Clinical Establishment Business

The Shareholders of the Company had approved vide resolution dated July 18, 2011, the transfer / sale / disposal of Hospital Infrastructure Undertaking including Out Patient Department business and radio diagnosis equipments (''Hospital Infrastructure Undertaking'') on a Going Concern Basis through slump sale to any one of the Affiliates / Group Company / Companies under the same management for a consideration of an amount not less than Rs. 600,000,000. Accordingly, the net assets of Rs. 230,893,623 of the clinical establishment business have been transferred as a going concern on a slump sale basis effective October 17, 2012 for an aggregate consideration of Rs. 700,000,000. The net profit aggregating Rs. 313,258,461(net of tax expense of Rs. 100,746,916) arising from the sale of the said business has been disclosed as an „extraordinary item-.

The Company has entered into a Hospital and Medical Services Agreement (HMSA) with Fortis Health Management Limited (FHML), whereby, the Company has engaged FHML to provide the clinical establishment services including the radiology and the out-patient consultation services on behalf of the Company.

5 Segment reporting

Primary Segment

The Company is engaged in providing health care services, which in the context of Accounting Standard 17 (Segmental Information) is considered as the only business segment. Accordingly, no separate segmental information has been provided herein.

Secondary Segment – Geographical Segment.

The Company operates in India and therefore mainly caters to the needs of the domestic market.

Therefore, there are no reportable geographical segments.

6 Capital and other commitments

At March 31, 2013, the Company has capital commitments of Rs 2,139,502 (Previous year Rs. 1,075,617) towards purchase of assets.

The cases are pending with various Consumer Disputes Redressal Commissions. The company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognized in the financial statements.

7 Gratuity

The Company has a defined benefit gratuity plan, whereby the employees are entitled to gratuity benefit on the basis of last salary drawn and completed number of years of service.

The Company also provides leave encashment benefit to employees, which is unfunded. The Company also provides superannuation benefits to its senior executives

The following table summarises the components of net benefit expense recognised in the statement of profit and loss and the fund status and amounts recognised in the balance sheet.

8 Employee stock option plans

The Company provides share-based payment schemes to its employees. During the year ended March 31, 2013, an employee stock option plan (ESOP) was in existence. The relevant details of the scheme and the grant are as below.

Malar Employee Stock Option Plan 2008 (Scheme) was approved by the board of directors of the company on 31st July 2008/28th May 2009 and by shareholders in the annual general meeting held on 29th September, 2008 /21st August 2009. The following are some of the important conditions to the scheme:

Vesting Plan

25% of the option shall vest on the completion of 12 months from the grant date.

25% of the option shall vest on the completion of 24 months from the grant date.

25% of the option shall vest on the completion of 36 months from the grant date.

25% of the option shall vest on the completion of 48 months from the grant date.

Exercise Plan

There shall be no lock in period after the options have vested. The vested options will be eligible to be exercised on the vesting date itself. Notwithstanding any provisions to the contrary in this plan the options must be exercised before the end of the tenure of the plan.

Effective Date

The plan shall be deemed to have come to in force on the 21 August 2009 or on such other date as may be prescribed by the board of directors of the Company subject to the approval of shareholders of the company in general meeting.

The weighted average remaining contractual life for the stock options outstanding as at 31 March 2013 is 3.75 years (31 March 2012: 4.75 years). The range of exercise prices for options outstanding at the end of the year was Rs. 10. (31 March 2012: Rs. 10).

The weighted average fair value of stock options granted during the year was Rs. 13.45 (31 March 2012: Rs 13.45). The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:

The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

The Company measures the cost of ESOP using the intrinsic value method. Had the Company used the fair value model to determine compensation, its profit after tax and earnings per share as reported would have changed to the amounts indicated below:

9 Operating lease payments

Operating lease agreements have been entered in to by the Company with respect to office premises and medical equipments. The total lease payments made during the year are as follows:

10 Previous year''s figures have been regrouped where necessary to conform to the current year''s classification.


Mar 31, 2012

1. Corporate information

Fortis Malar Hospitals Limited (the Company) was incorporated in the year 1989 to set up, manage and operate a multi specialty hospital and it commenced its commercial operations in the year 1992. The Company is a subsidiary of Fortis Hospitals Limited.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except as given below.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b - Security/ Guarantee against long term borrowings

The loan is secured by sole and exclusive charge on all fixed assets and current assets both present and future, including land and building, medical assets and plant and machinery.Further, the loan is secured by corporate guarantee of International Hospitals Limited.

c - Repayment Terms of the long term borrowings

Repayment in respect of the loan outstanding of Rs. 23.60 million is 36 monthly instalments.

Repayment in respect of other loans is 60 monthly instalments to commence after 12 months principal moratorium from disbursement of each tranche. Interest to be serviced monthly.

2 Proposed sale of Hospital Infrastructure Undertaking

The Shareholders of the Company have approved vide resolution dated July 18, 2011, the transfer / sale / disposal of Hospital Infrastructure Undertaking including Out Patient Department business and radio diagnosis equipments ('Hospital Infrastructure Undertaking') on a Going Concern Basis through slump sale to any one of the Affiliates / Group Company / Companies under the same management for a consideration of an amount not less than Rs. 600,000,000. On February 7, 2012, the Company has signed a Term Sheet with Fortis Health Management Limited ('FHML'), one of its group companies expressing intent to sell the Hospital Infrastructure Undertaking and proposed to enter into an exclusive and irrevocable Business Transfer Agreement effecting the transfer at a later date not exceeding six months from the date of the Term Sheet. The Company has also received an advance of Rs. 650,000,000 on February 7, 2012 towards the proposed transfer. The Company is in the process of taking necessary steps to execute the transfer. The Company has temporarily invested this amount as inter corporate deposit and has earned an interest of Rs. 9,616,439. The Company is still in discussion with FHML regarding finalizing the valuation for the transaction and other terms and conditions including the arrangement to lease back the infrastructure post the proposed transfer.

3 Management fee from Hospitals

During the current year, the Company has received management fee from two hospitals with which the Company had entered into operation and management agreements aggregating to Rs. 19,125,440. Of the above, one agreement has been terminated during December 2011 and the other agreement subsequent to the year end in April 2012.

4 Segment reporting

Primary Segment

The Company is engaged in providing health care services, which in the context of Accounting Standard 17 (Segmental Information) is considered as the only business segment. Accordingly, no separate segmental information has been provided herein.

Secondary Segment - Geographical Segment.

The Company primarily operates in India and therefore mainly caters to the needs of the domestic market. Therefore, there are no reportable geographical segments.

5 Capital and other commitments

At March 31, 2012, the Company has capital commitments of Rs. 1,075,617 (Previous year Rs. Nil) towards purchase of assets.

6 Contigent Liabilities

March 31, 2012 March 31, 2011

Claims against the Company not acknowledged as debts 72,323,252 3,223,252 (in respect of compensation demanded by the patients / their relatives for negligence). The cases are pending with various Consumer Disputes Redressal Commissions.

Based on expert opinion obtained, the management believes that the Company has good chance of success in these cases.

7 Deferral/capitalization of exchange differences

The Ministry of Corporate Affairs (MCA) has issued the amendment dated December 29, 2011 to AS 11 The Effects of Changes in Foreign Exchange Rates, to allow companies deferral/ capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the amendment/earlier amendment to AS 11, the company has capitalized exchange loss, arising on long-term foreign currency loan, amounting to Rs. 3,033,591 (March 31, 2011: Exchange gain Rs. 151,025) to the cost of plant and equipments.

8 Gratuity

The Company has a defined benefit gratuity plan, whereby the employees are entitled to gratuity benefit on the basis of last salary drawn and completed number of years of service.

The Company also provides leave encashment benefit to employees, which is unfunded. The Company also provides superannuation benefits to its senior executives

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other related factors, such as supply and demand in the employment market.

The company expects to contribute Rs. 1,600,000 to gratuity in the next year (March 31, 2011: Rs. 638,000).

The fund is 100% administered by Life Insurance Corporation of India ("LIC"). The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Amounts for the current and previous four periods are as follows:

4 Employee stock option plans

The Company provides share-based payment schemes to its employees. During the year ended March 31, 2012, an employee stock option plan (ESOP) was in existence. The relevant details of the scheme and the grant are as below.

Malar Employee Stock Option Plan 2008 (Scheme) was approved by the board of directors of the company on 31st July 2008/28th May 2009 and by shareholders in the annual general meeting held on 29th September, 2008 /21st August 2009. The following are some of the important conditions to the scheme:

Vesting Plan

- 25% of the option shall vest on the completion of 12 months from the grant date.

- 25% of the option shall vest on the completion of 24 months from the grant date.

- 25% of the option shall vest on the completion of 36 months from the grant date.

- 25% of the option shall vest on the completion of 48 months from the grant date.

Exercise Plan

There shall be no lock in period after the options have vested. The vested options will be eligible to be exercised on the vesting date itself. Notwithstanding any provisions to the contrary in this plan the options must be exercised before the end of the tenure of the plan.

Effective Date

The plan shall be deemed to have come to in force on the 21 August 2009 or on such other date as may be prescribed by the board of directors of the company subject to the approval of shareholders of the company in general meeting.

The weighted average remaining contractual life for the stock options outstanding as at 31 March 2012 is 4.75 years (31 March 2011: 5.75 years). The range of exercise prices for options outstanding at the end of the year was Rs. 10. (31 March 2011: Rs. 10.)

The weighted average fair value of stock options granted during the year was Rs. 13.45 (31 March 2011: Rs. 13.45). The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:

The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

9 Operating lease payments

Operating lease agreements have been entered in to by the Company with respect to office premises and medical equipments. The total lease payments made during the year are as follows:

10 There are no overdue amounts payable to Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 based on information available with the Company. Further, the Company has not paid any interest to any Micro and Small Enterprises during the year ended March 31, 2012 and year ended March 31, 2011.

11 The figures of previous year were audited by a firm of Chartered accountants other than S R B C & Co. Previous year's figures have been regrouped where necessary to conform to the current year's classification.


Mar 31, 2011

1. Segment Reporting:

As the Companys business activity primarily falls within a single business and geographical segment, there are no additional disclosures to be provided in terms of Accounting Standard 17 "Segment Reporting"

2. Fixed asset include, medical equipment, purchased through HDFC bank Ltd, under confirmed irrevocable foreign deferred letter of credit payable in US Dollars, after 36 months from 3rdOctober 2008. Liability has been adjusted on value of the Dollar at the close of the year.

3. Details of Directors Remuneration

(a) In view of the approval from Ministry of Company Affairs, the previous year figure has been reworked. Provision for incentives has been scaled down, to bring down the total remuneration paid to the Director to the limit approved by Ministry of Company Affairs Rs. 7,208,211 and excess remuneration paid Rs. 176,569 is being recovered. The figure for the current year is exclusive of Rs. 1,823,431 included in the provision for incentives for the financial year 2010-2011

(b) As the future liability for Gratuity and leave encashment is provided on an actuarial basis for the company as a whole, the amount pertaining to the Directors is not ascertainable and, not included above.

4. The balances outstanding in Hospital Sundry Debtors and Creditors are subject to confirmation.

5. Figures are regrouped and reclassified wherever necessary. The figures are rounded off to nearest Rupees

6. Provision for incentives include Rs.1,823,436 provision created for the whole time director(Previous year Rs. 25 lacs, (scaled down to Rs. 5 lacs during the current financial year)).

7. Assets, having original cost Rs. 59,331,032, which have become obsolete and irrepairable having, very little scrap value were removed from the gross block consequently written down value of Rs. 2,108,549 has been written off in the books of accounts.

8. Provision for gratuity includes additional provision Rs. Nil assessed by the independent actuary for the liability existed at the beginning of the year. (Previous year Rs. 1,691,197)

9. The company has been regularly remitting the service tax due for the payments received from all TPAs including M/s. Star Health and Allied Insurance Co. Ltd, except for the payments received under TNCM Insurance Scheme. There has been a certain delay in realization and remittance of Service Tax due on amount due from M/s. Star Health and Allied Insurance Co. Ltd., TPA for TNCM Insurance Scheme. For the payments received under the said scheme an amount of Rs. 41.32 lacs (more than six months Rs. 10.95 lacs) was not remitted to the authorities

10. Disclosure under AS-18 - Related Parties as on 31st March, 2011

(I). LIST OF RELATED PARTIES (AS CERTIFIED BYTHE MANAGEMENT):

A. Enterprises under control (whether directly or indirectly) of reporting enterprise

Malar Stars Medicare Limited

Enterprises which contol (directly or indirectly) reporting enterprise

Fortis Healthcare Holdings Limited

Fortis Healthcare (India) Limited

RHC Holding Private Limited (Holding Co. of FHHL) (w.e.f. December 22,2010)

International Hospital Limited

Enterprises which are under common control with reporting enterprise

(a) Subsidiaries of Fortis Healthcare (India) Limited

Fortis Hospotel Ltd.

International Hospital Limited

Escorts Heart Institute And Research Centre Limited

Escorts HeartAnd Super Speciality Institute Limited

Escorts HeartAnd Super Speciality Hospital Limited

Fortis Health Management Limited

Fortis Healthcare International Limited

Lalitha Healthcare Private Limited

Fortis Hospitals Limited

Fortis Emergency Services Limited

Escorts Hospital & Research Centre Limited

Fortis Global Healthcare (Mauritius) Limited

Fortis C-Doc Healthcare Limited (w.e.f. September 17,2010)

Fortis Asia Healthcare Pte. Limited, Singapore (w.e.f. January 7,2011)

Fortis Global Healthcare Infrastructure Pte. Limited, Singapore (w.e.f. March 31,2011)

Kanishka Housing Development Company Limited

(b) Subsidiaries of Fortis Healthcare Holdings Limited

Hiranandani Healthcare Private Limited

Fortis HealthStaff Ltd.

Fortis Hospital Management Ltd.

Religare Wellness Ltd.

Hospitalia Eastern Private Limited

Medsource Healthcare Pvt. Ltd.

(Subsidiary of Religare Wellness Ltd.)

(c) Subsidiaries of RHC Holding Private Limited (Holding Company of FHHL)

Fortis Healthcare Holdings Limited

Fortis Global Healthcare Ltd

A-1 Book Company Private Limited

RHC Finance Private Limited

Maple Leaf Buildcon Private Limited

Todays Holdings Private Limited

Religare Infotech Private Limited

RHC Financial Services (Mauritius) Ltd

Fortis Global Healthcare Holdings Pte. Ltd (Singapore)

Religare Infotech Pty Limited

Altai Investments Limited

Quality Healthcare Limited

Quality Healthcare Medical Services Limited

Quality Healthcare Medical Holdings Limited

Portex Limited

Quality Healthcare Services Limited

Green Apple Associates Limited

Quality Healthcare Hongkong Limited

Quality HealthCare Medical Services (Macau)Limited

Berkshire Group Limited

Healthcare Opportunities Limited

GlobalRX Limited

SmartLab Limited

Quality HealthCare Medical Centre Limited

Universal Lane Limited

Quality HealthCare Chinese Medicine Limited

Quality HealthCare Psychological Services Limited

Quality HealthCare Dental Services Limited

Quality HealthCare Nursing Agency Limited

Quality HealthCare Physiotherapy Services Limited

Dynamic People Group Limited

Normandy (Hongkong) Limited

Quality EAP (Macau) Limited

TCM Prodicts Limited

Great Option Limited

Marvellous Way Limited

Poltallock Limited

Summerset Green Limited

Allied Medical Practices Guild Limited

Quality HealthCare Professional Services Limited

D3 Health Services Limited

GHC Holding Limited

CASE Specialist Limited

Jadeast Limited

Jadefairs International Limited

Jadison Investment Limited

Jadway International Limited

Megafaith International Limited

Fortis Healthcare Singapore Pte. Limited

B. Associate or JV of reporting enterprise Investing party of which reporting enterprises is an associate NIL

C. individuals (directly or indirectly) having control or significant influence over reporting enterprise

Mr Malvinder Mohan Singh

Mr Shivinder Mohan Singh

Relatives of such individuals

Mrs. Nimmi Singh

Mrs. Japna Malvinder Singh

Mrs. Aditi Shivinder Singh

Ms. Nimrita Parvinder Singh )

Ms. Nanki Parvinder Singh )

Ms. Nandini Parvinder Singh )

Master Anhad Parvinder Singh ) MINOR

Master Udayveer Parvinder Singh )

Master Vivan Parvinder Singh )

Master Kabir Parvinder Singh )

D. Key managerial personnel(s)

Mr. Krish Ramesh

Relatives of Key managerial personnel(s)

Ms.R.Uthra.Wife

Mr. R. Krishnamachari, Father

Late Smt. K. Kalyani, Mother

Mr. R. Praveen Kumar, Son

Ms. R. Prashanthi

Mr. K. Ramkumar, Brother

Mr. K. Ravichandaran, Brother

Mrs. R. Shamala, Brothers Wife

Mrs. R. Sumathi, Brothers Wife

E. Enterprises over which any person mentioned at (c) and (d) have significant influence

Religare Enterprises Limited (REL)

Religare Securities Limited

Religare Finvest Limited

Religare Commodities Limited

REL Infrafacilities Limited (formerly known as Religare

Realty Limited)

Religare Venture Capital Ltd.

Religare Insurance Broking Ltd.

Religare Finance Limited

Religare Capital Markets Limited

Religare Macquarie Wealth Management Limited

Religare Health Insurance Company Limited

RELIGARE ARTS INITIATIVE LIMITED

Religare United Soccer Limited

Religare Arts Investment Management Limited

AEGON Religare Life Insurance Company Limited

Vistaar Religare Capital Advisors Limited

Religare Asset Management Company Limited

Religare Trustee Company Ltd,.

Mausam Films Limited

Vistaar Religare Films Limited

Vistaar Religare Media Limited

Vistaar Religare Pictures Limited

Vistaar Religare Entertainment Limited

Milestone Religare Investment Advisors Private Limited

Religare Housing Development Finance Corporation

Limited (Formerly known as Maharishi Housing

Development Finance Corporation Limited)

Religare Advisory Services Limited

Religare Capital Markets Plc.

Hichens, Harrison (Middle East) Limited

Hichens, Harrison (Ventures) Limited

Religare Capital Markets (UK) Limited

Religare Hichens Harrison Consultoria Internacional

Ltd

Religare Capital Markets Pty Limited

Religare Capital Markets Inc

London Wall Nominees Limited

HH1803.Com Limited

Tobler (Mauritius) Limited

Tobler (UK) Limited

Religare Global Asset Management Japan Co. Ltd.

Religare Investment Advisory (Mauritius)

Religare Investment Holdings (UK) Ltd.

Charterpace Limited

Blamire Limited

Hichens, Harrison (Far East) Pte Limited

Dion Global Solutions Limited

Religare Technologies Limited

Regius Overseas Holding Co. Ltd.

Dion Global Solutions Pty Ltd.

Dion Global Solutions (Australia) Pty Ltd.

Dion Global Solutions (Development) Pty Ltd.

Dion Global Solutions (Asia Pacific) Pty Ltd.

Dion Global Solutions (NZ) Ltd.

Dion Global Solutions (HK) Ltd.

Dion Global Solutions (UK) Ltd.

Dion Global Solutions (MY) Sdn Bhd

Dion Global Solutions (Singapore) Pte. Ltd.

Religare Technova Global Solutions Vietnam Company Ltd.

Super Religare Laboratories Limited

MENA Healthcare Investment Company Limited

Medical Management Company Limited

Super Religare Laboratories International Limited

Super Religare Laboratories International FZ-LLC

Super Religare Reference Laboratories (Nepal) Pvt. Ltd.

RHC Holding Private Ltd

Oscar Investments Ltd.

A-1 Book Company (P) Ltd

Malav Holdings (P) Limited

Luxury Farms (P) Ltd.

Vistas Realtors Private Limited

Shivi Holdings (P) Ltd

Greenview Buildtech Private Limited

RC Nursery (P) Ltd.

Shimal Research Laboratories Ltd

Hospitalia Informations Systems (P) Ltd

ANR Securities Limited.

Bindas Realtors Private Limited

Vistas Complexes Private Ltd

Meadows Buildtech Private Limited

Fortis Clinical Research Ltd

Green Biofuels Farms Private Ltd

Malsh Healthcare (Partnership Firm)

OscarTraders (Partnership Firm)

Religare Voyages Limited

ReligareAviation Limited

Religare Aviation Training Academy Limited

Religare Travels (India) Limited

Religare Bullion Limited

ReligareAviation Engineering Limited

Religare Flysims Limited

Religare Share Brokers Limited

Piramal Diagnostic Services P Limited

DDRC Piramal Diagnostic Services P Limited

Religare Global Asset Management (HK) Ltd.

Religare Capital Markets (EMEA) Limited

Kyte Management Limited

Religare Capital Markets (USA) LLC

Religare Capital Markets (Hongkong) Limited

Religare Capital Markets (Singapore) Pte Limited

Religare Voyages Business Services Private Limited

Notes:

1. Entities in which person mentioned in (c) and (d) have significant influence whether directly or indiretly, singly or jointly, are also included in the list.

11 Disclosures Under Accounting Standard -15 (Revised) On "Employee Benefits":

B. Defined Benefit Fund

The company has a defined benefit gratuity plan, whereby the employees are entitled to gratuity benefit on the basis of last salary drawn and completed number of years of services.

The company also provides Leave Encashment benefit to its employees, which is unfunded. The company also provides Super Annuation benefits to its senior executives.

The following table summaries the components of net benefit expenses recognised in the profit and loss account and the amounts recognised in the balance sheet.

Notes:

a) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

b) The Companys expected contribution to the fund in the next year is not presently ascertainable and hence, the contributions expected to be paid to the plan during the annual period beginning after the balance sheet date as required by Para 120 (o) of the Accounting Standard 15 (Revised) on Employee Benefits are not disclosed.

12. CONTINGENT LIABILITY

a) Estimated amount of contracts to be executed on capital account and not provided for Rs. 31.87 lacs


Mar 31, 2000

1. CONTINGENT LIABILITIES

a. Estimated amount of capital contracts remaining to be executed and not provided for, amounting to Rs.l3,00,000/-(previous period Rs.30,00,000/-)

b. Bank guarantees were given in favour of MMDA and others amounting to Rs.16,28,818/- (previous period Rs.75,000/-)

c. Loans and Advances include a sum of Rs.490.12 lacs paid to two companies which are included in the Register maintained u/s.30i of the Companies Act 1956, towards claim by the said companies which are yet to be quantified and reconciled.

2. In the absence of demand notice from the Financial Institutions interest has been provided as per the agreement and is subject to reconciliation.

3. a. The balances outstanding in Hospital Sundry Debtors and Creditors are subject to confirmation.

b. As per the Accounting policy 1(v) (c) 1/5th of the deferred revenue expenditure is written off in the current period.

4. Figures for the current period is for 18 months and figures for the previous period is for 12 months. Hence they are not comparable. Figures of the current period and previous period are regrouped and rearranged wherever necessary. The figures are rounded off to the nearest rupee.

5. Travelling expenses include Directors travel, amounting to Rs.7,29,622/- previous period Rs.2,72,582/-)

6. An amount of Rs. 1,38,418 has been contributed by the Company towards Kargil Relief Fund

 
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