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Notes to Accounts of KMC Speciality Hospitals (India) Ltd.

Mar 31, 2016

Note : Since the Company has carried forward losses and unabsorbed depreciation as per taxation laws, the recognition of deferred tax asset has been scaled down to the extent that the aggregate of the deferred tax asset matches with the aggregate of the deferred tax liability as at the year end.

Terms of repayment of cash credit facility from banks and the nature of security

The cash credit facilities are secured by way of the following:

(i) Hypothecation of current assets of the Company, both present and future;

(ii) Hypothecation of all movable assets, both present and future, comprising of medical equipments, machineries, furnitures, etc.

(iii) Equitable mortgage on the commercial lands situated at Old TS no. 132, New TS No. 2-part and New TS no. 3/2 part, Old Ward No. 1, New Ward No. K, Old block no. 25, New block no. 17, K.Abishekapuram Village, Cantonment, Trichy and commercial building in the leasehold land situated at No.6, Royal Road, Cantonment, Trichy; and

(iv) Corporate guarantee from Sri Kavery Medical Care (Trichy) Limited, the Holding Company and personal guarantees of Dr.S.Chandrakumar, Managing Director, Dr. S Manivannan, Director of the Company.

1 Transfer Pricing

The Company has specified domestic transactions with related parties as provided for in the Income Tax Act, 1961. In the opinion of the management, the Company maintains documents as prescribed by the Income-tax Act to prove that these specified domestic transactions are at arm’s length and the aforesaid legislation will not have any material impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

2 Segment reporting

The Company’s sole business segment is ‘Medical and Healthcare services’ and the principal geographical segment is India. Consequently, the management believes that there are no reportable segments as required under AS 17 - “Segment Reporting”.

3 Dues to micro and small enterprises

The management has identified the enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Such determination/ identification has been done on the basis of information received and available with the Company and relied upon by the auditors. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at March 31, 2016 has been made in the financial statements based on information received and available with the Company.

4 Related party disclosures

a) Names of related parties and nature of relationship are as follows:

Nature of relationship Name of the related party

Holding company Sri Kavery Medical Care (Trichy) Limited

Fellow subsidiaries Kaveri Medi CT Scan (Thuraiyur) Private Limited

Kavery Hospital (Hosur) Limited (till December 31, 2014) Kavery Medical Centre (Karaikudi) Limited

Key management personnel (KMP) Dr. S. Chandrakumar, Managing Director

Dr. D. Senguttuvan, Executive Director Mr. G. Ranganathan, Chief Financial Officer Mr. A. Thanikainathan, Company Secretary

* The obligation towards gratuity and leave encashment are calculated for the company as a whole and hence not included above

5. During the course of reconciliation of inventory records with the physical inventory for the current year, the management has observed certain discrepancies. The management is in the process of carrying out a comprehensive evaluation for identification of the reasons for these discrepancies and in the opinion of the management the impact, if any, arising on account of the said evaluation will not be material to the financial statements.

6. Misappropriation of funds

During the year, one of the employees had misappropriated the collections made from certain customer aggregating to Rs. 585,354/-. Based on internal management inquiries conducted in this regard, the management has decided to terminate the employee and no specific action was taken for recovery of the money from the concerned employee. The management has adjusted the inventory records after performing a comprehensive physical inventory verification.

7. Prior year comparatives

Prior year''s figures have been regrouped wherever necessary to confirm to this year''s presentation.


Mar 31, 2015

1. Company overview

KMC Speciality Hospitals (India) Limited ('the Company") was originally incorporated as Advanced Medical Care Private Limited on December 31,1982 under the Companies Act, 1956 and was converted into a Public Limited Company on July 15, 1988. The name of the Company was changed to Seahorse Hospitals Limited on March 21, 1995 and to its current name with effect from October 24, 2008. The Company is a super speciality hospital based in Trichy, belonging to the Kauvery Hospitals Group. The company is primarily engaged in the business of rendering medical and healthcare services.

2. Rights, preferences and restrictions attached to shares

The company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the company's residual assets. The equity shares are entitled to receive dividend as declared from time to time subject to payment of dividend to preference shareholders. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

3. On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

4. Terms of repayment of term loans from banks and the nature of security

a) Term loans availed from Axis Bank:

(i) Term loan-I was availed during October 2010 and is repayable in 60 monthly installments of INR 833,334/- along with interest, commencing from November 30, 2012, being 24 months from the date of sanction.

(ii) Term loan-II was availed during February 2012 and is repayable in 60 monthly installments of INR 833,334/- along with interest, commencing from January 31,2014, being 24 months from the date of sanction.

(iii) Term loan-III was availed during the financial year 2013-14 and is repayable in 60 monthly installments of INR 500,000/- along with interest, commencing from April 30, 2014, being 10 months from the date of sanction.

b) Term loan from City Union Bank was availed on January 2, 2013 and is repayable in 84 equated monthly installments (EMIs) of INR 923,244/- commencing from August 01,2013, being 6 months after the date of availment.

5. The above loans are secured by way of the following:

(i) Hypothecation of all movable assets, both present and future, comprising of medical equipments, machineries, furnitures, etc.

(ii) Equitable mortgage on the commercial lands situated at Old TS no. 132, New TS No. 2-part and New TS no. 3/2 part, Old Ward No. 1, New Ward No. K, Old block no. 25, New block no. 17, K.Abishekapuram Village, Cantonment, Trichy and commercial building in the leasehold land situated at No.6, Royal Road, Cantonment, Trichy.

(iii) Corporate guarantee from Sri Kavery Medical Care (Trichy) Limited, the Holding Company

(iv) Personal guarantees of (a) Dr. S Chandrakumar, the Managing Director and Dr. S Manivannan, Director for the Term Loans availed from Axis Bank and (b) Dr. S Chandrakumar, the Managing Director and Dr D Senguttuvan, Executive Director for the Term Loans availed from City Union Bank.

C) Other loans represents vehicle loan availed during October 2012 and is repayable in 36 EMI of INR 10,463/-. The loan is secured by hypothecation of fixed asset acquired thereunder.

Terms of repayment of cash credit facility from banks and the nature of security

The cash credit facilities are secured by way of the following:

(i) Hypothecation of current assets of the Company, both present and future;

(ii) Hypothecation of all movable assets, both present and future, comprising of medical equipments, machineries, furnitures, etc.

(iii) Equitable mortgage on the commercial lands situated at Old TS no. 132, New TS No. 2-part and New TS no. 3/2 part, Old Ward No. 1, New Ward No. K, Old block no. 25, New block no. 17, K.Abishekapuram Village, Cantonment, Trichy and commercial building in the leasehold land situated at No.6, Royal Road, Cantonment, Trichy; and

(iv) Corporate guarantee from Sri Kavery Medical Care (Trichy) Limited, the Holding Company and personal guarantees of Dr.S.Chandrakumar, Managing Director, Dr. S Manivannan, Director of the Company.

6. Contingent liabilities and commitments

Particulars As at As at March 31, 2015 March 31, 2014

Contingent liabilities

Claims against the Company not acknowledged as debts

* disputed customs duty 8,524,905 8,524,905

* disputed municipal rent 917,260 917,260

Guarantees given

* Guarantees given to bankers on behalf of 615,000,000 615,000,000

Sri Kavery Medical Care (Trichy) Limited

Others 118,417,427 46,334,861

Commitments

Estimated value of contracts remaining to be executed on capital

account and not provided for 15,877 3,044,562

7. Transfer Pricing

The Company has specified domestic transactions with related parties as provided for in the Income Tax Act, 1961. In the opinion of the management, the Company maintains documents as prescribed by the Income-tax Act to prove that these specified domestic transactions are at arm's length and the aforesaid legislation will not have any material impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

8. Segment reporting

The Company's sole business segment is 'Medical and Healthcare services' and the principal geographical segment is India. Consequently, the management believes that there are no reportable segments as required under AS 17 - "Segment Reporting".

9. Dues to micro and small enterprises

The management has identified the enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Such determination/ identification has been done on the basis of information received and available with the Company and relied upon by the auditors. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at March 31, 2015 has been made in the financial statements based on information received and available with the Company.

10. Related party disclosures

a) Names of related parties and nature of relationship are as follows:

Nature of relationship Name of the related party

Holding company Sri Kavery Medical Care (Trichy) Limited

Fellow subsidiaries Kaveri Medi CT Scan (Thuraiyur) Private Limited

Kavery Hospital (Hosur) Limited (till December 31,2014)

Kavery Medical Care (Karaikudi) Limited

Key management personnel (KMP) Dr. S. Chandrakumar, Managing Director

Dr. D. Senguttuvan, Executive Director

Mr. G. Ranganathan, Chief Financial Officer

Mr. A. Thanikainathan, Company Secretary

11. Subsequent to the balance sheet date, certain minority shareholders of the parent company have sent a notice to the board of directors of the parent company to convene an extra-ordinary general meeting of the parent company, alleging inter alia that various acts of the management, including transactions relating to the Company in relation to purchase of medicines, outsourcing of certain facilities of the hospital etc., are prejudicial to the interest of the Company.

12. In connection with the above mentioned allegations, the board of directors of the parent company have ordered for convening the extra-ordinary general meeting of the parent company as requested and in the explanatory statement to the said notice concluded that based on the (a) internal assessment made by the management; (b) the report of factual findings based on agreed upon procedures performed by an independent firm of chartered accountants; and (c) expert legal advice, the aforesaid allegations are false, baseless and are not substantiated by any documents. Based on the above, the management represents that there would be no material adverse impact on the Company in this regard. Accordingly, the Company has not recorded adjustments in relation to the aforesaid matters, if any, to the carrying value of assets and liabilities as at the balance sheet date.

13. Prior year comparatives

Prior year's figures have been regrouped wherever necessary to confirm to this year's presentation.


Mar 31, 2014

As at As at Particulars March 31, 2014 March 31,2013

Contingent liabilities

Claims against the Company not acknowledged as debt

- disputed customs duty 8,524,905 8,524,905

- disputed municipal rent 917,260 917,260 Guarantees given

- Guarantees given to bankers on behalf of 615,000,000 615,000,000 Sri Kavery Medical Care (Trichy) Limited

Others 46,334,861 3,616,400

Commitments

Estimated value of contracts remaining to be executed on capital

account and not provided for 3,044,562 56,700,000

1 Transfer Pricing

The Company has domestic transactions with related parties. For the year ended March 31,2014, the Company maintains documents as prescribed by the Income-tax Act to prove that these domestic transactions are at arm''s length and the aforesaid legislation will not have any material impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

2 Segment reporting

The Company''s sole business segment is ''Medical and Healthcare services'' and the principal geographical segment is India. Consequently, the management believes that there are no reportable segments as required under AS 17 - "Segment Reporting".

3 Dues to micro and small enterprises

The management has identified the enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Such determination/ identification has been done on the basis of information received and available with the Company and relied upon by the auditors. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at March 31,2014, has been made in the financial statements based on information received and available with the Company.

The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

4 Related party disclosures

a) Names of related parties and nature of relationship are as follows:

Nature of relationship

Holding company Fellow subsidiaries

Key management personnel (KMP)

Name of the related party

Sri Kavery Medical Care (Trichy) Limited

Kaveri Medi CT Scan (Thuraiyur) Private Limited Kavery Hospital (Hosur) Limited Kavery Medical Care (Karaikudi) Limited

Dr. S. Chandrakumar, Chairman and Managing Director Dr. D. Senguttuvan, Executive Director (w.e.f. July 20, 2013) Mr.D. Selvaraj, Director (till July 20, 2013) Dr. S. Vijayabaskaran, Director

5 Operating lease obligations

The Company has taken land for its hospital building and premises for staff accomodation, under cancellable and non-cancellable operating lease arrangements. The land lease was taken for a period of 42 years and premises for staff accomodation are, in general, taken for a period ranging between 1 - 2 years and the lease arrangements are subject to renewal at mutual consent thereafter. The lease rent expense recognised during the year amounts to Rs. 2,226,924 (Previous year: 1,538,323). The schedule for future minimum lease payments in respect of non- cancellable operating lease is set out below:

6. Changes in accounting estimates

During the current year, the Company revised the estimated economic useful life of the fixed assets to align with the accounting policy of the holding company. In the opinion of the management, this revision in the estimated useful life would result in a more appropriate presentation of the financial statements of the Company. Consequent to the said change, the depreciation charge for the year and loss before tax for the year are higher by Rs. 12,205,413/- with a corresponding impact on the fixed assets and reserves and surplus.

7. Prior year comparatives

Prior year figures have been reclassified/ regrouped wherever necessary to confirm to the current year''s classification. Previous year financial statements have been audited by a firm other than B S R & Co.


Mar 31, 2013

1 Corporate information KMC Specialty Hospitals (India) Limited (''the company") was originally incorporated as Advanced Medical Care Private Limited on December 31, 1982 under the Companies Act, 1956 vide Certificate of Incorporation issued by the Registrar of Companies, Chennai, Tamil Nadu. The Company was converted into a Public Limited Company on July 15, 1988. The name of the Company was changed to Seahorse Hospitals Limited on March 21, 1995 and to its current name with effect from October 24, 2008. The Company is a super speciality Hospital based in Trichy, belong to the KMC group. The company is primarily engaged in the business of rendering medical and healthcare services.

Note: Figures in bracket relates to the previous year

The total amount of Rs. 15,74,27,777 (Rs.9,72,29,102)borrowed by the company are guaranteed personally by Managing Director and Joint Managing Director of holding company and by the holding company.

The Company has recognized deferred tax on timing differences arising in an accounting period and reversing in subsequent accounting periods. Also, Deferred Tax in the case of losses is recognized only on Unabsorbed depreciation loss as the company is of the opinion that there will be sufficient profits in future available for set off such losses. However, deferred tax assets on business loss are not recognized as a matter of prudence.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

Note Particulars As at 31 March, 2013 As at 31 March, 2012 Rs Rs

2(a) Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

(a) Claims against the Company not acknowled ged as debt (give details) Gratuity claim from Mrs. Gandhi former.

Employee of KMC Special ity Hospitals (India) Limited (formerly Sea Horse Hospitals Limited)

(b) Guarantees:

Guarantee given to banks favoring holding company Sri Kavery Medical Care(Trichy) Ltd.

The company has obtained 61,50,00,000 56,50,00,000 the share holders approval through postal ballot.

(c) Other money for which the Company is contingently liable (give details)

1.The company has received a show cause notice from The Department of Customs for the medical equipment imported

during the year 1989-1993. The matter in challenged in the 85,24,905 85,24,905

Madras High court and the case is pendin g

2. The company has received a show cause notice from Municipal Corporation of Trichy for the arrears of rent on poramboke land. Of the said amount, an amount of Rs. 9,17,260 9,17,260

3,79,000 has been provided in the books. 3. The company has received a demand notice from Trichy Corporation for arrears of Property Tax for the period 20052013. The company in reply has filed an appeal with the district Munsif Court in the year 2003. A provision of Rs. 1,26,87,113 1,08,31,767

50,00,000 has been made based on the Managements estimate likely settlement of the above dues

(ii )Capital Commitments as on Balance Sheet Date

Estimated amount of contracts remaining to be executed on capital account and not provided for

Tangible assets 5,67,00,000 6,02,42,000

2 (e) Extra-ordinary & Exceptional Items In response to the demand made by the Holding company Sri Kavery Medical Care (Trichy) Limited of the interest waived earlier and in accordance with the approval of the Board of Directors of the company Rs.160.00 lakhs was paid during the current financial year as Interest towards loan taken from the Holding company and the same is treated as an Extraordinary item during the financial year. During the year the WDV of old assets acquired from erstwhile Seahorse Hospitals amounting to Rs 33.34 lakhs was written off during the year, the same is treated as an Exceptional item

2(f) Sundry Debtors .Creditors & Loans & Advances Sundry Debtors , Creditors , Loans & Advances are subject to confirmation. The auditor have relied on the balance as per books of accounts maintained in the absense of confirmation from the debtors/ creditors.

2(g) Previous Years figures have been regrouped/ rescheduled/ reclassified wherever necessary according to the revised schedule VI compliance.


Mar 31, 2012

1 Corporate information

KMC Speciality Hospitals (India) Limited ('the company') was originally incorporated as Advanced Medical Care Private Limited on December 31, 1982 under the Companies Act, 1956 vide Certificate of Incorporation issued by the Registrar of Companies, Chennai, Tamil Nadu. The Company was converted into a Public Limited Company on July 15, 1988. Tfie name of the Company was changed to Seahorse Hospitals Limited on March 21, 1995 and to its current name with effect from October 24, 2008. The Company is a super speciality Hospital based in Trichy, belong to the Kauvery group. The company is primarily engaged in the business of rendering medical and healthcare services.

Term Loan 1

59 Equal monthly installments of Rs.833334/- each and 1 final installment of Rs. 833294/- besides interest.

Moratorium period of 24 months till 31.10.201

i allowed and repayment starts from 30.11.2012 Term Loan II 59 Equal monthly installments of Rs.833334/-# each and 1 final installment of Rs. 833294/- besides interest. -

Moratorium period of 24 months till 31.03.2014 is allowed, and repayment starts from 30.04.2014 Note (iii): Security Details for both Term Loan I & II

Primary ,: Hypothecation of entire fixed assets created from and out of Term Loans.

Secondary:

Extension of Equitable Mortgage charge over the commercial land to the extent of 3016 Sq.ft comprised at old ward No: 1, New Ward No: K, Old Block No: 25, New Block No: 17, Old TS No: 132, NewTS No: 2 Part, K. Abishekapuram Village, Cantonment, Trichy - 620001 standing in the name of KMC Speciality Hospitals (India) Ltd.

Extension of Equitable Mortgage charge over the commercial land to the extent of 11,484 Sq. Ft comprised at old Ward no : 1, New ward No: K, Old block No: 25, New Block No: 17, Old TS No: 132, New TS No: 3/2 Part, K. Abhishekapuram Village, Cantonment, Trichy - 620001 standing in the name of KMC Speciality Hospitals (India) Ltd.

Extension of Equitable Mortgage charge over Multi storied commercial super structure situated in the lease hold land admeasuring 24864 sft in the name of Sri Kavery Medical Care (Trichy) Ltd.

Guarantees:

All the above loans are guaranteed personally by Managing Director, Joint Managing Director of the holding company and by the holding company.

Note (ii) Security Details Primary Security:

Hypothecation of entire current assets of the company (both present and future).

Entire fixed Assets of the company except Land and Building (WDV is at Rs. 1247.88 Lakhs based on ABS 2010-2011

Secondary:

Extension of Equitable Mortgage charge over the commercial land to the extent of 3016 Sq.ft comprised at old ward No: 1, New Ward No: K, Old Block No: 25, New Block No: 17, Old TS No: 132, New TS No: 2 Part, K. Abishekapuram Village, Cantonment, Trichy - 620001 standing in the name of KMC Speciality Hospitals (India) Ltd.

Extension of Equitable Mortgage charge over the commercial land to the extent of 11,484 Sq. Ft comprised at old Ward no : 1, New ward No: K, Old block No: 25, New Block No: 17, Old TS No: 132, NewTS No: 3/2 Part, K. Abhishekapuram Village, Cantonment, Trichy - 620001 standing in the name of KMC Speciality Hospitals (India) Ltd.

Extension of Equitable Mortgage charge over Multi storied commercial super structure situated in the lease hold land admeasuring 24864 sft in the name of Sri Kavery Medical Care (Trichy) Ltd.

Guarantees:

All the above loans are guaranteed personally by Managing Director Joint Managing Director of the holding company and by the holding company.

* Capital advances are classified as non-current since the Company would not expect these to be realised in cash but would be converted / settled through fixed assets, which are non-current in nature.

# Security Deposits represents deposits with Government Departments and other organisations as a security for performance of our obligations.

i) The inventories of all medicines, Medicare items traded and dealt with by the company are valued lower of cost and Net Realisable Value by applying the FIFO method.

ii) The stock of stores, dental instruments, surgical instruments, dental and other Consumables are valued at cost. Cost of these inventories comprises of all costs of purchase and other cost incurred in bringing the assets to their present location.

Notes:

'Represents Cheques on hand and Debit/ Credit card receipts on 31st March 2012.

# Represents Balances Deposit accounts with interest accrued thereon as on 31st March 2012.

# Salaries and wages represents Salaries, wages, bonus, compensated absences and all other amounts payable to employees in respect of services rendered as per their employment terms under a contract of service / employment and includes Managerial Remuneration

@ Contribution to Employee Benefit funds include contributions to Provident Fund .Pension Fund and Gratuity fund.

The company recognises deferred tax on timing differences arising in an accounting period and reversing in subsequent accounting periods. Also, Deferred Tax in the case of losses is recognised only on Unabsorbed depreciation loss as the company is of the opinion that there will be sufficient profits in future available for set off such losses. However, deferred tax assets on business loss are not recognised as a matter of prudence.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

2(a) Sundry Debtors .Creditors & Loans & Advances

Sundry Debtors , Creditors , Loans & Advances are subject to confirmation. The auditors have relied on the balance as per books of accounts maintained in the absense of confirmation from the debtors/ creditors.

2(b) Previous Years figures have been regrouped/ rescheduled/ reclassified wherever necessary according to the revised schedule VI compliance.


Mar 31, 2011

1. Cash and Cash Equivalents includes Cash and Bank Balances

2. The Cash Flow Statement has been prepared under the "Indirect Method" as per Accounting Standard 3 issued by ICAI.

3. Previous Years figures have been regrouped wherever necessary.

4. Figures in bracket represent outflow.


Mar 31, 2010

A) Significant Events during the year

i) During the year the company has effected a scheme of Capital Reduction as authorized under section 100 of the Companies Act 1956 and the same was confirmed by the Hon High Court of Judicature at Madras vide its order dated 24th November 2009. Consequent to such scheme of reduction, the loss of Rs. 11,29,05,000 been adjusted to write down the caoital from Rs. 12,54,50,000 to Rs. 1,25,45,000.

ii) The company is funded by borrowings from a company under the same management. Till last year, the company had agreed to pay interest at 10% p.a. However, the operations of the company did not generate enough inflows to service the interest payments and on representation, the other company has agreed to waive the entire interest payable till 31st March 2010.Accordingly, a sum of Rs 1,14,07,535 debited to the interest account is reversed and the payment made during the year has been adjusted against the principal outstanding.

b) Contingent Liability:

iii) The company has received a show cause notice from The Department of Customs demanding a sum of Rs.85,24,905.00(Previous Year Rs.85,24,905), towards customs duty for the medical equipment imported during the years 1989-93 and the said amount is not provided as the company is taking appropriate legal steps regarding this issue.

iv) The company has received a show cause notice from The Municipal Corporation, Trichy contending the construction of the 4th, 5th & 6th floors of the hospital building have no approval. The financial effect of the same could not be ascertained. The company has filed application before the appropriate authorities for the regularization of the construction.

v) The company has received a show cause notice from Trichy Municipal Corporation demanding a sum of Rs. 9,17,260 being the arrears of rent on peramboke land. Of the said sum, a sum of Rs. 3,79,000 has been provided in the books of accounts for the year ended 31st March 2009.

vi) The company has received a demand notice from Trichy Corporation for an amount of Rs. 1,08,31,767 being arrears of property tax for the period 2005-2010. The company in reply has filed an appeal with the District Munisif Court in the year 2003. A provision of Rs.50,00,000 has been made which is based on the managements estimate likely settlement of the above dues.

vii) Claims against the company not acknowledged as debt Rs. 4,35,000 (Previous year Rs.6,76,000)

c) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 59,14,142/- (Previous year- 2,26,145)

d) Sundry Debtors and Loans and Advances

Sundry Debtors, Creditors and deposits with Government authorities are yet to be confirmed. The company has sent letters of confirmation. The auditors have relied on the balance as per books of accounts maintained in the absence of confirmation from the debtors/creditors. The balances adopted are as appearing in the books of accounts.

e) Prior Period Item

Prior period item is shown net of income and expense, the same during the year amounts to Rs.3,52,965/- (Previous Year - Rs. 98,577)

f) The company provides hospital services and also sells drugs and Pharmaceutical products. The quantitative particulars as per Para 3(ii) d of Part-ll of Schedule-VI of the companies act, 1956 with respect to the total value of turnover, purchases, goods traded, sales etc for the financial year ended 31s1 March 2010 as required under the Companies Act,1956 are not disclosed. In the opinion of the management, such disclosure is practically difficult.

g) Payment to Managing Director - Dr.S. Chandrakumar - Monthly Remuneration - Rs.2,13,500

h) Earnings in Foreign Currency - Nil (Previous Year- Nil)

i) Expenditure in Foreign Currency-Nil (Previous Year- Nil)

j) Remittance during the period of foreign currency on account of Import of Raw Materials- Nil (Previous Year- Nil)

k) Micro, Small and Medium Enterprises Development Act, 2006

In accordance with the Notification No.GSR 719 (E) dt 16.11.2007, issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, small and Medium Enterprises as defined under the Micro, Small and Medium Development Act, 2006. The Company is in the process of compiling the relevant information from its suppliers about their coverage under the said act. Since the relevant information is not readily available, no disclosures as required as per statutory provisions as stated above have been made in the accounts.

a) Related Party Transactions under AS-18 and disclosure under SEBI (Substantial Acquisition of Shares & Takeovers) regulations, 1997:-

A list of related parties where control exists and other related parties with whom the company had transactions and their relationships:

Sl.No Name of the Related Party Nature of Relationships

1 Dr.S. Chandrakumar Key Management Personnel

2 Dr.S. Manivannan Key Management Personnel

3 Dr. T. Senthil Kumar Key Management Personnel

4 D. Selvaraj Key Management Personnel

5 Sri Kavery Medical Centre (Trichy) Ltd Enterprise in which KMP are interested (promoters)

b) Disclosure under Accounting Standard - 22

The company recognises deferred tax on timing differences arising in an accounting period and reversing in subsequent accounting periods. Also, Deferred Tax is the case of losses is recognised only on Unabsorbed depreciation loss as the company is of the opinion that there will be sufficient profits in future available for set off such losses. However, deferred tax assets on business loss are not recognised as a matter of prudence.

c) Travelling, Conveyance and Business Promotion expenses include expenditure incurred by the directors of the company for the purpose of the business of the company.

d) Business Segments (Accounting Standard -17)

The company is engaged only in one business segment, that is hospital service and hence no reporting is done under Accounting Standard - 17 (Segment Reporting) on segment revenue, expenses etc.

Previous years figures have been regrouped wherever found necessary to conform to the current years presentation.

g) The figures given in the Profit and Loss account and balance sheet have been rounded off to the nearest rupee.

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