I. Provisions (other than for employee
benefits)

A provision is recognised if, as a result of a past
event, the Company has a present legal or
constructive obligation that can be estimated
reliably, and it is probable that an outflow of
economic benefits will be required to settle
the obligation. Provisions are determined
by discounting the expected future cash
flows (representing the best estimate of the
expenditure required to settle the present
obligation at the balance sheet date) at a pre¬
tax rate that reflects current market assessments
of the time value of money and the risks specific
to the liability. The unwinding of the discount
is recognised as finance cost. Expected future
operating losses are not provided for.

J. Contingent liability and contingent
assets

Contingent liability is disclosed for:

(i) A possible obligation that arises from
past events and whose existence will be
confirmed only by the occurrence or non¬
occurrence of one or more uncertain future
events not wholly within the control of the
entity or

(ii) Present obligations arising from past events
where it is not probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation or
a reliable estimate of the amount of the
obligation cannot be made. When some
or all of the economic benefits required
to settle a provision are expected to be
recovered from a third party, a receivable
is recognised as an asset if it is virtually
certain that reimbursement will be received
and the amount of the receivable can be
measured reliably.

Contingent assets are neither recognised
nor disclosed in the financial statements.
However, contingent assets are assessed
continually and if it is virtually certain that
an inflow of economic benefits will arise, the
asset and related income are recognised in
the period in which the change occurs.

K. Revenue

The Company derives its revenue primarily from
rendering medical and healthcare services.
Income from medical and healthcare services

comprises of income from hospital services and
sale of pharmacy products.

Inpatient and outpatient revenue

Inpatient and outpatient revenue is recognized
as and when the related services are rendered.
Revenue is also recognised in relation to the
services rendered to the patients who are
undergoing treatment/ observation on the
balance sheet date to the extent of services
rendered. Revenue towards satisfaction of a
performance obligation is measured at the
amount of transaction price (net of variable
consideration) allocated to that performance
obligation. The transaction price of goods
sold and services rendered is net of variable
consideration on account of discounts and
concessions offered by the Company.

‘Unbilled revenue’ represents the value of
medical and healthcare services rendered in
excess of amounts billed to the patients as at the
balance sheet date.

Sale of traded goods - Pharmacy items

Revenue from sale of pharmacy items
are recognized on delivery of items to the
customers which is when the Company satisfies
a performance obligation by transferring a
promised good to a patient. Pharmacy items are
transferred when the patient obtains control of
such items.

The Company collects Goods & Service Tax (GST)
on behalf of the government and, therefore,
these are not economic benefits flowing to the
Company. Hence, they are excluded from revenue.

.. Leases

The Company’s lease asset classes primarily
consist of leases for buildings. The Company
assesses whether a contract contains a lease, at
inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control
the use of an identified asset for a period of
time in exchange for consideration. To assess
whether a contract conveys the right to control
the use of an identified asset, the Company
assesses whether: (i) the contract involves the
use of an identified asset (ii) the Company has
substantially all of the economic benefits from
use of the asset through the period of the lease
and (iii) the Company has the right to direct the
use of the asset.

At the date of commencement of the lease,
the Company recognizes a right-of-use asset
(“ROU”) and a corresponding lease liability for
all lease arrangements in which it is a lessee,
except for leases with a term of twelve months
or less (short-term leases) and low value leases.
For these short-term and low value leases, the
Company recognizes the lease payments as an
operating expense on a straight-line basis over
the term of the lease.

Certain lease arrangements includes the options
to extend or terminate the lease before the end
of the lease term. ROU assets and lease liabilities
includes these options when it is reasonably
certain that they will be exercised.

The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or prior to the commencement date
of the lease plus any initial direct costs less
any lease incentives. They are subsequently
measured at cost less accumulated depreciation
and impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis
over the shorter of the lease term and useful life
of the underlying asset. Right of use assets are
evaluated for recoverability whenever events
or changes in circumstances indicate that their
carrying amounts may not be recoverable.
For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair
value less cost to sell and the value-in-use) is
determined on an individual asset basis unless
the asset does not generate cash flows that
are largely independent of those from other
assets. In such cases, the recoverable amount is
determined for the Cash Generating Unit (CGU)
to which the asset belongs.

The lease liability is initially measured at
amortized cost at the present value of the
future lease payments. The lease payments are
discounted using the interest rate implicit in
the lease or, if not readily determinable, using
the incremental borrowing rates in the country
of domicile of these leases. Lease liabilities are
re-measured with a corresponding adjustment
to the related right of use asset if the Company

changes its assessment if whether it will exercise
an extension or a termination option.

Lease liability and ROU asset have been
separately presented in the Balance Sheet and
lease payments have been classified as financing
cash flows.

The Company has elected not to recognise right-
of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months.
The Company recognises the lease payments
associated with these leases as an expense over
the lease term.

M. Other income

(i) Interest income

Interest income from a financial asset
is recognized when it is probable that
the economic benefit will flow to the
Company and the amount of income can
be measured reliably.

I nterest income or expense is accrued on
a time basis, by reference to the principle/
outstanding using the effective interest
rate applicable.

The ‘effective interest rate’ is the rate that
exactly discounts estimated future cash
payments or receipts through the expected
life of the financial instrument to:

• the gross carrying amount of the financial
asset; or

• the amortised cost of the financial liability.

In calculating interest income and expense,
the effective interest rate is applied to the
gross carrying amount of the asset (when
the asset is not credit-impaired) or to the
amortised cost of the liability. However, for
financial assets that have become credit-
impaired subsequent to initial recognition,
interest income is calculated by applying
the effective interest rate to the amortised
cost of the financial asset. If the asset is no
longer credit-impaired, then the calculation
of interest income reverts to the gross basis.

(ii) Dividend income

Dividend income is recognized when the
right to receive the income is established.

N. Income tax

Income tax comprises current and deferred tax.
It is recognised in Statement of profit and loss
except to the extent that it relates to a business
combination or to an item recognised directly in
equity or in other comprehensive income.

(i) Current tax

Current tax comprises the expected tax
payable or receivable on the taxable income
or loss for the year and any adjustment to
the tax payable or receivable in respect of
previous years. The amount of current tax
reflects the best estimate of the tax amount
expected to be paid or received after
considering the uncertainty, if any, related
to income taxes. It is measured using tax
rates (and tax laws) enacted or substantively
enacted by the reporting date.

Current tax assets and current tax liabilities
are offset only if there is a legally enforceable
right to set off the recognised amounts, and
it is intended to realise the asset and settle
the liability on a net basis or simultaneously.

(ii) Deferred tax

Deferred tax is recognised in respect of
temporary differences between the carrying
amounts of assets and liabilities for financial
reporting purposes and the corresponding
amounts used for taxation purposes.
Deferred taxes is also recognised in respect
of carried forward tax losses and tax credits.

Deferred tax assets are recognised to the
extent that it is probable that future taxable
profits will be available against which they
can be used. The existence of unused tax
losses is strong evidence that future taxable
profit may not be available. Therefore, in case
of a history of recent losses, the Company
recognises a deferred tax asset only to
the extent that it has sufficient taxable
temporary differences or there is convincing
other evidence that sufficient taxable profit
will be available against which such deferred
tax asset can be realised. Deferred tax assets
- unrecognised or recognised, are reviewed
at each reporting date and are recognised/
reduced to the extent that it is probable/ no
longer probable respectively that the related
tax benefit will be realised.

Deferred tax is measured at the tax rates that
are expected to apply to the period when

the asset is realised or the liability is settled,
based on the laws that have been enacted or
substantively enacted by the reporting date.

The measurement of deferred tax reflects
the tax consequences that would follow
from the manner in which the Company
expects, at the reporting date, to recover
or settle the carrying amount of its assets
and liabilities.

Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset
current tax liabilities and assets, and they
relate to income taxes levied by the same
tax authority on the same taxable entity, or
on different tax entities, but they intend to
settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will
be realised simultaneously.

O. Borrowing cost

Borrowing costs include interest, amortisation of
ancillary costs incurred and exchange differences
relating to foreign currency borrowings to the
extent that they are regarded as an adjustment
to interest costs. Cost in connection with the
borrowing of funds to the extent not directly
related to the acquisition of qualifying assets are
charged to the statement of Profit and Loss over
the tenure of the loan. Borrowing costs allocated
to and utilised for qualifying assets, pertaining
to the period from commencement of activities
relating to construction/ development of the
qualifying asset up to the date of capitalisation
of such assets are added to the cost of the assets.
Capitalisation of borrowing costs is suspended
and charged to the statement of profit and
loss during extended periods when active
development activity on the qualifying assets
is interrupted.

Interest income earned on the temporary
investment of specific borrowings pending
their expenditure on qualifying assets is
adjusted against the borrowing costs eligible
for capitalisation.

All other borrowing costs eligible are recognised
in Statement of profit and loss in the period in
which they incurred.

P. Earnings per share

Basic earnings per share is computed by dividing
the net profit / (loss) after tax (including the
post tax effect of exceptional items, if any) for
the year attributable to equity shareholders by
the weighted average number of equity shares
outstanding during the year.

Diluted earnings per share is computed by
dividing the profit / (loss) after tax (including the
post tax effect of exceptional items, if any) for
the year attributable to equity shareholders as
adjusted for dividend, interest and other charges
to expense or income (net of any attributable
taxes) relating to the dilutive potential equity
shares, by the weighted average number of
equity shares considered for deriving basic
EPS and also weighted average number of
equity shares that could have been issued upon
conversion of all dilutive potential equity shares.

Q. Operating segment

An operating segment is a component of the
Company that engages in business activities from
which it may earn revenues and incur expenses,
including revenues and expenses that relate to
transactions with any of the Company’s other
components, and for which discrete financial
information is available. Operating segments
are reported in a manner consistent with the
internal reporting provided to the chief operating
decision maker. The Company’s Managing
Director is responsible for allocating resources
and assessing performance of the operating
segments and accordingly is identified as the
Chief Operating Decision Maker (‘CODM’). The
Company’s CODM reviews financial information
presented, for purposes of making operating
decisions and assessing financial performance
of the Company. Therefore, the Company has
determined that it operates in a single operating
and reportable segment.

R. Cash and cash equivalents

Cash comprises cash on hand and demand
deposits with banks. Cash equivalents are short¬
term balances (with an original maturity of three
months or less from the date of acquisition),
highly liquid investments that are readily
convertible into known amounts of cash and
which are subject to insignificant risk of changes
in value.

S. Cash flow Statement

Cash flows are reported using the indirect
method, whereby profit / (loss) is adjusted for
the effects of transactions of non-cash nature
and any deferrals or accruals of past or future
cash receipts or payments. The cash flows from
operating, investing and financing activities
of the Company are segregated based on the
available information. In cash flow statement,
cash and cash equivalents include cash in hand,
balances with banks in current accounts and
other short-term highly liquid investments with
original maturities of three months or less.

T. Insurance claims

Insurance claims are accounted for on the basis
of claims admitted / expected to be admitted
and to the extent that the amount recoverable
can be measured reliably and it is reasonable to
expect ultimate collection.

14.1 Credit period and risk

Credit is provided mainly to insurance companies, corporate customers, customers with insurance coverage
and customers covered by Government accorded health benefits. The insurance companies are required
to maintain minimum reserve levels and pre-approve the insurance claim, Government undertakings and
the corporate customers are enterprises with high credit ratings. Accordingly, the Company’s exposure to
credit risk in relation to trade receivables is low. Further creditworthiness of customers on a continuous
basis to whom credit has been granted after obtaining necessary approvals for credit. The collection from
the trade receivables are monitored on a continuous basis by the receivables team.

Note: No trade receivable are due from directors or other officers of the Company either severally or jointly
with any other person. Nor any trade receivable are due from firms or private companies respectively in
which any director is a partner, a director or a member.

14.2 Expected credit loss allowance

The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates
as given in the provision matrix, considering the amounts due from the government undertakings and
the other undertakings. Further the Company also establishes an allowance for credit loss that represents
its estimate of expected losses in respect of trade and other receivables based on the past and recent
collection trend.

b. Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares having a par value of Rs. 1 each. Each holder is entitled
to one vote per equity share. Dividends are paid in Indian Rupees. Dividend proposed by the Board of
Directors, if any, is subject to the approval of the shareholders at the Annual General Meeting, except in
the case of interim dividend.

In the event of liquidation of the company, the holder of the equity shares will be entitled to receive
any of the remaining assets of the company in proportion to the number of equity shares held by the
shareholders, after distribution of all preferential amount.

The Board of Directors of the Company have not recommended dividend for the financial year ended
March 31, 2026 and March 31, 2025.

19.1 Notes: Nature and purpose of other reserves
Retained earnings

Retained earnings represents the profits generated by the Company post distribution of dividends (if any)
to the shareholders. The reserve can be utilised for distribution of dividend by the Company considering
the requirements of the Companies Act, 2013.

Other comprehensive income

Other items of other comprehensive income consist of remeasurement of net defined benefit liability.

20 Capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. It sets the amount of capital required on the
basis of annual business and long-term operating plans which include capital and other strategic investments.
The funding requirements are met through a mixture of equity and other borrowings. The Company’s policy is
to use current and non-current borrowings to meet anticipated funding requirements. The Company monitors
capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined
as total liabilities, comprising interest-bearing loans and borrowings less cash and cash equivalents. Adjusted
equity comprises all components of equity.

22.2Security information

(i) Hypothetication of property, plant and equipments created / purchased out of bank finance.

(ii) Equitable mortgage over commercial land belonging to the Company and hospital building on the
land measuring 60,598 sq.ft. belonging to Survey No. 13, 14/1, 14/2 part and 32 situated at No. 27,
Alexinderia Road, Cantonment, Trichy - 620001.

(iii) Equitable mortgage over commercial building belonging to the Company with build-up area 1,11,083
sq.ft., built on Land measuring 24,864 sq.ft., at: 5 royal road, belonging to Sri Kauvery Medical Care
(India) Limited (Title deed No. 3171/2008) situated in Ward K, Block No.17, New TS No. 5, Trichy Jt I &
II, Sub Regional District of K Abhishekapuram Trichy - 620001.

(iv) Corporate guarantee from Sri Kauvery Medical Care (India) Limited, the Holding Company.

22.3Additional information

a. The Company does not have any borrowings secured against current assets, therefore the disclosure
of the difference between quarterly statement submitted to banks and balance as per books is
not applicable.

b. The Company does not have any charges or satisfaction of charge which is yet to be registered with
the Registrar of Companies beyond the statutory period.

c. The Company has not been declared a wilful defaulter by any bank or financial institution or
other lender.

23 Lease liabilities

(a) The Company, at the inception of a contract assesses whether a contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange
for consideration.

In adopting Ind AS 116, the Company has applied the below practical expedients:

(i) The Company has applied a single discount rate to a portfolio of leases with reasonably
similar characteristics.

(ii) The Company has treated the leases with remaining lease term of less than 12 months as if they were
“"short term leases””.

(iii) The Company has not applied the requirements of Ind AS 116 for leases of low value assets.

(b) The Company has taken land and buildings on leases having lease terms of more than 1 year to 37 years,
with the option to extend the term of leases. Refer note 5 for carrying amount of right-to-use assets at
the end of the reporting period by class of underlying asset.

Provident fund benefits:

The Company makes contributions, determined as a specified percentage of employee salaries, in respect
of qualifying employees towards provident fund, which is defined contribution plan. The Company has
no obligations other than to make the specified contributions. The contributions are charged to the
Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution
to provident fund is included in "Contribution to provident and other funds”.

Employee state insurance benefits:

The Company makes contributions, determined as a specified percentage of employee salaries, in
respect of qualifying employees towards Employee State Insurance, which is defined contribution plan.
The Company has no obligations other than to make the specified contributions. The contributions are
charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards
contribution to Employee state Insurance is included in "Contribution to provident and other funds”.

28.2 Defined benefit plans - Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the amount
calculated as per the Payment of Gratuity Act, 1972. The benefit vests upon completion of five years
of continuous service and once vested it is payable to employees on retirement or on termination of
employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company
makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation
of India.

A. Funding

The funding requirements are based on the gratuity fund’s actuarial measurement framework set
out in the funding policies of the plan. The funding of Plan is based on a separate actuarial valuation
for funding purposes for which the assumptions may differ from the assumptions set out in (E).
Employees do not contribute to the plan.

Sensitivity analysis

Significant actuarial assumptions for the determination of defined benefit obligation are discount
rate, expected salary increase rate, attrition rate and mortality. The sensitivity analysis below have
been determined based on reasonably possible changes of the respective assumptions occurring at
the end of the reporting Year while holding all other assumptions constant :

G. Effect of plan on Company''s future cash flows

(a) Funding Arrangements and Funding Policy

The Company has purchased an insurance policy to provide for payment of gratuity to the
employees. Every year, the insurance Company carries out a funding valuation based on the
latest employee data provided by the Company. Any deficit in the assets arising as a result of
such valuation is funded by the Company.

(a) The sensitivity analysis presented above may not be representative of the actual change in
the defined benefit obligations as it is unlikely that the change in assumptions would occur in
isolation of one another as some of the assumptions may be correlated.

(b) Furthermore, in presenting the above sensitivity analysis the present value of defined benefit
obligation has been calculated using the projected unit credit method at the end of the reporting
period which is the same as that applied in calculating the defined benefit obligation liability
recognised in the Balance Sheet.

(c) There is no change in the methods and assumptions used in preparing the sensitivity analysis
from the prior years.

The Company has not disclosed fair values of financial instruments such as investments, trade receivables,
cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets,
borrowings, trade payables and other financial liabilities, since their carrying amounts are reasonable
approximates of fair values due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following method and assumption was used to estimate the fair value / amortized cost:

The fair value of unquoted instruments, loans from banks and other financial liabilities, as well as other non¬
current financial liabilities are estimated by discounting future cash flows using rates currently available
for debt on similar terms, credit risk and remaining maturities.

The following table presents the fair value measurement hierarchy of financial assets and liabilities
measured at fair value on recurring basis as at March 31, 2026 and March 31, 2025:

i. Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the
Company’s risk management framework. The board of directors along with the top management are
responsible for developing and monitoring the Company’s risk management policies.

The Company’s risk management policies are established to identify and analyse the risks faced
by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to
limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Company’s activities. The Company, through its training and management
standards and procedures, aims to maintain a disciplined and constructive control environment in
which all employees understand their roles and obligations.

The Company’s audit committee oversees how management monitors compliance with the Company’s
risk management policies and procedures, and reviews the adequacy of the risk management
framework in relation to the risks faced by the Company,

ii. Credit risk

Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument
or customer contract, leading to financial loss. The credit risk arises principally from its operating
activities (primarily trade receivables) and from its investing activities, including deposits with banks
and financial institutions and other financial instruments.

Cash and cash equivalents

The Company held cash and cash equivalents with credit worthy banks and financial institutions as
at the reporting dates which has been measured on the 12-month expected loss basis. The credit
worthiness of such banks and financial institutions are evaluated by the management on an ongoing
basis and is considered to be good with low credit risk.

Other financial assets (including other bank balances)

Other financial assets comprises of rental deposits given to lessors, unbilled revenue, bank deposits
(due to mature within and after 12 months from the reporting date), interest accrued on fixed deposits,
electricity deposit given to Tamil Nadu Electricity Board and receivables from related parties. These
fixed deposits are held with credit worthy banks and financial institutions. The credit worthiness of
such banks and financial institutions are evaluated by the management on an ongoing basis and is
considered to be good with low credit risk.

iii. Liquidity risks

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s
approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to
meet its financial liabilities when they are due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Company’s reputation.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The
amounts are gross and undiscounted, including contractual interest.

Investments

The Investment made by the Company in other Companies are subject to the uncertainty of their
ability to generate profits from their operations and provide returns to the Company against the
investment made.

Trade receivables (Refer note 14)

Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous
basis to whom credit has been granted after obtaining necessary approvals for credit. The collection
from the trade receivables are monitored on a continuous basis by the receivables team.

The Company establishes an allowance for credit loss that represents its estimate of expected losses in
respect of trade and other receivables based on the past and recent collection trend. The Company’s
exposure to credit risk for trade receivables and other receivables is as follows:

(iii) The Company, is empaneled under TNCMCHIS, Medi Assist Health Care Service and MD India - TN
Govt NHIS for all the services offered by the hospital including Cardiology and Cardiothoracic Surgery.
Heart patients under this scheme are treated by the Company in its hospital and wherever the patients
require Angioplasty or Heart Surgeries like Bypass Surgery, Valve Replacement, etc., is outsourced
to the Kauvery Heart City Hospital, a division of SKMC, the holding company, which is located within
the same premises. All the approvals for such procedures are obtained and bills are submitted by the
Company. The amount so received from this scheme for such cardiac procedures performed by Heart
City is being reimbursed on a monthly basis as per the agreed terms between both the Company
and the Holding Company. In the opinion of the management, such outsourcing arrangements are
in accordance with the guidelines issued by the Government of Tamil Nadu vide orders in G.O.Ms No.
268 Health and Family Welfare (EAP/1) Department) dated November 17, 2016 (as amended) and in
compliance with the Memorandum of Undertaking dated May 2, 2017 entered into with United India
Insurance Company Limited. However, at present all these government schemes are empanelled
directly by the Kauvery Heart City Hospital, a division of SKMC, the holding company and thus the
amount/number of transactions got reduced significantly as compared to the previous years.

The Company also receives claims, which arise in the ordinary course of the business. However, the
management does not believe that such matters would have a material effect on the financial statements.

40 Segment reporting

Ind AS 108 "Operating Segment” ("Ind AS 108”) establishes standards for the way that public business
enterprises report information about operating segments and related disclosures about products and services,
geographic areas, and major customers. Based on the "management approach” as defined in Ind AS 108,
Operating segments are to be reported in a manner consistent with the internal reporting provided to the Chief
Operating Decision Maker (CODM).The CODM evaluates the Company’s performance and allocates resources
on an overall basis. The Company’s sole operating segment is therefore ‘Medical and Healthcare Services’.
The Company’s entire business operations is in India. Accordingly, there are no additional disclosures to be
provided under Ind AS 108.

41 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, 2026 has been made in the
financial statements based on information received and available with the Company.

(a) The Company accounts for costs incurred by / on behalf of the Related Parties based on the actual
invoices / debit notes raised and accruals as confirmed by such related parties. The Related Parties
have confirmed to the Management that as at March 31, 2026 and as at March 31, 2025, there are
no further amounts payable to / receivable from them, other than as disclosed above. The Company
incurs certain costs on behalf of other companies in the group. These costs have been allocated /
recovered from the group companies on a basis mutually agreed to with the group companies.

(b) Remuneration and other benefits pertain to short term employee benefits. As the gratuity and
compensated absences are determined for all the employees in aggregate, the post-employment
benefits and other long-term benefits relating to key management personnel cannot be
ascertained individually.

(c) The remuneration payable to key management personnel is determined by the nomination and
remuneration committee having regard to the performance of individuals and market trends.

(d) The above guarantees represents financial guarantee provided by the Company for term loans availed
by the holding company and financial guarantee provided by the Holding Company for the term loans
availed by the company.

(e) The rental expense disclosed above represents the actual amounts payable as per the agreement
entered into between the parties (excluding taxes thereon) accounted as payment of lease liabilities
in the books.

(f) The amount of transactions disclosed above is without considering goods and services tax (wherever
applicable, irrespective of whether input credit has been availed or not) as charged by / to the counter
party as part of the invoice/relevant document and is gross of tax deducted at source under the
Income-tax Act, 1961 and accounted in the ledger of the concerned expense/transaction head.

(g) The amount of payables / receivables indicated above is after deducting tax (wherever applicable)
and after including goods and services tax (wherever applicable) as charged by / to the counter party
as part of the invoice/relevant document and accounted in the ledger of the concerned party.

(h) Refer Note 22.2 for guarantees / securities provided by related parties in connection with loans availed
by the Company.

Notes:

a. The company has successfully transitioned from an under-liquidation risk zone (< 1.0) to a highly stable
short-term financial position.

b. The company reduced its long-term external borrowings or boosted its equity base via retained earnings,
significantly mitigating long-term solvency risk.

c. Driven primarily by surging operational profitability coupled with lower debt obligations. This shows a
vastly superior capability to comfortably service interest and principal repayments from existing cash flows.

d. Reflects enhanced wealth generation efficiency for shareholders.

e. I t signifies that the company no longer relies on short-term credit lines or trade payables to fund
core operations.

f. Indicates robust operational cost management and pricing power. The company managed to expand its
bottom-line margin significantly.

g. It proves that the entire pool of deployed capital (both long-term debt and equity) is generating much
healthier pre-tax operating returns.

44 Additional regulatory information as required by Schedule III to the Companies Act,
2013 - Others

(a) No proceedings have been initiated during the year or are pending against the company as at March
31, 2026 and March 31, 2025 for holding any benami property under Benami Property Transactions
(prohibition) Act, 1988.

(b) Transactions and balances with companies which have been removed from register of Companies [struck
off companies] as at the above reporting periods is Nil.

(c) The Company has not traded / invested in Crypto currency or virtual currency.

(d) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or
any other sources or kind of funds) by the Company to or in any other person or entities, including foreign
entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security
or the like on behalf of the Ultimate Beneficiaries.

(e) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities
("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company
shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.

(f) The Company has no such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act,
1961 (such as, search or survey or any other relevant provisions of the Income-tax Act, 1961).

(g) The Company has not granted any loans or advances in the nature of loans to promoters, directors,
KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any
other person.

(h) The Company does not have any scheme of arrangements which have been approved by the competent
authority in terms of sections 230 to 237 of the Act.

(i) The Company has complied with the number of layers prescribed under of Section 2(87) of the Act read
with the Companies (Restriction on number of Layers) Rules, 2017.

47 The Indian Parliament has approved the Code on Wages, 2019 and the Code on Social Security, 2020 which
could impact the employee compensation expenses including the contributions by the Company towards
Provident Fund and Gratuity. The effective date from which the change are applicable is yet to be notified and
final rules are yet to be framed. The Company will carry out an evaluation of the impact and record the same in
the financial statements in the period in which the Code becomes effective and the related rules are published.

48 In connection with the preparation of the financial statements for the year ended March 31, 2026, the
Board of Directors have confirmed the propriety of the contracts / agreements entered into by / on behalf of
the Company and the resultant revenue earned / expenses incurred arising out of the same after reviewing
the levels of authorisation and the available documentary evidences and the overall control environment.
Further, the Board of Directors have also reviewed the realizable value of all the current assets of the Company
and have confirmed that the value of such assets in the ordinary course of business will not be less than the
value at which these are recognised in the financial statements. In addition, the Board has also confirmed the
carrying value of the non-current assets in the financial statements. The Board, duly taking into account all
the relevant disclosures made, has approved these financial statements in its meeting held on May 29, 2026
in accordance with the provisions of Companies Act, 2013.

49 Previous year figures have been reclassified to conform to the current year classification / presentation.

I. Provisions (other than for employee benefits)

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.

J. Contingent liability and contingent assets

Contingent liability is disclosed for:

(i) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or

(ii) Present obligations arising from past events where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Contingent assets are neither recognised nor disclosed in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.

K. Revenue

The Company derives its revenue primarily from rendering medical and healthcare services. Income from medical and healthcare services comprises of income from hospital services and sale of pharmacy products.

Inpatient and outpatient revenue

Inpatient and outpatient revenue is recognized as and when the related services are rendered. Revenue is also recognised in relation to the services rendered to the patients who are undergoing treatment/ observation on the balance sheet date to the extent of services rendered.. Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of discounts and concessions offered by the Company.

''Unbilled revenue'' represents the value of medical and healthcare services rendered in excess of amounts billed to the patients as at the balance sheet date.

Sale of traded goods - pharmacy items

Revenue from sale of pharmacy items are recognized on delivery of items to the customers which is when the Company satisfies a performance obligation by transferring a promised good to a patient. Pharmacy items are transferred when the patient obtains control of such items.

The Company collects Goods & Service Tax (GST) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

L. Leases

The Company''s lease asset classes primarily consist of leases for buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (shortterm leases) and low value leases. For these shortterm and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are re-measured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases

that have a lease term of 12 months. The Company recognises the lease payments associated with these leases as an expense over the lease term.

M. Other income

(i) Interest income

Interest income from a financial asset is recognized when it is probable that the economic benefit will flow to the Company and the amount of income can be measured reliably.

Interest income or expense is accrued on a time basis, by reference to the principle/ outstanding using the effective interest rate applicable.

The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

(ii) Dividend income

Dividend income is recognized when the right to receive the income is established.

N. Income tax

Income tax comprises current and deferred tax. It is recognised in Statement of profit and loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.

(i) Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected

to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

(ii) Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred taxes is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle

current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

O. Borrowing cost

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs. Cost in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the statement of Profit and Loss over the tenure of the loan. Borrowing costs allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction/ development of the qualifying asset up to the date of capitalisation of such assets are added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the statement of profit and loss during extended periods when active development activity on the qualifying assets is interrupted.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is the borrowing costs eligible for capitalisation.

All other borrowing costs eligible are recognised in Statement of profit and loss in the period in which they incurred.

P. Earnings per share

Basic earnings per share is computed by dividing the net profit / (loss) after tax (including the post tax effect of exceptional items, if any) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of exceptional items, if any) for the year attributable to equity shareholders as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic EPS and also weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

Q. Operating segment

An operating segment is a component of the Company that engages in business activities from

which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Company''s Managing Director is responsible for allocating resources and assessing performance of the operating segments and accordingly is identified as the Chief Operating Decision Maker (''CODM''). The Company''s CODM reviews financial information presented, for purposes of making operating decisions and assessing financial performance of the Company. Therefore, the Company has determined that it operates in a single operating and reportable segment.

R. Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are shortterm balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

S. Cash flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. In cash flow statement, cash and cash equivalents include cash in hand, balances with banks in current accounts and other short-term highly liquid investments with original maturities of three months or less.

T. Insurance claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.

U. Recent accounting pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

23 Lease liabilities

(a) The Company, at the inception of a contract assesses whether a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

In adopting Ind AS 116, the Company has applied the below practical expedients:

(i) The Company has applied a single discount rate to a portfolio of leases with reasonably similar characteristics.

(ii) The Company has treated the leases with remaining lease term of less than 12 months as if they were "short term leases".

(iii) The Company has not applied the requirements of Ind AS 116 for leases of low value assets.

(b) The Company has taken land and buildings on leases having lease terms of more than 1 year to 42 years, with the option to extend the term of leases. Refer note 5 for carrying amount of right-to-use assets at the end of the reporting period by class of underlying asset.

Provident fund benefits:

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to provident fund is included in "Contribution to provident and other funds".

Employee state insurance benefits:

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Employee State Insurance, which is defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Employee state Insurance is included in "Contribution to provident and other funds".

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors along with the top management are responsible for developing and monitoring the Company''s risk management policies.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company,

ii. Credit risk

Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract, leading to financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and financial institutions and other financial instruments.

Investments

The Investment made by the Company in other Companies are subject to the uncertainty of their ability to generate profits from their operations and provide returns to the Company against the investment made.

Trade receivables (Refer note 14)

Loans

This balance primarily constitute of employee advances. The Company does not expect any losses from nonperformance by these counter parties.

Cash and cash equivalents

The Company held cash and cash equivalents with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness of such banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.

Other financial assets (including other bank balances)

Other financial assets comprises of rental deposits given to lessors, unbilled revenue, bank deposits (due to mature within and after 12 months from the reporting date), interest accrued on fixed deposits, electricity deposit given to Tamil Nadu Electricity Board and receivables from related parties. These fixed deposits are held with credit worthy banks and financial institutions. The credit worthiness of such banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.

iii. Liquidity risks

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its financial liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, including contractual interest.

(iii) The Company, is empaneled under TNCMCHIS, Medi Assist Health Care Service and MD India - TN Govt NHIS for all the services offered by the hospital including Cardiology and Cardiothoracic Surgery. Heart patients under this scheme are treated by the Company in its hospital and wherever the patients require Angioplasty or Heart Surgeries like Bypass Surgery, Valve Replacement, etc., is outsourced to the Kauvery Heart City Hospital, a division of SKMC, the holding company, which is located within the same premises. All the approvals for such procedures are obtained and bills are submitted by the Company. The amount so received from this scheme for such cardiac procedures performed by Heart City is being reimbursed on a monthly basis as per the agreed terms between both the Company and the Holding Company. In the opinion of the management, such outsourcing arrangements are in accordance with the guidelines issued by the Government of Tamil Nadu vide orders in G.O.Ms No. 268 Health and Family Welfare (EAP/1) Department) dated November 17, 2016 (as amended) and in compliance with the Memorandum of Undertaking dated May 2, 2017 entered into with United India Insurance Company Limited.

(iv) Amendment to the Minimum Wages Act

On March 02, 2018, the Govt. of Tamil Nadu passed an order by way of notification in the Official Gazette revising the minimum wages for employment in hospitals and nursing homes under the Minimum Wages Act, 1948. As per the order the notification shall come into force with immediate effect. We understand from the management that the impact of the said notification is fairly significant for the Healthcare Industry in particular to companies operating in Tier II and Tier III cities. In this regard, the Association of Healthcare Providers India ("AHPI") of which the Company is a member had filed a writ petition with the Madurai Bench of Madras High Court and pursuant to the aforesaid petition, the court had granted an interim stay order dated May 31, 2018 restraining the authorities from initiating proceedings against the members of AHPI.

Labour and Employment Department has issued an order dated July 16, 2019 and has mentioned that Committee is constituted to hold enquiries and advice the Government in the matter of revision of minimum wages and a report will be submitted with in 6 months from the date of the GO order. Taking into consideration the above developments and also based on the opinion from legal counsel and in view of the above, the amount has not been ascertained/determined. Accordingly, the Company has not created any provision in the books of account for the Year ended March 31, 2024 and March 31, 2023.

40 Segment reporting

Ind AS 108 "Operating Segment" ("Ind AS 108") establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. Based on the "management approach" as defined in Ind AS 108, Operating segments are to be reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM).The CODM evaluates the Company''s performance and allocates resources on an overall basis. The Company''s sole operating segment is therefore ''Medical and Healthcare Services''. The Company''s entire business operations is in India. Accordingly, there are no additional disclosures to be provided under Ind AS 108.

41 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, 2024 has been made in the financial statements based on information received and available with the Company.

44 Additional regulatory information as required by Schedule III to the Companies Act, 2013 - Others

(a) No proceedings have been initiated during the year or are pending against the Company as at March 31, 2024 and March 31, 2023 for holding any benami property under Benami Property Transactions (prohibition) Act, 1988.

(b) Transactions and balances with companies which have been removed from register of Companies [struck off companies] as at the above reporting periods is Nil.

(c) The Company has not traded / invested in Crypto currency or virtual currency.

(d) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries")

or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(e) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(f) The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income-tax Act, 1961).

(g) The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person.

(h) The Company does not have any scheme of arrangements which have been approved by the competent authority in terms of sections 230 to 237 of the Act.

(i) The Company has complied with the number of layers prescribed under of Section 2(87) of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

46 Operating leases As lessor

The Company had entered into an operating lease arrangement in respect of certain office space with a lease term of 29 years, which are subject to renewal at mutual consent thereafter. The cancellable arrangements can be terminated by either party after giving due notice. The lease rent income recognised during the year amounts to INR 18.90 lakhs (Previous year: INR 12.96 lakhs). The schedule for future minimum lease payments in respect of non-cancellable operating lease is set out below:

47 The Indian Parliament has approved the Code on Wages, 2019 and the Code on Social Security, 2020 which could impact the employee compensation expenses including the contributions by the Company towards Provident Fund and Gratuity. The effective date from which the change are applicable is yet to be notified and final rules are yet to be framed. The Company will carry out an evaluation of the impact and record the same in the financial statements in the period in which the Code becomes effective and the related rules are published.

48 The financial statements were approved for issue by the board of directors on May 29, 2024.

49 Previous year figures have been reclassified to conform to the current year classification/presentation.

for and on behalf of the board of directors of

KMC Speciality Hospitals (India) Limited

CIN: L85110TN1982PLC009781

Dr. S. Manivannan Dr. S. Chandrakumar

Managing Director Executive Chairman (Whole-Time)

DIN : 00910804 DIN :01867847

K. Anand Babu Sushma K

Chief Financial Officer Company Secretary

Place: Chennai

Date: May 29, 2024

Provisions Contingent liability

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of
the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is
recognised as finance cost. Expected future operating losses are not provided for.

J. Contingent liability and contingent assets

Contingent liability is disclosed for

(i) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the entity or

(ii) Present obligations arising from past events where it is not probable that an outflow of resources embodying
economic benefits will be required to settle the obligation or a reliable estimate of the amount of the obligation
cannot be made. When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement
will be received and the amount of the receivable can be measured reliably.

Contingent assets are neither recognised nor disclosed in the financial statements. However, contingent assets are
assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related
income are recognised in the period in which the change occurs.

K. Revenue

The Company derives its revenue primarily from rendering medical and healthcare services. Income from medical and
healthcare services comprises of Income from hospital services and sale of pharmacy products.

Inpatient and Outpatient Revenue

Inpatient and Outpatient revenue is recognized as and when the related services are rendered. Revenue is also
recognised in relation to the services rendered to the patients who are undergoing treatment/ observation on the
balance sheet date to the extent of services rendered. Revenue is recognised net of discounts and concessions given
to the patients.

''Unbilled revenue'' represents the value of medical and healthcare services rendered in excess of amounts billed to the
patients as at the balance sheet date.

Sale of traded goods - pharmacy items

Revenue from sale of pharmacy items are recognized on delivery of items to the customers which is when the Company
satisfies a performance obligation by transferring a promised good to a patient. Pharmacy items are transferred when
the patient obtains control of such items.

The Company collects Goods & Service Tax (GST) on behalf of the government and, therefore, these are not economic
benefits flowing to the Company. Hence, they are excluded from revenue.

L. Leases

The Company''s lease asset classes primarily consist of leases for buildings. The Company assesses whether a contract
contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys
the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an
identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period
of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less
(short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease
payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU
assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any
lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease
term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or
changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment
testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined
on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from
other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the
asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental
borrowing rates in the country of domicile of these leases. Lease liabilities are re-measured with a corresponding

adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an
extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been
classified as financing cash flows.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a
lease term of 12 months. The Company recognises the lease payments associated with these leases as an expense
over the lease term.

M. Other income(i) Interest income

Interest income from a financial asset is recognized when it is probable that the economic benefit will flow to the
Company and the amount of income can be measured reliably.

Interest income or expense is accrued on a time basis, by reference to the principle/outstanding using the effective
interest rate applicable.

The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the
expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the
asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that
have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective
interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation
of interest income reverts to the gross basis.

(ii) Dividend income

Dividend income is recognized when the right to receive the income is established.

N. Income tax

Income tax comprises current and deferred tax. It is recognised in Statement of profit and loss except to the extent that
it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.

(i) Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best
estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income
taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised
amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

(ii) Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred taxes is also
recognised in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against
which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be
available. Therefore, in case of a history of recent losses, the Company recognises a deferred tax asset only to the extent
that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will
be available against which such deferred tax asset can be realised. Deferred tax assets - unrecognised or recognised,
are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable
respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the
liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the
Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realised simultaneously.

O. Borrowing cost

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences relating to foreign
currency borrowings to the extent that they are regarded as an adjustment to interest costs. Cost in connection with the
borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the statement
of Profit and Loss over the tenure of the loan. Borrowing costs allocated to and utilised for qualifying assets, pertaining
to the period from commencement of activities relating to construction/ development of the qualifying asset up to the
date of capitalisation of such assets are added to the cost of the assets. Capitalisation of borrowing costs is suspended
and charged to the statement of profit and loss during extended periods when active development activity on the
qualifying assets is interrupted.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is the borrowing costs eligible for capitalisation.

All other borrowing costs eligible are recognised in Statement of profit and loss in the period in which they incurred.

P. Earnings per share

Basic earnings per share is computed by dividing the net profit / (loss) after tax (including the post tax effect of
exceptional items, if any) for the year attributable to equity shareholders by the weighted average number of equity
shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of exceptional
items, if any) for the year attributable to equity shareholders as adjusted for dividend, interest and other charges to
expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average

number of equity shares considered for deriving basic EPS and also weighted average number of equity shares that
could have been issued upon conversion of all dilutive potential equity shares.

Q. Operating segment

An operating segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s
other components, and for which discrete financial information is available. Operating segments are reported in a
manner consistent with the internal reporting provided to the chief operating decision maker. The Company''s Managing
Director is responsible for allocating resources and assessing performance of the operating segments and accordingly
is identified as the Chief Operating Decision Maker (''CODM''). The Company''s CODM reviews financial information
presented, for purposes of making operating decisions and assessing financial performance of the Company. Therefore,
the Company has determined that it operates in a single operating and reportable segment.

R. Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with
an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily
convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

S. Cash flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) is adjusted for the effects of transactions
of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are segregated based on the available information. In cash
flow statement, cash and cash equivalents include cash in hand, balances with banks in current accounts and other
short-term highly liquid investments with original maturities of three months or less.

T. Insurance Claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the
amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.

1. Company 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 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. Basis of preparation

A. Statement of compliance

The Company has prepared the financial statements (‘financial statements’) under Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The Company’s financial statements up to and for the year ended March 31, 2017 were prepared in accordance with the Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act.

As these are the Company’s first financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS 101, First-time Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance of the Company is provided in Note 40.

The financial statements were authorised for issue by the Company’s Board of Directors on May 29, 2018.

Details of the Company’s accounting policies are included in Note 3.

B. Functional and presentation currency

The Company’s fimctional currency is Indian Rupees (INR) and the financial statements are presented in Indian Rupees. All amounts have been presented in rounded off to the nearest thousands, unless otherwise indicated.

C. Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items:

Items Measurement basis

Certain financial assets and liabilities Fair value

Net defined benefit (asset)/ liability Fair value of plan assets less present value of defined benefit obligations

D. Use of estimates and judgements

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment during the year endedMarch 31, 2018 is included in the following notes:

- Note 10 - recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used;

- Note 14 - impairment of financials assets

- Note 24 — measurement of defined benefit obligations: key actuarial assumptions;

- Notes 38 - recognition and measurement of provisions and contingencies: key assumptions about likelihood and magnitude of an outflow of resources;

E. Measurement of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

Fair values arc categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3: inputs for the asset or liability that are not based, on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

Management uses various valuation techniques to determine fair value of financial instruments (where activemarket quotes are not available). This involves developing estimates and assumptions consistent with how markctparticipants would price the instrument. Management based on its assumptions on observable data as far aspossiblc but where it not available, the management uses the best information available.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

- Note 36 - financial instruments;

b. Right], prcfcrcnccj and restrictions attached te shtrcs

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 rcspcct of shares on which any call or other sums presently payable have not been paid.

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.

Terms of repayment or term loans and the nature of security

a) Term Loans outstanding as on March 31,2018 of INR 29,036 (March 31,2017: INR 63,410) availed fr om State Bank of India:

(i) Term loan -1 was availed initially for INR 50 million during the financial year 2010-11 from Axis Bank and is repayable in 60 monthly installments of INR 833,334/- commencing from November 30,2012, being 24 months from the date of sanction. During the previous year, the said loan was taken over by State Bank of India The term loan is repayable in 14 installments of INR 833,334/-cach commcncing from November 28,2016. The loan was repaid during the current year.

(ii) Tern loan -11 was availed initially for INR 50 million during financial year 2011-12 from Axis Bank and is repayable in 60 monthly installments of INR 833,334/- commencing from January 31,2014, being 24 months from the date of sanction. During the previous year, the said loan was taken over by Slate Bank of India The term loan is repayable in 28 installments of INR 833,334/each commencing from November 28,2016.

(iii) Term loan - in was availed initially for INR 30 million during the financial year 2013-14 from Axis Bank and is repayable in 60 monthly installments of INR 500,000/- commencing from April 30,2014, being 10 months from the date of sanction. During the previous year, the said loan was taken over by State Bank of India. The tenn loan is repayable in 24 instalments of INR 500,000/- each commencing from November 28,2016.

(iv) Term loan - IV was availed initially for INR 50 million during the financial year 2013-14 from City Union Bank and is repayable in 84 equated monthly installments of INR 933,244/- commencing from August 01,2013, being 6 months after the date of sanction. During the previous year, the said loan was taken over by State Bank of India. The term loan is repayable in 45 instalments of INR 750,000/- each commencing from December 28,2016.

The above loans are secured by way of the following:

(i) Hypothecation of fixed assets created/ purchased out of bank finance.

(ii) Equitable mortgage over commercial building belonging to the Company with build up area 111,083 sq. ft built on land measuring 24,864 sq. ft situated at No. 5, Royal road (land belonging to Sri Kavery Medical Care (Trichy) Limited, the Holding Company,

(iii) Extension of equitable mortgage over commercial land measuring 14,500 sq. ft situated at No.6, Alexandria road, Cantonment, Trichy - 620 001 belonging to the Company (title deed no. 3942/1995 & 3943/1995), situated in Ward No.K, Block no. 17, New T.S. No. 2 & 3/2, in Trichy Jt. I&U, sub regn dt ofK Abhishekapuram, Trichy - 620 001.

(iv) Personal guarantees of Dr.S.Chandrakumar, Managing Director, Dr. S Manivannan, Director and Dr. D Senguttuvan, Executive Director of the Company.

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

b) Term loam outstanding ai on March 31,2018 of INR 48,155 (March 31,2017: Nil) availed from HDFC Bank:

(i) Term loan -1 from HDFC Bank for INR 43.77 million was availed on December 26,2017, principal is repayable in 66 installments of INR 663,174/- towards principal commencing from August 30,2018. Interest being serviced monthly.

The above loan is secured by way of the following:

(i) First and exclusive chargc for the land, building and equipment purchased with the loan amount The collateral value of the land, building and equipment amounting atlcast INR 250 million.

(ii) Letter of comfort from the bolding company, Sri Kavery Medical Care (Trichy) Limited

(ii) Term loan towards purchase of car from HDFC Bank for INR 5 million was availed in the previous year and is repayable in 60 equated monthly installments (EMIs) of INR 100,904/- commencing from March 7, 2017. The loan is secured by way of hypothecation of the asset procured.

c) Term loans outstanding as on March 31,2018 of INR 46.229 (March 31,2017: Nil) availed from Yes Bank Limited:

(i) Term loan towards purchase of MR1 Scan from Yes Bank Limited for INR 39.55 million was availed on November 21,2017 and is repayable in 78 equated monthly installments (EMIs) of INR 647,916/- commencing from December 2017.

(ii) Term loan towards purchase of CT Scan from Yes Bank Limited lor INR 11.16 million was availed on October 9, 2017 and is repayable in 78 equated monthly installments (EMIs) of INR 182,732/- commencing from November 2017.

The above loans are secured by way of first and exclusive charge on the equipments purchased against the loan.

The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous scrvicc, to gratuity at the rate of fifteen days wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.

These defined benefit plans expose tbc Company to actuarial risks, such as interest rate risk, liquidity risk, salary escalation risk, demographic risk, regulatory risk and investment risk.

A. Funding

The finding requirements are based on the gratuity fund’s actuarial measurement framework set out in the funding policies of the plan. The funding of Plan is based on a separate actuarial valuation for funding purposes for which the assumptions may differ from tbc assumptions set out in (E). Employees do not contribute to the plan.

B. Reconciliation of He net defined benefit (asset) liability the following tabic shows a reconciliation from tic opening balances to the closing balances for the net defined benefit (asset) liability and its components.

Sensitivity of significant actuarial assumptions is computod by varying one actuarial assumption used for the valuation of defined benefit obligation by percentage indicated, keeping all other actuarial assumptions constant Although the analysis docs not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumption shows.

The Company has not disclosed fair values of financial instruments such as investments, loans, trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, borrowings, trade payables and other financial liabilities, since their carrying amounts ate reasonable approximates of fair values. The Company docs not have any financial asset/liability which arc classified as FVTPLor FVTOCL

B. Financial risk management

The Company has exposure to the Mowing risks arising from financial instruments:

a) credit risk (see (B)(ii));

b) liquidity risk (see (B)(iii)); and

c) market risk (acc (B)(iv)).

L Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of flic Company’s risk management framework. The board of directors along with the top management am responsible for developing and monitoring the Company’s risk management policies.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems arc reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company’s audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company,

ii Credit risk

Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract, leading to financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and financial institutions and other financial instruments.

Trade receivables

Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuons basis to whom credit has been granted after obtaining necessary approvals for credit. The collection from the trade receivables are monitored on a continuous basis by the receivables team.

The Company establishes an allowance for credit loss that represents its estimate of expected losses in respect of trade and other receivables based on the past and rcccnt collection trend. The maximum exposure to credit ri8k as at reporting date is primarily Iran trade receivables amounting to INR 17,394 (March31,2017 : INR 9,211; April 1,2016: INR 5,969). The Company’s exposure to crcdit risk for trade receivables and other receivables is as follows:

Loam

This balance primarily constitute of rcntai deposits given to lessors, employee advances and electricity deposit given to Tamil Nadu Electricity Board. The Company does not expect any losses fium non-performance by these counter parties.

Cash and calk equivalents

The Company held cash and cash equivalents with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness or such banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low crcdit risk.

Other financial assets

Other financial assets comprises of unbilled revenue, bank deposits (due to mature after 12 months from die reporting date) and interest accrued on fixed deposits. These fixed deposits are held with credit worthy banks and financial institutions. The credit worthiness of such banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.

Hi Liquidity risks

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that arc settled by delivering cask or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to moot its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company has current financial assets of INR 71 -578 (March 31,2017: INR 33,679 and April 1,2016: INR 18.235), which the management believes is sufficient a- meet all its liabilities maturing during the next 12 months amounting to INR 97,216 (March 31,2017: INR 85,132 and April 1, 2016: INR 81,828).

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, including contractual interest.

Iv. Market risks

Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rales and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables. The Company is exposed to marke: risk primarily related to interest rate risk.

Cash flow and fair value interest rate risk

The Company’s mam interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk, a) Interest rate risk exposure

The exposure of the Company’s borrowing to interest rate changcs a: the end of the reporting period arc as follows:

3 Explanation of transition to Ind AS

As stated a Nate 2A, these arc the Company’s first financial statements prepared in accordance with Ind AS. For the year ended March 31,2017, the Company had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2006. notified under Section 133 of the Act and other relevant provisions of file Act (‘previous GAAP’).

The accounting policies set out in Note 3 have been applied in preparing these financial statements for (he year ended March 31,2018 including the comparative information for the year ended March 31,2017 and the opening Ind AS balance sheet on the date of transition i.e. April 1,2016.

In preparing its ind AS balance shed as at April 1,2016 and in presenting the comparative information for the year ended March 31,2017, die Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in rotating its financial statements prepared in accordancc with previous GAAP, and how the transition from previous GAAP to hid AS has affected the Company financial position, financial performance and cash flows.

Optional exemption! availed and mandatory exceptions

In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

A Optional exemptions availed

L Property plant and equipment, intangible assets and Investment properties

As per Ind AS 101 an entity may elect to:

(i) measure an Hem of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed coet at that dale

(ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to:

- fair value;

- or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.

The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in hid AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including tne existence of an active maitet).

(iii) use canying values of property, plant and equipment, intangible assets and investment properties as on the date of transition to ind AS (which are measured in accordance with previous GAAP and after malting adjustments relating to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.

As permitted by Ind AS 101, the Company has elected to continue with the canying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets and investment property also.

B. Mandatory exceptions 1. Estimates

As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error. However, file estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions (hat existed at the date of transition (for preparing opening Ind AS balance sheet) or at file end of (he comparative period (for presenting comparative information as per Ind AS).

The Company’s estimates under Ind AS are consistent with the above requirement Key estimates considered in preparation of the financial statements that were not required under the previous GAAP are listed below:

- Impairment of financial assets based on the expected credit loss model.

- Determination of the discounted value for financial instruments tarried at amortised cost.

1 Clarification and meanremeat of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

4 Transfer pricing

The Company has specified domestic transactions with related parties as provided for in the Income Tax Act, 1961. to 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.

5 Segment reporting

Ind AS 108 “Operating Segment” (“Ind AS 108”) establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. Based on the “management approach” as defined in tod AS 108, Operating segments are to be reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM).The CODM evaluates the Company’s performance and allocates resources on overall basis. The Company’s sole operating segment is therefore ‘Medical and Healthcare Services’. The Company’s entire business operations is in India. Accordingly, there are no additional disclosure to be provided unde r Ind AS 108.

6 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 die amounts payable to such enterprises as at March 31, 2018 has been made in the financial statements based on information received and available with the Company.

7 Operating leases

(a) Ai leaiiee

The Company ha*s taken land for its hospital buikling 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 I - 2 years and the lease arrangements are subject to renewal at mutual consent thereafter. The lease rent expense recognised during the year amounts to INR 4,019 (Previous year: INR 2,017). The schedule for future minimum lease payments in respect of non-cancellable operating lease is set out below:

(b) As lessor

The Company had entered into an operating lease arrangement in respect of ccrtain office space with a lease term of 29 years, which arc subject to renewal at mutual consent thereafter. The cancellable arrangements can be terminated by either party afte giving due notice. The lease rent income recognised during the year amounts to INR 132 (Previous yean INR 132). The schedule for future minimum lease payments in respect of non-canccllable operating lease is set out below:

8 Disclosure of Specified Bank -otes (SBN)

During the previous year, the company had specified bank notes or other denomination notes as defined in the MCA Notification G.S.R. 308(E) dated March 31, 2017. The details of SBN held and transacted during the period November 8, 2016 to December 30, 2016, the denomination-wise SBNs and other notes as per the notification arc as follows:

For the purpose of this clause, the term specified bank note shall have the same meaning provided in the notification of the Government of India, the Ministry of Finance - Department of Economic Affairs No. S.0.3407 (E), dated November 8, 2016.

9. Previous Year figures have been reclassified wherever necessary to confirm with current year classification / Presentation.

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.

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.

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.

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.

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.

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.

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.