secunderabad...secunderabad healthcare limited board, consent of the members be and is hereby...

SECUNDERABAD HEALTHCARE LIMITED

Innovation is our future

19thAnnual Report

2009-2010


19th ANNUAL REPORT2009-2010

SECUNDERABAD HEALTHCARE LIMITED(Regd Office: S 1 – Vimal, Road No. 5, Jubilee Hills, Hyderabad 500033.)

BOARD OF DIRECTORS

Mr. M. Munisekhar : Managing DirectorMr. B. Daniel Solomon : Executive DirectorMr. G. Vasudeva Reddy : Non Executive - Independent DirectorMr. R. Surendra Naidu : Non Executive - Independent DirectorMr. Sharad T. Shah : Non Executive - Independent DirectorDr. Thakur Ramesh Singh Chouhan : Non Executive - Independent DirectorMr. Rajaram Arjun Rambade : Additional Director (Executive)

COMPANY SECRETARY

Mr. B. Venu Gopal Rao

BANKERS

Development Credit Bank (DCB)Central Bank of IndiaICICI Bank LtdYES Bank Ltd

AUDITORS

M/s. P. Murali & Co.,Chartered Accountants,6-3-655/2/3,Somajiguda,Hyderabad- 500 082.

REGISTERED & CORPORATE OFFICE

S 1 - Vimal, Road No. 5, 8-2-293/82/A, Plot no. 31-BJubilee Hills,Hyderabad 500033

SHARE TRANSFER AGENTS

M/s. Aarthi Consultants Private Limited1-2-285, Domalguda,Hyderabad – 500 029.

LISTING AT:

Bombay Stock Exchange Limited

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CONTENTS:

>> NOTICE

>> DIRECTORS’ REPORT

>> MANAGEMENT DISCUSSION AND ANALYSIS REPORT

>> CORPORATE GOVERNANCE REPORT.

>> MANAGING DIRECTORS CERTIFICATION

>> COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE.

>> AUDITOR’S REPORT

>> BALANCE SHEET

>> PROFIT & LOSS ACCOUNT

>> SCHEDULES

>> PROXY FORM & ATTENDANCE SLIP.

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NOTICENOTICE is hereby given that the 19th Annual General Meeting of the Members of Secunderabad Healthcare Limited will be held on Thursday, the 9th Day of Septem-ber, 2010 at 2.00 P.M at Sundaraiah Vignana Kendram (Mini Hall), Baghlingam-pally, Hyderabad-500 044, to transact the following items of Business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Profit & Loss Account for the year ended 31st March, 2010 and the Audited Balance Sheet as on 31st March, 2010 together with the Reports of the Board of Directors and the Auditors Report and notes thereon.

2. To appoint a Director in place of Mr. Sharad Tejshi Shah, who retires by rotation and be-ing eligible, offers himself for re-appointment.

3. To appoint a Director in place of Mr. R. Surendra Naidu, who retires by rotation and be-ing eligible, offers himself for re-appointment.

4. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

M/s. P. Murali & Co., Chartered Accountants, has expressed their unwillingness to continue as the auditors of the Company after the conclusion of the Annual General Meeting. The Company has received a confirmation from, M/s. A. Singhai & Co. that their appointment, if made would be within the limits prescribed under section 224 (1B) of the Companies Act, 1956.

“RESOLVED THAT pursuant to the provisions of Section 224(1B), 225 and other applicable provi-sions, if any of the Companies Act, 1956, M/s A. Singhai & Co. Chartered Accountants, be and are hereby appointed as the Statutory Auditors of the Company in place of M/s. P. Murali & Co., to hold office from the conclusion of this Annual General Meeting up to the conclusion of the next Annual General Meeting of the Company on such remuneration inclusive of the out- of- pocket expenses as may be determined by the Board of Directors in consultation with the Auditor.”

SPECIAL BUSINESS:

5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT Mr. Rajaram Arjun Rambade, who was appointed as an Additional Director of the Company by the Board in its meeting held on 14th May, 2010 and who holds office up to the date of this Annual General Meeting and in respect of whom a notice in writing has been received from a member signifying his/her intention to propose him as a candidate for the office of the Director of the Company, under the provisions of Section 257 of the Companies Act, 1956, be and is hereby appointed as a Director of the Company liable to retire by Rotation”

6. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 (“the Act”) the Company hereby approves the appointment of Mr. Solomon Daniel Bondugula as the Managing Director of the Company with effect from 1st September 2010 for a period of 5 Years, upon the terms and conditions including re-muneration as are set out in the draft Agreement (“the Agreement”) executed between the Company

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SECUNDERABAD HEALTHCARE LIMITEDand the Managing Director.

RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby authorized to vary, from time to time the percentage and quantum of the commission payable to the Managing Director, provided that the total remuneration payable whether by way of salary, perquisites, com-mission, allowances and benefits, shall not exceed the ceiling laid down under Section 309 of the Companies Act, 1956.

RESOLVED FURTHER THAT in the event of loss or inadequacy of profits during the tenure of service of the Managing Director, the payment of salary, commission, perquisites and other allow-ances shall be governed by the limits prescribed under Section II of Part II of Schedule XIII to the Companies Act, 1956.

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is hereby authorized to do all such acts, deeds, matters and things as it may, in its absolute discretion deem desirable, necessary, expedient, usual or proper to implement the aforesaid resolution.”


“RESOLVED THAT pursuant to the provisions of section 94 and other applicable provisions, if any, of the Companies Act, 1956, Authorized Share Capital of the Company be and is hereby increased from Rs. 5,00,00,000/- (Rupees Five Crores only) divided into 50,00,000 (Fifty Lakhs) Equity Shares of Rs. 10/- (Rupees Ten only) each to Rs. 90,00,00,000/- (Rupees Ninety Crores only) divided into 9,00,00,000 (Nine Crores) Equity Shares of Rs. 10/- (Rupees Ten only) each by creation of 8,50,00,000 (Eight Crores Fifty Lakhs) additional Equity Shares of Rs. 10/- (Rupees Ten only) each.

RESOLVED FURTHER THAT pursuant to the provisions of section 16 and other applicable provi-sions, if any, of the Companies Act, 1956, existing clause V (a) of the Memorandum of Association of the Company be and is hereby substituted with the following new clause:

V(a) The Authorized Share Capital of the Company is Rs. 90,00,00,000/- (Rupees Ninety Crores only) divided into 9,00,00,000 (Nine Crores) Equity Shares of Rs. 10/-(Rupees Ten only) each to be increased or reduced in accordance with the relevant provisions of the Companies Act, 1956.

RESOLVED FURTHER THAT the Board, be and is hereby authorized to do all such acts, deeds and things as may be deemed expedient to give effect to the aforesaid resolution”


“RESOLVED THAT pursuant to the provisions of Section 81(1A) and other applicable provisions of the Companies Act, 1956, (including any statutory modification(s) or re-enactment thereof for the time being in force) (hereinafter referred to as “the Act”) and in accordance with the provisions of the Memorandum and Articles of Association of the Company, the Listing agreements entered into by the Company with the Stock Exchanges where the Equity Shares of the Company are listed, applicable guidelines under the Securities and Exchange Board of India (Issue of Capital and Disclo-sure Requirements) Regulations, 2009 (“ICDR Regulations”) and such applicable regulations and/ or guidelines, if any, of any other authority and subject to such statutory, regulatory and government approvals, sanctions and permissions as may be necessary including such conditions and modifica-tions as may be prescribed or imposed by any of them while granting such approvals, sanctions and permissions, which the Board of Directors of the Company (herein after referred to as “the Board” which term shall be deemed to include any Committee thereof which the Board may constitute to exercise its powers, including the powers conferred by this resolution) be and is hereby authorized to accept and subject to such conditions and modifications as may be considered appropriate by the

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SECUNDERABAD HEALTHCARE LIMITEDBoard, consent of the members be and is hereby accorded to the Board to create, offer, issue and allot at its sole discretion on preferential basis 8,00,00,000 (Eight Crores) Convertible Equity Warrants (hereinafter referred to as “Warrants”) to the prospective investors or any of its nominees or affili-ates, at Rs. 18.60/- per warrant which is derived in accordance with clause 76 of Chapter VII of the SEBI (Issue of Capital & Disclosure Requirements) Regulations,2009, which shall be the higher of the following:

> Average of the weekly high and low of closing prices of the related shares quoted on the Stock Exchange during six months preceding the relevant date

OR > Average of the weekly high and low of closing prices of the related shares quoted on the Stock Exchange during two weeks preceding the relevant date and at any other price above the exercise price, as may be finalized by the Board.

RESOLVED FURTHER THAT at least 25% shall be payable before the allotment of warrants and Balance on or before 18 months from the date of allotment or else the money received for the allot-ment of warrants shall be forfeited by the Company.

RESOLVED FURTHER THAT in the event Convertible Warrants are issued the same shall at the option of the allottee, be converted into equivalent number of Equity Shares in one or more trenches but before expiry of 18 months from the date of allotment.

RESOLVED FURTHER THAT:

> The Relevant date for the purpose of Pricing of issue of is 10th August, 2010 which is 30 days prior from the date of Annual General Meeting, being in accordance with the ICDR Regula-tions.

> The Equity Shares to be offered, issued and allotted upon conversion of Convertible Warrants shall be subject to the relevant provisions contained in the Memorandum and Articles of Association of the Company in pursuance of this resolution and shall rank pari- passu with the then existing equity shares of the Company in all respects.

> The offer, issue and allotment of the convertible warrants shall be made at such times or times and in such manner as the Board may in its absolute discretion decide, subject to the provisions of the ICDR Regulations.

> The Board be and is hereby authorized to decide and approve the other terms and conditions of the issue of the convertible warrants and shall be entitled to vary, modify and alter any of the terms and conditions, including the issue price and size of the issue, as it may deem expedient, without being required to seek any further consent or approval of the members of the Company.

> The Board be and is hereby authorized to delegate all or any of the powers herein con-ferred by this resolution to any Director or Directors or to any committee of Directors or any other Officer or Officers of the Company.

> The Equity Shares allotted on conversion of warrants in terms of this resolution shall be subject to lock in requirements as per the provisions of Chapter VII of the SEBI (ICDR) Regulations, 2009.

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is hereby authorized to take such steps and to do all such acts, deeds and things as the Board may, in its absolute discretion, consider necessary, expedient, usual, proper or incidental to this resolution and to settle any question, remove any difficulty or doubt that may arise from time to time in relation to the offer, issue and allotment of the Shares and the utilization of the issue proceeds of the convert-

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SECUNDERABAD HEALTHCARE LIMITEDible warrants and to prescribe the forms of application, enter into agreements or other instruments, and to take such actions or give such directions as it may consider as being necessary or desirable and to obtain any approvals, permissions, sanctions which may be necessary or desirable, as it may in its absolute discretion deem fit.”

By order of the BoardVenu Gopal Rao Brahmanapalli

Place: Hyderabad.Date: 12th August, 2010. Company Secretary

NOTES:1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a member of the Company.

2. Proxies in order to be effective must be filed with the Company not later than 48 hours before commencement of the meeting.

3. The relevant explanatory statement in respect of the special business set out above, as required by section173 (2) of the Companies Act, 1956 is annexed hereto.

4. The Register of Members and Share Transfer Books of the Company will remain closed from 24th Day of August, 2010 to 26th Day of August, 2010 (Both Days inclusive) in connection with the Annual General Meeting of the Company.

5. Members are requested to: > Quote folio no./ DP ID & CL. ID for any communication for their Shareholding. > Bring the copy of the Annual Report and the Attendance Slip duly filled in for attending the Annual General Meeting; > Intimate to the Company’s Registrars and Share Transfer Agents, M/s. Aarthi Consultants Private Limited (for shares held in physical form) and to their Depository Participants (DP) (for shares held in dematerialized form) the changes, if any, in their Registered address, Bank account number / details etc. at an early date, quote ledger folio numbers /DP Identity and Client Identity Numbers in all their correspondences;

6. The copies of relevant documents can be inspected at the Registered Office of the Company on any working day between 11.00 a.m. to 1.00 p.m. up to the date of the Annual General Meeting of the Company. 7. Members/Beneficial Owners are requested to quote their full name as per Company’s re cord, Folio No. /DP and Client ID Nos. as the case may be, in all correspondence with the Company.

8. In case of Joint holders attending the meeting, only such joint holder who is higher in the order of names will be entitled to vote.

9. Corporate Members intending to send their authorized representatives are requested to send a duly certified copy of the Board resolution authorizing their representa tives to attend and vote at the Annual General Meeting.

10. Members desirous of obtaining any information concerning the accounts and operations of the Company are requested to address their questions to the Company at the registered office address so as to reach at least seven days before the date of the Meeting, to enable the information required to be made available at the Meeting, to the extent possible.

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SECUNDERABAD HEALTHCARE LIMITEDEXPLANATORY STATEMENT UNDER SECTION 173 (2)OF THE COMPANIES

ACT, 1956 IN RESPECT OF ITEM NOS. 4 TO 6 OF THE NOTICE:

ITEM NO. 4

Mr. Rajaram Arjun Rambade was appointed by the Board of Directors as an Additional Director with effect from 14th May 2010. As per Section 260 of the Companies Act, 1956, Mr. Rajaram Arjun Rambade holds office only upto the date of this Annual General Meeting. The Company has received a notice in writing under section 257 of the Companies Act, 1956, along with a deposit of Rs. 500/- from a member signifying his intention to propose the name of Mr. Rajaram Arjun Rambade as a candidature for the office of Director.

Particulars of Mr. Rajaram Arjun Rambade pursuant to Clause 49 of the Listing Agreement is given below.

Age: 47 years Educational Qualification: Commerce Graduate from the University of Mumbai Experience and Expertise in specific functional area: Finance, Taxation and Accountancy Name of Companies in which person holds Directorship: None Name of the Companies in which the person holds membership of Committees: None Shareholding in the Company (number & percentage): Nil

None of the Director is directly or indirectly concerned or interested in this resolution except Mr. Rajaram Arjun Rambade. The Board recommends the Resolution for the members’ approval in the Annual General Meeting.

ITEM NO. 5

The Board of Directors at their meeting held on 12th August, 2010 has proposed to appoint Mr. Solomon Daniel Bondugula as the Managing Director of the Company, subject to the approval of the members in the General Meeting of the Company.

The material terms and conditions of his appointment contained in the draft agreement between the Company and the said Managing Director are as follows:

> The Managing Director shall, subject to the supervision and control of the Board of Directors, carry out such duties as may be entrusted to him by the Directors and shall exercise such powers as are such powers as are delegated to him by the Board of Directors. Period of Agreement: with effect from 1st September’2010. Duration: 5 years. Remuneration:a) Salary Basic : Rs. 40,000 per monthb) Conveyance : Rs. 5,000 per monthc) House Rent Allowance : Rs. 15,000 per monthd) Gratuity : As per the rules of the Company’s Scheme. In computing the Gratuity benefits payable to the Managing Director, his period of employment from 1st of September’2010 would be considered as continuous employment with the Company and he would be eligible to receive gratuity benefits for such total continuous period of service. > Minimum Remuneration

In the event of any absence or inadequacy of net profits in any financial year, the remuneration as mentioned in the agreement entered between the M.D and the Company shall be the minimum remu-neration payable to the Managing Director.

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The Managing Director shall entitled to reimbursement of all the actual expenses or charges includ-ing all the other out- of- pocket expenses incurred by him on behalf of the Company, in furtherance of its business and objects.

> The Terms and conditions of the said appointment and/ or agreement may be altered, enhanced or varied from time to time by the Board as it may, in its absolute discretion, deem fit.

> The Agreement may be terminated by either party giving the other party 6 months notice.

> The Managing Director shall not be entitled to receive any fees for attending the meetings of the Board/ Committee.

None of the Directors other than Mr. Solomon Daniel Bondugula is interested in this resolution since it relates to his appointment.

ITEM NO.6

The Present Authorized Share Capital of the Company is 5,00,00,000/- (Rupees Five Crores only) divided into 50,00,000 (Fifty Lakhs) Equity Shares of Rs. 10/- (Rupees Ten only) each.

Having regard to the anticipated growth of the Company in future, and in view of the Expansion and Diversification plans of the Company and a consequence of the Private Placement of the Securities envisaged under item No. 7 of this Notice, your Directors anticipate an increase in the Capital Base of the Company.

Thus, the Authorized Share Capital of the Company needs to increased from the present 5,00,00,000/- (Rupees Five Crores only) divided into 50,00,000 (Fifty Lakhs) Equity Shares of Rs. 10/- (Rupees Ten only) each to Rs. 90,00,00,000/- (Rupees Ninety Crores only) divided into 9,00,00,000 (Nine Crores) Equity Shares of Rs. 10/- (Rupees Ten only) each by creation of 8,50,00,000 (Eight Crores Fifty Lakhs) additional Equity Shares of Rs. 10/- (Rupees Ten only) each in order to accommodate the said Private Placement of Securities.

Increase in Authorized Share Capital of the Company would necessitate amendment to Clause V(a) of the Memorandum of Association and would require Member’s approval by passing an Ordinary Resolution.

A copy of a Memorandum and Article of Association of the Company is open for inspection by any member of the Company between 11:00 a.m. to 1:00 p.m. during all working days at the Registered Office of the Company.

The Directors of the Company are deemed to be concerned or interested in the resolution only to the extent of shares held by them in the Company.

ITEM NO.7

Healthcare Sector is the backbone of any country and plays a very important role in the development of the country. As an integral part of the healthcare industry, your Company realizes its responsibility towards its clients, shareholders, employees and the society.

Thus, your company is always alert to grab any opportunities which can benefit its members and society as a whole. To enable your company to take full advantage of these opportunities, it is very important to have enough capital resources to deploy in the required projects as and when the need arises.

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Further, in this dynamic world it is very important to keep up breast with the technological develop-ments to pass on the benefit to our clients and also to maintain profitability. Thus, your company plans to raise Rs. 1,48,00,00,000 (Rupees One Hundred and Forty Crores only) through preferential allotment of 8,00,00,000 Convertible Equity warrants to various allottees at Rs. 18.60/- (Rupees Eighteen and Sixty paise only) per warrant.

Disclosures as per the requirements of the Securities and Exchange Board of In-dia (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“ICDR”) for preferential issues is furnished hereunder:

>> Object of the Issue

The proceeds of the proposed preferential allotment will be utilized for modernization, up gradation programme and also to meet the working capital requirement. Further, your company shall utilize the proceeds for capital expenditure and for the purpose of expansion and diversification in order to capitalize on organic and inorganic growth opportunities.

>> Pricing of the Issue

The Convertible Warrants shall be issued at Rs. 18.60/- (Ruppes Eighteen and Sixty paise only) which has been determined in accordance with Clause 76 of Chapter VII of the SEBI (Issue of Capi-tal & Disclosure Requirements) Regulations, by taking 10th August, 2010 as the Relevant Date.

>> Intention of the Promoters, Directors, Management personnel to subscribe to the offer:

The Promoters/Promoters Group of the Company are not subscribing to the present preferential issue.

Share Holding Pattern

Sr.No.

Category of Shareholders Pre-issue Shareholding (as on 30th June, 2010)

Post- issue Sharehold-ing (assuming full conversion)

1 Promoters/Promoters’ Group

Total Number of Shares

% Total Number of Shares

%

( A)

i)

ii)

Shareholding of Promoters and Promoters GroupIndianIndividuals/HUF

Foreign

660500

0

17.57

0

660500

0

0.79

0

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SECUNDERABAD HEALTHCARE LIMITEDTotal shareholding of Promoter and Promoter Group (A)

660500 17.57 660500 0.79

(B)

IIIa)b)i)

ii)

Public Holding

InstitutionsNon- InstitutionsBodies CorporateIndividuals/HUFShareholder holding nominal Share Capital up to Rs. 1lakhShareholder holding nominal Shares Capital in excess of Rs. 1lakhAny Others (Specify)Non- Resident IndiansClearing Members

0

442074

1,273,242

1,122,932260,852258,700

2,152

0

11.76

33.87

29.876.946.880.06

0

80442074

1,273,242

1,122,932 260,852258,700

2,152

0

96.04

1.52

1.340.310.310.00

Sub Total 3,099,100 82.43 83,099,100 99.21

Total Public shareholding ( B) 3,099,100 82.43 83,099,100 99.21

Total (A)+(B) 3,759,600 100.00 83,759,600 100.00

(C). Shares held by Custodians and against which Depository Receipts have been issued

0 0 0 0

Total (A)+(B+(C) 3,759,600 100.00 83,759,600 100.00

The aforesaid shareholding pattern may change from time to time depending upon the exercise of Convertible Warrants, transfer of shares by the existing Shareholders and/or further issue of the Capital by the Company.

>> Proposed Time within which the allotment shall be completed

The allotment of the Warrants shall be completed within a period of 15 days from the date of passing of the resolution by the Shareholders. Provided that, where the allotment is pending on account of pen-dency of any approval from any regulatory authority or the Central Government, the allotment shall be completed by the Company within a period of 15 days from the date of such approvals.

>> Identity of the Proposed Allottees and the percentage of the post preferential issue capital that may be held by them

Sr. No.

Name of Allottees No. of Warrants % Holding Post Conversion

1 Nazima Impex Private Limited 2700000 3.22

2 Jabeen Tradelink Private Limited 2900000 3.46

3 Gajpal Buildinfra Private Limited 1750000 2.09

4 Narois Impex Private Limited 2900000 3.46

5 Aalyya Traders Private Limited 3125000 3.73

6 Jeshna Multitrade Private Limited 2250000 2.69

7 Hamraj Fashions Consultants Private Limited 3700000 4.42

8 Roho Real Estate Private Limited 3750000 4.48

9 Radford Real Estate Private Limited 3725000 4.45

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SECUNDERABAD HEALTHCARE LIMITED10 Addo Constructions Private Limited 3500000 4.18

11 SKR Supreme Electronics & Trading Private Limited

3625000 4.33

12 Nishottam Traders Private Limited 2925000 3.49

13 Lakeview Land Private Limited 1600000 1.91

14 Adamina Traders Private Limited 3350000 4.00

15 Amrita Bhagwati Finance Private Limited 1700000 2.03

16 Black Horse Media & Entertainment Private Limited

2500000 2.98

17 Gill Entertainment Private Limited 2700000 3.22

18 Agrata Real Estate Private Limited 2700000 3.22

19 Anvita Trading Co. Private Limited 3625000 4.33

20 Marisha Real Estate Private Limited 3750000 4.48

21 Energy Commotrade Private Limited 3500000 4.18

22 Wellman Tradelink Private Limited 3250000 3.88

23 Aansal Securities Services Private Limited 2750000 3.28

24 Prraneta Industries Limited 3100000 3.70

25 Pavitra Mall Management Co. Private Limited 2500000 2.98

26 Nirvana Mall Management Co. Private Limited 2525000 3.01

27 Nu Pharmalogics Private Limited 3600000 4.30

TOTAL 80000000

>> Lock- in Period

The Equity Shares to be issued and allotted to the above named allottees shall be subject to lock-in for a period of 1 year from the date of its allotment or such reduced period as may be permitted under the SEBI (ICDR) Regulations, 2009 as amended from time- to time.

>> Auditor’s Certificate

A Certificate from the Auditors of the Company certifying that the proposed issue of Convertible War-rants to the above- mentioned allottees is in compliance with the SEBI (ICDR) Regulations, 2009 shall be made available for inspection at the Registered Office of the Company on all working days except Saturday and Sunday and all public holidays during 11:00 a.m. to 1 p.m.

The Company undertakes that it shall re- compute the price of the Warrants in terms of the SEBI (ICDR) Regulations, 2009 where it is required to do so. The Company also undertakes that if the amount payable on account of re- computation is not paid within the time stipulated in the SEBI (ICDR) Regulations, 2009, the Convertible Warrants/ Equity Shares issued upon conversion shall con-tinue to be locked- in till such required amount, if any is paid by the above- named allottees.

Since the Convertible Warrants proposed to be issued to the above- mentioned allottees will be is-sued on preferential basis, consent of the Shareholders of the Company is being sought under section 81(1A) of the Companies Act, 1956 and in terms of the Listing Agreement executed by the Company with the Stock Exchange where the Equity Shares of the Company are listed.

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SECUNDERABAD HEALTHCARE LIMITEDAs the proposal for issue of the Warrants on Convertible basis will be in the interest of the Company, the Board of Directors recommend the passing of the special resolution as set out in the notice.

By order of the BoardVenu Gopal Rao Brahmanapalli

Place: Hyderabad.Date: 12th August, 2010.

Company Secretary

NOTES ON DIRECTORS APPOINTMENT/RE-APPOINTMENT:

Name of the Director

Mr. Sharad Tejshi Shah

Mr. R. Surendra Naidu

Mr. Rajaram Ar-jun Rambade::

Mr. Solomon Daniel Bondu-gula

Date of Appoint-ment

28th June, 2008 23.02.2006 14.05.2010 31-10-1991

Date of Birth 19.08.1951 09.04.1964 12.04.1963 07.12.1958

Qualification BS in Chemistry Degree B. Com, A.C.A. Graduation & Electronics

Expertise in Spe-cific Functional areas

Specialisation in Chemistry and in Business in USA for more than 25 years

Electronics & Telecommunica-tions

20 Years of Experience in Fi-nance, Taxation, Regulations and Equity Markets.

20 Years Experi-ence in Health-care Industry.

DIRECTORS’ REPORTTo The Members of M/s. SECUNDERABAD HEALTHCARE LIMITED

Your Directors have a pleasure in presenting the 19th Annual Report together with the Audited State-ment of Accounts for the Financial year ended 31st March, 2010.

FINANCIAL RESULTS: (Rs. In Lakhs)

Particulars Year ended 31.03.2010 Year ended 31.03.2009

Turnover 1843.27 1592.24

Profit before Tax (+) / Loss (-) 25.88 43.06

Provision for Tax 4.05 4.79

Profit After Tax (+) / Loss (-) 21.85 38.26

Balance Brought Forward 166.01 174.33

OPERATIONS:

Your Company achieved a turnover of Rs. 1843.27 Lacs as compared to Rs. 1592.24 Lacs in 2008-09 and the net profit after tax stood at Rs. 21.85 Lacs compared to Rs 38.26 Lacs in the previous year. Even though the Company registered a growth of 15.75% in the turnover for the current financial year under review, there is decline in the net profit after tax of the Company. This is due to increase in purchases amounting to Rs. 18,39,69,902. Such an increase is of 38.98% as compared to the previous accounting year.

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SECUNDERABAD HEALTHCARE LIMITEDThe Company is committed to continue its efforts for the developmental activities and has several plans to sustain and improve the turnover and profitability in the future.

OUTLOOK:

The year 2009 presented a lot of uncertainties and grave challenges for the Indian economy because of the financial and economic crisis that struck the world. But to the delight of the countrymen, India emerged from this crisis after having weathered against all odds only to usher in an era of sound economic situation aiming for a consistent 9% growth. The aim of the government outlined in the budget 2010-11 is to achieve inclusive growth by bringing the rural masses within the ambit of the development agenda.

The health infrastructure across Indian states is projected to grow by an average of 5.8 percent per annum between 2009-2013, taking the total expenditure in 2013 to USD 14.2 billion as suggested by the Indian Healthcare edition of KPMG’s trend monitor. The report states that the Indian healthcare industry is estimated to double in value by 2012 and more than quadruple by 2017. The main factors propelling this growth are rising income levels, changing demographics and illness profiles, with a shift from chronic to lifestyle diseases. This is likely to result in considerable infrastructure challenges and opportunities.

Financial Budget for 2010-11 is encouraging in terms of increase in planned allocation for the Ministry of Health and Family Welfare from Rs.19,534 crore in 2009-10 to Rs.22,300 crore in 2010-11 and reduction in customs duty on all medical, surgical, dental and veterinary equipment (including parts and accessories) from 7.5% to 5%. These goods are also being exempted from special CVD. The basic custom duty is exempted on specified inputs used for the manufacture of orthopedic implants.

Strengthening food security, improving education opportunities and providing health facilities at the level of households, both in rural and urban areas are sine-qua-none for inclusive growth to which the government and policy makers have attached utmost significance and priority. The financial year 2010-11 marks the beginning of reverting to a high growth rate and moving towards greater fiscal consolida-tion and economic vibrance. This is going to be a new beginning for all the sectors of the economy and thus there is new hope and optimism for each of them. Last few years have seen consistent growth in the Indian healthcare sector, which has a promising future. And it is expected that the reform propos-als enshrined in the budget would help in accelerating and sustaining the growth path in the industry. Undoubtedly healthcare sector would help India become a global giant over the next decade.

DIVIDEND

Keeping in view the Company’s need for Capital for its various growth plans and the with the intent to finance such plans through internal accruals to the maximum your Directors are of the opinion that it is prudent that no dividend be declared for the year under review

ALLOTMENT OF SHARES PURSUANT TO CONVERSION OF WARRANTS:

The Company had issued Share Warrants to a tune of 175000 Share warrants to the promoters and 200000 Share warrants to non promoters, at a price of Rs. 100/- per warrant that are convertible into Equity Shares, as determined in accordance with the relevant SEBI (DIP) Guidelines, 2000. Such War-rants are convertible at the option of the Warrant holders within an aggregate time frame of 18 months from date of its allotment to the Warrant holders into 375000 Equity Shares at a price of Rs. 100/- per share as determined in accordance with the relevant SEBI (DIP) Guidelines, 2000.

Upon receipt of the balance consideration for the same, the Board has allotted 2,00,000 Equity Share, in its meeting held on 15th June 2009 upon conversion of the Warrants in to Equity shares. The Com-pany has made the necessary application for listing of these shares with the Bombay Stock Exchange Limited.

13

SECUNDERABAD HEALTHCARE LIMITEDADDITIONAL INFORMATION AS REQUIRED U/S 217(1)(e) OF THE COMPA-NIES ACT, 1956:

> Conservation of Energy: The Company is monitoring the consumption of energy and is identifying measures for conservation of energy. > Technology Absorption, adaptation and innovation: No technology either indigenous or Foreign is involved. > Research and Development (R & D): The Company is taking steps to get Research and Development work carried out. > Foreign exchange earnings: NIL > Foreign exchange out go : NIL PARTICULARS OF EMPLOYEES:

In pursuance of the provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, the Directors report that no employee who was in receipt of remuneration of Rs.24, 00,000/- or more per annum or Rs. 2,00,000/- or more per month, where employed for a part of the year.Thus furnishing of particulars under the Companies (particulars of employees) Rules 1975 does not arise.

DIRECTORS:

Mr. Sharad Tejshi Shah & Mr. R. Surendra Naidu, Directors, retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offers himself for re-appoint-ment.

Mr. Rajaram Arjun Rambade, Additional Director of the Company, is been proposed to be ap-pointed as a Director liable to retire by rotation upon the notice received in writing from a Member of the Company along with a deposit of Rs. 500/- signifying his intention to propose the said director as candidate for the Office of Directors.

AUDIT COMMITTEE

The Company has an Audit Committee duly constituted as per the provisions of Sec 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement and the said Committee has also com-plied with all the Legal and Statutory requirements.

AUDITORS AND AUDITORS REPORT:

M/s. A. Singhai & Co., are appointed as Statutory Auditors of the Company in place of M/s. P. Mu-rali & Co Chartered Accountants to hold office from the conclusion of the ensuing Annual General Meeting upto the conclusion of the next Annual General Meeting. The Company has received letters from the Auditors to the effect that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re appointment within the meaning of section 226 of the said act.

The notes on accounts referred to in the Auditors’ Report are self–explanatory and therefore do not call for any further comments.

DIRECTORS’ RESPONSIBILITY STATEMENT UNDER SECTION 217(2AA):

As required under Section 217(2AA) of the Companies Act, 1956 which was introduced by the Companies (Amendment) Act, 2000, your Directors confirm that:

14

SECUNDERABAD HEALTHCARE LIMITED > In the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures; > The Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for the period;

> The Directors had taken proper and sufficient care for the maintenance of adequate ac counting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; > The Directors had prepared the annual accounts on a going concern basis.

STATEMENT PURSUANT TO CLAUSE 38 OF LISTING AGREEMENT:Presently the Company’s Equity shares are listed on and Bombay Stock Exchange Limited (BSE) and the Company have paid the Annual Listing Fees for the year 2010-11.

CORPORATE GOVERNANCE:The Securities and Exchange Board of India (SEBI) has prescribed certain corporate governance stan-dards vide clause 49 of the Listing Agreement. Your directors reaffirm their commitment to these standards and a detailed report on corporate governance together with a Auditor’s certificate on its compliance is annexed hereto and forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORTManagement‘s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section form-ing part of the Annual Report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:The Company maintains appropriate systems of internal control, including monitoring procedures and MIS system that define roles and responsibilities of people across various levels of the organization to ensure that all assets are safeguarded against loss from unauthorized use or disposition. Company poli-cies, guidelines and procedures are in place to ensure that all transactions are authorized and recorded correctly as well as to provide for adequate checks and balances.

Audits are finalized and conducted based on internal risk assessment. Significant deviations are brought to the notice of the Audit Committee by the Board periodically and corrective are measures recommended for implementation. All these steps facilitate timely detection of any irregularities and early remedial measures.

PERSONNELYour Company firmly believes that a dedicated workforce constitutes the primary source of sustain-able competitive advantage. Accordingly, human resource development continues to receive focused attention. Your Directors wish to place on record their appreciation of the dedicated and commendable services rendered by the staff and workforce of the Company.

DEPOSITSThe Company has not accepted any deposits during the year pursuant to the provisions of Section 58A of the Companies Act, 1956.

15

SECUNDERABAD HEALTHCARE LIMITEDACKNOWLEDGEMENTSYour Directors commend the contribution made by the employees to the continued satisfactory busi-ness performance during the year and the ongoing management support received by the Company. The Directors place on record their appreciation to all stakeholders particularly Shareholders, Cus-tomers, Suppliers, various Central and State Government Agencies and Local Authorities, the Medi-cal Community and business partners, who have contributed to the Company’s continued support. The Directors also place on record the continued management support received by the Company in the areas of Health, Safety and Environment and in terms of product and process know- how.

For and on behalf of the Board

Sd/- Sd/-Place: Hyderabad (M.Munisekhar) (Daniel Soloman) Date: 12th August, 2010 Managing Director Executive Director

16

SECUNDERABAD HEALTHCARE LIMITEDMANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS

Healthcare undoubtedly is one of the pillars of social sector reforms in India. Ensuring right to food, health and education to all citizens has been the prime objective of our government since indepen-dence.

Good health implies ensuring Right to Life which is universally acclaimed fundamental human right under the 1948 Human Rights Declaration of the United Nations. But a big chunk of our population lacks affordability and proper access to healthcare facilities in the country due to which death due to diseases, epidemics, birth and accidents occur at a high rate in India. The Government of India has been unable to fulfill its commitment of ‘Health for All by 2000 A.D.’ till now. In fact, primary health care services are difficult to obtain for people living especially in urban slums, villages or remote tribal regions. The condition of government hospitals has worsened over time. In many of the government hospitals there is inadequate staff, the supply of medicines is insufficient and the infrastructure is also inadequate. There is lack of availability of government health care services on one hand and the exor-bitant cost of private health services on the other. This often leaves common people in rural areas with no other option but to resort to treatment from quack doctors who often practice irrationally.

BUSINESS REVIEW

Health Care Industry being occupying a Dominant position in India needs to be developed at a pace similar to the Global Economies of the World. Your Company has always been vibrant in achieving this objective envisaged by the Government. As an integral part of the healthcare industry, your Com-pany realizes its responsibility towards its clients, shareholders, employees and the society.

Your company has the vision to develop the healthcare sector to the level achieved by the developed economies.

Further, your Company is also considering various business avenues to expand, diversify and special-ize in the same. This would enable us to not only optimally utilize the available resources but also create value for our shareholders.

OPPORTUNITIES AND THREATS

Indian healthcare industry is at growing stage and is thereby not subjected to strict regulations by the government. There is a general liberalization of trade and investment owing to which most devices do not need import license. Further, no restrictions have been imposed on refurbished medical equipments which presents a vast scope for and opportunities for the Health Care Sector.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company’s operating and business control procedures have been framed in order that they ensure efficient use of resources and comply with the procedures and regulatory requirements.

The Company has a proper and adequate system of internal controls to ensure that all assets are safe-guarded and protected against loss from unauthorized use or disposition and that transactions are authorized, recorded and reported correctly. The Audit Committee reviews the quarterly and annual financial statements, adequacy of disclosures, treatment of various items involving accounting judg-ments.

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HUMAN RESOURCES DEVELOPMENT

The Company believes that the Human resources are vital in giving the Company a Competitive edge in the current business environment. The Company’s philosophy is to provide congenial work envi-ronment, performance oriented work culture, knowledge acquisition/ dissemination, creativity and responsibility. As in the past, the Company enjoyed cordial relations with the employees at all the levels.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Company’s objec-tives, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

The Company is not under any obligation to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.

18

SECUNDERABAD HEALTHCARE LIMITEDCORPORATE GOVERNANCE

Your Company is of a firm view that Corporate Governance must maintain global standards of corpo-rate conduct as it is a systematic process whereby Companies are directed and controlled to enhance wealth generating capacity for the benefit of all its stakeholders. Your Company is committed to best practices in the area of Corporate Governance, both in letter and spirit. Good Governance facilitates effective management and control of business, maintaining a high level of business ethics and opti-mizing the value for all Stakeholders. The Corporate Governance Structure in the Company assigns responsibilities and entrusts authority among different participants in the organization viz. the Board of Directors, the Senior Management, Employees, etc.

COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE

The Company’s philosophy on Corporate Governance is based on the principles of integrity, fair-ness, equity, transparency, accountability and commitment to values. These principles have been elaborated as under:

> Independence and versatility of the Board. > Integrity and ethical behavior of all personnel. > Recognition of obligations towards all stake holders – Customers, Employees and Shareholders. > Total compliance with laws in all environments in which the Company operates.

The Company recognizes that good Corporate Governance is a continuing exercise and it is commit-ted to follow the best practices in the overall interest of the stakeholders.

The Securities and Exchange Board of India (SEBI) has specified certain mandatory governance prac-tices, which are incorporated in Clause 49 of the Listing Agreement of Stock Exchanges. This section, along with the section on “Management Discussion & Analysis” and “Additional Shareholders’ Infor-mation” constitute the Company’s compliance with Clause 49 of the Listing Agreement.

BOARD OF DIRECTORS:

>Composition of Board:

The Board of Directors at Secunderabad Health Care limited has been constituted in a manner which ensures appropriate mix of executive and independent directors to ensure proper governance and man-agement. The Board members have collective experience in diverse fields.

a) The Company has Seven Directors out of which - i) Three are Executive Directors including Managing Director, ii) Four are Non-Executive Independent Directors. The composition of the Board is in conformity with clause 49 of the Listing Agreements entered into with the Stock Exchanges and meets the stipulated requirements.b) None of the Directors on the Board is a Member of more than 10 committees or Chairman of more than 5 companies across all the Companies in which he is a Director. The Directors have made necessary disclosures regarding Committee positions in other public companies as on March 31, 2010. c) The names and categories of the Directors on the Board, their attendance at Board Meet-ings held during the year and the number of Directorships and Committee Chairmanships / Member-ships held by them in other companies is given below. Other Directorships do not include alternate directorships, directorships of private limited companies, section 25 companies and of companies incorporated outside India. Chairmanship / Membership of Board Committees include only Audit and Shareholders / Investors Grievance Committees.

19


Directors’ Attendance Record and Directorships / Committee Memberships:

Size and composition:Name of the Direc-tor

Category(Promoter/Executive/Non- Ex-ecutive)

Designation Rela-tionship with other Direc-tors

Number of mem-berships in Board of other Public Limited Company Member

Associated with other committees of Public Limited Company

Member Chairman

Sri M. Munisekhar Promoter /Executive

Managing Director

None 1

Nil Nil

Sri. Daniel Solomon Executive Executive Director

None Nil

Nil Nil

Sri. G.Vasudeva Reddy

Non Ex-ecutive and Independent

Director None Nil

Nil Nil

Sri R. Surendra Naidu


Director None Nil

Nil Nil

Sri. Sharad T Shah Non Ex-ecutive and non-Inde-pendent

Director None Nil

Nil Nil

Dr. Thakur Ramesh Singh Chouhan @


Director None Nil

Nil Nil

Sri Rajaram Arjun Rambade *

Executive Director None Nil

1 1

Sri M. T. Srinivas Rao **


Director None Nil

Nil Nil

Sri. Hari Kumar *** Non- Ex-ecutive and Independent

Director None -- -- -

@ Dr. Thakur Ramesh Singh Chouhan was inducted on the board w.e.f. on 30th June 2009.*Sri. Rajaram Arjun Rambade was inducted on the board w.e.f. on 14th May 2010. **Sri. M. T. Srinivas Rao resigned from the Directorship of the Company w.e.f. 30.06.2009.***Sri. K. Hari Kumar resigned from the Directorship from the Company w.e.f. 28.10.2009

Number of Board meetings held and attendance of the Directors during the Financial Year 2009-2010:

20

SECUNDERABAD HEALTHCARE LIMITEDMinimum four Board Meetings are held at the Registered Office of the Company in one financial year in the Company and the time frame between two Board Meetings does not exceed four months. Apart from the above, additional Board meetings are convened by giving appropriate notice to address the specific needs of the Company.

During the financial year under review, the Board met on 15th June 2009, 23rd June 2009, 31st July 2009, 2nd September, 2009, 25th September 2009, 28th October 2009, and on 30th January 2010. The Last Annual General Meeting was held on 25th September 2009. The attendance of each Director is as under:

Name of the Director No. meetings attended Presence at AGM

Sri M. Munisekhar 6 Yes

Sri Daniel Solomon 6 Yes

Sri G.Vasudeva Reddy 6 Yes

Sri R. Surendra Naidu 6 Yes

Sri Sharad T. Shah 2 No

Sri Thakur Ramesh Singh Chouhan@ 4 Yes

Sri Rajaram Arjun Rambade * N.A N.A

Sri K Hari Kumar *** 4 Yes

Sri M. T. Srinivas Rao** 2 No

d) None of the Non-Executive Directors have any material pecuniary relationship or transactions with the Company.e) During the year, information as mentioned in Annexure1A to Clause 49 of the Listing Agreements has been placed before the Board for its consideration. > Code of Conduct:

The Board has laid down a ‘Code of Conduct’ for all board members and the senior management of the Company. Annual Declaration to this effect is given in the Annual Report in affirmation of the Compliance of the Code for the year 2009-10.

AUDIT COMMITTEE:

>> During the year under review, due to the resignation of Mr. K Hari Kumar and Sri M T Srinivas Rao, the Audit Committee of the Company was re-constituted in line with the provisions of Clause 49 of the Listing Agreements with the Stock Exchanges read with Section 292A of the Companies Act, 1956.

>> The terms of reference of the Audit Committee include a review of;

* Overview of the Company’s financial reporting process and disclosure of its financial information to ensure that the financial statements reflect a true and fair position and that sufficient and credible information is disclosed. * Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services. * Discussion with external auditors before the audit commences, of the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. * Reviewing the financial statements and draft audit report including quarterly / half yearly financial information.

21

SECUNDERABAD HEALTHCARE LIMITED * Reviewing with the Management the annual financial statements before sub mission to the Board, focusing on: - Any changes in accounting policies and practices; - Qualification in draft audit report; - Significant adjustments arising out of audit; - The going concern concept; - Compliance with accounting standards; - Compliance with the Stock Exchange and legal requirements con cerning financial statements; - Any related party transactions. * Reviewing the Company’s financial and risk management’s policies. * Disclosure of contingent liabilities. * Reviewing with the Management the adequacy of internal control systems of the Company. * Reviewing the adequacy of internal audit function, including the structure of the internal audit department, approval of the audit plan and its execution, staffing and se niority of the official heading the department, reporting structure, coverage and frequency of internal audit. * Discussion with the internal auditors of any significant findings and follow-up thereon. * Reviewing the findings of any internal investigations by the internal auditors into the matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. * Looking into the reasons for substantial defaults in payments to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and credi tors. * Reviewing compliances as regards the Company’s Whistle Blower Policy.

>> The previous Annual General Meeting of the Company was held on 25th September 2009 and Mr. Surendra Naidu, Chairman of the Audit Committee, attended previous AGM.

>> The composition of the Audit Committee and the attendance of each member of the Audit Committee are given below:

Name of the Director Designation No. of Meetings held No. meetings attended

Sri R. Surendra Naidu Chairman 4 4

Sri. Daniel Solomon Member 4 1

Sri. Rajaram Arjun Rambade *

Member N.A N.A.

Sri Thakur Ramesh Singh Chouhan @

Member 4 3

Sri K Hari Kumar *** Member 4 2

Sri M. T. Srinivas Rao**

Member 4 1


22

SECUNDERABAD HEALTHCARE LIMITEDThe heads of Finance and Statutory Auditor as Invitees also attended the meetings of Audit commit-tee. The Audit committee approves the un-audited financial results for each quarter before submitting to the Board of Directors for approval and adoption. During the year under review, Audit Committee met on 23rd June 2009, 31st July 2009, 28th October 2009 and on 30th January 2010.

Name of the Director

Relation-ship with other Directors

Business relation-ship with Company if any

Loans and ad-vances from Com-pany

Remu-nera-tion

Paid during the Year 2009-10

Sitting feesRs.

SalaryRs.

Commis-sion

TotalRs.

Mr. Munisekhar Medasani

None Managing Director

Nil Nil 7,68,000 Nil 7,68,000

B. Daniel Solomon

None Executive Director

Nil Nil Nil Nil Nil

No sitting Fee was paid to any Director.

SHAREHOLDERS /INVESTORS GRIEVANCE COMMITTEE:The Board has constituted the Shareholders and Investors Grievance Committee. Its role and respon-sibility is to expeditiously process and approve the transactions in Securities, complying with SEBI regulations and listing requirements and redressal of investor grievances. The Committee oversees and monitors the performance of the Registrar & Transfer Agents and devices measures for overall improvement in the quality of investor services. The Committee also looks into the complaints re-ceived from the stock exchanges. In view of the non- receipt of any complaints from the sharehold-ers, the Committee did not meet during the year under review.

Details of Committee membersName of the Director Chairman/Member

Sri. R.Surendra Naidu Chairman

Dr. Thakur Ramesh Singh Chouhan @ Member

Sri. Rajaram Arjun Rambade * Member

Sri. K. Hari Kumar *** Member

Sri. M. T. Srinivas Rao** Member


23

SECUNDERABAD HEALTHCARE LIMITEDDetails of Complaints received/resolvedThe total No. of Complaints received and complied during the year as follows:

Nature of Complaint Received Resolved Pending

Total Nil Nil Nil

Sri. Soloman Daniel is the Compliance Officer.

DETAILS OF ANNUAL GENERAL MEETINGS: Location and time of the last Three AGM’s:

Financial Year Date Time Venue Special resolu-tions passed

2008-09(18th AGM)

25.09.2009 2.00 p.m Sundaraiah Vignan Kend-aram (Mini Hall) Baghlingampally Hyderabad.

Nil

2007-08 (17th AGM)

29.09.2008 2.00 p.m. Sundaraiah Vignan Kend-aram (Mini Hall) Baghlingampally Hyderabad.

Nil

2006-07 (16th AGM)

29.09.2007 2.00 p.m. Sundaraiah Vignan Kend-aram (Mini Hall) Baghlingampally Hyderabad.

Nil

Issue of Capital

Board of Directors in its meeting held on 28th October 2009 proposed to issue further shares under GDR mechanism subject to approval of the members. Considering the cost factor and regulatory approvals, the issue was dropped and now, it is proposed to raise the capital by issue of convertible Equity Warrants on Preferential Basis as per the ICDR Guidelines, 2009.

DISCLOSURES:

> There were no materially significant related party transactions i.e. transactions of the Company of material nature with its promoters, the directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the Company at large. > During the last three years, there were no prohibition or penalties imposed on the Company either by Stock Exchange or by SEBI or any statutory authority for non-compliance on any matter related to capital markets.

NOTES ON DIRECTORS APPOINTMENT/RE-APPOINTMENT:

Relevant details forms part of the explanatory statement to the notice of the Annual General Meeting/Director’s Report.

MEANS OF COMMUNICATION

The quarterly, half-yearly and yearly financial results will be sent to the Stock Exchanges immedi-ately after the Board approves the same and these results will also be published in prominent daily newspapers.

24


MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India highlighting individual business, forms part of the Annual Report.

GENERAL SHARE HOLDER INFORMATION:(I) Annual General MeetingDate 9th September, 2010

Time 2.00 P.M

Venue Sundaraiah Vignan Kendaram (Mini Hall) , Baghlingampally, Hyderabad.

(II) Financial Calendar: (Tentative Schedule)The financial reporting will be as follows:

Quarter ending 30th June, 2010 For the Quarter ended 30th June, 2010, the Company has already declared the Unaudited Financial Results on August 02, 2010

Quarter ending 30th September, 2010 On or before 15th November 2010

Quarter ending 31st December, 2010 On or before 15th February 2011

Quarter ending 31st March, 2011 Decision will be taken based upon the option to declare Audited / Un-Audited Financial Results

Annual General Meeting for FY ended 31st March, 2011

Before end of September, 2011

(III) Date of Book Closure 24th August, 2010 to 26th August, 2010 (both days inclusive).

(IV) Dividend payment date If, declared will be paid within the stipulated time as per the Act.

(V) Listing on Stock Exchanges Bombay Stock Exchange Limited (BSE)

(VI) Stock CodeBombay Stock Exchange Ltd Secunderabad Healthcare

524540

Dematerialization of Securities ISIN: INE 930C 01016

25

SECUNDERABAD HEALTHCARE LIMITED(VII) Market Price Data: High, Low during each Month in last Financial Year

During the financial year ended 31.03.2010

Month High(in Rs.)

Low(in Rs.)

May 2009 40.85 36.20June 2009 42.50 38.15July 2009 41.20 23.80August 2009 30.50 22.40September 2009 32.25 22.05October 2009 30.30 20.00November 2009 20.90 16.00December 2009 18.00 15.70January 2010 20.70 14.00February 2010 15.60 11.42March 2010 19.50 11.60

(VIII) Stock Performance in Com-parison to Broad-based indices such as BSE Sensex, CRISIL Index, BZX 200, Nifty etc.

The share price of the Company has been mov-ing with the trends of indices.

(IX) Registrar & Transfer Agent M/s. Aarthi Consultants Private Limited1-2-285, Domalguda, Hyderabad – 500 029.Ph: 040-2763 8111; 040-2763 4445Fax: 040-2763 2184Website: www.aathiconsultants.comEmail: [email protected]

(X) Share Transfer SystemDocuments will be accepted at

M/s. Aarthi Consultants Private Limited1-2-285, Domalguda, Hyderabad – 500 029.Ph: 040-2763 8111; 040-2763 4445Fax: 040-2763 2184Website: www.aathiconsultants.comEmail: [email protected]

The Shares of the Company are in physical form and electronic form. The transfer of shares in demat form is done through the Depositories without involvement of the Company. As regards, transfer of shares held in physical form, the transfer documents can be lodged with M/s. Aarthi Consultants Private Limited at above-mentioned address.

The Transfer of shares in physical form is normally processed within 10-12 days from the date of receipt, if the documents are complete in all respects. The Share Transfer Committee severally empowers to approve the transfers.

26

SECUNDERABAD HEALTHCARE LIMITED (XI) (a) Distribution of Shareholding as on 31-03-2010. Share Holding of Nominal Value

Share Holders Share Amount

Rs. Rs. Numbers % of Total In Rs. % of Total

(1) (2) (3) (4) (5)

Up to 5,000 1883 77 3532010 9.39

5,001 - 10,000 278 11 2499420 6.65

10,001 - 20,000 103 4 1682610 4.48

20,001 - 30,000 68 3 1797210 4.78

30,001 - 40,000 23 1 840190 2.23

40,001 - 50,000 32 1 1559060 4.15

50,001 - 1,00,000 28 1 2073110 5.51

1,00,001 and above 139 2 23612390 62.81

TOTAL 2454 100 37596000 100.00

(XI) (b) Distribution of Shareholding as on 31-03-2010CATEGORY No. of Shares held %of shareholding

(A) Shareholding of Promoter and Promoter Group:

(1) Indian

a. Individuals/Hindu Undivided Family 860500 22.89

b. Central Government/State Government 0 0

c. Bodies Corporate 0 0

d. Financial Institutions / Banks 0 0

Others:

e. Mutual funds 0 0

f. Trusts 0 0

Sub-Total (A)(1) 860500 22.89

(2) Foreign

a. Individuals (Non- Residents Individuals/ Foreign Individuals)

0 0

b. Bodies Corporate 0 0

c. Institutions 0 0

d. Any others specify- Overseas Corporate Bodies

0 0

Sub-Total (A)(2) 0 0

Total Shareholding of Promoter and Pro-moter Group A = (A)(1)+ (A)(2)

860500 22.89

(B) Public Shareholding

(1) Institutions

a. Mutual funds / UTI 0 0

27


b. Financial Institutions / Banks 0 0

c. Central Government/State Government(s) 0 0

d. Venture Capital Funds 0 0

e. Insurance Companies 0 0

f. Foreign Institutional Investors 0 0

g. Foreign Venture Capital Investors 0 0

Others:

h. Foreign Companies 0 0

Sub-Total (B)(1) 0 0

(2) Non- Institutions

a. Bodies Corporate 493588 13.13

b. Individuals

i). Individual Shareholders holding Nominal Share Capital upto Rs. 1 Lakh

1234438 32.83

ii). Individual Shareholders holding Nominal Share Capital in excess of Rs. 1 Lakh

907894 24.15

Others:

c. Any other (specify)

Non- resident Individuals 258700 6.88

Clearing Members 4480 0.12

Sub-Total (B)(2) 2899100 77.11

Total Public Shareholding B = (B)(1) + (B)(2) 2899100 77.11

TOTAL (A+B) 3759600 100.00

(C) Shares held by Custodians and against Deposi-tories Receipts have been issued

0 0

GRAND TOTAL (A+B+C) 3759600 100.00

(XII) Dematerialization of shares & liquidity The Company’s shares are compulsory traded in dematerialized form and are available for trading on both the Depositories in India viz. National Securities Depository Limited (NSDL) and Central Depositary Services (India) Limited (CDSL). A portion of 76.93% of the Company’s share capital are dematerialized as on 31st March 2010.

The Company’s shares are listed and eligible to trade on the above-mentioned Stock Exchanges in the electronic form.

Under the Depository System, the International Securities Identification Number (ISIN) allotted to the Company’s shares is INE 930C01016.

XIII) Outstanding GDRs/ADRs./Warrants or any Con-vertible Instruments, conversation date and likely impact on equity.

NIL

28


(XIV) Address for Correspondence S 1 - Vimal, Road No. 5, Jubilee Hills, Hyderabad- 500033.

ADOPTION OF NON- MANDATORY REQUIREMENTS OF CLAUSE 49 OF THE LISTING AGREEMENT.

The Company has complied with the mandatory requirements of Clause 49 of the Listing Agreement and every effort has been made to comply with the non- mandatory requirements of the Clause, the details of which are mentioned hereunder:

>> Training Of the board Members

New Directors appointed by the Board are given formal induction and orientation with respect to the Company’s vision, strategic direction and core values including ethics, corporate governance practices, financial matters and business operations. Periodic presentations are made at the Board and Committee Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved.

>> Meetings of Independent Directors

The Independent Directors of the Company meet from time to time as they deem appropriate without the presence of the Executive Directors or Management Personnel. These meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss the matters pertaining to the affairs of the Company and put forth their views to the Lead Independent Director. The Lead Independent Director takes appropriate steps to present such views to the Managing Director.

>> Whistle Blower Policy

The Company promotes ethical behavior in all its business activities and has put in place a mecha-nism of reporting illegal or unethical behavior. The Company has a Whistle Blower Policy wherein the employees are free to report violations of laws, rules, regulations or unethical conduct to their immediate superior or such other person as may be notified by the management to the work groups. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice. For and on behalf of the Board

Sd/- Sd/-Place: Hyderabad (M.Munisekhar) (Daniel Soloman) Date: 12th August, 2010 Managing Director Executive Director

29


DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE

COMPANY’S CODE OF CONDUCT

I, M. Munisekhar, Managing Director of M/s.Secunderabad Healthcare Limited hereby declare that all the Board members and Senior managerial personnel have affirmed with the Code of Conduct laid down for the members of the Company for the year ended 31st March 2010. Sd/- M.Munisekhar Managing Director Place: Hyderabad Date: 12th August, 2010

MANAGING DIRECTORS CERTIFICATIONI, M.Munisekhar, Managing Director of M/s. Secunderabad Healthcare Limited certify:

1.That I have reviewed the financial statements and the cash flow statement for the year ended 31st March 2010 and to the best of my knowledge and belief; i) These statements do not contain any materially untrue statement nor omit any material fact nor contain statements that might be misleading, and ii)These statements present a true and fair view of the Company’s affair and are in com-pliance with the existing accounting standards, applicable laws and regulations.

2.That there are, to the best of my knowledge and belief, no transactions entered into by the Com-pany during the year, which are fraudulent, illegal or violative of the Company’s code of conduct;

3.That i accept responsibility for establishing and maintaining internal controls, and i have evalu-ated the effectiveness of the internal control systems of the Company and have disclosed to the auditors and the audit committee, deficiencies in the design or the operation of internal controls, if any, of which I are aware and the steps that i have taken or propose to take and rectify the identified deficiencies and;

4.That I have informed the auditors and the audit committee of: a)Significant changes in the internal control during the year; b)Significant changes in the accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and c)Instances of significant fraud of which we have become aware and the involvement or an employee having a significant role in the Company’s internal control system. Sd/- M.Munisekhar Managing Director Place: Hyderabad Date: 12th August, 2010

30

SECUNDERABAD HEALTHCARE LIMITEDCOMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

ToThe Members,M/s. SECUNDERABAD HEALTHCARE LIMITED

We have read the report of the Board of Directors on Corporate Governance and have examined the relevant records relating to compliance condition of corporate governance of M/s. Secunderabad Healthcare Limited (“the Company”) for the year ended 31st March 2010 as stipulated in clause 49 of the Listing Agreement of the said Company with the Stock Exchanges.

The compliance of the conditions of the corporate governance is the responsibility of the manage-ment. Our examination, conducted in the manner described in the Guidance note on Certification of Corporate governance” issued by the Institute of Chartered Accountants of India was limited to procedures and implementation thereof adopted by the Company for ensuring compliance with the conditions of Corporate Governance. Our examination was neither an audit nor was it conducted to express an opinion on the financial statements of the Company.

In our opinion and to the best of our information and explanations given to us and on the basis of our examination described above, the Company has complied with the conditions of Corporate Governance as stipulated in clause 49 the above-mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Com-pany nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For P. MURALI & CO., CHARTERED ACCOUNTANTS Sd/- P. MURALI MOHANA RAO-Place: Hyderabad Partner.Date: 12th August, 2010

31

SECUNDERABAD HEALTHCARE LIMITEDAUDITORS’ REPORT

ToThe Members of SECUNDERABAD HEALTH CARE LIMITED

1. We have audited the attached Balance Sheet of SECUNDERABAD HEALTH CARE LIMITED as at 31st March, 2010 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on the date annexed thereto. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial state-ments based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes exam-ining, on a test basis, evidence supporting the amounts and disclosures in the financial state-ment. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis of our opinion .

3. As required by the Companies (Auditor’s Report) order 2003 and as amended by the Companies (Auditor’s Report)(Amendment) Order 2004, issued by the Central Government of India in terms of the sub-section(4A) of section 227 of the Companies Act, 1956, we enclose in the annex-ure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we report that: (i) We have obtained all the information and explanations, which to the best of our knowl-edge and belief were necessary for the purposes of our Audit ; (ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books ; (iii) The financial statements dealt with by this report are in agreement with the books of ac-count ;(iv) In our opinion, the financial statements dealt with by this report comply with the Accounting standards referred to in sub-section (3C) of Section 211 of Companies Act, 1956 ; (v) On the basis of written representations received from the Directors, as on 31st March , 2010 and taken on record by the Board of Directors, we report that none of the Directors is disquali-fied as on 31st March , 2010 from being appointed Director in terms of clause(g) of sub-section(1) of section 274 of the Companies Act,1956 ; (vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India ;(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March , 2010; (b) In the case of the Profit & Loss Account, of the Profit for the period ended on that date; and © the Cash Flow Statement, of the cash flows for the year ended on that date. For P.MURALI & CO., CHARTERED ACCOUNTANTS FRN: 007257S

PLACE : Hyderabad P.MURALI MOHANA RAODATE : 12-08-2010 PARTNER

32

SECUNDERABAD HEALTHCARE LIMITEDANNEXURE TO THE AUDITORS’ REPORT

I. (a)The Company has maintained proper records showing full particulars incluing quanti tative details and situation of Fixed Assets. (b)As explained to us , the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies between the book records and the physical inventory have been noticed on such verification.

(c)The Company has not disposed off substantial part of the Fixed Assets during the year.

II. (a)The Inventory has been physically verified during the year and in our opinion, the frequency of verifications is reasonable. (b) In our opinion, the procedures of the physical verification of inventory followed by the Management are reasonable and adequate in relation of the size of the Company and the nature of its business. (c)The Company is maintaining proper records of inventory and as explained to us, there were no material discrepancies noticed on such verification of stocks as compared to book records.

III. (a)The Company has not granted any loans, secured or unsecured to Companies, Firms or other Parties covered in the register maintained U/s.301 of the Companies Act, 1956. (b)As the Company has not granted any loans ,the clause of whether the rate of interest & other terms and conditions on which loans have been granted to parties listed in the register maintained under section 301 is prejudicial to the interest of company, is not applicable. (c)As no loans are granted by company, the clause of receipt of interest & principal amount from parties , is not applicable to the company. (d) No loans have been granted to Companies, Firms & other parties listed in the register U/s.301 of the Companies Act, 1956 , hence overdue amount of more than rupees one lac does not arise and the clause is not applicable. (e)The Company has not taken any loans, secured or unsecured from Companies, Firms or other Parties covered in the register maintained U/s.301 of the Companies Act, 1956. (f)As the Company has not taken any loans, the clause of whether the rate of interest & other terms and conditions on which loans have been taken from parties listed in the register maintained under section 301 is prejudicial to the interest of company, is not applicable. (g)As no loans are taken by the company, the clause of repayment of interest & principal amount to parties, is not applicable to the company.

IV. In our opinion and according to the information and explanations given to us, there are generally adequate internal control systems commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and services. There is no continuing failure by the company to correct any major weaknesses in internal control.

33

SECUNDERABAD HEALTHCARE LIMITEDV. (a)In our opinion and according to the information and explanation given to us, the contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been made by the company in respect of the financial year, are entered in register U/s 301 of the Companies Act, 1956 does not arise.

(b) According to the information and explanations given to us, as no such contracts or arrangements made by the company, the applicability of the clause of charging the reasonable price having regards to the prevailing market prices at the relevant time does not arise.

VI. The Company has not accepted any deposits from the public and hence the applicability of the clause of directives issued by the Reserve Bank of India and provisions of section 58A,58AA or any other relevant provisions of the Act and the rules framed there under does not arise. As per information and explanations given to us the order from the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal has not been received by the Company.

VII. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

VIII. In respect of the Company, the Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956.

IX. a) The Company is regular in depositing undisputed statutory dues including Income Tax, Cess and any other statutory dues with the appropriate authorities and at the last of the financial year there were no amounts outstanding which were due for more than 6 months from the date they became payable. b)According to the information and explanations given to us, no undisputed amounts are payable in respect of Income Tax, Cess and any other statutory dues as at the end of the period, for a period more than six months from the date they became payable.

X. The Company has been registered for a period of not less than 5 years, and the Company has no accumulated losses at the end of the financial year and the company has not incurred cash losses in this financial year and the immediately preceding financial year.

XI. According to information and explanations given to us, the Company has not taken any loans from Banks or Financial Institutions. Hence this clause of repayment of dues to Financial Institutions or Banks or debenture holders and the defaulted payment therein is not applicable to the Company.

XII. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities and hence the applicability of the clause regarding maintenance of adequate documents in respect of loans does not arise.

XIII. This clause is not applicable to this Company as the Company is not covered by the pro visions of special statute applicable to Chit Fund in respect of Nidhi/Mutual Benefit Fund/ Societies. XIV. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, Debentures and other investments and hence the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order 2003, are not applicable to the Company.

34

SECUNDERABAD HEALTHCARE LIMITEDXV. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks or Financial Institutions, and hence the applicability of this clause regarding terms and conditions which are prejudicial to the interest of the company does not arise. XVI. According to the information and explanations given to us, the Company has not obtained any Term Loans, hence this clause is not applicable.

XVII. According to the information and explanations given to us, no funds are raised by the Company on short-term basis. Hence the clause of short term funds being used for long-term investment does not arise.

XVIII. According to the information and explanations given to us, the Company has not made any preferential allotment of Shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956 and hence the applicability of the clause regarding the price at which shares have been issued and whether the same is prejudicial to the interest of the Company does not arise.

XIX. According to the information and explanations given to us, the company does not have any debentures and hence the applicability of the clause regarding the creation of security or charge in respect of debentures issued does not arise.

XX. According to information and explanations given to us, the company has not raised money by way of public issues during the year, hence the clause regarding the disclosure by the management on the end use of money raised by Public Issue is not applicable.

XXI. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under audit.

For P.MURALI & CO., CHARTERED ACCOUNTANTS FRN: 007257S PLACE : Hyderabad P.MURALI MOHANA RAODATE : 12-08-2010 PARTNER Membership No. 23412

35


SECUNDERABAD HEALTHCARE LIMITEDBALANCE SHEET AS ON 31st MARCH 2010

SCHEDULE AS AT AS ATPARTICULARS NO.S 31 03 2010 31 03 2009

(Rupees) (Rupees)

I SOURCES OF FUNDS1.Shareholders' Fundsa. Capital 1 57,696,000 57,696,000b. Reserves & Surplus 18,786,210 16,600,817

2.Deferred Tax Laibility 11,807,026 11,808,758

TOTAL 88,289,236 86,105,575

II APPLICATION OF FUNDS1.Fixed Assetsa. Gross Block 2 67,371,444 67,371,444b. Depreciation 17,149,046 9,768,845c. Net Block 50,222,398 57,602,599

2.Investments 4,250,000 4,250,000

3.Current Assets, Loans & Advancesa. Inventories 16,803,370 6,825,360b. Sundry Debtors 3 41,750,039 21,532,927c. Cash & Bank Balances 4 26,617 60,521d. Advances & Deposits 5 1,244,263 1,105,416Less: Current Liabilities, 6 26,007,451 5,271,248

Advances & Provisions

NET CURRENT ASSETS 33,816,838 24,252,976NOTES ON ACCOUNT 7

TOTAL 88,289,236 86,105,575

AS PER OUR REPORT OF EVEN DATE FOR AND ON BEHALF OF THE BOARDfor P. MURALI & CO., SECUNDERABAD HEALTHCARE LIMITEDCHARTERED ACCOUNTANTS

Sd/ Sd/ Sd/PARTNER DIRECTOR DIRECTOR

PLACE : HYDERABADDATE : 12 08 2010

36

SECUNDERABAD HEALTHCARE LIMITEDSECUNDERABAD HEALTHCARE LIMITED

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 03 2010

SCHEDULE ENDING ENDING PARTICULARS NO.S 31 03 2010 31-03-2009

(Rupees) (Rupees) 1 INCOME

Sales 184,327,046 159,273,214 Closing Stock 16,803,370 6,825,360 Other Income 89,118 TOTAL 201,130,416 166,187,692

2 EXPENDITURE

Opening Stock 6,825,360 7,531,546 Purchases 175,631,902 132,374,233 Administrative & Selling Expenses 8,696,698 14,568,688 Interest & Bank Charges 7,594 26,428 Depreciation 7,380,201 7,380,201 TOTAL 198,541,755 161,881,096

3 PROFIT BEFORE TAX 2,588,661 4,306,596 4 PROVISION FOR TAXATION 405,000 479,420 5 PROFIT AFTER TAX 2,183,661 3,827,176 6 PROVISION FOR FRINGE BENEFIT TAX 1,212

7 DEFERRED TAX LIABILITY 1,732 (4,658,282)

8 BALANCE BROUGHT FORWARD 16,600,817 17,433,135 9 BALANCE CARRIED FORWARD 18,786,210 16,600,817

Earnings Per Share 0.61 1.08 Notes on Account 7 -

AS PER OUR REPORT OF EVEN DATE FOR AND ON BEHALF OF THE BOARDfor P. MURALI & CO., SECUNDERABAD HEALTHCARE LIMITEDCHARTERED ACCOUNTANTS

SD/ SD/ SD/-PARTNER DIRECTOR DIRECTOR

PLACE : HYDERABADDATE : 12 08 2010

37


38

SECUNDERABAD HEALTHCARE LIMITEDSCHEDULES FORMING PART OF BALANCE SHEET AS ON 31 03 2010

SCHEDULE 1 SHARE CAPITAL

AS AT AS ATPARTICULARS 31 03 2010 31 03 2009

(RUPEES) (RUPEES)

AUTHORISED:5000000 Equity Shares of Rs.10/ Each 50,000,000 50,000,000

ISSUED,SUBSCRIBED & PAID UP:3559600 Equity Shares of Rs.10/ Each 35,596,000 35,596,000

Share Warrents 22,100,000 22,100,000

57,696,000 57,696,000

SCHEDULE 3SUNDRY DEBTORS

Others 41,750,039 21,532,927

SCHEDULE 4CASH & BANK BALANCES

Cash on hand 496 6,845Balance with Scheduled Banks 26,121 53,676

26,617 60,521

SCHEDULE 5ADVANCES & DEPOSITS

Advances 1,244,263 1,105,416

1,244,263 1,105,416

SCHEDULE 6CURRENT LIABILITIES, ADVANCES & PROVISIONS

Loans & Sundry Creditors 22,366,054 1,587,214Outstanding Expenses & Provisions 3,641,397 3,684,034

26,007,451 5,271,248

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39

SECUNDERABAD HEALTHCARE LIMITEDSCHEDULE – 7

NOTES FORMING PART OF THE ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIESGeneral :

(i) These accounts are prepared on the historical cost basis and on the accounting principles of a going concern.(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting Principles.

Revenue Recognition :

(i) The Company follows the Mercantile system of Accounting and recognizes income and expenditure on accrual basis. (ii) Revenue is not recognized on the grounds of prudence, until realized in respect of liquidated damages, delayed payments as recovery of the amounts are not certain.

Investments :

(i) Investments are stated at cost i.e cost of acquisition, inclusive of expenses incidental to acquisition wherever applicable.

Fixed Assets :

(i) Fixed assets are started at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight, duties taxes and incidental expenses thereto.

Depreciation and Amortization :

(i) Depreciation is provided on straight line method on pro-rata basis and at the rates and manner specified in the Schedule XIV of the Companies Act, 1956.

Inventories :

Inventories are valued at cost or market price whichever is lower.

Taxation :

The current charge for income tax is calculated in accordance with the relevant tax regulations ap-plicable to the company, Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial Statements. Deferred tax asset & liability are measured as per the tax rates/laws that have been enacted or substantively enacted by the Balance Sheet date.

Earning Per Share :

The earning considered in ascertaining the company’s earning per Share comprises net Profit after tax. The number of shares used in computing basic earning per share is the weighted average number of shares outstanding during the year.

40

SECUNDERABAD HEALTHCARE LIMITEDGratuity :

No provision for gratuity has been made as no employee has put in qualifying period of service for entitlement of this benefit.B. NOTES ON ACCOUNTS

1 Particulars of Employees in accordance with Sub-section (2A) of Section 217 of the Companies Act , 1956 read with Companies (Particulars of Employees) Rule 1975. NIL2 Directors Remuneration : Current Year (Rs.) Previous Year (Rs.) 540,000/- 636,000/- 3 Auditors Remuneration : Current Year (Rs.) Previous Year (Rs.)

66, 180/- 56, 257/-4 Detailed information regarding quantitative particulars under part II of schedule VI to the Com-panies Act, 1956.

( AS PER DETAILS ENCLOSED )

5 There are no dues to SSI Units outstanding for more than 30 days.

6 Confirmations were obtained from debtors/creditors as to the balance receivable from/payable to them as at year end.

7 In accordance with Accounting Standard 22 (AS 22) issued by the ICAI, the Company has ac-counted for deferred income tax during the year. The deferred income tax provision for the current year amounts to Rs.1732/- towards deferred income tax Asset. (Previous year Rs. 4658282/- to-wards deferred income tax Liability.)

8 Previous years figures have been regrouped wherever necessary.

9 The figures have been rounded off to the nearest rupee.

SIGNATURES TO SCHEDULES 1 to 7

As per our report of even date For and on behalf of the Board For P MURALI & CO., SECUNDERABAD HEALTH CARE LTD. CHARTERED ACCOUNTANTS

Sd/- Sd/- Sd/-

PARTNER DIRECTOR DIRECTOR

PLACE ; HYDERABADDATE : 12-8-2010

41


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 03 2010

(Rs. In lakhs)

Current YearPreviousYear

A. CASH FLOW FROM OPERATING ACTIVITIES:Net profit/(Loss)before taxation, and extraordinaryItems 25.89 43.07Adjustments for:

Depreciation 73.80 73.80Interest expenses 0.08 0.26Preliminary Expenses W/o 0.00 0.00

Operating Profit before working capital changes 99.76 117.13Trade and other receivables (203.56) (48.69)Inventories (99.78) 7.06Trade payables 203.31 (87.26)

NET CASH FLOW OPERATING ACTIVITIES (0.26) (11.75)B. CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of fixed assets 0.00 (0.06)Investments 0.00 (15.00)

NET CASH USED IN INVESTING ACTIVITIES 0.00 (15.06)C. CASH FLOW FROM FINANCING ACTIVITIES:

Interest paid (0.08) (0.26)Unsecured Loan 0.00 0.00

NET CASH USED IN FINANCING ACTIVITIES (0.08) (0.26)

NET INCREASE IN CASH AND CASH EQUIVALENTS (0.34) (27.08)Cash and Cash equivalents as at (Opening Balance) 0.61 27.69Cash and Cash equivalents as at (Closing Balance) 0.27 0.61

FOR AND ON BEHALF OF THEBOARD

for SECUNDERABAD HEALTHCARE LIMITED

SD/ SD/PLACE : HYDERABADDATE : 12 08 2010 MANAGING DIRECTOR EXECUTIVE DIRECTOR

42


To The Board of Directors Secunderabad Healthcare Limited We have examined the attached Cash Flow Statement of M/s Secunderabad Health-care Limited for the the year ended 31st March, 2010. The Statement has been prepared by the company in accordance with the requirement of Clause 32 of listing agreement with Stock Exchange and is based on and in agreement with the corresponding Profit & Loss Account and Balance Sheet of the Company covered by our report of 15th July, 2010 to the member of the Company. for P. MURALI & CO CHARTERED ACCOUNTANTS SD/- PLACE: HYDERABAD (P. MURALI MOHANA RAO)DATE: 12-08-2010 PARTNER

43

SECUNDERABAD HEALTHCARE LIMITEDStatement Pursuant to part IV of Schedule VI to the Compnanies Act, 1956:

Balance Sheet Abstract and Company's General Business Profile

I. I. REGISTRATION DETAILS

Registration No. 0 1 0 1 3 3 8 0 State Code 0 1

Balance Sheet 3 1 0 3 2 0 1 0Date Date Month Year

II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. THOUSANDS)

PUBLIC ISSUE RIGHTS ISSUEN I L N I L

BONUS ISSUE PRIVATE PLACEMENTN I L N I L

III. POSITION OF MOBILISATION AND DEPOLOYMNET OF FUNDS (AMOUN IN RS. THOUSANDS)

TOTAL LIABILITIES TOTAL ASSETS8 8 2 8 9 8 8 2 8 9

SOURCE OF FUNDSPAID UP CAPITAL RESERVES & SURPLUS

5 7 6 9 6 1 8 7 8 6

SECURED LOANS UNSECURED LOANSN I L N I L

DEFERED TAX LIABILITY1 1 8 0 7

APPLICATION OF FUNDSNET FIXED ASSETS INVESTMENTS

5 0 2 2 2 4 2 5 0

NET CURRENT ASSETS MISC. EXPENDITURE3 3 8 1 7 N I L

IV PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS)

TURNOVER TOTAL EXPENDITURE

2 0 1 1 3 1 1 9 8 5 4 2

+ PROFIT /LOSS BEFORE TAX + PROFIT / LOSS AFTER TAX2 5 8 9 2 1 8 4

EARNING PER SHARE IN RS.DIVIDENDRATE %

0 . 6 1 N I L

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES OF COMPANY

Item Code No.(ITC Code)

PRODUCTDESCRIPTIONS

for and on behalf of the Boardfor SECUNDERABAD HEALTH CARE LIMITED

SD/ SD/PLACE : HYDERABADDATE : 15 07 2010 MANAGING DIRECTOR EXECUTIVE DIRECTOR

44


PROXY FORM

I/We …………………………………………………………………………………………...… of ……………………………….. being a member/members of the above named Company hereby appoint …………………………………….. of ………... or failing him/her ………………………….of ………………………as my/our proxy to vote for me/us on my/our behalf at the 19th Annual General Meeting of the Company to be held on Thursday, the 9th September, 2010 at 2.00 PM at Sundaraiah Vigna Kendram, Mini Hall, Baghlingampally, Hyderabad and at any adjournment thereof.

Signed this……………………… day of ___________ 2010. NOTES: A Member entitled to attend and vote at the meeting is entitled to appoint a proxy and vote instead of himself. Proxy need not be a member. The proxy form duly completed should be deposited at the Registered Office of the Com-pany not less than 48 hours before the time fixed for holding the meeting.

………………………………………cut here…………………………………………………………..


ATTENDANCE SLIP(Please present this slip at the entrance of the meeting venue)

Regd. Folio ……………. Shares held ………………..

I hereby record my presence at the 19th Annual General Meeting of the Company to be held on Thursday, the 9th September, 2010 at 2.00 PM at Sundaraiah Vigna Kendram, Mini Hall, Baghlingampally, Hyderabad

Name of the Shareholder :

Name of the Proxy :

Signature of member/proxy :

Note: 1) To be signed at the time of handing over this slip.

Members are requested to register their names at least 15 minutes prior to the commencement of the meeting.

Affix Revenue stamp and Sign Across

Book-Post

TO,

SECUNDERABAD HEALTHCARE LIMITEDS 1 – Vimal, Road No. 5, Jubilee Hills, Hyderabad 500033.