20th agm 27.09.2012 final...hyderabad - 500 034. icici bank ltd. 20th annual general meeting...

DolphinMedical Services Limited

Regd. Office: # 417, Sanali Heavens, Ameerpet, HYDERABAD - 500 073, A.P., IndiaCorp. Office: Ramachandra Rao Road, VIJAYAWADA - 520 002, A.P., India

Website : www.dolphinmedicalindia.comE-mail ID for Investor’s Grievances : [email protected]

20th ANNUAL REPORT

2011 - 2012

DOLPHIN MEDICAL SERVICES LIMITED 20th Annual Report

BOARD OF DIRECTORS

Dr. G.V. MOHAN PRASAD Managing DirectorDr. M. LAKSHMI SUDHA DirectorMr. VINAY VISHNURAJ NAYAK Independent DirectorMr. NARENDRA SEENA KARKERA Independent DirectorMr. M. HEMANTH KUMAR Independent Director

REGISTERED OFFICE CORPORATE OFFICE# 417, Sanali Heavens Ramachandra Rao RoadAmeerpet SuryaraopetHYDERABAD - 500 073 VIJAYAWADA - 520 002Andhra Pradesh Krishna DistrictIndia Andhra Pradesh, India

AUDITORSM/s. PINNAMANENI & CO.Chartered AccountantsMoghulrajpuramVIJAYAWADA - 520 010 &AmeerpetHYDERABAD - 500 073

REGISTRARS & SHARE TRANSFER AGENTS BANKERSM/s. XL SOFTECH SYSTEMS LTD. Canara Bank3, Sagar Society, Road No.2 The Federal Bank Ltd.Banjara Hills HDFC Bank Ltd.HYDERABAD - 500 034. ICICI Bank Ltd.

20th ANNUAL GENERAL MEETING Contents Page Nos.

Date : 29th September, 2012

Time : 10.35 A.M.

Venue : Neni Hi-tech Club169, Lal BungalowOld Airport RoadNew BowenpallySECUNDERABAD - 500 011

01. Notice 1

0 2 Directors’ Report 2

03. Auditors’ Report on Consolidated

Financial Statements 1 2

04. Consolidated Balance Sheet 1 3

05. Consolidated Profit & Loss Account 1 4

06. Consolidated Cash Flow Statement 1 5

07. Notes 1 6

0 8 Auditors’ Report 2 0

09. Balance Sheet 2 3

10. Profit & Loss Account 2 4

11. Cash Flow Statement 2 5

12. Notes 2 6


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NOTICE

Notice is hereby given that the 20th Annual General Meeting of the members of M/s.DOLPHINMEDICAL SERVICES LIMITED will be held on Saturday, the 29th September, 2012 at 10.35 A.M atNeni Hi-tech Club, 169, Lal Bungalow, Old Airport Road, New Bowenpally, Secunderabad – 500 011to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the audited Balance Sheet as at 31st March 2012 and Profit andLoss Account for the year ended on that date and the reports of Auditors and Directors reportthereon.

2. To appoint a director in place of Mr. Vinay Vishnuraj Nayak, who retires by rotation and beingeligible offers himself for re - appointment.

3. To appoint M/s. Pinnamaneni & Co., Chartered Accountants as Statutory Auditors of the Company,who shall hold office from the conclusion of this Annual General Meeting until the conclusion ofthe next Annual General Meeting of the Company and to fix their remuneration.

//By Order of the Board//For DOLPHIN MEDICAL SERVICES LTD

Date: 15.08.2012Place: Hyderabad Sd/-

Dr. G.V. MOHAN PRASADMANAGING DIRECTOR

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO PPOINT A PROXYINSTEAD OF HIMSELF / HER SELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY.PROXY FORMS TO BE VALID SHALL BE LODGED WITH THE OMPANY NOT LESS THAN 48 HOURSBEFORE THE MEETING.

2. The Share Transfer books of the Company will be closed from 28.09.2012 to 29.09.2012 (bothdays inclusive).

3. All the documents referred to in the notice are open for inspection at the registered office of thecompany during office hours on all working days up to the date of the Annual General Meeting.

4. The register of Directors shareholding shall be open for inspection to any member of the companyduring the period beginning 14 days before the date of company’s AGM and ending 3 days afterthe date of its conclusion. The said register shall also remain open and accessible during theAGM to any person having a right to attend the meeting.

5. The Ministry of Corporate Affairs (“MCA”) has taken a “Green Initiative in the CorporateGovernance” by allowing paperless compliances by companies and has issued circulars on April21, 2011 and April 29, 2011 inter-alia stating that a company would have complied with Section53 of the Companies Act, 1956, if the service of document has been made through electronicmode. In that case, the company is required to obtain email addresses of its members forsending the notice / documents through email by giving an advance opportunity to everyshareholder to register his email address and changes therein, if any, from time to time with thecompany.

Therefore, in view of the above, the members are requested to up date your email ids with theDepository Participant, if the shares are in Demat mode and directly to the Registrars andTransfer Agents of the Company, in case the shares are in physical mode.

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DIRECTORS REPORT TO THE SHARE HOLDERS

Your Directors have great pleasure in presenting to you “20th Annual Report” of your Companyalong with the Audited Accounts for the year ended 31st March 2012.

1. FINANCIAL RESULTS:

The Financial Results for the year ended 31st March 2012 are furnished below: (Rs. In Lakhs)

Particulars 2010-11 2011-12

Operating Income 406.49 376.20

Other Income 14.45 0.38

Profit/(Loss)before Interest & Depreciation 138.32 37.90

Depreciation 59.36 64.59

Cash Profit/(Loss) 69.47 (80.14)

During the year under review your company has suffered huge losses due to requirement ofcomprehensiveness of services i.e., the need to add fulfledged laboratory services and otheradvanced modalities, and also heavy marketing expenditure incurred disproportionate to theinput the reason of which is the heavy competition in the stand alone diagnostic sector and alsodue to the lack of high end sophisticated diagnostic equipment along with the added problemsbeing faced regarding the premises. The heavy interest on the bank loan and the indifferentinappropriate handling of the account by the bank also contributed substantially to the losseswhile bad debts to some extent also added to the situation. However the management ismaking efforts for solving this issue at the earliest.

2. SUBSIDIARY COMPANIES:

During the year under review the Subsidiary Companies incorporated were not able to recordany progress. However the Board is exploring the possibility of utilizing them for the envisagedpurpose at the earliest.

3. DIVIDEND:

The Directors have taken a decision not to recommend any dividend for the year 2011-12, asthe company has suffered huge losses.

4. PUBLIC DEPOSITS:

During the year under review the company has not accepted any ‘public deposit’ as in defined inprovision of Section 58A of the Companies Act, 1956 read with Companies (Acceptance ofDeposits) Rules 1975 as amended from time to time. There are no outstanding unclaimed depositsas on 31st March 2012.

5. MANAGEMENT’S PERCEPTION:

PRESENT STATE OF AFFAIRS - AN OVERVIEW

During the year under review, the company has suffered huge losses due to many intrinsic &extrinsic reasons. Some of them are, requirement of comprehensiveness of services i.e., theneed to add fulfledged laboratory services and other advanced modalities, and also heavymarketing expenditure incurred disproportionate to the input which is again partly due to theheavy competition in the stand alone diagnostic sector and non functioning of some of the majormedical equipments. During this year there was a major repair of electronic components andthe non insurable high cost tube of CT Scan equipment. While lack of sophisticatedness andadvancement in the diagnostic equipment is to some extent also the cause of reduction inrevenues, the prevailing competitive conditions are also not suitable for standalone diagnosticservices. The establishing of inhouse diagnostic centres by many hospitals decreased the referralof patients to standalone diagnostic centres – which are forced to depend on small timepractitioners and a few consultation clinics of specialists. This resulted in huge increase inmarketing expenditure and the added burden of increased establishment expenses, which alsoled to substantial losses. The grim power supply problem in the region also contributed its partfor this situation. The delay in meeting this added expenditure is costing heavily to the organization.The Digital Radiography equipment also could not be put to proper use due to mismatch between

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the old X-ray unit of outdated model and the subsequently added Digital Radiography equipment.

This was represented to the bank for support many a time, but in vain. Now due to the rapid

change in the equipment models, newer comprehensive units with in-built compatible DR and X-

ray systems need to be purchased to make this service available to the patients. Some other

existing equipments also need updation to cope up with the advanced modality services. Thus

on the whole there is lack of comprehensiveness in the services presently provided. OtherEquipment like MRIT had a repair in its main unit – the head, which company is presently

represented by a dealer outside India. Other causes like repairs of other diagnostic Equipment,

condemning of old assets that are outdated and non-functioning, poorly equipped state to face

the stiff competition between diagnostic centres of the region, the heavy interest burden of the

bank and increase of running expenditure which is a consequence of many of the above and

other causes mentioned below added to the complexity of the situation.

The uncertainty being faced on the outcome of the court cases on the existing lease hold premises

is also adding to the troubles of the company. The hostile attitude and actions of the lessors of

the premises are also not conducive to optimize the utilization of the premises. The necessary

modifications, time and again which needed to be further made from time to time for the premises

in addition to those already made, involves further investment, which could be further wasted

depending on the outcome of the court case.

From the beginning and more so since 2001, the lessor has been causing more trouble thanearlier to the company for the reasons best known to them and the management had to spend

most of the valuable time fighting for the litigation and the company is leaving no stone unturned

in fighting the litigation in respect of the lease hold at various stages. The quagmire of litigation

the company was constrained to involve in respect of its leasehold due to the mischief of the

CSITA and M/s Tilak Enterprises has also substantially contributed to the woes of the company.

In view of the looming uncertainty due to the said litigation, the company is not able to makeoptimum use of the premises, as there is the fear of losing the further investment as may be

made for modifications and renovations to the premises from time to time if the verdict of the

Courts is going to be adverse. This is in addition to the already invested huge amounts on the

premises over a period of many years on various occassions. Even though the company is

somehow able to get along with in the premises, we could go only for moderate expansion andnot the fulfledged updating, which is the present exigency in view of the hard core competition

prevailing in the market, especially in the arena of medical diagnostic services. An attempt was

made by the company in 2008 to update some of the outdated equipment but the high end

models could not be installed. This is in substantial part due to bank and other factors mentioned

in the earlier AGM and also the lack of cooperation by and the hostile atmosphere with the

lessors – whose cooperation and consent was required for erecting the exclusive high tensiontransformers mandatory for such high end models. The grim power problem also could not be

addressed by the company by installing high end noiseless power generators, which required a

lot of additional space, which again required the consent of the already hostile lessor of the

premises.

In addition to those discussed above, the bank factors mentioned earlier in the last Annual

General Meeting also had a role to play. Because of these uncertainties with regard to such

issues and also the problem of leasehold premises, we were not able to install the latestsophisticated diagnostic equipment and we are constrained to manage with the possible moderate

expansion which could hardly withstand the present day competition which has resulted in

disproportionately increased expenditure, outweighing the operational costs also. With the threat

of eviction from the existing premises hovering over, we are not able to achieve the desired

growth and progress. In contrast thereto, our competitors are equipped with relatively better

modern equipment capturing the demand from the local doctors at the cost of our patronage,causing huge loss to our company.

The term Loan with Canara Bank has become NPA in November 2011 due to many of the

reasons already mentioned above and also the reasons clearly mentioned in the last Annual

Report. As a consequence of the account becoming NPA with the bank, the bank has resorted to

initiating steps for auctioning the landed property of the company at a reserve price of its ownin addition to launching other legal measures. The matter was represented to the DRT by thecompany and as of date is pending disposal.

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DOLPHIN MEDICAL SERVICES LIMITED 20th Annual ReportSTEPS PROPOSED BY THE BOARD FOR FUTURE BUSINESS DEVELOPMENT AND ENHANCEDPROFITABILITY

Your company has already initiated steps for settling the NPA issue with Canara Bank and hassubmitted a OTS proposal on 05th June 2012 and the bank has placed it in the CANADALAT on 6th

June 2012. But unfortunately the proposal was not accepted by Canara Bank citing that ouroffer was low. Your company is now taking further steps to once again propose OTS afterdiscussions with the Canara Bank Officials and arrive at a mutually agreeable finality. NewSteps and suggestions from Financial & other strategic Consultants as may be required forimprovement of Business or alternative steps for solving this issue, are also being explored.The company is taking all the necessary steps for rectifications and repair of all the medicalequipment and putting them to optimum use by measures outweighing the regular marketfactors to the extent possible. But the uncertainity pertaining to the premises is still hoveringover and the management will try to explore ways & means to overcome this problem also.Recovery of other advances to possibly provide some reserves for the company is one othermeasure being contemplated. The company is also exploring the scope for starting new avenuesof profitable business activities as earlier envisaged and also as may be decided feasible infuture.

6. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION & FOREIGN EXCHANGEEARNINGS AND OUT GO:

The required information as per Sec.217 (1) (e) of the Companies Act 1956 is provided hereunder:

A. CONSERVATION OF ENERGY:The Company has taken necessary steps to conserve the energy utilization during theyear under review.

B. TECHNOLOGY ABSORPTION:1. Research and Development (R&D) : Rs.80.94 lakhs2. Technology absorption, adoption and innovation : NIL

C. FOREIGN EXCHANGE EARNINGS AND OUT GO:Foreign Exchange Earnings : NILForeign Exchange Outgo : NIL

7. INTERNAL CONTROL AND ITS ADEQUACY:

The Board is committed to ensure that the Company’s ‘internal control’ system remains effectiveand efficient in areas such as operations and Security. For this purpose proper planning andeffective conduct of the ‘internal audit’ is given top-most attention.

8. DIRECTORS’ RESPONSIBILITY:

To best of their knowledge and belief and on the basis of information furnished to them theDirectors make following statement, which is required to be made in terms of Section 217 (2AA)of the Companies Act, 1956:

(i) While preparing Annual Accounts, the applicable accounting standards have been followedalong with proper explanations

(ii) Appropriate accounting policies have been selected and applied consistently and havemade judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 31, 2012 and of the losses of thecompany for the year ended on that date.

(iii) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.

(iv) The Annual Accounts of the Company have been prepared on basis of a ‘going concern’.

9. CORPORATE GOVERNANCE:

a) A note on Management Discussion and Analysis of Report is enclosed.

b) As per clause 49 of the Listing Agreement with the Stock Exchanges, a separate section onCorporate Governance Practices followed by the Company together with a certificate obtainedfrom the auditors of the Company is set out in Annexure, forming part of this report.

DOLPHIN MEDICAL SERVICES LIMITED 20th Annual Report10.PARTICULARS OF EMPLOYEES:

During the year under review, no employee of the company was in receipt of remuneration forthe whole year which in the aggregate was Rs.60,00,000/- or more per annum nor was anyemployee in receipt of remuneration Rs.5,00,000/- or more per month for the any part of theyear in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, readwith the Companies (Particulars of Employees) Rules, 1975 as amended.

During the year under review, industrial relations of the company continued to be cordial andpeaceful.

11.DIRECTORS:

In accordance with requirements of the Companies Act, 1956 and Articles of Association of theCompany, Mr. Vinay Vishnuraj Nayak retires by rotation. He however is eligible for reappointment.The board has therefore recommended his reappointment.

12.AUDITORS:

M/S Pinnamaneni & Co, Chartered Accountants, the Company’s auditors term office will concludewith this Annual General Meeting. They have expressed willingness to accept the assignment fora further period on one more year. They have also confirmed their eligibility for such anappointment under Section 224(1B) of the Companies Act, 1956.The Board recommends firmsre-appointment as Company’s auditors.

13.LISTING AT STOCK EXCHANGES:

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited, PhirozeJeejeebhoy Towers, Dalal Street, Mumbai - 400 001.

14.ACKNOWLEDGEMENTS:

Your Directors thank and appreciate all the executives, staff, Bankers, Customers and Workersof the Company for their dedicated services.

//By Order of the Board//

For DOLPHIN MEDICAL SERVICES LIMITED

Place: Hyderabad, Sd/- Sd/-

Date: 15.08.2012 Dr. G.V. MOHAN PRASAD Dr. M. LAKSHMI SUDHA

MANAGING DIRECTOR WHOLE TIME DIRECTOR

CORPORATE GOVERNANCE REPORT

Corporate Governance is the system by which business corporations are directed and controlled.Corporate Governance Structure specifies the relationship, distribution of Rights and responsibilitiesamong different participants in the Organization, such as the Board, Managers and shareholders,spells out the rules and procedures for making decisions on corporate affairs. By doing this, it alsoprovides the structure through which the Company objectives are set and the means of attainingthese objectives and monitoring the performance.

The essence of Corporate Governance revolves around three basic interrelated segments. Integrityand fairness, transparency and disclosures, accountability and responsibility. It is about commitmentto values and ethical business conduct, voluntary practices and compliance with laws and regulationsleading to effective control and management of the organization in achieving the objectives.

Dolphin believes that good corporate governance brings about sustained corporate growth andlong term benefits for share holders. The Company’s core values are based on integrity, respectfor statutory/regulatory requirements and complaints thereof, emphasis on product quality, effectivestrategic planning and processes, growth and development of human resources, which entailsconverting opportunities into achievements.

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DOLPHIN MEDICAL SERVICES LIMITED 20th Annual ReportDolphin respects the rights of its share holders to information on the performance of the Companyand focus on the Trusteeship role of the Board in increasing the wealth and long term shareholders’value creation over a sustained period of time.

Dolphin continues to focus its resources strengths and strategies to achieve highest standards ofcorporate governance and endeavors to implement the code of corporate governance in its truespirit.

In accordance with clause 49 of the Listing Agreement with Indian Stock Exchanges on corporategovernance a report on the practices and compliances by the company is as follows:

This Report provides the structure through which the company objectives are set and the means ofattaining the overall business objectives and goals.

A. BOARD OF DIRECTORS:

Composition:

The Board of Directors consists of Professionals drawn from diverse fields. All the Directors on theBoard consist of Executive and Non-Executive Directors and three of them being independent.

None of the Directors on the Board is a member in more than 10 committees or Chairman of morethan 5 Committees (as specified in Clause 49 of the Listing Agreement with Stock Exchanges). TheDirectors have made the necessary disclosures regarding Committee memberships.

Sl. Name & Category of the No.of No.ofNo. Directors Directorships held Memberships/

in other Public Chairmanships heldCompanies in Committees of

other Companies

1. Dr. G.V. Mohan Prasad[Promoter & Executive Director] 2 —

2. Dr. M. Lakshmi Sudha[Promoter & Executive Director] 2 —

3. Mr. Vinay Vishnuraj Nayak[Independent Director] — —

4. Mr. Narendra Seena Karkera[Independent Director] — —

5. Mr. Hemanth Kumar Manikyam[Independent Director] — —

A BRIEF RESUME OF DIRECTOR RETIRING BY ROTATION

Mr. VINAY VISHNURAJ NAYAK

Accordingly Mr. Vinay Vishnuraj Nayak retires by rotation at the ensuing Annual General Meeting.Mr. Vinay Vishnuraj Nayak offers himself for reappointment. The brief resume of Mr. Vinay VishnurajNayak is as follows:

Mr. Vinay Vishnuraj Nayak is a Financial Consultant with rich experience in the Banking Sector. Hehas worked in the Reserve Bank of India (RBI) as Manager/Assistant General Manager for manyyears and was also a nominee director from Reserve Bank of India in a private Bank. He has alsobeen associated with auditing of banks and providing financial consultancy services to some of thereputable companies like the Essar group of Companies.

B. BOARD MEETINGS:

During the Financial Year 2011-2012 the Board of Directors met 6 (Six) times on the followingdates:

15.05.2011, 14.08.2011, 29.09.2011, 14.11.2011, 01.12.2011 and 14.02.2012

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DOLPHIN MEDICAL SERVICES LIMITED 20th Annual ReportThe Attendance of Directors at these Board Meetings and at the previous Annual General Meetingwas under:

Name of the Director No.of Board No.of WhetherMeetings held Meetings Present at the

during the attended by previous AGMtenure of the the Director

Director

Dr. G.V. Mohan Prasad 6 6 Yes

Dr. M. Lakshmi Sudha 6 6 Yes

Mr. Vinay Vishnuraj Nayak 6 5 No

Mr. Narendra Seena Karkera 6 5 No

Mr. Hemanth Kumar Manikyam 6 4 No

C. COMMITTEES OF THE BOARD:

In order to ensure that the functions of the Board are discharged effectively, information disclosedin the financial statements are in order and no material information is left undisclosed, besidesensuring the stricter implementation of the Corporate Governance, the Board has formed thefollowing three committees.

1. Audit Committee2. Remuneration Committee3. Investors/Share holders Grievances Committee

The scope of the said Committees, memberships and the powers delegated is enumeratedhereunder:

1) Audit Committee:

Terms of Reference of Composition, Name of the Members and Chairman:

The Board has constituted an Audit Committee in accordance with Clause 49 of the listing Agreement as well as Section 292A of the Companies Act, 1956. The Audit Committee comprises of 3 directors, 2 of them being non-executive directors. The composition of Audit Committee is as follows:

Mr. Narendra Seena Karkera, Chairman of the committee, Mr. Vinay Vishnuraj Nayak and Dr. M.Lakshmi Sudha are the members of the Committee, all being directors. The Managing Director,along with Statutory Auditors and Accounts Manager are invitees to the meeting. The terms ofReference of this Committee are wide enough covering matters specified for Audit Committeesunder the Listing Agreement/Companies Act, 1956.

Meetings and the attendance during the year:

During the year under review, the total number of meetings held was 4 (four) on the followingdates:

1. 15th May, 2011 2. 14th August, 20113. 14th November, 2011 and 4. 14th February, 2012

The attendance of the each member of the Committee is given below:

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

Mr. Narendra Seena Karkera 4 4

Mr. Vinay Vishnuraj Nayak 4 4

Dr. M. Lakshmi Sudha 4 4

The primary objective of the audit Committee is to monitor and effectively supervise theCompany’s financial reporting process with a view to provide accurate, timely and properdisclosures and the integrity and quality of the financial reporting.

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DOLPHIN MEDICAL SERVICES LIMITED 20th Annual Report During the year, the Audit Committee met Four times. Executives of Accounts Department,

Representative of the Statutory Auditors were invited to attend the Audit CommitteeMeetings.

2) Remuneration Committee

The Remuneration Committee consists of Mr. Hemanth Kumar Manikyam, Mr.Vinay VishnurajNayak and Mr. Narendra Seena Karkera all being Independent non-executive directors.Remuneration Committee meeting was held on 14.08.2011 during the year.

The details of the remuneration paid to Managing Director and Whole-Time Director during theyear 2011-12 are given below:

Name & Designation All elements of remuneration packagesi.e., salary benefits, bonuses, pension etc.

Dr. G.V. Mohan PrasadManaging Director Rs.21,15,000/-

Dr. M. Lakshmi SudhaDirector Rs.10,35,000/-

The above directors did not receive any other benefits like incentives and stock optionsduring the 2011-2012 except the remuneration package.

3) Investors / Shareholders Grievance Committee:

The Company has constituted an Investors / Shareholders Grievance Committee under theChairmanship of Dr. M. Lakshmi Sudha. The other members of the Committee are Mr. HemanthKumar Manikyam and Mr. Vinay Vishnuraj Nayak. The Committee looks into the shareholdersand investors complaints. The number of shares pending for transfer was NIL as on 31st March,2012.

D. Annual General Meetings:

Particulars about the last three Annual General Meetings (AGMs) of the Company are as under:

Sl. No. Particulars Date Venue

1 17th AGM 30.09.2009 Neni Hi-tech Club,169, Lal Bungalow, Old Airport

Road, New Bowenpally, Secunderabad – 500 011





There was no Extra-ordinary General Meeting held during the year 2011 – 2012.

No resolution was passed through postal ballot during the year 2011-12.

No Special resolution is proposed through postal ballot at the ensuing Annual General Meeting.

E. Disclosures

a. There is no materially significant related party transaction made by the company with itspromoters, Directors or the management, their subsidiaries or relatives etc. that may havepotential conflict with the interests of the Company at large.

b. The Company had complied with the requirement of the Stock Exchange, SEBI and otherstatutory authorities on all matters relating to capital market during the last three years. Nopecuniary penalties have been imposed on the company by any of the above mentionedauthorities.

c. The company has already put in place a system for employees to report to the managementabout concerns relating to unethical behavior, any fraud or violation of companies Code of

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Conduct and access have been provided up to the higher level of supervision including theAudit Committee.

d. The Company has complied with all the mandatory requirements and has also disclosedinformation relating to non mandatory requirements.

F. Means of Communication

* Half yearly report sent to each No, as the results of the Company are

household of the shareholder published in the newspapers.

* Quarterly Results -do-

* Any website where displayed -do-

* Whether it is also displayed in -do-

Official newspapers

* The presentations made to

Institutional investors or to analysts -No-

* News papers in which results are 1) The Financial Express

Normally published in 2) Andhra Prabha

3) Surya

The crux of the Corporate Governance is the transparency in disclosure of the timely, reliableand relevant information pertaining to the Organization. A good Corporate Governance isone in which all the stakeholders have access to the similar information in quality and quantitywhich enables them to take an informed decision at the right time.

Recognizing this prominent feature, the quarterly results of the Company for each quarter,the audited/unaudited annual results, are announced within the statutory time frame andpublished in The Financial Express, Andhra Prabha, Surya etc.,

Management discussion and analysis forms part of the Annual Report, which is mailed to theshareholders of the Company individually.

G. General Shareholder Information:

Annual General Meeting

Date 29.09.2012

Time 10.35 A.M

Venue Neni Hitech Club,169, Lal Bungalow, Old Airport Road,New Bowenpally, Secunderabad–500 011,Andhra Pradesh.

Financial Calendar The following is the tentative financial calendar of theCompany which is subject to change.Quarter Period Declaration of resultsFirst Apr-June Held on 15th

Aug 2012

Second July-Sep 2nd week of Nov 2012Third Oct-Dec 2nd week of Feb 2013Fourth Jan-Mar 2nd week of May 2013

Date of Book Closure 28th

September 2012 to 29th

September 2012

Dividend Payment dates -NIL-

Listing on Stock Exchanges Bombay Stock Exchange Limited

Listing Fees Not Paid for the year 2012-2013

Stock Code - BSE 526504

ISIN Number for NSDL & CDSL INE 796 B 01013

Market Price Data: high & Lowduring each month for the As per Annexure Ifinancial year 2011-12.

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Liquidity

Outstanding GDRs/ ADRs/Warrants or any convertibleinstruments conversion dateand likely impact on Equity

-NIL-

Registrar and Share Transfer M/s. XL Softech Systems Ltd., 3, Sagar Society, Road No.2,Agents Banjara Hills, Hyderabad – 500 034.

Share Transfer System Share Transfers would be registered and returned within aperiod of four weeks from the date of receipt, if thedocuments are clear in all respects.The Share TransferCommittee, which normally meets twice in a month, or atmore frequency depending on the volume of transfers aimsat ensuring registration and return of transferred sharespromptly on receipt of completed documents.

Distribution of shareholdingand share holding pattern as As per Annexure – IIon 31st March, 2012

Dematerialization of Shares and The equity shares of thecompany are being traded in electronic mode from 22

nd

February 2002 as per SEBI Circular. This facilitates fasterand efficient Transfer system and also reduce investorsrisks of bad delivery/loss in transit of documents besideshaving the advantage of exemption from stamp duty.96.31% of the Equity Share Capital has been dematerializedas on 31.03.2012. As per the directions of Securities andExchange Board of India, trading in the company sharesshall compulsorily be in dematerialized form by all classesof investors and facilities for dematerialization are fullyoperational. The company shares are regularly traded onBSE.

Plant Location #29-12-13A, Ramachandra Rao Road, Vijayawada, Andhra

Pradesh.

Address for Correspondence Share holders correspondence should be addressed to XL

Softech Systems Ltd., #3, Sagar Society, Road No.2, Banjara

Hills, Hyderabad – 500 034, Andhra Pradesh.

Your Company has a website by name www.dolphinmedicalindia.comEmail Id for investor’s grievances: [email protected] of Registrar and Transfer Agents:M/s. XL Softech Systems Ltd,3, Sagar Society, Road No.2,Banjara HillsHyderabad – 500 034Andhra Pradesh.

NON-MANDATORY REQUIREMENTS:The Company has not adopted the clauses specified in the non mandatory requirements of theListing agreement except constituting of the remuneration committee.ANNEXURE I:High / Low of market price of the Company’s shares traded on Bombay Stock Exchange Ltd.,Mumbai during the financial year 2011-12:

Month Highest Lowest Month Highest Lowest

April, 11 3.42 2.81 October 2.45 1.86

May 3.24 2.68 November 2.68 1.92

June 3.32 2.69 December 2.50 1.42

July 3.20 2.72 January, 12 2.50 1.78

August 2.97 2.33 February 2.34 1.61

September 2.71 2.07 March 2.03 1.72

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No. of Equity Shares held No. of Folios % age No. of shares % age

Up to 500 3,687 58.27 8,60,752 5.70

501 – 1000 1,065 16.83 9,46,301 6.27

1001 – 2000 673 10.64 11,12,343 7.37

2001 – 3000 256 4.05 6,83,218 4.52

3001 – 4000 140 2.21 5,26,064 3.48

4001 – 5000 144 2.28 6,91,472 4.58

5001 – 10000 203 3.21 15,62,019 10.34

10001 and above 159 2.51 87,17,783 57.73

Grand Total 6,327 100.00 1,50,99,952 100.00

No. of Shares in Physical Mode 5,58,011 3.69

No. of Shares in Electronic Mode 145,41,941 96.31

ANNEXURE II:

The distribution of shareholding as on 31st March, 2012:

Shareholding Pattern as on 31st March, 2012

DECLARATION BY CEO OF THE COMPANY ON CODE OF CONDUCT

As per the revised clause 49 of the listing agreement of the Stock Exchanges the Board shall laydown a code of conduct for all board members and senior management of the Company. Thecode of conduct shall be posted on the website of the Company and all the members and seniormanagement personnel shall affirm compliance with the code on annual basis. The annual reportof the Company shall contain a declaration to this effect signed by CEO of the Company.

I hereby declare that:

1. Code of conduct prepared for the Board Members and senior management of the Companywas approved by the Board of Directors and the same was adopted by the Company.

2. Code of Conduct adopted by the Company was circulated to the members of the Board andsenior management of the Company and also posted in the website of the Company.

3. All the members of the Board and senior management of the Company have complied withall the provisions of the code of conduct.

For DOLPHIN MEDICAL SERVICES LIMITED

Sd/-DR. G. V. MOHAN PRASAD

MANAGING DIRECTOR

Category No. of Shareholders No. of Shares % age

Promoters 46 41,44,401 27.45

Foreign Collaborators —- —- —-

Mutual Funds —- —- —-

Fls./Banks 1 200 0.00

FIIs/NRIs 30 99,928 0.66

Domestic Companies 117 6,00,303 3.98

Public 6,117 1,02,18,404 67.67

Others 16 36,716 0.24

Total 6,327 1,50,99,952 100.00

12


AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCETo

The Members of Dolphin Medical Services Limited

We have examined the compliance of conditions of Corporate Governance by Dolphin Medical ServicesLimited, for the year ended on 31st March, 2012, as stipulated in Clause 49 of the Listing Agreementof the said Company with Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Ourexamination was limited to procedures and implementation thereof, adopted by the Company forensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor anexpression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, wecertify that the Company has complied with the conditions of Corporate Governance as stipulated inthe Listing Agreement.

We state that no investor grievance is pending for a period exceeding one month against the Companyas per the records maintained by the Shareholders/Investor Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Companynor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For M/s. PINNAMANENI & CO.,Chartered Accountants

Place : Hyderabad Sd/-Date : 15.08.2012 P.V.V. Satyanarayana

Partner_______________________________________________________________________________

AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTSTo

The Board of Directors of M/s. Dolphin Medical Services Ltd.

1. We have audited the attached Consolidated Balance Sheet of M/s. Dolphin Medical Services Ltd.and its subsidiaries M/s. Bridge Corporate Services Pvt. Ltd. and M/s. Evum Life Sciences Pvt. Ltd.(hereinafter together referred to as ‘consolidated entities’) as at 31st March, 2012, the relatedConsolidated Profit and Loss Account and Consolidated Cash Flow Statement for the year endedon that, which we have signed under reference to this report. These Consolidated FinancialStatements are the responsibility of the company’s management. Our responsibility is to expressan opinion on these consolidated financial statements based on our audit.

2. We conducted the audit in accordance with auditing standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statement presentation. We believethat our audit provides a reasonable basis for our opinion.

3. We report that the Consolidated Financial Statements have been prepared by the Company’smanagement in accordance with the requirements of Accounting Standard 21, ‘ConsolidatedFinancial Statements’ as referred to in sub-section (3C) of Section 211 of the Companies Act,1956 and on the basis of the separate audited financial statements of the company and itssubsidiaries included in the Consolidated Financial Statements.

4. On the basis of the information and explanations given to us and on consideration of the separateaudit reports on individual audited financial statements of the company and its aforesaidconsolidated entities, in our opinion, the Consolidated Financial Statements give a true and fairview in conformity with the accounting principles generally accepted in India.

a . in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of thecompany and its consolidated entities as at 31st March, 2012.

b. in the case of the consolidated Profit and Loss Account, of the consolidated results of operationsof company and its consolidated entities for the year ended 31st March, 2012 and

c. in the case of the consolidated cash flow statement, of the consolidated cash flows of thecompany and its consolidated entities for the year ended 31st March, 2012.

for PINNAMANENI & Co.,Chartered Accountants,

Place : Hyderabad Sd/-Date : 15.08.2012 P.V.V.SATYANARAYANA

Partner

13


Figures as at theend of previousreporting period

Figures as at theend of current

reporting periodPARTICULARS

As per our report of even datefor DOLPHIN MEDICAL SERVICES LIMITED for PINNAMANENI & CO., Sd/- CHARTERED ACOUNTANTSDr. G. V. MOHAN PRASAD Sd/-Managing Director P.V.V.SATYANARAYANA

Sd/- PartnerDr. M. LAKSHMI SUDHADirector

Place : HyderabadDate : 15.08.2012

Note No

I. EQUITY AND LIABILITIES

(1) Shareholder’s Funds

(a) Share Capital 1 150,999,520.00 150,999,520.00

(b) Reserves and Surplus 2 11,209,325.50 26,110,637.39

(c) Minority Interest 525,000.00 525,000.00

(2) Non-Current Liabilities

(a) Long-term borrowings

Term Loan from Canara Bank 76,457,273.00 68,939,018.00

(b) Deferred tax liabilities (Net) 3 6,245,383.00 5,817,739.00

(3) Current Liabilities

(a) Short-term borrowings

Vehicle Loans from HDFC Bank Ltd. 468,202.85 919,132.72

(b) Trade payables 113,459.05 252,280.05

(c) Other current liabilities 929,505.66 2,045,422.76

Total 246,947,669.06 255,608,749.92

II.ASSETS

(1) Non-current assets

(a) Fixed assets

(i) Tangible assets 4 113,987,869.35 125,807,532.35

(ii) Intangible assets 5 39,457,319.00 31,085,809.60

(iii) Capital work-in-progress 33,476,627.00 32,817,207.00

(b) Non-current investments 6 4,100,000.00 4,100,000.00

(c) Long term loans and advances 28,195,000.00 28,195,000.00

(d) Other non-current assets 7 835,453.00 835,453.00

(2) Current assets

(a) Inventories 464,010.00 340,570.00

(b) Trade receivables --- 90,192.00

(c) Cash and cash equivalents 8 114,496.71 893,743.36

(d) Short-term loans and advances 9 26,106,894.00 31,233,242.61

(e) Other current assets 210,000.00 210,000.00

Total 246,947,669.06 255,608,749.92

Significant Accounting Policies

Notes on Accounts 1to14

Consolidated Balance Sheet as at 31st March, 2012Amount in Rupees

14


PARTICULARS

As per our report of even datefor DOLPHIN MEDICAL SERVICES LIMITED for PINNAMANENI & CO., Sd/- CHARTERED ACOUNTANTSDr. G. V. MOHAN PRASAD Sd/-Managing Director P.V.V.SATYANARAYANA

Partner Sd/-Dr. M. LAKSHMI SUDHADirector


Consolidated Profit and Loss statement for the year ended 31st March, 2012

I. Revenue from operations 1 0 37,619,959.00 40,648,561.00

II. Other Income 37,780.00 1,445,188.00

III. Total Revenue (I +II) 37,657,739.00 42,093,749.00

IV. Expenses:

Cost of materials consumed 1 1 8,569,293.00 7,945,483.00

Employee benefit expense 1 2 4,464,502.00 7,157,032.00

Financial costs 1 3 11,804,923.30 6,650,031.03

Depreciation and amortization expense 4 6,459,550.00 5,936,110.03

Other expenses 1 4 20,833,138.59 13,158,917.25

Total Expenses 52,131,406.89 40,847,573.31

V. Profit before exceptional and

extraordinary items and tax (III - IV) -14,473,667.89 1,246,175.69

VI. Profit before tax -14,473,667.89 1,246,175.69

VII. Tax expense:

Income Tax ___ 235,359.00

Deferred tax 427,644.00 996,338.00

VIII. Profit(Loss) for the period

from continuing operations (V -VII) -14,901,311.89 14,478.69

IX. Profit/(Loss) for the period -14,901,311.89 14,478.69

X. Earning per equity share:

(1) Basic -0.99 0.00

(2) Diluted -0.99 0.00



reporting period

Note No

Amount in Rupees

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit/(Loss) after tax (14,901,311.89)

Adjustment For

Depreciation 6,459,550.00

Proposed Dividend —

Profit/Loss on Fixed Assets 5,360,113.00

Interest & Finance Charges 11,804,923.30

Prel. Exp.W/o —

Operating Profit/(Loss) before working capital charges 8,723,274.41

Adjustment For

Increase/ Decrease in inventory (123,440.00)

Increase/ Decrease in Loans & Advances 5,126,348.61

Increase/ Decrease in Deposits —

Increase/ Decrease in Other Current Assets —

Incraese/ Decrease in Trade payables (138,821.00)

Incraese/ Decrease in Trade Receivables 90,192.00

Increase/ Decrease in Current Liabilities (1,115,917.10)

Provision for Deferred tax 427,644.00

Cash generated from operations (A) 12,989,280.92

CASH FLOW FROM INVESTING ACTIVITIES

Increase/Decrease in Capital Work in progress (659,420.00)

Sale of Fixed Assets —

Purchase of Investment __—__Sale of Investment —

Interest received —

Dividend received —

Finance Charges paid (4,286,668.30)

Net cash flow from investing activities (B) (4,946,088.30)

CASH FLOW FROM FINANCIAL ACTIVITIES

Proceeds from Convertible Share Warrants —

Proceeds from Borrowings —

Payment of Borrowings (450,929.87)

Dividend paid —

Increase/Decrease in Intangible Assets (8,371,509.40)

Net cash used in Financing Activities (C) (8,822,439.27)

Net Increase /(Decrease) incash and cash equivalents (A+B+C) (779,246.65)

Cash and Cash equvalents as at previous year 893,743.36

Cash and Cash equvalents as at current year 114,496.71


15

for DOLPHIN MEDICAL SERVICES LIMITED for PINNAMANENI & CO., Sd/- CHARTERED ACOUNTANTS Dr. G. V. MOHAN PRASAD Sd/- Managing Director P.V.V.SATYANARAYANA

Partner Sd/- Dr. M. LAKSHMI SUDHA Director

Place : Hyderabad Date : 15.08.2012

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31.03.2012

Particulars Amount (Rs.)

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ANNEXED TO AND FORMING PART OFCONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2012I. SIGNIFICANT ACCOUNTING POLICIES TO THE CONSOLIDATED ACCOUNTS :

a . Basis of Preparation of Consolidated Financial StatementsThe Consolidated Financial Statements include accounts of Dolphin Medical Services Limited(‘the company’) and its subsidiaries Bridge Corporate Services Private Ltd. and Evum Life SciencesPrivate Ltd. The Consolidated financial statements have been prepared under historical costconvention and in conformity with the generally accepted accounting principles in India, theAccounting Standards notified under Sub-section 3(C) of Section 211 of the Companies Act,1956 of India and other relevant provisions of the Act. All inter companytransactions between

subsidiary companies are eliminated.

b. Income and ExpenditureAll items and expenditure shown in the statement having material bearing on the accounts areaccounted on accrual basis.

c. Fixed AssetsFixed Assets are stated at cost of acquisition. Cost of acquisition is inclusive of freight, duties,levies, preparatory works, erection, installation and all incidentals attributable to bringing theasset to its working condition.

d. Capital Work in ProgressThe assets under installation or under construction and related advances as at the BalanceSheet date are shown as Capital Work in Progress.

e . DepreciationDepreciation is computed on Straight Line method basis in accordance with the provision ofSchedule XIV of the Companies Act, 1956.

f. InvestmentsInvestments are stated at cost of acquisition and the same are considered as long terminvestments.

g. Deferred Income TaxThe Company has accounted for Deferred Tax in accordance with the Accounting Standard-22“Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India.Deferred tax is accounted for by computing the tax effect of timing differences, which ariseduring the year and reverse in subsequent periods.The deferred Tax Liability for the current year amounting to Rs.4.27 Lakhs is shown in the Profitand Loss account under provision for Deferred tax. As at the year end, deferred Tax liabilityaggregates to Rs.62.45 Lakhs.

h. Employee BenefitsProvident fund: The Company makes contribution to Provident Fund administered by the CentralGovernment under the Provident Fund Act, 1952.

i. Contingent LiabilitiesContingent Liabilities are generally not provided for in the accounts and are shown separatelyif any in the notes on accounts.

II. NOTES ON ACCOUNTS TO THE CONSOLIDATED ACCOUNTSNotes to the accounts forming part of Consolidated Balance Sheet as on 31st March 2012 and Profitand Loss account for the year ended on that date.1. The company is a holding company with investments in subsidiary companies.2. All the fixed assets are located in India and are as detailed in notes.3. The stocks are valued at cost or market value whichever is less.4. Contingent liabilities not provided for.5. Figures have been re-grouped wherever necessary.6. Confirmation of balances are not obtained for sundry creditors and advances made.

for PINNAMANENI & CO., for DOLPHIN MEDICAL SERVICES LIMITED CHARTERED ACOUNTANTS Sd/- Sd/- Dr. G. V. MOHAN PRASAD P.V.V.SATYANARAYANA Managing Director Partner

Sd/-Dr. M. LAKSHMI SUDHADirector



16

17


1 Share Capital

a Authorised

2,50,00,000 Equity Shares of Rs.10/- each 250,000,000.00 250,000,000.00

b ISSUED CAPITAL


c SUBSCRIBED & PAID UP CAPITAL


2 Reserves and Surplus

a Capital Reserve 3,225,000.00 3,225,000.00

b Share Premium 23,689,704.00 23,689,704.00

c Profit & Loss Account Profit/Loss(-)

Opening Balance -804,066.61 -818,545.30

Add: Proft/Loss (-) during the year -14,901,311.89 14,478.69

-15,705,378.50 -804,066.61

Total 11,209,325.50 26,110,637.39

3 Deferred tax liabilities (Net)

Opening Balance 5,817,739.00 4,821,401.00

Add: Current year (Asset)/Liability 427,644.00 996,338.00

Total 6,245,383.00 5,817,739.00

5 Intangible Assets

Research & Development Expenditure 16,300,662.00 8,206,460.00

Miscellaneous Expenditure 23,156,657.00 22,879,349.60

(to the extent not written off or adjusted)

Total 39,457,319.00 31,085,809.60

6 Non-current investments

Meridian Projects Limited 3,200,000.00 3,200,000.00

Cosmic Fortunes India Ltd. 900,000.00 900,000.00

Total 4,100,000.00 4,100,000.00

7. Other non-current assets

Rent Deposit 575,920.00 575,920.00

Telephone Deposit 53,000.00 53,000.00

Electricity Deposit 103,502.00 103,502.00

PF Deposit 103,031.00 103,031.00

Total 835,453.00 835,453.00

8 Cash and cash equivalents

Cash in Hand 97,206.00 405,273.00

Balance with Banks 17,290.71 488,470.36

Total 114,496.71 893,743.36

9 Short-term loans and advances

Advances recoverable in cash or kind or for

value to be received

Income Tax deducted at source 65,844.00 18,079.00

Advances to Directors 1,260,280.00 ----

Loans and Advances-Considered Good unsecured 9,692,229.00 21,366,541.00

Loans and Advances-Considered Doubtful 14,588,541.00 9,348,622.61

Other Loans and Advances 500,000.00 500,000.00

Total 26,106,894.00 31,233,242.61

Notes on Accounts

AS AT 31.03.2011AS AT 31.03.2012PARTICULARS

Amount in Rupees

18

DOLPHIN MEDICAL SERVICES LIMITED 20th Annual ReportAmount in Rupees

Particulars

1 0 Revenue from Operations

Medical Division:

Diagnostics & Other Allied Services 37,418,709.00 40,146,501.00

Biotech & Herbal Services 83,750.00 281,060.00

Software Division:

Software Operations 117,500.00 221,000.00

Total 37,619,959.00 40,648,561.00

1 1 Cost of Materials Consumed

Opening Stock 340,570.00 351,740.00

Purchases 8,692,733.00 7,934,313.00

Closing Stock 464,010.00 340,570.00

Cost of Materials Consumed 8,569,293.00 7,945,483.00

1 2 Employee Benefit Expense

Salaries 2,365,354.00 2,433,873.00

Provident Fund to Staff 80,578.00 79,216.00

Staff Welfare Expenses 156,170.00 124,193.00

Incentives to Staff 587,400.00 499,750.00

Directors Remuneration 1,275,000.00 4,020,000.00

Total 4,464,502.00 7,157,032.00

1 3 Financial Costs

Interest on Canara Bank Term Loan 11,393,621.00 6,304,808.00

Interest on Vehicle Loans 411,302.30 345,223.03

Total 11,804,923.30 6,650,031.03

1 4 Other Expenses

Consultancy Charges 1,192,761.00 974,027.00

Laboratory Maintenance 432,640.00 402,115.00

Repairs & Maintenance 3,081,956.00 2,386,058.00

Medical Expenses 491,473.00 453,447.00

Rent 737,088.00 737,088.00

Misc. Aminities 304,750.00 262,900.00

Printing & Stationery 434,621.00 378,725.00

Postage & Telegrams 329,460.00 314,648.00

Conveyance 167,520.00 140,031.00

Travelling Exps. 2,564,480.71 1,956,322.00

Hospital Maintenance 592,614.00 478,933.00

Vehicle Maintenance 396,774.00 339,260.00

Books & Subscriptions 182,716.75 150,381.00

Advertisement 101,202.00 91,109.00

Rates, Taxes & Fees 76,757.46 12,597.00

Interest on Income Tax 24,009.78 23,292.00

Bank Charges 41,698.25 38,381.20

Computers Maintenance 440,690.03 359,296.05

Software Development 134,700.00 185,400.00

Share Transfer Expenses 42,792.00 42,894.00

Listing Fees 111,200.00 99,554.00

Generators Maintenance 359,467.00 236,741.00

Marketing Expenses 1,224,449.00 1,178,288.00

Telephone Charges 347,962.00 279,684.00

Electricity Charges 437,187.00 503,912.00

Loss on Fixed Assets 5,360,113.00 —-

Insurance 80,634.00 144,457.00

Bad Debts 64,091.61 —-

Educational Updates 452,710.00 443,125.00

Seminars 604,621.00 526,252.00

Audit Fees 20,000.00 20,000.00

Total 20,833,138.59 13,158,917.25

Notes on Accounts

AS AT 31.03.2011AS AT 31.03.2012

DOLPHIN MEDICAL SERVICES LIMITED 20th Annual Report 4

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35

AUDITORS’ REPORT

To

The Members of M/s. Dolphin Medical Services Ltd.

1. We have audited the attached Balance Sheet of M/s. Dolphin Medical Services Limited, asat 31st March, 2012, the Profit and Loss Account and also the Cash Flow Statement for theyear ended on that date annexed thereto. These financial statements are the responsibilityof the com-pany’s management. Our responsibility is to express an opinion on thesefinancial statements 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 assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the companies(Auditor’s Report) Order (Amendment) 2004, issued by the Central Government of India interms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in theAnnexure 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:

a) We have obtained all the information and explanations, which to the best of our knowledgeand belief were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the companyso far as appears from our examination of those books;.

c) The Balance Sheet and Profit & Loss account dealt with by this report are in agreement withthe books of account.

d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this reportcomply with the accounting standards referred in sub-section (3C) of section 211 of theCompanies Act, 1956;

e) On the basis of written representation received from the directors, as on 31st March, 2012,and taken on record by the Board of Directors, we report that none of the directors isdisqualified as on 31st March, 2012, from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given tous, the said accounts give the information required by the Companies Act, 1956, in themanner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March,2012;

ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

for PINNAMANENI & Co.,

Chartered Accountants,

Place :Hyderabad

Date :15.08.2012 Sd/-

P.V.V.SATYANARAYANA

Partner


20


21

ANNEXURE TO THE REPORT OF THE AUDITORS

Referred to in Paragraph 1 of our report of even date.

1.1 The Company has maintained proper records showing full particulars including quantitativedetails and situation of fixed assets.

1.2 The fixed assets have been physically verified by the management during the period and noserious discrepancies have been noticed on such verification.

1.3 The Company not disposed substantial part of the fixed assets during the period and hence donot affect going concern status of the company.

2.1 The stock of inventory have been physically verified during the year by the management. Inour opinion, the frequency of verification is reasonable.

2.2 In our opinion, the procedures of physical verification of inventory followed by the managementare reasonable and adequate considering the size of the Company and the nature of its business.

2.3 No material discrepancies have been noticed on physical verification of stocks as compared tobook records in so far as appears from our examination of the books.

03. According to the information and the explanations given to us, the Company has not grantedany loans secured or unsecured to companies, firms or other parties to be listed in the Registerto be maintained under section 301 of the Companies Act, 1956. Accordingly the provisions ofclauses 4(iii)(b), 4(iii)(c) & 4(iii)(d) order are not applicable.

04. In our opinion and according to the information and explanations given to us, there are adequateinternal control system commensurate with the size of the Company and the nature of itsbusiness, for the purchase of inventory and fixed assets and for the sale of goods and services.During the course of our audit, we have not observed any continuing failure to correct majorweaknesses in internal controls system.

05. According to the information and explanations given to us, we are of the opinion that thecompany has not purchased any goods, materials and had not sold goods, materials andservices in pursuance of contracts or arrangements to be entered in the register to be maintainedU/S 301 of the Companies Act, 1956. Accordingly clause 4(v)(b) is not applicable.

06. In our opinion and according to the information and explanations given to us and as shown bythe books of accounts, the Company has not accepted deposits within the meaning Section58A, 58AA or any other relevant provisions of the Companies Act, 1956. Hence compliance ofprovisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956does not arise.

07. In our opinion that the Company has an Internal Audit system commensurate with its size andnature of its Business.

08. We have been informed by the Company that the Central Government had not prescribed anycost records U/s. 209(1)(d) of the Companies Act, 1956 and hence the Company did notmaintain any cost records.

9.1 According to the books and records examined by us and the information and explanationsgiven to us, the company is regular in depositing with appropriate authorities the undisputedstatutory dues payable in respect of Income-tax, Wealth-tax, Sales-tax, Service-tax, customsduty and excise duty which have remained outstanding as at 31st March, 2012 for a periodexceeding six months from the date they became payable.

9.2 According to the books and records examined by us and the information and explanationsgiven to us, there were no disputed amounts which are not deposited payable in respect ofIncome-tax, Wealth-tax, Sales-tax, Services-tax, customs duty and excise duty which haveremained outstanding as at 31st March, 2012 for a period exceeding six months from the datethey became payable.


22

10. The Company has accumulated losses at the end of the financial year. Further the Companyhas not incurred any cash losses during the financial year and in the immediately precedingfinancial year.

11. In our opinion and according to the information and explana-tions furnished to us by theCompany, there were no defaults in repayment of its dues to financial institution during theyear. The Company has not issued any debentures.

12. According to the books and accounts examined by us and the information and explanationsgiven to us, the Company has not granted any loans and advances against security by waypledge of shares, debentures and other securities.

13. The company is not a chit fund, nidhi, mutual benefit fund or a society. Accordingly, theprovisions of clause 4(xiii) of the Order is not applicable.

14. According to the information and explanations given to us, the company is not dealing ortrading in shares, securities, debentures and other investments. Accordingly, the provisions ofclause 4(xiv) of the Order, is not applicable.

15. According to the information and explanations given to us, the company has not given anyguarantee for loans taken by others from bank or financial institutions.

16. According to the books and records examined by us, and information and expiations given tous, the company has defaulted the repayment of the term loan of Rs.665.45 lakhs availed fromCanara Bank, Industrial Finance Branch, Hyderabad. The said bank has recalled the entiredebt vide its notice No.CR 97/573/2011/IFBHYD dated 30th November 2011 and therefore thetotal debt of Rs.7,64,57,273/- outstanding in the books of account is overdue.

17. According to the information and explanations given to us, and books and records examined byus, no funds raised on short-term basis have been utilised for long-term investment.

18. According to the information and explanations given to us, and books and records examined byus, the company has not made any preferential allotment of shares to parties and companiescovered in the register maintained under Section 301 of the Act during the year.

19. According to the information and explanations given to us, the company has not issued debenturesduring the period under audit. Accordingly, the provisions of clause 4(xix) of the Order, is notapplicable.

20. The company has not issued any money by public issues during the year.

21 During the course of our examination of the accounts of the Company in accordance withgenerally accepted auditing practices, we have not come across any instances of fraud on orby the Company, nor we have been informed by the management, of any such instance beingthe noticed or reported during the year.

for PINNAMANENI & Co.,Chartered Accountants,

Place :HyderabadDate :15.08.2012 Sd/-

P.V.V.SATYANARAYANAPartner


23

BALANCE SHEET AS ON 31.03.2012



reporting period

PARTICULARS

As per our report of even datefor DOLPHIN MEDICAL SERVICES LIMITED for PINNAMANENI & CO.,Sd/- CHARTERED ACOUNTANTSDr. G. V. MOHAN PRASAD Sd/-Managing Director P.V.V.SATYANARAYANASd/- PartnerDr. M. LAKSHMI SUDHADirector


Note No

I. EQUITY AND LIABILITIES

(1) Shareholder’s Funds

(a) Share Capital 1 150,999,520.00 150,999,520.00

(b) Reserves and Surplus 2 11,209,325.50 26,110,637.39

(2) Non-Current Liabilities

(a) Long-term borrowings

Term Loan from Canara Bank 76,457,273.00 68,939,018.00

(b) Deferred tax liabilities (Net) 3 6,245,383.00 5,817,739.00

(3) Current Liabilities

(a) Short-term borrowings

Vehicle Loans from HDFC Bank Ltd. 468,202.85 919,132.72

(b) Trade payables 113,459.05 252,280.05

(c) Other current liabilities 929,505.66 2,045,422.76

Total 246,422,669.06 255,083,749.92

II. ASSETS

(1) Non-current assets

(a) Fixed assets

(i) Tangible assets 4 113,987,869.35 125,807,532.35

(ii) Intangible assets 5 37,848,367.00 29,754,165.00

(iii) Capital work-in-progress 33,476,627.00 32,817,207.00

(b) Non-current investments 6 5,225,000.00 5,025,000.00

(c) Long term loans and advances 28,195,000.00 28,195,000.00

(d) Other non-current assets 7 835,453.00 835,453.00

(2) Current assets

(a) Inventories 464,010.00 340,570.00

(b) Trade receivables ___ 90,192.00

(c) Cash and cash equivalents 8 73,448.71 775,387.96

(d) Short-term loans and advances 9 26,106,894.00 31,233,242.61

(e) Other current assets 210,000.00 210,000.00

Total 246,422,669.06 255,083,749.92

Significant Accounting Policies

Notes on Accounts 1to14

Amount in Rupees


PARTICULARS

As per our report of even datefor DOLPHIN MEDICAL SERVICES LIMITED for PINNAMANENI & CO.,Sd/- CHARTERED ACOUNTANTSDr. G. V. MOHAN PRASAD Sd/-Managing Director P.V.V.SATYANARAYANASd/- PartnerDr. M. LAKSHMI SUDHADirector


Profit and Loss statement for the year ended 31st March, 2012

I. Revenue from operations 1 0 37,619,959.00 40,648,561.00

II. Other Income 37,780.00 1,445,188.00

III. Total Revenue (I +II) 37,657,739.00 42,093,749.00

IV. Expenses:

Cost of materials consumed 1 1 8,569,293.00 7,945,483.00

Employee benefit expense 1 2 4,464,502.00 7,157,032.00

Financial costs 1 3 11,804,923.30 6,650,031.03

Depreciation and amortization expense 4 6,459,550.00 5,936,110.03

Other expenses 1 4 20,833,138.59 13,158,917.25

Total Expenses 52,131,406.89 40,847,573.31

V. Profit before exceptional and

extraordinary items and tax (III - IV) -14,473,667.89 1,246,175.69

VI. Profit before tax -14,473,667.89 1,246,175.69

VII. Tax expense:

Income Tax ___ 235,359.00

Deferred tax 427,644.00 996,338.00

VIII. Profit(Loss) for the period

from continuing operations (V -VII) -14,901,311.89 14,478.69

IX. Profit/(Loss) for the period -14,901,311.89 14,478.69

X. Earning per equity share:

(1) Basic -0.99 0.00

(2) Diluted -0.99 0.00


Figures as at theend of currentreporting period

Note No

Amount in Rupees

24

CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31.03.2012

Particulars Amount (Rs.)

CASH FLOW FROM OPERATING ACTIVITIESNet Profit/(Loss) after tax (14,901,311.89)

Adjustment For

Depreciation 6,459,550.00

Proposed Dividend —

Profit/Loss on Fixed Assets 5,360,113.00

Interest & Finance Charges 11,804,923.30

Prel. Exp.W/o —

Operating Profit/(Loss) before working capital charges 8,723,274.41

Adjustment For

Increase/ Decrease in inventory (123,440.00)

Increase/ Decrease in Loans & Advances 5,126,348.61

Increase/ Decrease in Deposits —

Increase/ Decrease in Other Current Assets —

Incraese/ Decrease in Trade payables (138,821.00)

Incraese/ Decrease in Trade Receivables 90,192.00

Increase/ Decrease in Current Liabilities (1,115,917.10)

Provision for Deferred tax 427,644.00

Cash generated from operations (A) 12,989,280.92

CASH FLOW FROM INVESTING ACTIVITIES

Increase/Decrease in Capital Work in Progress (659,420.00)

Sale of Fixed Assets —

Purchase of Investment (200,000.00)

Sale of Investment —

Interest received —

Dividend received —

Finance Charges paid (4,286,668.30)

Net cash flow from investing activities (B) (5,146,088.30)

CASH FLOW FROM FINANCIAL ACTIVITIES

Proceeds from Convertible Share Warrants —

Proceeds from Borrowings —

Payment of Borrowings (450,929.87)

Dividend paid —

Increase/Decrease in Intangible Assets (8,094,202.00)

Net cash used in Financing Activities (C) (8,545,131.87)

Net Increase /(Decrease) incash and cash equivalents (A+B+C) (701,939.25)

Cash and Cash equvalents as at previous year 775,387.96

Cash and Cash equvalents as at current year 73,448.71


25

for DOLPHIN MEDICAL SERVICES LIMITED for PINNAMANENI & CO.,Sd/- CHARTERED ACOUNTANTSDr. G. V. MOHAN PRASAD Sd/-Managing Director P.V.V.SATYANARAYANASd/- PartnerDr. M. LAKSHMI SUDHADirector



26

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ANNEXED TO AND FORMING PART OFACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2012I. SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Preparation of financial statementsThe financial statements have been prepared under historical cost convention and in conformitywith the generally accepted accounting principles, applicable provisions of the Companies Act,1956 and as per the Accounting Standards issued by the Institute of Chartered Accountants ofIndia.

b. Income and ExpenditureAll items and expenditure shown in the statement having material bearing on the accounts areaccounted on accrual basis.

c. Fixed AssetsFixed Assets are stated at cost of acquisition. Cost of acquisition is inclusive of freight, duties,levies, preparatory works, erection, installation and all incidentals attributable to bringing theasset to its working condition.

d. Capital Work in ProgressThe assets under installation or under construction and related advances as at the BalanceSheet date are shown as Capital Work in Progress.

e . DepreciationDepreciation is computed on Straight Line method basis in accordance with the provision ofSchedule XIV of the Companies Act, 1956.

f. InvestmentsInvestments are stated at cost of acquisition and the same are considered as long terminvestments.

g. Deferred Income TaxThe Company has accounted for Deferred Tax in accordance with the Accounting Standard-22“Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India.Deferred tax is accounted for by computing the tax effect of timing differences, which ariseduring the year and reverse in subsequent periods.The deferred Tax Liability for the current year amounting to Rs.4.27 Lakhs is shown in the Profitand Loss account under provision for Deferred tax. As at the year end, deferred Tax liabilityaggregates to Rs.62.45 Lakhs.

h. Employee BenefitsProvident fund: The Company makes contribution to Provident Fund administered by the CentralGovernment under the Provident Fund Act, 1952.

i. Contingent LiabilitiesContingent Liabilities are generally not provided for in the accounts and are shown separatelyif any in the notes on accounts.

II. NOTES ON ACCOUNTSNotes to the accounts forming part of Balance Sheet as on 31st March 2012 and Profit and Lossaccount for the year ended on that date.1. The company is a holding company with investments in subsidiary companies.2. All the fixed assets are located in India and are as detailed in notes.3. Remuneration to Auditors. Audit Fees: Rs.20,000/-4. The stocks are valued at cost or market value whichever is less.5. Contingent liabilities not provided for.6. Figures have been re-grouped wherever necessary.7. Confirmation of balances are not obtained for sundry creditors and advances made.

for PINNAMANENI & CO., for DOLPHIN MEDICAL SERVICES LIMITED CHARTERED ACOUNTANTS Sd/- Sd/- Dr. G. V. MOHAN PRASAD P.V.V.SATYANARAYANA Managing Director Partner

Sd/-Dr. M. LAKSHMI SUDHADirector



27

Notes on Accounts

AS AT 31.03.2011AS AT 31.03.2012PARTICULARS

1 Share Capital

a Authorised


b ISSUED CAPITAL1,62,75,300 Equity Shares of Rs.10/- each 162,753,000.00 162,753,000.00

c SUBSCRIBED & PAID UP CAPITAL1,50,99,952 Equity Shares of Rs.10/- each 150,999,520.00 150,999,520.00

2 Reserves and Surplusa Capital Reserve 3,225,000.00 3,225,000.00b Share Premium 23,689,704.00 23,689,704.00c Profit & Loss Account Profit/Loss(-)

Opening Balance -804,066.61 -818,545.30Add: Proft/Loss (-) during the year -14,901,311.89 14,478.69

-15,705,378.50 -804,066.61Total 11,209,325.50 26,110,637.39

3 Deferred tax liabilities (Net)Opening Balance 5,817,739.00 4,821,401.00Add: Current year (Asset)/Liability 427,644.00 996,338.00Total 6,245,383.00 5,817,739.00

5 Intangible AssetsResearch & Development Expenditure 16,300,662.00 8,206,460.00Miscellaneous Expenditure 21,547,705.00 21,547,705.00 (to the extent not written off or adjusted)Total 37,848,367.00 29,754,165.00

6 Non-current investmentsMeridian Projects Limited 3,200,000.00 3,200,000.00Cosmic Fortunes India Ltd. 900,000.00 900,000.00Bridge Corporate Services Pvt. Ltd. 575,000.00 475,000.00Evum Life Sciences Pvt. Ltd. 550,000.00 450,000.00Total 5,225,000.00 5,025,000.00

7 Other non-current assetsRent Deposit 575,920.00 575,920.00Telephone Deposit 53,000.00 53,000.00Electricity Deposit 103,502.00 103,502.00PF Deposit 103,031.00 103,031.00Total 835,453.00 835,453.00

8 Cash and cash equivalentsCash in Hand 56,158.00 312,997.00Balance with Banks 17,290.71 462,390.96Total 73,448.71 775,387.96

9 Short-term loans and advancesAdvances recoverable in cash or kind or forvalue to be receivedIncome Tax deducted at source 65,844.00 18,079.00

Advances to Directors 1,260,280 ---

Loans and Advances-Considered Good unsecured 9,692,229.00 21,366,541.00Loans and Advances-Considered Doubtful 14,588,541.00 9,348,622.61

Other Loans and Advances 500,000.00 500,000.00

Total 26,106,894.00 31,233,242.61

Amount in Rupees

28

DOLPHIN MEDICAL SERVICES LIMITED 20th Annual ReportAmount in Rupees

Particulars

1 0 Revenue from Operations

Medical Division:

Diagnostics & Other Allied Services 37,418,709.00 40,146,501.00

Biotech & Herbal Services 83,750.00 281,060.00

Software Division:

Software Operations 117,500.00 221,000.00

Total 37,619,959.00 40,648,561.00

1 1 Cost of Materials Consumed

Opening Stock 340,570.00 351,740.00

Purchases 8,692,733.00 7,934,313.00

Closing Stock 464,010.00 340,570.00

Cost of Materials Consumed 8,569,293.00 7,945,483.00

1 2 Employee Benefit Expense

Salaries 2,365,354.00 2,433,873.00

Provident Fund to Staff 80,578.00 79,216.00

Staff Welfare Expenses 156,170.00 124,193.00

Incentives to Staff 587,400.00 499,750.00

Directors Remuneration 1,275,000.00 4,020,000.00

Total 4,464,502.00 7,157,032.00

1 3 Financial Costs

Interest on Canara Bank Term Loan 11,393,621.00 6,304,808.00

Interest on Vehicle Loans 411,302.30 345,223.03

Total 11,804,923.30 6,650,031.03

1 4 Other Expenses

Consultancy Charges 1,192,761.00 974,027.00

Laboratory Maintenance 432,640.00 402,115.00

Repairs & Maintenance 3,081,956.00 2,386,058.00

Medical Expenses 491,473.00 453,447.00

Rent 737,088.00 737,088.00

Misc. Aminities 304,750.00 262,900.00

Printing & Stationery 434,621.00 378,725.00

Postage & Telegrams 329,460.00 314,648.00

Conveyance 167,520.00 140,031.00

Travelling Exps. 2,564,480.71 1,956,322.00

Hospital Maintenance 592,614.00 478,933.00

Vehicle Maintenance 396,774.00 339,260.00

Books & Subscriptions 182,716.75 150,381.00

Advertisement 101,202.00 91,109.00

Rates, Taxes & Fees 76,757.46 12,597.00

Interest on Income Tax 24,009.78 23,292.00

Bank Charges 41,698.25 38,381.20

Computers Maintenance 440,690.03 359,296.05

Software Development 134,700.00 185,400.00

Share Transfer Expenses 42,792.00 42,894.00

Listing Fees 111,200.00 99,554.00

Generators Maintenance 359,467.00 236,741.00

Marketing Expenses 1,224,449.00 1,178,288.00

Telephone Charges 347,962.00 279,684.00

Electricity Charges 437,187.00 503,912.00

Loss on Fixed Assets 5,360,113.00 —-

Insurance 80,634.00 144,457.00

Bad Debts 64,091.61 —-

Educational Updates 452,710.00 443,125.00

Seminars 604,621.00 526,252.00

Audit Fees 20,000.00 20,000.00

Total 20,833,138.59 13,158,917.25

Notes on Accounts

AS AT 31.03.2011AS AT 31.03.2012

DOLPHIN MEDICAL SERVICES LIMITED 20th Annual Report 4

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36,

459,

550.

0017

,208

,304

.32

29,1

78,2

43.2

111

3,98

7,86

9.35

125,

807,

532.

35

ATTENDANCE SLIP

DOLPHIN MEDICAL SERVICES LIMITEDRegd. Office: # 417, Sanali Heavens, Ameerpet, HYDERABAD - 500 073, A.P. India

Please complete this attendance slip and hand it over at the entrance of the hall.* Only members or their proxies are entitled to be present at the meeting.* Please note that children will not be allowed inside the meeting hall.

FOLIO NO. NO.OF SHARES:

NAME & ADDRESS

I hereby record my presence at the TWENTIETH ANNUAL GENERAL MEETING of the Company at Neni Hi-techClub, 169, Lal Bungalow, Old Airport Road, New Bowenpally, Secunderabad - 500 011, A.P. India on Saturday, the 29th

September, 2012 at 10.35 A.M

SIGNATURE OF THE * SHAREHOLDER / PROXY

* Strike whichever is not applicable

Note : If you are attending the meeting in person or by proxy, the Balance Sheet of your Company may please bebrought with you for your reference at this meeting.

========================================= CUT HERE ===========================================ATTENDANCE SLIP

DOLPHIN MEDICAL SERVICES LIMITEDRegd. Office: # 417, Sanali Heavens, Ameerpet, HYDERABAD - 500 073, A.P. India

I/We ____________________________________________________________________________________________ being a

Member / Members of DOLPHIN MEDICAL SERVICES LIMITED hereby appoint _________________________________

__________________________________________ son of _____________________________________________ or failing him

______________________________________ son of _____________________________________________ or failing him

________________________________________ son of ______________________________________________ as my / our

proxy to attend and vote for me / us and on my / our behalf at the TWENTIETH ANNUAL GENERAL MEETING of the

Company to be held on Saturday, the 29th September, 2012 and any adjournment thereof.

Dated this __________ day of _______________________ 2012.

Signed by the said ______________________________________________________________________________________

NOTE The proxy form duly signed by the member(s) across Re.1/- revenue stamp should reach the Company’s Share Department at the RegisteredOffice of the Company atleast 48 hours before the time fixed for the meeting.

Re1/-RevenueStamp tobe affixed


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20th agm 27.09.2012 final...hyderabad - 500 034. icici bank ltd. 20th annual general meeting...

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