The Directors have pleasure in presenting their 25th Annual Report andAudited Statement of Accounts of the Company for the year ended 31st March2015.
PERFORMANCE AT A GLANCE:
(Rs. in Lakhs)
|Particulars ||Year ended 31.03.2015 ||Year ended 31.03.2014 |
|Gross Income ||1898.88 ||1800.20 |
|Profit / (Loss) Before Depreciation Tax & Financial Expenses ||225.77 ||268.47 |
|Financial Expenses ||138.38 ||139.35 |
|Depreciation ||118.71 ||80.95 |
|Profit / (Loss) Before Tax ||(31.32) ||48.18 |
|Less: Exceptional Items ||65.89 || |
|Tax Expenses: || || |
|a. Current Tax ||- ||- |
|b. Fringe Benefit Tax ||- ||- |
|c. Deferred Tax Liability ||- ||- |
|d. Income Tax for earlier year ||- ||3.54 |
|Profit / (Loss) for the year carried to Balance Sheet ||(97.21) ||44.64 |
No Dividend has been recommended by the Board in view of losses suffered by the Companyin FY 2014-15.
TRANSFER TO RESERVES:
As the company has suffered loss there are no transfers made to Reserves 6t Surplusduring the year under review.
The Company has made a gross income of Rs. 1898.88 Lakhs during the year under review(previous year-Rs. 1800.20 Lakhs). The depreciation for the year under review amounted toRs.118.71 Lakhs as against Rs. 80.95 Lakhs in the corresponding period of the previousyear. The Company has registered a Loss of Rs (97.20) Lakhs during the year under reviewas against the profit after tax of Rs.44.64 Lakhs of the previous year. Increase inemployee cost administrative expenses repairs & maintenance and depreciation are themain reasons for the decrease in Net Profit. Due to competition by various hospitalslocated near our hospital the company was compelled to maintain competitive rates for thepatients. The Patient Care services underwent improvements which resulted in improvedservice levels which in turn contributed to the revenue growth.
Your management believes that the strengthening of existing facilities and addition ofnew facilities and services with restructuring of tariff keeping always the affordabilityfactor in mind will improve the performance to further heights.
During the year under review the number of inpatients was 4041 as against 4398 in theprevious year. The number of outpatients was 29237 during the year under review as against29918 in the previous year. The average occupancy was 80.
MANAGEMENTDISCUSSION AND ANALYSIS
Adetailed review of operations performance and future outlook of the Company iscontained in the "MANAGEMENT DISCUSSION AND ANALYSIS REPORT" that forms anintegral part of this report. (Annexure - I)
MATERIAL CHANGES & COMMITMENTS:
There is no change in the nature of business of the company during the year. There areno material changes and commitments in the business operations of the company since theclose of the financial year on 31 st March 2015 to the date of this report.
EXTRACT OF ANNUAL RETURN:
As required pursuant to Section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 is given in (Annexure-II)
REAPPOINTMENT OF DIRECTOR:
Mr. NAVIN RAAKESH Director is retiring by rotation at this Annual General Meeting andbeing eligible offer himself for re-appointment.
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:
The Company has received necessary declaration from each Independent Director of theCompany under Section 149 (7) of Companies Act 2013 that the Independent Directors of thecompany meet with the criteria of their Independence laid down in Section 149 (6).
COMPOSITION OF COMMITTEES OF BOARD:
Currently the board has three committees: Audit Committee Nomination &Remuneration Committee and Stakeholders Relationship Committee.
The Composition & Activities are as follows:
The Composition & Activities are as follows:
|Name of the Committee ||Composition of the Committee/ No of times the committee met ||High lights of duties responsibilities & Activities |
|Audit Committee ||Dr. R. Venkataswamf || |
| ||Chairperson of the Committee (Independent Director) || The Audit Committee was mandated with the same Terms of Reference specified in Clause 49 of the Listing Agreements with Stock Exchanges. O The current Terms of Reference fully conform to the requirements of the Companies Act |
| ||Mr.T Jeyapragasam Secretary of the Committee (Company Secretary) || |
| ||Dr. S. Kameswaran (Independent Director) || |
| ||Mr. B. Ramachandran (Independent Director) || |
| ||Mr. A.N. Radhakrishnan (Chairman & Managing Director) || The Audit committee is responsible for overseeing the Company! s financial reporting process reviewing the quarterly/half- yearly/annual financial statements reviewing with the management the financial statements and adequacy of internal audit function recommending the appointment/re-appointment of statutory auditors and fixation of audit fees reviewing the significant internal audit findings/related party transactions .reviewing the Management Discussion and Analysis of financial condition and result of operations and also statutory compliance issues. |
| ||The Committee met 4 times on || |
| || 29-05-2014 || |
| || 14-08-2014 || |
| || 10-11-2014 || |
| || 12-02-2015 || |
| || || The Committee acts as a link between the management external and internal auditors and the Board of Directors of the Company. |
|Nomination & Remuneration Committee ||Dr. S. Kameswaran - Chairperson of the Committee (Independent Director) ||To fix salary allowances and other perks to senior level personnel as and when appointed by the Company. |
| ||Dr. R. Venkataswami (Independent Director) ||REMUNERATION POLICY The Remuneration Policy of the Company for the managerial personnel is based on the performance potential and performance of the individual/personnel. |
| ||Mr. B. Ramachandran (Independent Director) || |
| ||The Committee met on 14-08-2014 ||CEO/CFO CERTIFICATION by Dr. V. Krishnamurthy Chief Executive Officer and Mr. AN. Radhakrishnan Chairman & Managing Director as required under Clause 49 (IX) of the Listing Agreement was placed before the Board at its meeting held on 28.05.2015. |
|Stakeholders Relationship Committee ||Dr. S. Kameswaran Chairperson of the Committee (Independent Director) || The Company has attended to the investors! complaints and redressed them within 15 days from the date of their receipt during the year 2014- 2015. |
| ||Dr. R. Venkataswami (Independent Director) || |
| ||Mr. B. Ramachandran (Independent Director) || |
POLICIES OF THE BOARD:
WHI5TLE BLOWER POLICY:
As per Section 177 (9) of the Act read with relevant Rule 7 of the Companies (Meetingsof Board and its Powers) Rules 2014 and Clause 49 of the Listing Agreement the Companyhas established a vigil mechanism overseen by the Audit Committee. The Policy ensures thatstrict confidentiality is maintained whilst dealing with concerns and also that nodiscrimination will be meted out to any person for a genuinely raised concern. This hasbeen uploaded in the Companys website. No complaint under this facility was receivedin FY 2014-15.
The Remuneration Policy of the Company for the managerial personnel is based on theperformance potential and performance of the individual/personnel.
RISK MANAGEMENT POLICY:
The Company has Business Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Companys competitive advantage.
M/s. Varma and Varma (FRN. 0045325) Chartered Accountants Chennai-600 020 has beenappointed as the auditors of the Company at the 24th Annual General Meeting held on17.09.2014 & their appointment has to be ratified for the current financial year.There are no qualifications in the Independent Auditors report.
Pursuant to Section 204(1) of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. T.Murugan a Practicing Company Secretary (C.P.No.4393) to undertake theSecretarial Audit of the Company for FY2014-15.
The Secretarial Audit Report was placed before the Board on 28th May 2015. There are noqualifications in the Secretarial Audit Report. (Annexure-III)
The Company has not accepted deposits during the year and there are no public depositsfallen due for payment and claimed but not paid as on 31st March 2015. The total amountof deposit outstanding as at 31 st March 2015 was Nil.
SIGNIFICANT & MATERIAL ORDERS:
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and companys operations in future.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board. During theyear such controls were tested and no reportable material weaknesses in the operationswere observed.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company did not give any Loan or Guarantee or provided any security or makeinvestment covered under Section 186 of the Companies Act 2013 during the year.
CORPORATE SOCIAL RESPONSIBILITY;
The requirements of compliance of Corporate Social Responsibility are not applicable toour company
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY:
Particulars of contracts or arrangements with Related Parties referred in Section188(1) of the Companies Act 2013 is furnished in accordance with Rule 8(2) of theCompanies (Accounts) Rules 2014 in FormAOC-2 (Annexure IV).
FORMAL ANNUAL EVALUATION;
The Board has carried out the annual performance evaluation of its own performance andthe Directors individually after taking into consideration inputs received from theDirectors covering various aspects on the Boards functioning such as adequacy ofthe composition of the Board and its Committees performance of specific dutiesobligations and governance.
The Performance evaluation of the Independent Directors was carried out by the entireboard & the Performance evaluation of the Chairman was carried out by the Independentdirectors.
The Directors expressed their satisfaction with the overall evaluation process
RATIO OF REMUNERATION TO EACH DIRECTOR:
Disclosure of Ratio of Remuneration to each Director to the median employeesremuneration
The ratio of the remuneration of each director to the median remuneration of theemployee of the company for the financial year
|Name of Director ||Ratio |
|CHAIRMAN & M D || |
|Mr.A. N. Radhakrishnan ||6.80:1 |
|DIRECTORS || |
|Mr.G. R. Navin Raakesh ||NIL |
|Mrs. Premalatha ||NIL |
|INDEPENDENT DIRECTORS || |
|Dr. S. Kameshwaran ||NIL |
|Dr. R. V enkatas wami ||NIL |
|Mr. B. Ramachandran ||NIL |
|The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year: ||Nil |
|The percentage increase in the median remuneration of employees in the financial year ||There is an average increase of 8% |
|The number of permanent employees on the rolls of company ||248 |
|The explanation on the relationship between average increase in remuneration and company performance ||Inspite of the Loss incurred by the Company the employees on an average received an annual increase of 8% based on their performance and this increase in remuneration is in line with the market trends. |
|Comparison of the remuneration of the key Managerial Personnel against the performance of the Company ||The remuneration fixed in for Key Managerial Personnel is based on the contributions made by them for retaining the sustantiability of the hospital inspite of the competitive market. |
|Variations in the market capitalization of the company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the company as at the close of the current financial year and previous financial year ||Particulars ||31.03.2015 ||31.03.2014 ||change |
| ||Stock Price (in Rs.) ||13.79 ||5.76 ||139.41% |
| ||Market Cap (Rs. In crores) ||10.29 ||4.30 ||139.30% |
| ||EPS ||(1.30) ||0.60 || |
| ||P/E ||10.60 ||9.60 || |
|Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. ||The average annual increase in the salaries of employees other than the managerial personnel across the organization was around 8%. There is no increase in the managerial remuneration for the past five years. |
|Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company ||The remuneration fixed in for Key Managerial Personnel is based on the contributions made by them for retaining the sustantiablity of the hospital inspite of the competitive market. |
|The key parameters for any variable component of remuneration availed by the directors ||There is no variable component in the remuneration paid to the directors |
|The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year ||0.083:1 Directors Highest Salary - Rs.900000/- p.a. Employees Highest Salary - CEO - Rs. 10890000/-p.a. |
|Affirmation that the remuneration is as per the remuneration policy of the company ||Yes |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars required to be disclosed under the Companies (Disclosures of Particulars inthe Report of the Board of Directors) Rules 1988 are annexed hereto and the same formspart of this Report. (Annexure V)
REPORT ON CORPORATE GOVERNANCE
Your Company continues to strive towards highest standards of Corporate Governance. Thereport of Board of Directors on Corporate Governance is given in separate section titled"Report on Corporate Governance" which forms part of this Annual Report. Thecompany has established Whistle Blower Mechanism. (Annexure VI)
DIRECTORS RESPONSIBILITY STATEMENT:
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed and that there is no material deviation there from:
(b) Reasonable and prudent accounting policies have been applied in the preparation ofthe financial statements that they have been consistently applied and that reasonableprudent judgment and estimates have been made in respect of items not concluded by theyear end so as to give a true and fair view of the state of affairs of the Company as at31 st March 2015 and of the Loss for the year ended on that date.
(c) Proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detectingfraud and otherirregutarities.
(d) The financial statements have been prepared on a going concern basis.
(e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingefficiently.
(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating efficiently.
DUES TO SSI
During the year under review the following dues were outstanding more than Rs.100000/- to Small
Scale Industrial Units:
|1. M/S. Shree Health Care India ||-Rs. 137644/- |
|2. M/S. Medicine Zone ||-Rs.334581/- |
|3. M/S. Sri Vari Paadham Products ||- Rs.307551/- |
The Company confirms that it has paid the annual listing fees for the year 2015-16 toBSE where shares of the company are listed.
Your Company is grateful for the co-operation and assistance extended by variousDepartments of Government of Tamitnadu and Government of India. The Board also wishes toplace on record its appreciation of the dedicated services of our Consultants employeesand other members of the hospital. The Board also places on record its sincereappreciation to the Shareholders for reposing faith in the management of the Company.
| ||ON BEHALF OF THE BOARD |
|Place: Chennai ||A.N. RADHAKRISHNAN |
|Date: 28.05.2015 ||CHAIRMAN & MANAGING DIRECTOR |