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Chennai Meenakshi Multispeciality Hospital Ltd.

BSE: 523489 Sector: Health care
NSE: N.A. ISIN Code: INE889F01017
BSE LIVE 15:07 | 15 Sep 12.10 -0.60
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OPEN 12.10
PREVIOUS CLOSE 12.70
VOLUME 11
52-Week high 17.41
52-Week low 10.60
P/E
Mkt Cap.(Rs cr) 9
Buy Price 12.10
Buy Qty 489.00
Sell Price 13.30
Sell Qty 500.00
OPEN 12.10
CLOSE 12.70
VOLUME 11
52-Week high 17.41
52-Week low 10.60
P/E
Mkt Cap.(Rs cr) 9
Buy Price 12.10
Buy Qty 489.00
Sell Price 13.30
Sell Qty 500.00

Chennai Meenakshi Multispeciality Hospital Ltd. (CHENNAIMEENA) - Director Report

Company director report

The Directors have pleasure in presenting their 26th Annual Report andAudited Statement of Accounts of the Company for the year ended 31st March2016.

PERFORMANCE AT A GLANCE:

(Rs. in Lakhs)

Particulars Yearended 31.03.2016 Year ended 31.03.2015
Gross Income 2053.96 1898.88
Profit / (Loss) Before Depreciation Tax fit Financial Expenses 315.32 225.77
Financial Expenses 133.70 138.38
Depreciation 116.21 118.71
Profit / (Loss) Before Tax 65.41 (31.32)
Less: Exceptional Items - 65.89
Tax Expenses:
a. CurrentTax - -
b. Fringe Benefit Tax - -
c. Deferred Tax Liability - -
d. Income Tax for earlieryear - -
Profit / (Loss) for the year carried to Balance Sheet 65.41 (97.21)

DIVIDEND

No Dividend has been recommended by the Board for the year 2015-16 in view ofinsufficient profit in the Financial Year 2015-16.

TRANSFER TO RESERVES:

There are no transfers made to Reserves fit Surplus during the year under review.

BUSINESS OPERATIONS:

The Company has made a gross income of Rs. 2053.96 Lakhs during the year under review(previous year Rs. 1898.88 Lakhs). The depreciation for the year under review amounted toRs. 116.21 Lakhs as against Rs. 118.71 Lakhs in the corresponding period of the previousyear. The Company has registered a Profit of Rs. 65.41 Lakhs during the year under reviewas against the Loss after tax of Rs. (97.21) Lakhs of the previous year. Increase inemployee cost administrative expenses repairs fit 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.

OPERATIONAL HIGHLIGHTS

During the year under review the number of inpatients was 4050 as against 4041 in theprevious year. The number of outpatients was 26900 during the year under review as against29237 in the previous year. The average occupancy was 70%.

AAANAGEMENT DISCUSSION AND ANALYSIS

Adetailed review of operations performance and future outlook of the Company iscontained in the “AAANAGEMENT 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 2016 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-ll)

REAPPOINTMENT OF DIRECTOR:

Mrs. Premalatha Kanikannan (DIN: 01710387) Director is retiring by rotation at thisAnnual General Meeting and being eligible offer herself 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).

PARTICULARS OF EMPLOYEES:

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided elsewhere in the annualreport.

NUMBER OF MEETINGS OF BOARD:

The details of number of meetings of Board of Directors is included as a part ofCorporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.

COMPOSITION OF COMMITTEES OF BOARD:

Currently the board has the following committees: Audit Committee Nomination &Remuneration Committee Stake holders Relationship Committee Internal ComplaintsCommittee and Whistle Blower Committee.

The Composition & Activities are as follows:

Name of the Committee Composition of the Committee/ No of times the committee met Highlights of duties responsibilities & Activities
Audit Committee Dr. R. Venkataswami (DIN:02622178) Resigned w.e.f 01.01.2016 Chairperson of the Committee (Independent Director) The Audit Committee was mandated with the same Terms of Reference specified in SEBI (LODR) Regulations 2015.
Dr. S. Kameswaran Chairperson DIN: 00255389 w.e.f 01-01-2016 (Independent Director) The current Terms of Reference fully conform to the requirements of the Companies Act.
Mr. B. Ramachandran DIN: 06397113 (Independent Director) Member 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.
Mr. A.N. Radhakrishnan DIN:01508867 (Chairman & Managing Director) Member
Mr. T.Jeyaprakasam Secretary of the Committee (Company Secretary)
The Committee met 4 times on
? 28-05-2015
? 13-08-2015
? 13-11-2015
? 10-02-2016
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) DIN: 00255389 To fix salary allowances and other perks to senior level personnel as and when appointed by the Company.
Dr. R. Venkataswami Resigned w.e.f. 1.1.2016 Member (Independent Director) REMUNERATION POLICY: The Remuneration Policy of the Company for the managerial
Mr. B. Ramachandran DIN: 06397113 (Independent Director) Member personnel is based on the performance potential and performance of the individual/personnel.
Mrs. Premalatha Kanikannan DIN: 01710387 (Director) Member The Committee met on ? 13-11-2015 ? 31-12-2015 CEO/CFO CERTIFICATION by Dr. V. Krishnamurthy Chief Executive Officer and Mrs. Premalatha Kanikannan Chief Financial Officer as required under SEBI (LODR) was placed before the Board at its meeting held on 28.05.2016.
Stakeholders Relationship Committee Dr. S. Kameswaran DIN: 00255389 Member of the Committee (Independent Director) i=!> The Company has attended to the investors’ complaints and redressed them within 15 days from the date of
Dr. R. Venkataswami Resigned w.e.f. 1.1.2016 (Independent Director) their receipt during the year 20152016.
Mr. B. Ramachandran DIN: 06397113 (Independent Director) Chairperson of the Committee
Internal Complaints Committee Mr. B. Ramachandran DIN: 06397113 (Independent Director) Member To consider & redress complaints of sexual harassment.
Dr. S. Kameswaran DIN: 00255389 (Independent Director) - Member
Whistle Blower Committee Mr. B. Ramachandran DIN: 06397113 (Independent Director) Member This provides adequate safeguards against victimisation of Directors / Employees or any other person.
Dr. S. Kameswaran DIN: 00255389 (Independent Director) - Member

POLICIES OF THE BOARD:

WHISTLE 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 SEBI (LODR) 2015 the Company has established avigil mechanism overseen by the Audit Committee. The Policy ensures that strictconfidentiality is maintained whilst dealing with concerns and also that no discriminationwill be meted out to any person for a genuinely raised concern. This has been uploaded inthe Company’s website. No complaint under this facility was received in FY 2015-16.

REMUNERATION POLICY:

The Remuneration Policy of the Company for the managerial personnel is based on theperformance potential and performance of the individual/personnel.

Criteria for payment of Remuneration to Non-Executive Directors (Pursuant to Part-DSchedule II (1) of SEBI (LODR) Regulation 2015.

The Non-Executive Directors will be paid sitting fees for attending the Board andCommittee Meetings as per the stipulations in the Act and the Articles of Association ofthe company and as recommended by the Nomination and Remuneration Committee. Differentscales of sitting fee may be fixed for each category of the directors and type of meeting.However the fees payable to the Independent Directors and Woman Directors shall not belower than the fee payable to other categories of directors.

In addition to this the travel and other expenses incurred for attending the meetingsare to be met by the Company. Subject to the provisions of the Act and the Articles ofAssociation the Company in General Meeting may by special resolution sanction and pay tothe Directors remuneration not exceeding 1 % of the net profits of the Company computed inaccordance with the relevant provisions of the Act. The company shall have no pecuniaryrelationship or transactions with any Non-Executive Directors.

RISK AAANAGEMENT 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 Company’s competitive advantage.

RELATED PARTYTRANSACTION POLICY:

The Policy regulates all transactions between the Company and its related parties.

INSIDERTRADING POLICY:

The Policy provides the framework in dealing with Securities of the Company.

AUDITORS

M/s. Varma and Varma (FRN. 04532S) Chartered Accountants Chennai-600020 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.

SECRETARIAL AUDIT:

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 the FY 2015-16.

The Secretarial Audit Report was placed before the Board on 28th May 2016. There are noqualifications in the Secretarial Audit Report. (Annexure-lll)

PUBLIC DEPOSITS

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 2016. The total amountof deposit outstanding as at 31 st March 2016 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 company’s 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 RESPONSIBILTY:

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 2014in 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 Board’s 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 employees’remuneration

The ratio of the remuneration of each director to the median remuneration of the employee of the company for the financial year Name of Director Ratio
CHAIRMAN & MANAGING DIRECTOR
Mr.A.N.Radhakrishnan 6.30 :1
DIRECTORS
Mr.G.R.Navin Raakesh NIL
Mrs.Premalatha Kanikannan NIL
INDEPENDENT DIRECTORS
Dr.S.Kameswaran NIL
Mr.B.Ramachandran NIL

The percentage increase in remuneration of each Chief Executive Officer - 5.51%director Chief Financial Officer Chief Executive Company Secretary - 25%

Officer Company Secretary or Manager if any in the financial year:

The percentage increase in the median remuneration of employees hi the financial yearThere is an average mcrease of 5.91%

The number of permanent employees on the rolls of 256 company

The explanation on the relationship between average The employees on an averagereceived an annual increase in remuneration and company performance increase of 5.91 %based on their performance and this increase in remuneration is in line with the markettrends.

Comparison of the remuneration of the key The remuneration fixed in for Key ManagerialManagerial Personnel against the performance of the Personnel is based on thecontributions made by Company them for retaining the sustantiability of the hosnitalinsnite of the comnetitive 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 31.03.2016 31.03.2015 change
Stock Price (in Rs. ) 11.25 13.79 -18.42%
Market Cap (Rs. in crores) 8.40 10.29 -18.37%
EPS 0.88 (1.30)
P/E 12.78 Negative EPS
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 5.91%. 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 0.078:1 Directors Highest Salary - Rs. 900000/- p.a. Employees Highest Salary - Chief Executive Officer 11490000/-p.a.
Affirmation that the remuneration is as per the remuneration policv of the company Yes

Transfer to Investor Education and Protection Fund:

There are no amount which remain unpaid/unclaimed for a period of seven years and henceno amount has been transferred to ‘IEPF’.

Particulars of Employees:

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided elsewhere in the AnnualReport.

Directors and Key Managerial Personnel:

The details about the changes in the Directors and Key Managerial Personnel by way ofappointment resignation etc. and disclosure of relationships between directors inter-seunder relevant Regulation(s) of SEBI (LODR) Regulations 2015 is included as part ofCorporate Governance Report.

The Directors who are liable to retire by rotation and also whether they offer forre-appointment is included in the Notice of Annual General Meeting.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required to be given as per Section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 are annexed hereto and the sameforms part of this Report. (AnnexureV)

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. (AnnexureVI)

DIRECTORS’ RESPONSIBILITY STATEMENT:

The Financial Statements are prepared in accordance with the Generally AcceptedAccounting Principles (GAAP) under the historical cost convention on accrual basis exceptfor certain financial instruments which are measured at fair values. GAAP Comprisesmandatory Accounting Standards as prescribed under Section 133 of the Companies Act 2013(“the Act”) read with Rule 7 of the Companies (Accounts) Rules 2014 theprovisions of the Act (to the extent notified) and guidelines issued by the Securities andExchange Board of India (SEBI). There are no material departures from the prescribedAccounting Standards in the adoption of these Standards.

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 hadbeen 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 2016 and of the Profit for the year ended on that date;

(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) The Directors had prepared the financial statements 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 operatingeffectively;

(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

DUES TO SSI

During the year under review the following dues were outstanding more than Rs.100000/- to Small Scale Industrial Units:

S.No. Name of the Sundry Creditors Classified Balance as on 31.03.2016 Remarks
1. M/s. Bagdi Orthocare Small Enterprises Rs. 113677 Pharmacy Purchase
2. M/s. R.K. Pharma Distributors Small Enterprises Rs. 267044 Pharmacy Purchase

LISTING FEES:

The Company confirms that it has paid the annual listing fees for the year 2015-16 toBSE where shares of the company are listed.

ACKNOWLEDGEMENTS:

Your Company is grateful for the co-operation and assistance extended by variousDepartments of Government of Tamilnadu 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 : 28.05.2016 CHAIRMAN & MANAGING DIRECTOR