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Dolphin Medical Services Ltd.

BSE: 526504 Sector: Health care
NSE: N.A. ISIN Code: INE796B01013
BSE LIVE 11:16 | 22 Sep 1.25 0.02
(1.63%)
OPEN

1.29

HIGH

1.29

LOW

1.25

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 1.29
PREVIOUS CLOSE 1.23
VOLUME 221
52-Week high 2.22
52-Week low 0.84
P/E
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 1.25
Sell Qty 128.00
OPEN 1.29
CLOSE 1.23
VOLUME 221
52-Week high 2.22
52-Week low 0.84
P/E
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 1.25
Sell Qty 128.00

Dolphin Medical Services Ltd. (DOLPHINMEDICAL) - Director Report

Company director report

DOLPHIN MEDICAL SERVICES LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S REPORT TO THE SHARE HOLDERS Your Directors have great pleasure in presenting to you '20th Annual Report' of your Company along 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 of comprehensiveness of services i.e., the need to add fulfledged laboratory services and other advanced modalities, and also heavy marketing expenditure incurred disproportionate to the input the reason of which is the heavy competition in the stand alone diagnostic sector and also due to the lack of high end sophisticated diagnostic equipment along with the added problems being faced regarding the premises. The heavy interest on the bank loan and the indifferent inappropriate handling of the account by the bank also contributed substantially to the losses while bad debts to some extent also added to the situation. However the management is making efforts for solving this issue at the earliest. 2. SUBSIDIARY COMPANIES: During the year under review the Subsidiary Companies incorporated were not able to record any progress. However the Board is exploring the possibility of utilizing them for the envisaged purpose at the earliest. 3. DIVIDEND: The Directors have taken a decision not to recommend any dividend for the year 2011-12, as the company has suffered huge losses. 4. PUBLIC DEPOSITS: During the year under review the company has not accepted any 'public deposit' as in defined in provision of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules 1975 as amended from time to time. There are no outstanding unclaimed deposits as 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., the need to add fulfledged laboratory services and other advanced modalities, and also heavy marketing expenditure incurred disproportionate to the input which is again partly due to the heavy competition in the stand alone diagnostic sector and non functioning of some of the major medical equipments. During this year there was a major repair of electronic components and the non insurable high cost tube of CT Scan equipment. While lack of sophisticatedness and advancement in the diagnostic equipment is to some extent also the cause of reduction in revenues, the prevailing competitive conditions are also not suitable for standalone diagnostic services. The establishing of inhouse diagnostic centres by many hospitals decreased the referral of patients to standalone diagnostic centres - which are forced to depend on small time practitioners and a few consultation clinics of specialists. This resulted in huge increase in marketing expenditure and the added burden of increased establishment expenses, which also led to substantial losses. The grim power supply problem in the region also contributed its part for 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 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. Other Equipment 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 than earlier 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 make optimum 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 and not 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 tension transformers 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 latest sophisticated 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 own in addition to launching other legal measures. The matter was represented to the DRT by the company and as of date is pending disposal. STEPS PROPOSED BY THE BOARD FOR FUTURE BUSINESS DEVELOPMENT AND ENHANCED PROFITABILITY Your company has already initiated steps for settling the NPA issue with Canara Bank and has submitted 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 our offer was low. Your company is now taking further steps to once again propose OTS after discussions with the Canara Bank Officials and arrive at a mutually agreeable finality. New Steps and suggestions from Financial & other strategic Consultants as may be required for improvement 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 medical equipment and putting them to optimum use by measures outweighing the regular market factors to the extent possible. But the uncertainity pertaining to the premises is still hovering over 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 other measure being contemplated. The company is also exploring the scope for starting new avenues of profitable business activities as earlier envisaged and also as may be decided feasible in future. 6. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION & FOREIGN EXCHANGE EARNINGS 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 the year under review. B. TECHNOLOGY ABSORPTION: 1. Research and Development (R&D) : Rs.80.94 lakhs 2. Technology absorption, adoption and innovation : NIL C. FOREIGN EXCHANGE EARNINGS AND OUT GO: Foreign Exchange Earnings : NIL Foreign Exchange Outgo : NIL 7. INTERNAL CONTROL AND ITS ADEQUACY: The Board is committed to ensure that the Company's 'internal control' system remains effective and efficient in areas such as operations and Security. For this purpose proper planning and effective 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 the Directors 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 followed along with proper explanations (ii) Appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2012 and of the losses of the company for the year ended on that date. (iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets 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 on Corporate Governance Practices followed by the Company together with a certificate obtained from the auditors of the Company is set out in Annexure, forming part of this report. 1O. PARTICULARS OF EMPLOYEES: During the year under review, no employee of the company was in receipt of remuneration for the whole year which in the aggregate was Rs.60,00,000/- or more per annum nor was any employee in receipt of remuneration Rs.5,00,000/- or more per month for the any part of the year in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended. During the year under review, industrial relations of the company continued to be cordial and peaceful. 11. DIRECTORS: In accordance with requirements of the Companies Act, 1956 and Articles of Association of the Company, 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 conclude with this Annual General Meeting. They have expressed willingness to accept the assignment for a further period on one more year. They have also confirmed their eligibility for such an appointment under Section 224(1B) of the Companies Act, 1956.The Board recommends firms re- appointment as Company's auditors. 13. LISTING AT STOCK EXCHANGES: The Equity Shares of the Company are listed on Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001. 14. ACKNOWLEDGEMENTS: Your Directors thank and appreciate all the executives, staff, Bankers, Customers and Workers of 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