HealthFore Technologies Limited
Your Directors have immense pleasure in presenting this 7thAnnual Report onthe business and operations of the Company along with the Audited Financial Statements forthe financial year ended March 31 2016.
The brief highlights of financial results of the Company for the Financial Years2015-16 and 2014-15 are as under: (Rs. in Million)
|Particulars ||2015-16 ||2014-15 |
|Total Income ||229.15 ||305.75 |
|Total Expenditure ||965.12 ||901.80 |
|Profit/ (Loss) before Tax ||(735.97) ||(596.05) |
|Profit/ (Loss) after Tax ||(735.97) ||(596.05) |
|Balance brought forward from previous year ||(3876.18) ||(3278.21) |
|Impact due to change in useful life of fixed assets in accordance with provisions of Companies Act 2013 ||- ||(1.92) |
|Other Adjustments ||- ||(0.18) |
|Balance carried to Balance Sheet ||(4612.15) ||(3876.00) |
The total Income of the Company is Rs. 229.15 Million during the financial year 2015-16as against the total Income of Rs. 305.75 Million in the previous financial year 2014-15.However the total expenditure is Rs. 965.12 Million as against Rs. 901.80 Million in theprevious year. The Loss after Tax is Rs. 735.97 Million during the financial year 2015-16as against Rs. 596.05 Million in the previous financial year.
During the financial year under review your Company continued to focus on its coreproducts i.e. Hospital Information and Management Systems ("HIS") andMagnum Imaging. Magnum Imaging now has multiple new capabilities like Magnum LiteUniversal Viewer 3D Imaging Viewer and cloud object based storage for addressing thecurrent and future requirement in Imaging. Recognizing the fact that Imaging AdvancedImaging and Vendor neutral archive are the future of Imaging Space new initiatives havebeen undertaken to address these needs.
During the year your Company completed implementation of Magnum Infinity HIS in ShellNigeria in the first half of last year. This was followed by rollout of Magnum InfinityHIS and Magnum Imaging in multiple facilities of Anglo Arabian Healthcare group in UAE.The group is operating one hospital and 7 clinics in Ajman and Sharjah. Your Company alsoestablished its presence in Zambia with the successful rollout of Magnum Infinity HIS andMagnum Imaging in Lusaka Trust Hospital.
Your Company was also active in the Indian market with Magnum Infinity HIS rolled outsuccessfully in Kerudi Cardiac and Cancer Hospital in Bagalkot Karnataka SCI Hospital inDelhi and Southend Fertility & IVF Clinics in NCR. Magnum Infinity HIS and MagnumImaging were rolled out successfully in Bangalore Institute of Gastroenterology and SSHospital in Bangalore as well. Asram Hospital Vijayawada a 1000 bedded Teachinghospital is implementing Magnum Imaging Solution for their medical imaging archival andviewing across the organization.
To give Shareholders an idea of the Healthcare Sector and the growth it is providing toIT Companies we would like to highlight that Indias health care industry (whichincludes hospitals medical infrastructure medical devices clinical trials outsourcingtelemedicine health insurance and medical equipment) is developing at a great pace and isexpected to reach $160 billion by 2017 according to Frost & Sullivan. Thecountrys healthcare sector is poised to grow to $280 billion by 2020 while it isexpected to be a leader in e-health by 2019. The Healthcare information technology marketin India is expected to reach $14.5 billion in 2018 from the present estimated $381.3million mainly due to fast adoption of technology by stakeholders according to Frost& Sullivan.
Healthcare technology changes will be rapid and in some parts of the world disruptiveto established health care models. Some exciting advancements are taking place at theintersection of information technology and medical technology such as using 3D printingto help in preparing tissues for transplants. In addition the use of big data andanalytics to gain insights is an active industry trend. A significant development inhealthcare will be in the area of predictive healthcare analytics wherein the vitalparameters of a human body can be monitored and alerts raised if a negative trend isdetected. Your company can leverage vast amounts of patient data gathered from a varietyof sources to determine the clinical value of specific treatments and how to make thembetter. We intend to focus on emerging markets and high growth economies where the needfor such products and services is high.
Your Board is confident that with the steps taken in FY 2015-16 with restructuring themanagement structure as well as focusing on profitable product lines your Company isready for a cycle of sustained growth.
DIVIDEND AND TRANSFER TO RESERVES
Keeping in view the losses of the Company during the financial year under review theBoard of Directors of your Company has not recommended any dividend for the financial yearended March 31 2016. Accordingly there has been no transfer to general reserves.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR 2015-16 AND THE DATE OF THE REPORT
Subsequent to the financial year ended March 31 2016 there have been no materialchanges and commitments affecting the financial position of the Company which haveoccurred between the end of the financial year 2015-16 and the date of the Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the financial year under review asstipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") is presented in a separatesection and forms an integral part of this Report.
During the financial year under review there has been no change in the Share Capitalof the Company.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return in Form No. MGT 9 is presented in a separate sectionand is annexed herewith as Annexure - A to this Report.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees or investments covered under the provisions ofSection 186 of the Companies Act 2013 ("Act") have been disclosed in thenotes forming part of the Financial Statements.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the financial year underreview were on an arms length basis and in the ordinary course of business. Therewere few materially significant Related Party Transactions made by the Company with otherrelated parties in the financial year. The details of the transactions with relatedparties are provided in the notes to accompanying financial statements.
All Related Party Transactions are placed before the Audit Committee for approval asrequired under Regulation 23 of Listing Regulations. Prior omnibus approval of the AuditCommittee is obtained for the transactions which are of a foreseen and repetitive nature.The transactions entered into pursuant to the omnibus approval so granted are audited anda statement giving details of all related party transactions is placed before the AuditCommittee for their approval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompanys website and can be accessed through the link http://www.healthfore.com/Related-Party-Transactions-Policy.pdf
None of the Directors has any pecuniary relationships or transactions vis--vis theCompany except to the extent of sitting fees paid to them as approved by the Board ofDirectors.
Disclosures as required under Section 134(3)(h) read with Rule 8(2) of the Companies(Accounts) Rules 2014 are provided in the Form AOC-2 which is annexed herewith as Annexure- B and forms part of this Report.
RISK MANAGEMENT POLICY
The Company has developed and implemented a Risk Management Policy to mitigate variousrisks that can impact the Companys ability to achieve its strategic objectives. Thesaid policy is being implemented and monitored by the Audit Committee.
EMPLOYEE STOCK OPTION SCHEME
The Members of the Company at their Annual General Meeting (" AGM")held on September 13 2013 had approved HealthFore Employee Stock Option Scheme - 2013("Scheme") for the eligible employees / Directors of the Company.Nomination and Remuneration Committee of the Board of Directors of the Company interalia administers and monitors the Scheme of the Company in accordance with the Securitiesand Exchange Board of India (Share Based Employee Benefits) Regulations 2014 (erstwhileSecurities and Exchange Board of India (Employee Stock Option Scheme and Employee StockPurchase Scheme) Guidelines 1999) ("the SEBI Guidelines"). However tilldate no Stock Options have been granted by the Company under the above Scheme.
There is no material change in the Scheme during the financial year under review.Certificate from Auditors confirming that Scheme has been implemented in accordance withthe SEBI Guidelines will be placed at the forthcoming AGM of the Company for inspection bythe members.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the financial year under review Mr. Vikram Sahgal Independent Director of theCompany has resigned from the Board of Directors of the Company with effect from May 212015. Mr. Maninder Singh Grewal Chairman and Managing Director of the Company hasresigned from the position of Managing Director and Key Managerial Personnel of theCompany effective from close of business hours on December 31 2015 but he continued toact as Director and Non-Executive Chairman of the Board w.e.f. January 01 2016.Thereafter Mr. Maninder Singh Grewal Non-Executive Chairman of the Board resigned fromthe office of Director of the Company w.e.f. January 06 2016. The Board of Directorsplaced on record its deep appreciation and gratitude for the valuable services andguidance provided by them during their tenure as Directors of the Company.
The Members of the Company at the AGM held on September 18 2015 approved theappointment of Mr. Harjiv Singh as an Independent Director for a term of 5 (Five) yearswith effect from May 21 2015. Further the Members of the Company at the said AGM hasalso approved the appointment of Mr. Hemant Dhingra and Mr. Daljit Singh as Non-ExecutiveNon-Independent Directors of the Company with effect from the respective dates of theirappointment as Additional Directors i.e. March 24 2015 and July 30 2015 whose period ofoffice shall be liable to determination by retirement by rotation.
Mr. Nalin Nayyar was appointed as an Additional Director by the Board in the categoryof Non-Executive Non-Independent Director on August 01 2016 pursuant to the provisions ofSection 161 of the Act and the Articles of Association of the Company.
In terms of Section 161 of the Act Mr. Nalin Nayyar will hold office upto the date ofthe ensuing AGM of the Company.
The Company has received notice in writing from a Member along with the deposit ofrequisite amount proposing Mr. Nalin Nayyar for appointment as Director of the Company.The Board of Directors recommends his appointment.
In terms of the provisions of Section 152 of the Act and the Articles of Association ofthe Company Mr. Daljit Singh Non-Executive Non-Independent Director is liable to retireby rotation at the ensuing AGM of the Company and being eligible has offered himself forre-appointment. The Committee and the Board of Directors recommends his re-appointment.
The brief resume of the Directors seeking appointment and re-appointment along withother details as stipulated under Regulation 36(3) of the Listing Regulations andSecretarial Standards issued by ICSI are provided in the Notice convening the AGM of theCompany.
The Company has received declarations from all the Independent Directors of the Companythat they meet with the criteria of independence as laid down under Section 149(6) of theAct and Regulation 16 of Listing Regulations.
Mr. Varun Sood was appointed as Chief Executive Officer and Key Managerial Personnel ofthe Company w.e.f. January 01 2016.
Accordingly pursuant to the provisions of Section 203 of the Act Mr. Varun SoodChief Executive Officer Mr. Amit Gupta Chief Financial Officer and Ms. Shikha RastogiCompany Secretary are the Key Managerial Personnels of the Company.
BOARD/COMMITTEE COMPOSITION AND MEETINGS
A calendar of Meetings is prepared and circulated in advance to the Directors. TheBoard of Directors of the Company met 6 (six) times during the financial year 2015-16.Thedetails of composition of Board and Committees and their meetings held during the yearunder review are provided in the Report on Corporate Governance which forms part of thisreport. The intervening gap between two meetings of the Board was within the periodprescribed under the Act and Regulation 17 of the Listing Regulations.
Pursuant to the provisions of the Act and Listing Regulations the Board has carriedout performance evaluation of its own performance the Directors individually Chairman aswell as the evaluation of the working of its Audit Committee Nomination and RemunerationCommittee ("NRC") and Stakeholders Relationship Committee.Following process of evaluation was followed:
|S. No. ||Process ||Remarks |
|1. ||Individual Self- Assessment ||Self-evaluation forms were shared and completed by the Directors and submitted to the Chairperson of NRC. |
|2. ||One to One discussion ||An independent Advisor was authorised to interact with each member to assess performance invite direct feedback and seek inputs to identify opportunities for improvement. |
|3. ||Board Evaluation for the Board NRC and of Independent Directors ("IDs") ||Using the Self-Assessment feedback and output from the one-to-one discussions the formal Board Evaluation Process was conducted. A compilation of the individual self- assessments and one to one discussions were placed at the meeting of the NRC the IDs and the Board of Directors held on January 27 2016 for them to review collectively and include as additional feedback to the formal process completed in the meetings. |
|4. ||Final recording and reporting ||Based on the above a final report on Board Evaluation was collated presented and tabled at a meeting of the Board of Directors. The report also noted best practices in certain areas and considered opportunities for improvement.3 |
PROPOSED SCHEME OF AMALGAMATION BETWEEN HEALTHFORE TECHNOLOGIES LIMITED AND OSCARINVESTMENTS LIMITED AND THEIR RESPECTIVE SHAREHOLDERS AND CREDITORS
The Board of Directors of HealthFore Technologies Limited at their meeting held onDecember 14 2015 have approved the Scheme of Amalgamation (the Scheme)between HealthFore Technologies Limited (HealthFore or theAmalgamating Company) and Oscar Investments Limited (Oscar orAmalgamated Company) and their respective shareholders and creditorsunder Sections 391 to 394 and other applicable provisions of the Companies Act 1956.
We believe that the proposed Amalgamation will build a stronger and sustainablebusiness and enhance the potential for future growth. It will strengthen the competitiveposition of the combined entity and would result in increased shareholders value of boththe companies.
HealthFore and Oscar have filed the application with the BSE Limited for itsin-principle approval under Clause 24(f) of the Listing Agreement and the same is pendingas on date.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andtheir remuneration including criteria for determining qualifications positive attributesindependence of a Director etc. Details of Remuneration Policy are stated in the CorporateGovernance Report which forms part of this Report.
The Company has neither invited nor accepted any deposits from public within themeaning of Section 73 of the Act read with Companies (Acceptance of Deposit) Rules 2014during the financial year under review.
LISTING WITH STOCK EXCHANGE
The Equity Shares of your Company continue to be listed on BSE Limited ("BSE").The Annual Listing Fee for the financial year 2016-17 has been paid to BSE.
None of the Director of your Company is disqualified as per the provisions of section164(2) of the Act. The Directors of the Company have made necessary disclosures asrequired under various provisions of the Act and the Listing Regulations.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In view of the nature of activities which are being carried on by your Company theparticulars as prescribed under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Account) Rules 2014 regarding Conservation of Energy and Technology Absorptionare not applicable to the Company and hence not been provided.
However the Company requires energy for its operations and every endeavor has beenmade to ensure the optimal use of energy avoid wastage and conserve energy as far aspossible.
The Company has incurred expenditure of Rs. 8.66 Million (Previous Year: Rs. 19.31Million) in Foreign Exchange and earned Rs. 60.07 Million (Previous Year: Rs. 139.55Million) in Foreign Exchange during the financial year under review.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) of the Act the Board of Directors based on therepresentation as provided to the Board by the management confirm that:
(i) In the preparation of the annual financial statements for the financial year endedMarch 31 2016 the applicable accounting standards had been followed along with properexplanation relating to material departures;
(ii) The Directors had selected such accounting policies and applied them consistentlyand made 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 2016 and of the loss ofthe Company for the year under review;
(iii) The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) The Directors had prepared the annual financial statements for the financial yearended March 31 2016 on a going concern basis;
(v) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(vi) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
REPORT ON CORPORATE GOVERNANCE
Your Company believes that Corporate Governance is the basis of stakeholdersatisfaction and therefore the Company continues to be committed to uphold the higheststandards of Corporate Governance and adhere to the requirements set out by the ListingRegulations.
A detailed Report on Corporate Governance along with the Certificate of M/s. VAP &Associates Company Secretaries in Practice confirming the compliance to the conditionsof Corporate Governance as stipulated in Clause 49 of the Listing Agreement for the periodApril 1 2015 to November 30 2015 and Regulations 17 to 27 clauses (b) to (i) ofRegulation 46(2) and para C D & E of Schedule V of the Listing Regulations for theperiod December 1 2015 to March 31 2016 is set out in this Annual Report and forms anintegral part of this Report.
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. Ravi Rajan & Co. (erstwhile M/s. RRCA & Associates merged with M/s. RaviRajan & Co. w.e.f. 01.12.2015) Chartered Accountants (Firm Registration No. 009073N)were appointed as Statutory Auditors of the Company to hold office till the conclusion ofthe AGM to be held in the year of 2019 subject to ratification of their appointment bythe Members at every AGM.
The Company has received a written confirmation from them to the effect that theirratification if made would be within the limits as prescribed under Section 141(3)(g) ofthe Act and that they are not disqualified from being re-appointed as Auditors of theCompany.
Accordingly based on the recommendations of the Audit Committee the Board ofDirectors of the Company recommends the ratification of appointment of M/s. Ravi Rajan& Co. as Statutory Auditors of the Company from the conclusion of the forthcoming AGMtill the conclusion of the next AGM.
STATUTORY AUDITORS REPORT
The Statutory Auditors Report does not contain any qualification reservation oradverse remark. Further the observations of the Auditors in their report read togetherwith the Notes to Financial Statements are self-explanatory and therefore in the opinionof the Board of Directors do not call for any further explanation.
DETAILS OF FRAUD REPORTABLE BY STATUTORY AUDITOR TO BOARD
Basis the confirmations reported to the Board in this regard there were no instancesof fraud misfeasance or irregularity detected and reported in the Company during thefinancial year 2015-16 by the Statutory Auditors of the Company pursuant to Section143(12) of the Act.
SECRETARIAL AUDITOR REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2015 the Board of Directors of the Companyappointed M/s. Mukesh Agarwal & Co. a firm of Company Secretaries in Practice as theSecretarial Auditor of the Company to conduct the Secretarial Audit of the Company for thefinancial year 2015-16.
The Secretarial Audit Report of the Company for the financial year ended March 312016 is annexed herewith as Annexure - C to this Report. The Secretarial AuditReport does not contain any qualification reservation or adverse remark.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has in place a vigil mechanism named Whistle Blower Policy for Directorsand employees of the Company to report their genuine concerns and to deal with instancesof unethical practices fraud and mismanagement or gross misconduct by the employees ofthe Company if any that can lead to financial loss or reputational risk to theorganization.
The Policy has been uploaded on the website of the Company & can be accessedthrough the link http://www.healthfore.com/ Whistle-Blower-Policy.pdf INTERNALFINANCIAL CONTROLS AND INTERNAL CONTROL SYSTEM
The Company has in place adequate systems of internal control commensurate with itssize and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation complying with applicable statutes safeguarding assets from unauthoriseduse executing transactions with proper authorisation and ensuring compliance of corporatepolicies.
To ensure that all systems and procedures are in place and order regular internalaudit is conducted.The scope and authority of the Internal Audit function is defined inthe Internal Audit Manual.
Internal Audit of the Company during FY 2015-16 was conducted by M/s. Batra Sapra &Co. The Company has appointed M/s. KPMG as the Internal Auditor of the Company for FY2016-17. To maintain its objectivity and independence the Internal Auditor reports to theAudit Committee about the Internal Audit findings and corrective actions thereon on aquarterly basis.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197 of the Act read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedfrom time to time is provided in a separate annexure forming part of this Report.However pursuant to Section 136 of the Act this Report along with Corporate GovernanceReport and Financial Statements are being sent to all the Members of the Company excludingthe aforesaid information and the said particulars are made available at the RegisteredOffice of the Company during business hours on working days of the Company upto the dateof the ensuing AGM. The Members desirous of obtaining such particulars may write to theCompany Secretary of the Company. Disclosures pertaining to remuneration and other detailsas required pursuant to Section 197(12) of the Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure- D and forms part of this Report.
The details of remuneration paid to the Directors of the Company are given in Form No.MGT-9 annexed as Annexure - A to this Report.
Our employees are the most valuable assets of the Company. The Company draws itsstrength from a highly engaged and motivated workforce; hence a large part of ourmanagement focus is to care and support our employees. Learning and development offeringsare customized for each phase of the employee life cycle and span all career levelsskill and domain groups. We continually strive to provide our employees with competitiveand innovative compensation packages. Individual and organizational capability buildingremained one of the strategic focus areas. The workforce management strategy was executedoptimally to deliver a sustained utilisation rate throughout the year helping businessgrow while maintaining employee costs at the desired level.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORK PLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has in place a Sexual Harassment Policy in line with the requirements ofThe Sexual Harassment of Women at the Work Place (Prevention Prohibition and Redressal)Act 2013. All employees (permanent contractual temporary trainees) are covered underthis policy. No case has been reported during the financial year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant or material orders passed by the Regulators / Courts whichwould impact the going concern status of the Company and its operations in future.
Your Directors would like to express their sincere appreciation for the co-operationand assistance received from the Bankers Regulatory Authorities Stakeholders includingFinancial Institutions Customers and other business associates who have extended theirvaluable sustained support and encouragement during the financial year under review.
Your Directors also gratefully acknowledge and appreciate the commitment displayed byall executives officers and staff at all levels of the Company towards the success of theCompany.
| ||For and on behalf of the Board |
| ||For HealthFore Technologies Limited |
| ||Sd/- ||Sd/- |
|Place: New Delhi ||Daljit Singh ||Hemant Dhingra |
|Dated: August 01 2016 ||Director ||Director |