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Sharma East India Hosp and Medical Research Ltd.

BSE: 524548 Sector: Health care
NSE: N.A. ISIN Code: INE465H01012
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Sharma East India Hosp and Medical Research Ltd. (SHARMAEIHOSP) - Director Report

Company director report

The Members

Your Directors have pleasure in submitting their Twenty Eighth Annual Report on thebusiness and operations of your Company together with the Audited Annual Accounts and CashFlow Statement for the year ended 31st March 2017.

1. FINANCIAL RESULTS

(Rs. in Lacs)
For the year ended on
2016-2017 2015-2016
Revenue from operations & Other income 1738.54 1743.02
Profit before interest Depreciation & Tax 177.92 110.22
Less : Interest 103.44 48.02
Operating Profit 74.48 62.20
Less: Depreciation 64.62 58.70
Net Profit before Tax 9.86 3.50
Add/(Less): Tax Expense
Current Tax 5.62 1.90
Deferred Tax (2.57) (1.39)
Adjustment of taxes of earlier years (0.69) -
Net Profit After Tax 7.50 2.99
Add: Profit brought forward from Previous Year 204.51 201.52
Surplus carried forward to Balance Sheet 212.01 204.51
Earnings per Share (Basic & Diluted) 0.23 0.09

2. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

The Company's Revenue from Operations and Other Income are Rs. 1738.54 Lacs and theprofit after tax is Rs. 7.50 Lacs during the current year.

Further your Company has been continuously making efforts to enhance the operations andalso trying to hold its grip over upcoming opportunities in Medical & Health Industry.

3. DIVIDEND

Your Directors have considered it financially prudent in the long-term interests of theCompany to reinvest the profits into the business to build a strong reserve base and growthe business of the Company. Further in view of marginal funds the Board of Directorsdoesn't recommended payment of dividend for the year under review.

4. TRANSFER TO RESERVES

No amount has been transferred to General Reserve during the year. The company carriesreserves of Rs. 212.01 Lacs under the head surplus at the end of the financial year2016-17.

5. SIGNIFICANT MATERIAL CHANGES AFTER BALANCE SHEET DATE AFFECTING FINANCIALPOSITION

There are no changes and commitments affecting the financial position of the companywhich have occurred between the date of Balance Sheet i.e. 31.03.2017 and the date of thisreport.

6. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

Details pertaining to Conservation of Energy and Technology Absorption as requiredunder Section 134 (3) (m) of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rules 2014 are as follows:-

(A) Conservation of Energy: The operations of the company are not energy intensive. Weregularly evaluate and use new energy efficient technologies and make necessary investmentin energy saving equipments to make our infrastructure more energy-efficient. The companyis continuously striving to conserve the energy at its all levels.

(B) Technology Absorption: Your Company strives for latest technology for its processesand also strives to achieve full technology absorption.

There were no foreign exchange earnings and outgo during the financial year.

7. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Risk Management of the Company is overseen by the Board of Directors at variouslevels and the policy of the Company on Risk Management is provided in this Annual Reportin Management Discussion and Analysis Report.

8. CORPORATE SOCIAL RESPONSIBILITIES (CSR)

The Company does not meet the criteria of Section 135 of Companies Act 2013 read withthe Companies (Corporate Social Responsibility Policy) Rules 2014. The Company has notdeveloped and implemented any Corporate Social Responsibility policy as the saidprovisions are not applicable to the Company.

9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013.

Details of loans investments and guarantees covered under the provisions of Section186 of Companies Act 2013 are given in the Notes forming part of Financial Statements.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business.

The details forming part of the Related Parties Transactions under Section 188(1) ofthe Companies Act 2013 during the year as per Form AOC-2 is enclosed as Annexure A.Further there were no contracts or arrangements entered with the Company's PromotersDirectors Management or their relatives which could have had a potential conflict withthe interests of the company.

11. EXPLANATIONS OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE SECRETARIAL AUDITORS IN THEIR REPORTS

Observations of Statutory Auditors and Secretarial Auditors are self-explanatory and donot call for any further comments.

i. Statutory Auditors :

During the year under review there were no audit qualifications made by the Auditorsin their Report on the Company's financial statements. The Company continues to adopt bestaccounting practices to ensure a regime of un-qualified financial statements.

ii. Secretarial Auditors :

Secretarial Audit was conducted according to the provisions of Section 204 of theCompanies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. There were no adverse comments qualifications orreservations or adverse remarks in the Secretarial Audit Report.

The Secretarial Audit Report submitted by Secretarial Auditor is enclosed as a part ofthis report as Annexure- B.

12. REMUNERATION RATIO OF THE DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP)/EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of Directorsand Key Managerial Personnel of the Company is furnished in Annexure C to this report.

13. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT AND REMUNERATION

The remuneration policy of the company has been framed by the Nomination andRemuneration Committee of the Company. The Company's Policy relating to appointment ofDirectors payment of remuneration Directors' qualifications positive attributesindependence of Directors etc. pursuant to Section 178(3) of the Companies Act 2013 is asfollows:

The Company considers human resources as its invaluable assets. The policy of thecompany on nomination and remuneration of Directors Key Managerial Personnel (KMPs) andother employees has been formulated in terms of Section 178 Section 197 and otherapplicable provisions of the Companies Act 2013 and the listing agreement in order to payequitable remuneration to the Directors KMPs and employees of the Company and toharmonize the aspirations of human resources consistent with the goals of the Company.

Remuneration payable to Directors of the Company are as per the limits as contained inthe provisions of Section 197 read with Schedule V of the Companies Act 2013.

The Remuneration Policy of the Company stipulates the criteria for determiningqualifications competencies positive attributes and independence for appointment of aDirector (Executive /Non-Executive) and provides the Board information about the mattersrelating to the remuneration of the Directors Key Managerial Personnel and otheremployees. This includes reviewing and approving corporate goals and objectives relevantto the compensation of the Directors Key Managerial Personnel and other employees andevaluating the performance of Directors Key Managerial Personnel and other employees inlight of those goals and objectives.

The Remuneration Policy of the company stipulates that:

a) the composition of remuneration is such that it is reasonable and sufficient toattract retain and motivate the directors of the quality required to run the companysuccessfully.

b) there is proper relationship between remuneration and performance.

c) remuneration to Directors Key Managerial Personnel and Senior Management involves abalance between fixed and incentive pay reflecting short and long term performanceobjective appropriate to the working of the company and its goals.

14. EXTRACT OF ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92(3) of CompaniesAct 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules2014 in form MGT 9 is furnished in Annexure D and is attached to this Report.

15. DETAILS OF BOARD MEETINGS CONDUCTED DURING THE YEAR

During the Financial Year 2016-17 four meetings of the Board of Directors were held asper Section 173 of Companies Act 2013 details of which are summarized below. Theprovisions of Companies Act 2013 were adhered to while considering the time gap betweentwo meetings.

Date of Meeting

14th May 2016

10th August 2016

11th November 2016

08th February 2017

16. DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility statement and confirm that:-

(a) in the preparation of the annual accounts for the year ended 31st March 2017 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;

(b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period;

(c) they have 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) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial controls to be followed by the company thatare adequate and operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and these are adequate and are operating effectively.

17. SUBSIDIARIES AND JOINT VENTURES COMPANIES

The Company does not have any Subsidiary and Joint venture Companies.

18. DEPOSITS

The Company has neither accepted nor renewed any deposits covered under the provisionsof section 73 and Chapter V of the Companies Act 2013 read with the Companies (Acceptanceof

Deposits) Rules 2014 during the year.

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of Board is in accordance with the requirements set forth by Section149 of Companies Act 2013. The Directors possess experience in various fields thatencompass Medical and Health Law Banking Accounting and Finance. The composition ofBoard of Directors consists of 6 Directors which is a perfect combination of One Executiveand Five Non Executive directors. The Board consists of 3 Independent Directors. Thestatus of board/KMPs during the financial year ended on 31.03.2017 is as follows:

S.No Name Designation / Change in Designation Category Date of appointment - Date of Change in Designation Date of Cessation & Mode of Cessation
1. Karan Sharma Director Non-Executive 01/04/2007 N.A.
2. Shailendra Sharma Director/Managing Director Executive 16/11/1989- N.A.
Managing Director 14/08/2015
3. Maya Sharma Director Non-Executive 18/09/2015 N.A.
4. Madhur Krishna Director/Independent Non-Executive 14/07/2011- N.A.
Khaitan Director Independent 18/09/2015
5. Subhash Chand Jain Director/Independent Non-Executive 28/04/1990- N.A.
Director Independent 18/09/2015
6. Avani Agarwal Director/Independent Non-Executive 14/07/2011- N.A
Director Independent 18/09/2015
7. Vimal Kumar Joshi Chief Financial Officer N.A. 14/08/2014 N.A
8. Shiv Shankar Sharma Company Secretary N.A. 18/03/2016 N.A.

None of the Directors of the Company is disqualified for being appointed as Directors.

20. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted their declaration to the Board that theyfulfil all the requirements as stipulated in Section 149(6) of the Companies Act 2013.

21. AUDITORS:-

21.1 Statutory Auditors

M/s. Gopal Sharma & Co. Chartered Accountants Jaipur have resigned w.e.f.31.08.2017 from the post of Statutory Auditors of the company and therefore the Board ofDirectors of the Company in their meeting held on 06th September 2017 have recommendedthe appointment of M/s Amit Goyal & Co. Chartered Accountants Jaipur as theStatutory Auditors for the financial year 2017-18.

In terms of the provisions of Section 139(8) of the Companies Act 2013 the Board ofDirectors of a Company cannot except with the consent of Members in General Meeting by anordinary resolution appoint any person as an Auditor of the Company hence the Boardrecommends the said Resolution for approval of the members as an Ordinary Resolution atthis Annual General Meeting.

21.2 Cost Auditor

Pursuant to Section 148 of the Companies Act 2013 read with rules made there under themaintenance of cost audit records is not applicable to the company.

21.3 Secretarial Auditors

The Company has appointed Secretarial Auditors to conduct the secretarial audit for theFinancial Year ended 31.03.2017 according to the provisions of section 204 of theCompanies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

22. COMMITTEES OF THE BOARD

Details of the Committees of the Board of Directors of the Company is as under:-

a) Audit Committee

The constitution of audit committee is in confirmation with the requirements of Section177 of the Companies Act 2013. At present the Audit Committee of the Company consists of4 Directors out of which 3 directors are Independent (Details of the same are summarizedbelow). The Committee is chaired by Mr. Madhur Krishna Khaitan an Independent Director.All the members of the audit committee are financially literate and are able to read andunderstand the financial statements.

S.No. Name of Members of Committee Nature of Directorship Designation
1. Madhur Krishna Khaitan Independent Director Chairman
2. Maya Sharma Non-Executive Director Member
3. Subhash Chand Jain Independent Director Member
4. Avani Agarwal Independent Director Member

b) Nomination & Remuneration Committee

The constitution of Nomination & Remuneration Committee is in confirmation with therequirements of Section 178 of the Companies Act 2013. At present the Nomination &Remuneration Committee of the Company consists of 4 Directors out of which 3 directorsare Independent (Details of the same are summarized below). The Committee is chaired byMr. Madhur Krishna Khaitan an Independent Director.

S.No. Name of Members of Committee Nature of Directorship Designation
1. Madhur Krishna Khaitan Independent Director Chairman
2. Maya Sharma Non-Executive Director Member
3. Subhash Chand Jain Independent Director Member
4. Avani Agarwal Independent Director Member

c) Stakeholders Relationship Committee

The constitution of Stakeholders Relationship Committee is in confirmation with therequirements of Section 178 of the Companies Act 2013. At present the StakeholdersRelationship Committee of the Company consists of 3 Directors (Details of the same aresummarized below). The Committee is chaired by Dr. Karan Sharma a Non-Executive Director.

S.No. Name of Members of Committee Nature of Directorship Designation
1. Karan Sharma Non-Executive Director Chairman
2. Subhash Chand Jain Independent Director Member
3. Madhur Krishna Khaitan Independent Director Member

d) Share Transfer Committee

The Share Transfer Committee has been constituted to oversee the matters related withtransfer of shares of the company so as to avoid delay in Share Transfer Process and toexpeditiously resolve the issues related with share transfers. At present the ShareTransfer Committee of the Company consists of 3 Directors (Details of the same aresummarized below). The Committee is chaired by Dr. Karan Sharma a Non-Executive Director.

S.No. Name of Members of Committee Nature of Directorship Designation
1. Karan Sharma Non-Executive Director Chairman
2. Subhash Chand Jain Independent Director Member
3. Shailendra Sharma Managing Director Member

23. VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013 theCompany has established a vigil mechanism for directors and employees to report genuineconcerns. The Vigil Mechanism provides adequate safeguards against victimization ofemployees and directors who express their concerns. The Mechanism provides direct accessto the chairman of the Audit Committee. The Vigil Mechanism Policy has been uploaded onthe website of the Company at www.jaipurhospital.co.in

24. SHARES

a) BUY BACK OF SHARES

During the year under review Company has not dealt with buy back proposal.

b) SWEAT EQUITY

During the year under review the Company has not issued any Sweat Equity Shares.

c) BONUS SHARES

During the year under review no Bonus Shares were issued.

d) EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees during the year.

25. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 (1) (e) of SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 Management Discussion and Analysis report is enclosed tothis report.

26. CORPORATE GOVERNANCE REPORT

The Company does not fulfill the criteria as specified under sub regulation (2) ofregulation 15 of Chapter IV of SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015 ("The Regulations 2015") with respect to applicability ofCorporate Governance provisions mentioned in regulations 17 to 27 and clauses (b) to (i)of sub regulation (2) of regulation 46 and paras C D and E of Schedule V of theRegulations 2015. Therefore the Corporate Governance Report pursuant to sub regulation(3) of regulation 34 and Schedule V of the Regulations 2015 need not be attached to thisreport.

27. ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD AND COMMITTEES

The performance of the Board of Directors and Committees of the company are evaluatedon the basis of fulfilment of short term and long term objectives of the company. Besidesthis other qualitative and quantitative factors are also considered the basis ofevaluation of the Board of Directors and Committees.

28. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The company has adequate Internal Financial Controls with reference to the FinancialStatements. Details of the same are provided in Management Discussion and Analysis Report.

The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets.

All the transactions are properly authorized recorded and reported to the Management.The Company is following all the applicable Accounting Standards for properly maintainingthe books of accounts and reporting financial statements.

29. CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business of the company during the financial year.

30. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

31. ACKNOWLEDGEMENT

The Board expresses their grateful thanks for the assistance and co-operation extendedby Punjab National Bank & other Banks various departments of State & CentralGovernment and other Associations.

Your Directors wish to convey their gratitude and appreciation to all employees of theCompany for their valuable contribution during the year. They also wish to place on recordtheir appreciation to the Company's Customers Investors Shareholders BankersSuppliers Distributors and other business associates for their cooperation and support.

Last but not the least Directors wish to place on records their deep sense ofappreciation for the devoted services of Consultant Doctors and entire Nursing Staff atall levels of the Company for its growth.

BY THE ORDER OF THE BOARD
Sd/- Sd/-
Jaipur (Shailendra Sharma) (Maya Sharma)
September 06 2017 Managing Director Director
DIN: 00432070 DIN: 00432496