Your Directors have immense pleasure in presenting the Twelfth Annual Report on thebusiness and operations of your Company along with the audited financial statements forthe financial year ended March 31 2020.
1. RESULTS OF OPERATION AND STATE OF AFFAIRS
|Particulars || |
| ||2020 ||2019 ||2020 ||2019 |
|Revenue from operations ||760.42 ||594.78 ||8738.50 ||7962.71 |
|Other income ||114.51 ||84.15 ||37.87 ||34.62 |
|Total income ||874.93 ||678.93 ||8776.37 ||7997.33 |
|Total expenditure ||810.32 ||628.89 ||8426.50 ||7585.31 |
|Profit/(loss) before exceptional items and tax ||64.61 ||50.04 ||349.87 ||412.02 |
|Exceptional item ||- ||(1.52) ||(19.64) ||(1.52) |
|Profit/(loss) before tax ||64.61 ||48.52 ||330.23 ||410.50 |
|Share of net profit/ (loss) of equity accounted investees ||- ||- ||(0.19) ||(0.25) |
|Profit/(loss) before tax ||64.61 ||48.52 ||330.04 ||410.25 |
|Less: Tax expense ||4.00 ||0.45 ||15.38 ||42.94 |
|Profit for the year ||60.61 ||48.07 ||314.66 ||367.31 |
|Other comprehensive income/(loss) net of taxes ||(0.25) ||0.57 ||144.61 ||62.41 |
|Total comprehensive income/ (loss) ||60.36 ||48.64 ||459.27 ||429.72 |
|Profit attributable to || || || || |
|Owners of the company ||60.61 ||48.07 ||276.61 ||333.11 |
|Non-controlling interest ||- ||- ||38.05 ||34.20 |
|Total ||60.61 ||48.07 ||314.66 ||367.31 |
|Total comprehensive income attributable to || || || || |
|Owners of the company ||60.36 ||48.64 ||405.42 ||389.85 |
|Non-controlling interest ||- ||- ||53.85 ||39.87 |
|Total ||60.36 ||48.64 ||459.27 ||429.72 |
|Earnings per share || || || || |
|Basic ||1.21 ||0.96 ||5.51 ||6.63 |
|Diluted ||1.21 ||0.96 ||5.50 ||6.62 |
|Particulars || |
| ||2020 ||2019 ||2020 ||2019 |
|Cash and cash equivalents ||15.55 ||3.49 ||150.80 ||227.64 |
|Trade receivables ||44.78 ||35.22 ||2366.44 ||2028.70 |
|Other current assets ||112.76 ||294.25 ||1578.43 ||1360.35 |
|Total current assets ||173.09 ||332.96 ||4 095.67 ||3616.69 |
|Property plant and equipment (including capital work in progress) ||868.41 ||821.01 ||4261.93 ||3872.01 |
|Goodwill ||- ||- ||1068.74 ||839.65 |
|Other intangible assets ||3.25 ||1.79 ||216.60 ||126.89 |
|Other non-current assets ||2508.25 ||2221.06 ||2794.90 ||481.17 |
|Total non-current assets ||3379.91 ||3043.86 ||8342.17 ||5319.72 |
|Total Assets ||3553.00 ||3376.82 ||12437.84 ||8936.41 |
|Non-current liabilities ||359.81 ||198.22 ||4 997.25 ||2589.00 |
|Current liabilities ||262.59 ||198.32 ||3 722.08 ||2667.59 |
|Total current and non-current liabilities ||622.4 ||396.54 ||8719.33 ||5256.59 |
|Equity ||499.52 ||505.23 ||499.52 ||505.23 |
|Other equity ||2431.08 ||2475.05 ||2772.62 ||2708.53 |
|Non-controlling interest ||- ||- ||446.37 ||466.06 |
|Total equity ||2930.60 ||2980.28 ||3 718.51 ||3679.82 |
|Total equity and liabilities ||3553.00 ||3376.82 ||12437.84 ||8936.41 |
During the year under review the Company reported on a consolidated basis a totalincome from operations of RS 8738.50 crores as compared to RS 7962.71 crores registeringa year on year growth of 9.74%. Of the total revenues from operations for fiscal 2020 ourhospital segment accounted for RS 4572.78 crores our clinic segment accounted for RS2006.13 and our retail pharmacy segment accounted for RS 2143.11. Our operations inIndia which primarily consist of hospitals accounted for RS 1612.70 crores of our totalrevenues from operations for the year ended March 31 2020.
Our strategies for the financial year 2020-2021 are explained in the ManagementDiscussion and Analysis which forms part of this Annual Report.
2. TRANSFER TO RESERVES
There are no appropriations to/from the general reserves of the Company during the yearunder review.
An amount of RS 120 crores was utilized for buyback of shares RS 1.56 crores wascharged as transaction costs relating to buyback and RS 5.71 crores was transferred to theCapital Redemption Reserve upon buyback in accordance with Section 69 of the CompaniesAct 2013.
Your Directors wish to conserve resources for future expansion and growth of theCompany hence they have decided to plough back the profits and thus do not recommendedany dividend for the financial year under review.
In terms of Regulation 43A of the SEBI (Listing Obligations and DisclosuresRequirements) Regulations (Listing Regulations") the Company has adoptedDividend Distribution Policy setting out the parameters and circumstances that will betaken into account by the Board in determining the distribution of dividend to theShareholders and/or retaining profits earned by the Company. The detailed Policy isannexed to this report as Annexure 1 and is also available on the website of the Companyat www.asterdmhealthcare.com/investors.
4. SHARE CAPITAL
During the year under review the Company has bought back a total number of 5714285equity shares under the Buyback Offer on a proportionate basis through tender offer routeat a price of RS 210 per equity share. Consequent to the buyback of shares by the Companythe paid-up equity share capital of the Company stands at RS 499.51 Crores consisting of499513060 equity shares of RS 10 each as on March 31 2020. Further the Company hasnot issued any shares with differential voting rights or any sweat equity shares. Detailsof Employee Stock Options granted by the Company are provided separately in annexure tothis report.
As on March 31 2020 except Dr. Azad Moopen who holds 1733536 equity shares Mr. T JWilson who holds 2710356 equity shares Mr. Shamsudheen Bin Mohideen Mammu Haji whoholds 5661732 equity shares Mr. Anoop Moopen who holds 1165910 equity shares and Ms.Alisha Moopen who
holds 169122 no other Directors hold any equity shares or preference shares in theCompany.
During the year under review the Company has not issued any bonus shares or rightsshares.
5. PUBLIC DEPOSITS
The Company has not accepted any public deposits within the meaning of Section 73 ofthe Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
6. LOANS GUARANTEE AND INVESTMENTS
Pursuant to Section 186 of the Companies Act 2013 and Schedule V of the ListingRegulations disclosure relating to loans/advances given guarantees provided andinvestments made are provided as part of the financial statements.
7. SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES
The Company along with its subsidiaries are engaged in the business of setting uphospitals clinics and pharmacies in India and GCC. At the beginning of the year yourCompany had 8 direct subsidiaries 63 step-down subsidiaries and 5 associate companies. Ason March 31 2020 the Company has 9 direct subsidiaries 67 step-down subsidiaries and 4associate companies. Your Company has no joint ventures as on March 31 2020. There hasbeen no material change in the nature of the business of the subsidiaries.
Following entities have become subsidiaries step-down subsidiaries/ associates of theCompany during the reporting period:
a. Aster Clinical Lab LLP
b. Ezhimala Infrastructure LLP
c. Alfaone FZ LLC
d. Grand Optics LLC
e. Premium Healthcare Limited
f. Wahat Al Aman Home Healthcare LLC
g. Emed Human Resources India Private Limited
Pursuant to provisions of section 129(3) of the Companies Act 2013 a statementcontaining salient features of the financial statements of the Company's subsidiaries inForm AOC-1 is annexed as Annexure 2 to this report.
8. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
In line with the requirements of the Companies Act 2013 and Listing Regulations theCompany has formulated a policy on dealing with Related Party Transactions which is alsoavailable on the Company's website at www.asterdmhealthcare. com/investors. The policyintends to ensure that proper reporting approval and disclosure processes are in placefor all transactions between the Company and related parties.
All related party transactions are placed before the Audit Committee for review andapproval. Prior omnibus approval is obtained for related party transactions on yearlybasis for transactions which are of repetitive nature and /or entered in the ordinarycourse of business.
No material related party transactions i.e. transactions exceeding 10% of the annualconsolidated turnover as per the last audited financial statements were entered into bythe Company during the year.
A statement giving details of all related party transactions entered pursuant to theomnibus approval so obtained is placed before the Audit Committee for their review on aquarterly basis. Disclosures as required under Section 134(3) (h) read with Rule 8(2) ofthe Companies (Accounts) Rules 2014 are given in Form AOC-2 as specified under CompaniesAct 2013 which is annexed as Annexure 3 to this report.
9. DIRECTORS' RESPONSIBILITY STATEMENT
In terms of section 134 (5) of the Companies Act 2013 the Directors confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there has been no material departures;
b) the Directors have 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 at the end of the financial year and ofthe profit and loss of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company whichare adequate and are operating effectively;
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors on recommendation of the Nomination and RemunerationCommittee appointed Mr. Chenayappillil John George (DIN: 00003132) as an AdditionalDirector (Non-Executive Independent) on the Board of the Company with effect from April11 2020 for a term of three years subject to approval of the Members at the ensuingAnnual General Meeting of the Company. The Notice of 12th Annual General Meeting of theCompany contains the above proposal for the approval of the Members.
In accordance with Articles of Association Mr. Daniel Robert Mintz (DIN:00960928) Director who retired by rotation was re-appointed as Director at the 11thAnnual General Meeting of the Company held on August 08 2019.
The Members of the Company at the Annual General Meeting held on August 08 2019passed special resolution for the re-appointment of Dr. Azad Moopen (DIN:00159403) asManaging Director of the Company for a period of 5 years subject to approval of theCentral Government. The Central Government has granted approval under section 196 readwith Part-I (e) of schedule-V of the Companies Act 2013 vide letter reference no. SRNH95544425/02/2019-CL- VII dated February 27 2020 for the re-appointment of Dr. AzadMoopen as Managing Director of the Company with effect from December 01 2019 for a periodof 3 years 4 months and 13 days i.e upto April 14 2023 on which date Dr. Azad Moopenshall be attaining the age of 70 years.
As per the proviso to section 196 (3) (a) of the Companies Act 2013 a Company isrequired to obtain the approval of the Members by the way of a special resolution forappointing a person as a Managing Director who has attained the age of 70 years. Based onthe aforementioned provisions the Company shall seek necessary approvals in future forcontinuing the appointment of Dr. Azad Moopen as Managing Director after April 14 2023.
In accordance with Articles of Association Mr. Anoop Moopen (DIN: 02301362)Director shall retire by rotation at the ensuing Annual General Meeting. The Directorbeing eligible offers himself for re-appointment. The Notice of 12th Annual GeneralMeeting of the Company contains the above proposal for the approval of the Members.
During the year under review Mr. Maniedath Madhavan Nambiar (DIN: 01122411) hadresigned as Non-Executive Independent Director of the Company with effect from the closeof the business hours on February 11 2020.
Mr. Ravi Prasad (DIN: 07022310) and Mr. Daniel James Snyder (DIN:02298099)Non-Executive Independent Directors of the Company had retired from the Board of Directorsof the Company on completion of their term of 5 years with effect from the close of thebusiness hours on April 20 2020.
Change in Designation
The Board of Directors on recommendation of the Nomination and RemunerationCommittee at their meeting held on August 07 2019 has recommended the appointment of Ms.Alisha Moopen (DIN: 02432525) as Deputy Managing Director of the Company for a period of 5years. The Members of the Company passed a special resolution vide Postal ballot resultsdated October 14 2019 to appoint Ms. Alisha Moopen as Deputy Managing Director of theCompany for a period of 5 years with effect from August 07 2019 subject to approval ofthe Central Government. The Company has applied for the approval of the Central Governmentunder section 196 read with Part-I (e) of schedule-V of the Companies Act 2013 andapproval is awaited.
Key Managerial Personnel
In terms of the provisions of Section 203 of the Companies Act
2013 the Company has appointed the following Key Managerial
|Name of the Key Managerial Personnel ||Designation |
|1 Dr. Azad Moopen ||Chairman and Managing Director |
|2 Ms. Alisha Moopen ||Deputy Managing Director |
|3 Mr. Sreenath Reddy ||Group Chief Financial Officer |
|4 Ms. Puja Aggarwal ||Company Secretary and Compliance Officer |
11. COMMITTEES OF DIRECTORS
The Company has constituted committees as required under the Companies Act 2013 andthe Listing regulations the details of the said Committees forms part of the CorporateGovernance Report.
12. BOARD EVALUATION
Pursuant to the provisions of Companies Act 2013 and the Listing Regulations theevaluation of Board of Directors was conducted for the financial year 2019-20.
The evaluation was conducted by engaging an external independent firm having therequisite expertise in this field. An online questionnaire method was adopted forevaluation based on the criteria formulated by the members of the Nomination andRemuneration Committee (NRC"). The evaluation was made to assess theperformance of individual Directors committees of Board Board as a whole and theChairman. Adherence to the Code of Conduct display of leadership qualities independenceof judgement integrity and confidentiality etc were the criterion based on which theperformance evaluation was conducted. Further the evaluation of Management was conductedbased on the factors such as timeliness in the flow of information transparency andquality of information provided to the Board for decision making adoption of suggestionsprovided by the Board etc.
The Independent Directors at their meeting held on April 02 2020 reviewed theperformance of the Non-Independent Directors Committees of the Board the Board as awhole and Chairman based on the evaluation of other Directors. The Nomination andRemuneration Committee at their meeting reviewed the outcome of the evaluation process.The Directors were satisfied by the constructive feedback obtained from theircounterparts.
13. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the declaration from Independent Directors in accordance withSection 149(7) of the Companies Act 2013 and Regulations 25(8) of the Listing Regulationsthat he/she meets the criteria of independence as laid out in Section 149(6) of the Actand Regulations 16(1)(b) of the Listing Regulations.
14. POLICY ON APPOINTMENT OF DIRECTORS AND REMUNERATION
The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178 (3) of the Companies Act 2013 has been disclosed in theCorporate Governance Report and is also available on the website of the Company atwww.asterdmhealthcare.com/investors.
15. BOARD MEETINGS AND ANNUAL GENERAL MEETING
The Board of Directors met 5 times during the financial year viz May 28 2019; August07 2019; November 12 2019; January 09 2020 and February 11 2020. The intervening gapbetween the meetings was within the period prescribed under the Companies Act 2013detailed information regarding the meetings of the Board and Committees of the Board isincluded in the report on Corporate Governance.
The annual general meeting for the financial year 2018-19 was held on August 08 2019at the registered office of the Company. The Members of the Company passed a specialresolutions vide Postal ballot results dated October 14 2019 to shift the registeredoffice of the Company from the State of Kerala to the State of Karnataka and to appointMs. Alisha Moopen as Deputy Managing Director of the Company for a period of 5 years.
16. SECRETARIAL STANDARDS
The Company has devised proper systems to ensure compliance with all applicableSecretarial Standards issued by the Institute of Company Secretaries of India(ICSI") as required under section 118 (10) of the Companies Act 2013.
17. PARTICULARS OF EMPLOYEES
The statement containing particulars of employees as required under section 197 (12) ofthe Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in Annexure 4 forming partof this report.
18. EMPLOYEE STOCK OPTION SCHEME
The Nomination and Remuneration Committee of the Board inter alia administers andmonitors the Company's Employees Stock Option Plan Aster DM Healthcare EmployeesStock Option Plan 2013" in accordance with SEBI (Share Based Employee Benefits)Regulations 2014 (SBEB Regulations") and the Plan is implemented through DMHealthcare Employees Welfare Trust.
During the year 131336 shares were transferred from the ESOP Trust to the eligibleemployees under the Company's prevailing ESOP Plan. As on March 31 2020 the ESOP Trustheld 2872616 (0.58%) equity shares of the Company.
Disclosures as required under Rule 12 of Companies (Share Capital and Debentures)Rules 2014 SEBI (SBEB) Regulations 2014 read with SEBI Circular CIR/CFD/POLICYCELL/2/2015 dated June 16 2015 have been provided separately in Annexure 5 to theDirectors' Report.
The certificate from the Statutory Auditor that the Plan has been implemented inaccordance with SBEB Regulations and the resolutions passed by the shareholders shall beplaced at the Annual General Meeting for inspection by the Members.
19. INTERNAL CONTROL SYSTEMS
The Management has laid down internal financial controls to be followed by the Company.The Company has adopted policies and procedures for ensuring orderly and efficient conductof the business including adherence to the Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial disclosures.The internal control system is commensurate with the nature of business size andcomplexity of operations and has been designed to provide reasonable assurance on theachievement of objectives effectiveness and efficiency of operations reliability offinancial reporting and compliance with applicable laws and regulations.
As part of the Corporate Governance Report CFO certification is provided forassurance on the existence of effective internal control systems and procedures in theCompany.
The internal control framework is supplemented with an internal audit program thatprovides an independent view of the efficacy and effectiveness of the process and controlenvironment and supports a continuous improvement program. The internal audit program ismanaged by an in-house internal audit function and by Grant Thornton India LLP externalfirm. The Audit Committee of the Board oversees the internal audit function.
The Audit Committee is regularly apprised by the internal auditors through variousreports and presentations. The scope and authority of the internal audit function isderived from the audit charter approved by the Audit Committee. The internal auditfunction develops an internal audit plan to assess control design and operatingeffectiveness as per the risk assessment methodology. The internal audit functionprovides assurance to the Board that a system of internal control is designed and deployedto manage key business risks and is operating effectively.
20. VIGIL MECHANISM
The Company believes in conducting its affairs in a transparent manner and adoptshighest standards of professionalism and ethical behaviour. Integrity is one of the keyvalues of the Company that it strictly abides by. Keeping that in view the Company hasestablished a vigil mechanism for Directors and employees to report concerns aboutunethical behaviour actual or suspected fraud or violation of the Company's code ofconduct or ethics. The Whistle Blower Policy has been amended with effect from February11 2020 and is available on the website of the Company at www.asterdmhealthcare.com/investors.
The Company as a policy condemns any kind of discrimination harassmentvictimization or any other unfair employment practice being adopted against whistleblowers and provides adequate safeguard measures. It also provides a direct access to theChairman of the Audit Committee under extraordinary circumstances.
In addition to this the Company has also engaged an independent agency called'Integrity Matters' that provides an electronic and digital platform to report anyunethical practices or harassment/ injustice at the workplace confidentially and ifdesired anonymously by any employees or vendors of the Company or any of its subsidiariesanywhere in the world to ensure fairness and transparency in the process.
21. RISK MANAGEMENT POLICY
Risk is the effect of uncertainty on an expected result and every business is exposedto it. The ability to effectively identify and manage risk is a vital element of businesssuccess for all parts of the Company's business. During the period under review theCompany has strategized to handle the risks by:
- defining analysing and prioritizing various kinds of risks;
- forming a cross functional team with well-defined roles for identifying and reportingof new risks;
- giving training and support for the risk owners; and
- commencing the standardization and digitalization of risk reporting planning riskmanagement activities and reviewing the risks periodically.
The Company strives to bring in further accountability and transparency and expertisein the risk management by periodic reporting to the Risk Management committee. The RiskManagement Committee oversees how management monitors compliance with the risk managementpolicies and procedures and reviews the adequacy of the risk management framework inrelation to the risks being faced by the Company.
Risk of natural calamities including pandemic innovation risk and medical risk wereidentified by management as high risks that can have major impact on the business of theCompany. Competition risk Technology risk and Investment risk are examples of moderaterisks on the company's business.
The Risk management policy is available on the website of the Company atwww.asterdmhealthcare.com/investors.
22. CORPORATE SOCIAL RESPONSIBILITY
The Company has a well-defined policy on CSR as per the requirement of Section 135 ofthe Companies Act 2013 which covers the activities as prescribed under Schedule VII ofthe Act Companies Act 2013. The CSR Policy of the Company is available on the website ofthe Company at www. asterdmhealthcare.com/investors. Details on Corporate SocialResponsibility activities undertaken during the year is provided in Annexure 6 formingpart of this report.
Further the CSR policy of the Company has undergone changes during the period underreview. The policy is amended to put forth its core values and high standards of corporategovernance by inclusion of the mission and vision statements. It has clearly defined theactivities the Company proposes to undertake which are in line with the mission and visionstatements. The policy mainly focuses on three elements being:
Environment: The programmes covered under this head are relating to sustainabilitypractices like waste management measures to reduce the impact of climate change andglobal warming sustainable consumption of materials etc.
People: Employment of equal rights to women recruitment of differently abled peopleand ensuring employment of peripheral community members.
Social: Strategic Pillars of various programmes proposed to be undertaken: Safety andHealth awareness programmes Mobile Medical Services Community Dialysis Centers EarlyDiseases Detection and Cancer Screening Programme Paediatric Cardiac Surgeries DisasterManagement and Village Adoption.
i. Statutory Auditors
At the Annual General Meeting held on August 08 2019
M/s. B S R & Associates LLP Chartered Accountants [Firm Registration No:116231W/W-100024] were appointed as the Statutory Auditor of the Company to hold officetill the conclusion of 12th Annual General Meeting. M/s. B S R & Associates LLP haveheld the office as Statutory Auditor for the maximum term prescribed as per Section 139 ofthe Companies Act 2013 hence they are liable to retire at the ensuing 12th Annual GeneralMeeting.
The Board of Directors on the recommendation of the Audit Committee has approved andrecommended to the Members for the appointment of M/s. Deloitte Haskins & SellsChartered Accountants [Firm registration number: 008072S] as Statutory Auditors of theCompany for a period of 5 years from the conclusion of 12th AGM till the conclusion of the17th AGM. The Notice of 12th Annual General Meeting of the Company contains the aboveproposal for the approval of the Members.
ii. Secretarial Auditor
M/s. M Damodaran & Associates LLP Practising Company Secretaries [Firmregistration number: L2019TN006000] were appointed to conduct the Secretarial Audit of theCompany for the financial year 2019-20 as required under section 204 of the CompaniesAct 2013 and Rules thereunder.
iii. Cost Auditor
The Company has maintained cost record and accounts as specified by the CentralGovernment under section 148(1) of the Companies Act 2013 and rules made thereunder andM/s. BBS & Associates Cost Accountants [Firm Registration No: 00273] were appointedas the Cost Auditor of the Company to conduct the audit of cost records for the financialyear 2019-20.
The Board of Directors on the recommendation of the Audit Committee has appointedM/s. BBS & Associates Cost Accountants [Firm Registration No: 00273] as the CostAuditor of the Company to conduct the audit of cost records for the financial year2020-2021 at a remuneration of RS 140000 (Rupees one lakh and forty thousand only) plusout of pocket expenses & taxes as applicable if any in connection with the costaudit.
The Board of Directors of the Company proposes the ratification of remuneration of M/s.BBS & Associates Cost Accountants for financial year 2020-2021 at the ensuing AnnualGeneral Meeting. The Notice of 12th Annual General Meeting of the Company contains theabove proposal for the approval of the Members.
24. AUDIT REPORT
i. Statutory Audit Report
Audit report on the financial statements of the Company for the financial year 2019-20is being circulated to the Members along with the financial statements. There are noqualifications or adverse remarks made by the statutory auditors in their report for thefinancial year ended March 31 2020.
During the year under review the Statutory Auditors have not reported to the AuditCommittee any incident of fraud committed against the Company by its officers or employeesunder Section 143 (12) of the Companies Act 2013.
ii. Secretarial Audit Report
The Secretarial Audit report issued by M/s. M Damodaran & Associates LLPPractising Company Secretaries for the financial year 2019-20 is annexed as Annexure 7 tothis report. The observation and management response to the same is given below:
1. Alfaone FZ LLC was incorporated in Dubai on October 09 2019 as a wholly ownedsubsidiary of Aster DM Healthcare FZC a step-down subsidiary of the Company thedisclosure of which was made to the stock exchanges on October 31 2019. The lag wasmainly due to the delay in receiving the license from the registration authority.
2. Company had restricted its designated persons' from trading in its securitiesduring the period between July 01 2019 and August 09 2019 on account of consideration ofits financial results for the quarter ended on June 30 2019. On July 09 2019 one of theNon-Executive Directors of the Company based on the pre-clearance received from theCompany's Compliance Officer bought 25000 equity shares of the Company from the market.Upon being made aware of the transaction and its potential noncompliance the ComplianceOfficer reported the same to the management and the Company's Audit Committee whoinitiated an enquiry into the matter. The Company has since informed The Securities andExchange Board of India that the said trade was executed by the Director based on the pre-clearance issued inadvertently by the Compliance Officer and that the Director did notpossess any unpublished price sensitive information at the time of seeking preclearancefor the said trade.
During the year under review the Secretarial Auditors have not reported to the AuditCommittee any incident of fraud committed against the Company by its officers or employeesunder Section 143 (12) of the Companies Act 2013.
Pursuant to Regulation 24A of the Listing Regulations read with SEBI circular datedFebruary 08 2019 listed entities are required to submit the Annual SecretarialCompliance report with the stock exchanges within sixty days from the end of the financialyear. Further SEBI vide its circular dated March 19 2020 extended the timeline forfiling by one-month upto June 30 2020. The Company has received the Annual SecretarialCompliance report from M/s. M Damodaran & Associates LLP Practising CompanySecretaries [Firm registration number: L2019TN006000] and the same has been submitted tothe stock exchanges within the stipulated date and a copy of the report is annexed asAnnexure 7A to this report.
25. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION
In March 2020 the World Health Organisation declared COVID-19 to be a pandemic. Thispandemic has resulted in disruption to regular business operations due to lockdowndisruptions in transportation travel bans quarantines social distancing and otheremergency measures imposed by the Government. The Company has adopted measures to curb thespread of infection in order to protect the health of its employees and ensure businesscontinuity with minimal disruption. The Company believes that the COVID-19 pandemic willonly have a short-term impact on its operations and after easing of the lockdownrestrictions the business is expected to return to normal. The Company has consideredavailable internal and external information while finalizing various estimates in relationto its financial results upto the date of approval of the financial results by the Boardof Directors. Further the Company has taken various measures to reduce its fixed cost -for example salary reductions optimization of administrative sales and marketing costsdeferment of capex along with judicious resource allocation and requesting for the waiverof minimum guarantee fee and revenue share for hospital premises taken on lease.Accordingly the Management believes that the Company will not have any challenge inmeeting its financial obligations for the next 12 months based on the financial positionand liquidity as on the date of the balance sheet and as on date of signing of thesefinancial results. The actual impact of the global health pandemic may be different fromthat which has been estimated as the COVID -19 situation evolves in India and globally.
The Company will continue to closely monitor any material changes to future economicconditions. However the pandemic did not have any material impact on the financial resultfor the year ended March 31 2020.
26. EXTRACT OF ANNUAL RETURN
As per Section 134 (3) (a) of the Companies Act 2013 an extract of the annual returnin prescribed format is given in Form MGT-9 as Annexure 8 to this report and is alsoavailable on the website of the Company at www.asterdmhealthcare.com/investors.
27. SIGNIFICANT AND MATERIAL ORDERS
There are no significant or material orders passed by any regulators or courts ortribunals impacting the going concern status and Company's operations in future.
28. BUSINESS OF THE COMPANY
The Company is into the business of setting up and running of hospitals and healthcarecentres. There has been no change in the nature of business during the last financialyear.
29. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has in place a Policy on Prevention of Sexual Harassment at workplaceframed under Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been constituted as per thesaid Act to redress the complaints with respect to sexual harassment. All employees(permanent contractual temporary trainees) are covered under this policy. During theyear under review no cases were reported on sexual harassment.
30. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREX EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed as Annexure 9 to thisreport.
31. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required under the Regulation 34 (3) of theSEBI Listing Regulations and Schedule
V (B) to the said regulation forms part of the Annual report.
32. CORPORATE GOVERNANCE
As per Regulation 34 and Schedule V (C) to the SEBI Listing Regulations the CorporateGovernance Report with the Compliance certificate from the Practicing Company Secretary isattached to this report as Annexure 10.
33. BUSINESS RESPONSIBILITY REPORT
As per the Regulation 34 (2) (f) of the SEBI Listing Regulations a BusinessResponsibility Report is annexed as Annexure 11 to this report.
34. LISTING ON STOCK EXCHANGES
The Company's shares are listed on both BSE Limited and National Stock Exchange ofIndia Limited from February 26 2018.
Your Directors thank the Company's Shareholders customers banks financialinstitutions and well-wishers for their continued support during the year. Your Directorsplace on record their appreciation on the contribution made by the employees at alllevels. The Company's consistent growth was made possible by their hard work solidaritycooperation and support. The Board sincerely expresses its gratitude to Government ofIndia Ministry of Corporate Affairs Reserve Bank of India Foreign Investment PromotionBoard Securities and Exchange Board of India BSE Limited National Stock Exchange ofIndia Limited and Governments of Kerala Karnataka Andhra Pradesh Telengana andMaharashtra for the guidance and support received from them including officials thereatfrom time to time.
| ||For and on behalf of the Board of Directors |
| ||Dr. Azad Moopen |
|Place: Dubai ||Chairman and Managing Director |
|Date: June 23 2020 ||DIN: 00159403 |