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Chennai Meenakshi Multispeciality Hospital Ltd.

BSE: 523489 Sector: Health care
NSE: N.A. ISIN Code: INE889F01017
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NSE 05:30 | 01 Jan Chennai Meenakshi Multispeciality Hospital Ltd
OPEN 19.00
PREVIOUS CLOSE 19.00
VOLUME 15
52-Week high 31.70
52-Week low 11.00
P/E 9.50
Mkt Cap.(Rs cr) 14
Buy Price 0.00
Buy Qty 0.00
Sell Price 19.00
Sell Qty 185.00
OPEN 19.00
CLOSE 19.00
VOLUME 15
52-Week high 31.70
52-Week low 11.00
P/E 9.50
Mkt Cap.(Rs cr) 14
Buy Price 0.00
Buy Qty 0.00
Sell Price 19.00
Sell Qty 185.00

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

Company director report

The Directors have pleasure in presenting their 27th Annual Report and AuditedStatement of Accounts of the Company for the year ended 31st March 2017.

PERFORMANCE ATA GLANCE: (Rs in Lakhs)

Particulars Year ended Year ended
31.03.2017 31.03.2016
Gross Income 1913.16 2066.86
Profit / (Loss) Before Depreciation Tax a Financial Expenses 156.61 315.32
Financial Expenses 135.60 133.70
Depreciation 111.90 116.21
Profit / (Loss) Before Tax (90.89) 65.41
Less: Exceptional Items - -
Tax Expenses:
a. Current Tax
b. Fringe Benefit Tax
c. Deferred Tax Liability
d. Income Tax for earlier year 0.98 -
Profit / (Loss) for the year carried to Balance Sheet (91.88) 65.41

DIVIDEND

In view of the absence of profit your Directors have not recommended any dividend forthe year 2016-17 (Previous Year- NIL).

TRANSFER TO RESERVES:

No transfers were made to Reserves a Surplus for the year 2016-17.

BUSINESS OPERATIONS:

During the year 2016-17 there was decline in the overall performance of the company dueto stiff competition poor patient visits due to construction of a new ramp in thehospital partly due to poor money flow in the hands of people consequent ondemonetization effect of Cyclone Vardha a Chief Minister's demise. The gross incomeduring the year under review was Rs.1913.16 Lakhs as against Rs.2066.86 in the previousyear. There was a Loss of Rs. 91.88 Lakhs during the year under review as against a profitof Rs.65.41 in the previous year.

OPERATIONAL HIGHLIGHTS

The Number of patients was 3418 during the year 2016-17 as against 4050 in the previousyear. The average occupancy was 46%. Your management believes that the strengthening ofexisting facilities and addition of new facilities and services with restructuring oftariff keeping always the affordability factor in mind are expected to improve theperformance.

MANAGEMENT DISCUSSION ANDANALYSIS

A detailed review of operations performance and future outlook of the Company iscontained in the "MANAGEMENT DISCUSSION AND ANALYSIS REPORT" that forms anintegral part of this report.

(Annexure -I)

MATERIAL CHANGES Et COMMITMENTS:

There is no change in the nature of business of the company during the year. There areno material changes and commitments in the business operations of the company since theclose of the financial year on 31st March 2017 to the date of this report.

EXTRACT OF ANNUAL RETURN:

As required pursuant to Section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 is given in (Annexure-II)

REAPPOINTMENT OF DIRECTOR:

Mr. G.R.Navin Raakesh (DIN: 01692155) retires by rotation and being eligible offershimself for re -appointment.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of theCompany under Section 149 (7) of Companies Act 2013 that the Independent Directors of thecompany meet with the criteria of their Independence laid down in Section 149 (6).

PARTICULARS OF EMPLOYEES:

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

NUMBER OF MEETINGS OF BOARD:

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

COMPOSITION OF COMMITTEES OF BOARD:

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

The Composition a Activities are as follows:

Name of the Committee Composition of the Committee/ No of times the committee met Highlights of duties responsibilities & Activities
Audit Committee Dr. S. Kameswaran c The Audit Committee was mandated with the same Terms of Reference specified in SEBI (LODR) Regulations 2015.
Chairperson DIN: 00255389
(Independent Director)
Mr. B. Ramachandran
DIN: 06397113 c The current Terms of Reference fully conform to the requirements of the Companies Act.
(Independent Director)
Member
Mr. A.N. Radhakrishnan
DIN: 01508867 i=::. The Audit committee is responsible for overseeing the Company's financial reporting process reviewing the quarterly/half- yearly/annual financial statements reviewing with the management the financial statements and adequacy of internal audit function recommending the appointment/re-appointment of statutory auditors and fixation of audit fees reviewing the significant internal audit findings/related party transactions reviewing the Management Discussion and Analysis of financial condition and result of operations and also statutory compliance issues.
(Chairman & Managing Director) Member
Mr. T.Jeyaprakasam
Secretary of the Committee (Company Secretary)
The Committee met 4 times on
:-. 28-05-2016
:-. 12-08-2016
:-. 08-11-2016
10-02-2017
1#. The Committee acts as a link between the management external and internal auditors and the Board of Directors of the Company.
Nomination & Remuneration Committee Dr. S. Kameswaran c> To fix salary allowances and other perks to senior level personnel as and when appointed by the Company.
Chairperson of the Committee
(Independent Director)
DIN: 00255389
REMUNERATION POLICY:
Mr. B. Ramachandran The Remuneration Policy of the Company for the managerial personnel is based on the performance potential and performance of the individual/personnel.
DIN: 06397113
(Independent Director)
Member of the Committee
Mrs. Premalatha Kanikannan
DIN: 01710387
Director (Chief Financial Officer) CEO/CFO CERTIFICATION by Dr. V. Krishnamurthy Chief Executive Officer and Mrs. Premalatha Kanikannan Chief Financial Officer as required under SEBI (LODR) was placed before the Board at its meeting held on 22.05.2017.
Member of the Committee
No. of meetings held : NIL
Stakeholders Relationship Committee Dr. S. Kameswaran c The Company has attended to the investors' complaints and redressed them within 15 days from the date of their receipt during the year 2016- 2017.
DIN: 00255389 Member of the Committee (Independent Director)
Mr. B. Ramachandran
DIN: 06397113
(Independent Director)
Chairperson of the Committee
The Committee met on
:-. 09-01-2017
:-. 13-02-2017
:-. 07-03-2017
Internal Complaints Committee Mr. B. Ramachandran To consider & redress complaints of sexual harassment.
DIN: 06397113
(Independent Director) Member
Dr. S. Kameswaran
DIN: 00255389
(Independent Director) Member
Whistle Blower Committee Mr. B. Ramachandran This provides adequate safeguards
DIN: 06397113 against victimisation of Directors /
(Independent Director) Member Employees or any other person.
Dr. S. Kameswaran
DIN: 00255389
(Independent Director) Member

POLICIES OF THE BOARD:

WHISTLE BLOWER POLICY:

As per Section 177 (9) of the Act read with relevant Rule 7 of the Companies (Meetingsof Board and its Powers) Rules 2014 and SEBI (LODR) 2015 the Company has established avigil mechanism overseen by the Audit Committee. The Policy ensures that strictconfidentiality is maintained whilst dealing with concerns and also that no discriminationwill be meted out to any person for a genuinely raised concern. This has been uploaded inthe Company's website. No complaint under this facility was received in FY 2016-17.

REMUNERATION POLICY:

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

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

The Non -Executive Directors will be paid sitting fees for attending the Board andCommittee Meetings as per the stipulations in the Act and the Articles of Association ofthe company and as recommended by the Nomination and Remuneration Committee. Differentscales of sitting fee may be fixed for each category of the directors and type of meeting.However the fees payable to the

Independent Directors and Woman Directors shall not be lower than the fee payable toother categories of directors.

In addition to this the travel and other expenses incurred for attending the meetingsare to be met by the Company. Subject to the provisions of the Act and the Articles ofAssociation the Company in

General Meeting may by special resolution sanction and pay to the Directorsremuneration not exceeding 1 % of the net profits of the Company computed in accordancewith the relevant provisions of the Act. The company shall have no pecuniary relationshipor transactions with any Non -Executive Directors.

RISK MANAGEMENT POLICY:

The Company has Business Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage.

RELATED PARTY TRANSACTION POLICY:

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

INSIDERTRADING POLICY:

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

AUDITORS

M/S. Varma a Varma Chartered Accountants the Statutory Auditors of the Company holdoffice till the conclusion of the 27th Annual General Meeting of the Company. The Boardhas recommended the appointment of M/s. MRC a Associates (FRN. 004005S) CharteredAccountants Chennai-600 030 as the Statutory Auditors of the Company in their place for aterm of five consecutive years from the conclusion of the 27th Annual General Meeting ofthe Company scheduled to be held in the year 2017 till the conclusion of the 32nd AnnualGeneral Meeting to be held in the year 2022 for approval of shareholders of the Companybased on the recommendation of the Audit Committee.

There are no qualifications in the Independent Auditors report.

SECRETARIALAUDIT:

Pursuant to Section 204(1) of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. T. Murugan a Practicing Company Secretary (C. P. No.4393) to undertake theSecretarial Audit of the Company for the Financial Year 2016-17.

The Secretarial Audit Report was placed before the Board on 22nd May 2017. There are noqualifications in the Secretarial Audit Report. (Annexure-III)

PUBLIC DEPOSITS

The Company has not accepted deposits during the year and there are no public depositsfallen due for payment and claimed but not paid as on 31st March 2017. The total amountof deposit outstanding as at 31st March 2017 was Nil.

SIGNIFICANT Et MATERIAL ORDERS:

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board. During theyear such controls were tested and no reportable material weaknesses in the operationswere observed.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The company did not give any Loan or Guarantee or provided any security or makeinvestment covered under Section 186 of the Companies Act 2013 during the year.

CORPORATE SOCIAL RESPONSIBILTY:

The requirements of compliance of Corporate Social Responsibility are not applicable toour company.

PARTICULARS OF CONTRACTS ORARRANGEMENTS WITH RELATED PARTY:

Particulars of contracts or arrangements with Related Parties referred in Section188(1) of the Companies Act 2013 is furnished in accordance with Rule 8(2) of theCompanies (Accounts) Rules 2014 in Form AOC-2 (Annexure-IV).

FORMAL ANNUAL EVALUATION:

The Board has carried out the annual performance evaluation of its own performance andthe

Directors individually after taking into consideration inputs received from theDirectors covering various aspects on the Board's functioning such as adequacy of thecomposition of the Board and its Committees performance of specific duties obligationsand governance.

The Performance evaluation of the Independent Directors was carried out by the entireBoard a the Performance evaluation of the Chairman was carried out by the IndependentDirectors.

The Directors expressed their satisfaction with the overall evaluation process.

RATIO OF REMUNERATION TO EACH DIRECTOR:

Disclosure of Ratio of Remuneration to each Director to the median employees'remuneration

The ratio of the remuneration of each director to the median remuneration of the employee of the company for the financial year
Name of Director & KMP Ratio
CHAIRMAN &
MANAGING DIRECTOR
Mr.A.N.Radhakrishnan 0.067 :1
DIRECTORS
Mr.G.R.Navin Raakesh NIL
Mrs.Premalatha
NIL
Kanikannan
INDEPENDENT
DIRECTORS
Dr.S.Kameswaran NIL
Mr.B.Ramachandran NIL
The percentage increase in remuneration of each - 15.67% Chief Executive Officer director Chief Financial Officer Chief Executive Company Secretary - 25%
Officer Company Secretary or Manager if any in the financial year:
The percentage increase in the median remuneration of employees in the financial year There is an average increase of 6.24%
The number of permanent employees on the rolls of company 249
The explanation on the relationship between average increase in remuneration and company performance The employees on an average received an annual increase of 6.24% based on their performance and this increase in remuneration is in line with the market trends.
Comparison of the remuneration of the key Managerial Personnel against the performance of the Company The remuneration fixed in for Key Managerial Personnel is based on the contributions made by them for retaining the sustantiability of the hospital inspite of the competitive market.
Variations in the market capitalization of the company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the company as at the close of the current financial year and previous financial year Particulars 31.03.2017 31.03.2016 change
Stock
Price (in Z) 12.85 11.25 14.22%
Market
Cap (z 9.60 8.40 14.29%
in crores)
EPS -1.23 0.88
p/E Negative EPS 12.78
Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. The average annual increase in the salaries of employees other than the managerial personnel across the organization was around 6.24%.
There is no increase in the managerial remuneration for the past five years.
Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company The remuneration fixed in for Key Managerial Personnel is based on the contributions made by them for retaining the sustantiablity of the hospital inspite of the competitive market.
The key parameters for any variable component of remuneration availed by the directors There is no variable component in the remuneration paid to the directors
The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year 0.067:1
Directors Highest Salary - Z 900000/- p.a.
Employees Highest Salary - Chief Executive Officer
- Z 13290000/- p.a.
Affirmation that the remuneration is as per the remuneration policy of the company Yes

Transfer to Investor Education and Protection Fund:

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

Particulars of Employees:

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

Directors and Key Managerial Personnel:

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

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

CONSERVATION OF ENERGY TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

REPORT ON CORPORATE GOVERNANCE

Your Company continues to strive towards highest standards of Corporate Governance. Thereport of Board of Directors on Corporate Governance is given in separate section titled"Report on Corporate Governance" which forms part of this Annual Report. Thecompany has established Whistle Blower Mechanism. (Annexure VI)

DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134(5) of the Companies Act 2013.

In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed and that there is no material deviation there from;

(b) Reasonable and prudent accounting policies have been applied in the preparation ofthe financial statements that they have been consistently applied and that reasonableprudent judgment and estimates have been made in respect of items not concluded by theyear end so as to give a true and fair view of the state of affairs of the Company as at31st March 2017 and of the Loss for the year ended on that date;

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

(d) The Directors had prepared the financial statements on a going concern basis;

(e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;

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

DUES TO SMALL Et MICRO ENTERPRISES:

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

S.No. Name of the Sundry Creditors Classified Balance as on 31.03.2017 Remarks
1. M/s. Bagdi Orthocare Small Enterprises Z 255019 Pharmacy Purchase
2. M/s. R.K. Pharma Distributors Small Enterprises Z 583158 Pharmacy Purchase
3. M/s. Sri Vari Padham Products Micro Enterprises Z 106764 Pharmacy Purchase

LISTING FEES:

The Company confirms that it has paid the annual listing fees for the year 2016-17 toBSE where shares of the company are listed.

ACKNOWLEDGEMENTS:

The Directors thank the Company's investors employees customers and medicalprofessionals for their continuous support. The Directors also thank the Government ofIndia Government of

Tamilnadu and agencies for their co-operation.

ON BEHALF OF THE BOARD
Place: Chennai A.N. RADHAKRISH NAN
Date : 22.05.2017 CHAIRMAN Et MANAGING DIRECTOR