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KMC Speciality Hospitals (India) Ltd.

BSE: 524520 Sector: Health care
NSE: N.A. ISIN Code: INE879K01018
BSE 00:00 | 26 Jun 11.31 -0.08
(-0.70%)
OPEN

11.60

HIGH

11.60

LOW

10.93

NSE 05:30 | 01 Jan KMC Speciality Hospitals (India) Ltd
OPEN 11.60
PREVIOUS CLOSE 11.39
VOLUME 22390
52-Week high 20.30
52-Week low 8.59
P/E 21.34
Mkt Cap.(Rs cr) 184
Buy Price 11.31
Buy Qty 1.00
Sell Price 11.47
Sell Qty 100.00
OPEN 11.60
CLOSE 11.39
VOLUME 22390
52-Week high 20.30
52-Week low 8.59
P/E 21.34
Mkt Cap.(Rs cr) 184
Buy Price 11.31
Buy Qty 1.00
Sell Price 11.47
Sell Qty 100.00

KMC Speciality Hospitals (India) Ltd. (KMCSPECIALITY) - Director Report

Company director report

The Members

Your Directors have pleasure in presenting their THIRTY FIFTH Annual Report on thebusiness and operations of the Company and the accounts for the Financial Year ended March31 2018.

1. Financial highlights for the year ended March 312018

Particulars 2017-18 2016-17
(Rs In Lakhs) (Rs In Lakhs)
Operating Income 7066.65 5482.88
Other Income 32.16 11.50
Total Income 7098.81 5494.38
Operating Expenses 5653.64 4252.48
EBIDTA 1445.17 1241.90
Finance Cost 78.70 124.06
Depreciation 386.38 319.11
Profit/(Loss) before Tax 980.09 798.73
Tax expense 226.43 171.59
Provision for Deferred Tax 88.48 91.73
Profit/fLoss) after Tax (PAT) 665.18 535.41

2. Dividend

Board has not recommended dividend for the financial year 2017-18 keeping in view thelong term objectives of the Company.

3. Reserves

The Company has not transferred any amount to General reserve during the year.

4. Business and Operations Review

Total Operating income increased by 28.89% to Rs. 7066.65 lakhs during the financialyear 2017-18 from 5482.88 lakhs in the previous year.

Your Company has earned Profit after tax of Rs. 665.18 lakhs for the financial year2017-18 significantly higher than Rs. 535.41 lakhs achieved during the previous year.

Improvement in Bed occupancy with better revenue mix coupled with operationalefficiency and cost control measures contributed to better profitability.

5. Statement in respect of adequacy of internal financial controls with reference tothe Financial Statements

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain independence of the Internal Audit function theInternal Auditor reports to the Chairman of the Audit Committee.

The Internal Audit Team along with the Process Team monitors and evaluates the efficacyand adequacy of internal control systems in the Company its compliance with operatingsystems accounting procedures and policies of the Company. Based on the report ofinternal audit corrective actions in the respective areas are undertaken and controlsstrengthened. Significant audit observations and corrective actions thereon are reportedto the Audit Committee of the Board.

6. Disclosure of particulars of loans/advances/investments outstanding during thefinancial Year

The Company has not given any loans and advances to other body corporate and associatesas specified under Section 186 of the Companies Act 2013. The details of the investmentsmade by the Company and guarantees provided by the Company are given in the notes to thefinancial statements.

7. Deposits

The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the balancesheet.

8. Statutory Auditors

Section 139 of the Companies Act 2013 provided for the appointment of StatutoryAuditors for a period of five years and hence M/s B S R & Co. LLP CharteredAccountants (ICAI Firm Registration No 101248W/W-100022) were appointed as the StatutoryAuditors of the Company in the Annual General Meeting of the Company held on 27thSeptember 2014 for a period till the conclusion of the Thirty Sixth Annual GeneralMeeting.

9. The details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future

There are no significant and material orders passed by the regulators or courts ortribunals that may have an impact for the company as a going concern and /or company'soperations.

10. Closure of Register of Members and Share Transfer Books

The Register of Members and Share Transfer Books of the company will be closed witheffect from 22nd September 2018 to 28th September 2018 (both daysinclusive).

11. The Board observed that there are no qualifications or reservations or adverseremarks by the Statutory Auditors as well as by the Secretarial Auditor in their reports.

12. Share Capital

The Company has not issued any equity shares with differential rights sweat equityshares employee stock options or employee stock purchase scheme. No shares have beentransferred to Suspense account in terms of Clause 39 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. As at the end of the financial year theCompany's Authorized Equity Share Capital stands at Rs 2500 lakhs and Paid up Equity ShareCapital stands at Rs. 1630.85 Lakhs consisting of 1630.85 lakhs fully paid up EquityShares of Re. 1 each.

13. Corporate Governance

Your Company has been complying with the provisions of Corporate Governance asstipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

A separate report on Corporate Governance along with Practicing Company Secretary'scertificate on compliance of the Corporate Governance norms as stipulated in Schedule Vread with Clause 34(3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and Management Discussion & Analysis report are provided elsewherein this Annual Report.

14. Transfer to Investor Education and Protection Fund

As required under the provisions of Section 205A and 205C and other applicableprovisions of the Companies Act 1956 (Section 124 of the Companies Act 2013) dividendsthat remain unpaid/unclaimed for a period of seven years are to be transferred to theaccount administered by the Central Government viz. Investor Education and ProtectionFund

("IEPF").There are no amounts which remain unpaid/unclaimed for a period ofseven years and hence no amount has been transferred to "IEPF".

15. Extract of Annual Return

The Extract of Annual Return as on the Financial Year ended 31sMarch 2018as prescribed under Section 92 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 is attached to this report as Annexure 1.

16. Conservation of energy technology absorption foreign exchange earnings and outgo:

The particulars required to be given as per Section 134(3) (m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are under

i. Conservation of energy-

Though the nature of the business of the company is such that the consumption of energyis not significant when compared to the overall cost of operations the company takes allefforts to conserve energy and carries out periodical energy audits.

ii. Technology absorption-

in spite of the fund constraints the company is currently in the process of updatingthe technology in various fields of equipments. Within the limitations everythingpossible was done to acquire improve and update the technology.

iii. Foreign Exchange earnings and outgo.

Particulars 2017-18 2016-17
1. Foreign Exchange Earned Nil Nil
2. Foreign Exchange outgo Nil Nil

17. Corporate Social Responsibility

Corporate Social Responsibility (CSR) is an initiative brought in by the Ministry ofCorporate Affairs whereby every company having net worth of rupees 500 Crores or more orturnover of rupees 1000 Crores or more or a net profit of rupees 5 Crores or more duringany financial year are mandated to serve the society by contributing at least 2% of theaverage net profits of the Company during the three immediately preceding financial yearsin various CSR activities as defined in Schedule VII of the Companies Act 2013.

The net profit for the financial year 2017-18 has crossed the ceiling limit of Rs. 5Crores and hence CSR rules are applicable to the Company. The Company has duly constituteda Corporate Social Responsibility Committee as required under Section 135 (1) of theCompanies Act 2013 and the relevant rules made thereunder and the Board has approved apolicy on Corporate Social Responsibility which is available in the website of the Companyhttp://www.kauvervhosDital.eom/investors#.

The annual report on your Company's CSR activities is appended as Annexure 4 to theBoard's report.

18. Particulars of Employees

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

19. Directors and Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act 2013 the KeyManagerial Personnel of the Company are Dr. S Chandrakumar Managing Director Dr DSenguttuvan Executive Director Mr. S. Badrinarayan Chief Financial Officer and Mr.Sathyan G Company Secretary.

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

The Statement of Declarations from Independent Directors that they meet the criteria ofindependence as provided in subsection (6) of Section 149 of the Companies Act 2013 hasbeen obtained from the Independent Directors and the Board has taken on record the same.

20. Declaration given by Independent Directors

All the Independent Directors of the Company have given their declaration under Section149 (7) of the Companies Act 2013 confirming that they are in compliance with thecriteria as laid down in the said Section for being an Independent Director of theCompany. Further there has been no change in the circumstances which may affect theirstatus as independent director during the year.

21. Policy on Directors' Appointment and Remuneration including criteria fordetermining qualifications positive attributes independence of a director

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for the selection and appointment of Directors Senior Management andtheir remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

22. Particulars of contracts or arrangements with related parties

During the financial year 2017-18 the contracts and arrangements entered by the Companywith related parties were on an "arm's length" basis and in the ordinary courseof business. There are no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interests of the Company at large.

The policy on dealing with Related Party Transactions as approved by the Board isuploaded on the Company's website.

The details of contracts or arrangements with related parties entered during the yearare given in a separate annexure to the report in Annexure 2.

23. Risk Management

The Company approaches Risk Management by identification assessment monitoring andmitigation of various risks that the company may face in its business. The Company'senterprise Risk Management approaches identifies and categorizes the major risks relatingto Operations and Finance. The Company's objective is to achieve a balance betweenacceptable levels of risk and reward in effectively managing its Operational FinancialBusiness and other risks.

24. Secretarial Audit Report

Pursuant to Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. Alagar& Associates Practicing Company Secretary as the Secretarial Auditors of the Companyin the Board Meeting held on 10th February 2018. The Secretarial Audit Reportissued by the Company's Secretarial Auditor M/s. Alagar & Associates is annexed andforms part of this Report in Annexure 3. The report does not contain any qualification.

25. Number of meetings of Board

The details of the number of meetings of the Board of Directors are included as a partof Corporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

26. Composition of Audit Committee

The Audit Committee of the Company has been constituted in accordance with theprovisions of Section 177 of the Companies Act 2013 read with Clause 18 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The details of theAudit Committee are included as a part of Corporate Governance Report.

27. Details of establishment of vigil mechanism

The Company has formulated and adopted a vigil mechanism for employees to reportgenuine concerns to the Chairman of the Audit Committee. The policy provides opportunitiesfor employees to access in good faith the Audit Committee if they observe unethical andimproper practices. The Whistle Blower policy of the Company is available in the websiteof the Company. The link for the same is http://www.kauvervhospital.eom/investors#.

28. Prevention of Insider Trading

The Company has adopted a code for prevention of insider trading with a view toregulate trading and securities by the Directors and designated employees of the Company.The code requires pre-clearance for dealing in the Company's securities and prohibits thepurchase or sale of Company's Securities while in possession of unpublished pricesensitive information and during the period when the trading window is closed.

29. Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and the Regulation 19 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors of the Company has completed a formal evaluation of their performance and thatof its Committees and individual directors.

30. Separate Meeting of Independent Directors

The Independent Directors of the Company had met during the financial year to reviewthe performance of the NonIndependent Directors Chairman (after taking into account theviews of Executive and Non-Executive Directors of the Company) and Board as a whole andalso the access quality quantity and timeliness of the flow of information between theCompany's management and the Board.

During the Financial Year under review the Independent Directors met on 11thNovember 2017 and all the Independent Directors attended the Meeting without the presenceof the non-independent directors and the members of the management.

31. Listing fees:

The Company confirms that it has paid the annual listing fees for the year 2018-19 toBombay Stock Exchange where the company's shares are listed.

32. Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013:

The Company has in place a Policy on prevention of Sexual Harassment in accordancewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. All employees are covered under this policy.

The company has not received any complaints under Sexual Harassment of Women atWorkplace (Prevention Prohibition & Redressal) Act 2013 during the financial year2017-18.

33. Directors' Responsibility Statement as required under Section 134 (5) of theCompanies Act 2013

In terms of provisions of Section 134(5) of the Companies Act 2013 your Directorsconfirm that:

(i) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation 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 at the end of the financial year and ofthe profit and loss of the company for that period.

(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities.

(iv) the directors had prepared the annual accounts on a going concern basis.

(v) the directors had laid down internal financial controls and such internalfinancial controls are adequate and were operating effectively.

(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.

34. Material changes and commitments affecting financial position between the end ofthe financial year and the date of the report

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 2018 to the date of this report.

35. Familiarization Programme for Independent Directors:

The Board members are provided with necessary documents reports and internal policiesto enable them to familiarize with the Company's procedures and practices. The details ofsuch familiarization programmes for the Independent Directors are posted on the website ofthe Company.

36. Acknowledgments

We thank the various Government Agencies and Banks for their continued support andco-operation to the Company. We place on record our appreciation of the contribution madeby our employees consultants and officers of the Company during the year under report.

For and on behalf of the Board of Directors

Place: Chennai (Dr S Chandrakumar) (Dr D Senguttuvan)
Date :13th August 2018 DIN:01867847 DIN:01867900
MANAGING DIRECTOR EXECUTIVEDIRECTOR