Your Directors have pleasure in presenting their THIRTY SIXTH Annual Report on thebusiness and operations of the Company and the accounts for the Financial Year ended March312019.
1. Financial highlights for the year ended March 312019
|Particulars ||2018-19 (Rs In Lakhs) ||2017-18 (Rs In Lakhs) |
|Operating Income ||8225.86 ||7066.65 |
|Other Income ||164.40 ||32.16 |
|Total Income ||8390.26 ||7098.81 |
|Operating Expenses ||6626.99 ||5653.64 |
|EBIDTA ||1763.27 ||1445.17 |
|Finance Cost ||110.51 ||78.70 |
|Depreciation ||419.94 ||386.38 |
|Profit/(Loss) before Tax ||1232.82 ||980.09 |
|Tax expense ||319.38 ||226.43 |
|Provision for Deferred Tax ||52.67 ||88.48 |
|Profit/(Loss) after Tax (PAT) ||860.77 ||665.18 |
Board has not recommended dividend for the financial year 2018-19 keeping in view thelong term objectives of the Company.
The Company has not transferred any amount to General reserve during the year.
4. Business and Operations Review
Total Operating income increased by 16.40% to Rs. 8225.86 lakhs during the financialyear 201819 from 7066.65 lakhs in the previous year.
Your Company has earned Profit after tax of Rs. 860.77 lakhs for the financial year2018-19 significantly higher than Rs. 665.18 lakhs achieved during the previous year.
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
During the year under review the company has granted loan to its holding company SriKauvery Medical Care (India) Limited to the extent of Rs.55000000/- and the board hasprovided approval for the grant of additional loan of Rs.30000000/- in compliance withSection 186 of the Companies Act 2013. The Company has not given any other loans andadvances to any other body corporate and associates as specified under Section 186 of theCompanies Act 2013. The details of the investments made by the Company and guaranteesprovided by the Company are given in the notes to the financial statements.
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 Chennai (ICAI Firm Registration No 101248W/W-100022) were appointed as theStatutory Auditors of the Company in the Annual General Meeting of the Company held on 27thSeptember 2014 till the conclusion of the Thirty Sixth Annual General Meeting.
Since the tenure of the existing statutory auditors gets completed with the conclusionof the ensuing Annual General Meeting the board is in the process of appointment of newstatutory auditors.
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 20thSeptember 2019 to 26th September 2019 (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 Regulation 39 of the SEBI (Listing Obligationsand Disclosure 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 Regulation 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 124 of the Companies Act 2013 and otherapplicable provisions of the Companies Act 2013 dividends that remain unpaid/unclaimedfor a period of seven years are to be transferred to the account administered by theCentral Government viz.
Investor Education and Protection Fund (IEPF).There are no amounts whichremain unpaid/unclaimed for a period of seven years and hence no amount has beentransferred to IEPF.
15. Extract of Annual Return
The extract of Annual Return as on the Financial Year ended 31st March2019 as prescribed under Section 92 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 is attached to this report as Annexure 1 and the same has beenplaced in the website of the company http://www.kauveryhospital.com/investors#.
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.
|S. No. ||Particulars ||2018-19 ||2017-18 |
|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 2019-20 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.kauveryhospital.com/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 Executive Chairman (Whole -Time) and Dr. S Manivannan Managing Director.
During the year under review Dr. D Senguttuvan Executive Director resigned witheffect from 30th August 2018 Mr. Adithya Bharadwaj Nominee Director resignedwith effect from 30th August 2018 Mr. Sathyan G Company Secretary andCompliance Officer resigned with effect from 12th January 2019 and Mr. SBadrinarayanan Chief Financial Officer resigned with effect from 31st March2019.
Dr. S Aravindan has been appointed as an additional director on 31st August2018 and subsequently got regularized as a Non-Executive director in the Annual GeneralMeeting held on 28th September 2018 Mr. A Ganesan has been appointed as anadditional director designated as nominee director on 31st August 2018 andsubsequently got regularized as a nominee director in the Annual General Meeting held on28th September 2018 and Mr. Dandapani Swaminathan has been appointed as anadditional director (Independent & Non Executive) on 29th December 2018.
The Statement of Declarations from Independent Director that they meet the criteria ofindependence as provided in sub-section (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 2018-19 the contracts and arrangements entered by theCompany with related parties were on an arm's length basis and in the ordinarycourse of business. There are no materially significant related party transactions made bythe Company with Promoters Directors Key Managerial Personnel or other designatedpersons which 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. Reporting of Frauds
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.
25. 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 Secretaries Chennai as the Secretarial Auditors ofthe Company in the Board Meeting held on 9th February 2019. The SecretarialAudit Report issued by the Company's Secretarial Auditor M/s. Alagar & Associates isannexed and forms part of this Report in Annexure 3. The report does not contain anyqualification.
26. 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.
27. 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 Regulation 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.
28. 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.kauveryhospital.com/investors#.
29. 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 preclearance 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.
30. 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.
31. Separate Meeting of Independent Directors
The Independent Directors of the Company had met during the financial year to reviewthe performance of the Non-Independent 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 09thFebruary 2019 and all the Independent Directors attended the meeting without the presenceof the non-independent directors and the members of the management.
32. Listing fees
The Company confirms that it has paid the annual listing fees for the year 2019-20 toBombay Stock Exchange where the company's shares are listed.
33. 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 year2018-19.
34. 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.
35. 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 2019 to the date of this report.
36. 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 programme for the Independent Directors are posted on the website ofthe Company.
37. Applicability of maintenance of Cost Records as specified by the Central Government
As per the requirements of the Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 the maintenance of Cost Records asspecified by the central government is not applicable to the company.
We thank the various Government Agencies and Banks for their continued support andcooperation 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 S Manivannan) |
|Date : 30th May 2019 ||DIN:01867847 ||DIN:0091080 |
| ||EXECUTIVE CHAIRMAN ||MANAGING DIRECTOR |
| ||(Whole - Time) || |