Metropolis Healthcare Ltd.
|BSE: 542650||Sector: Health care|
|NSE: METROPOLIS||ISIN Code: INE112L01020|
|BSE 16:01 | 03 Mar||1977.30||
|NSE 15:59 | 03 Mar||1973.70||
|Mkt Cap.(Rs cr)||10,104|
|Mkt Cap.(Rs cr)||10104.00|
Metropolis Healthcare Ltd. (METROPOLIS) - Director Report
Company director report
Your Directors take pleasure in presenting the 19th Annual Report on thebusiness and operations of your Company along with the audited financial statements forthe year ended 31 March 2019.
The key highlights of the standalone and consolidated audited financial statements ofyour Company for the financial year ended 31 March 2019 and comparison with the previousfinancial year ended 31 March 2018 are summarised below:
(Rs in Lakhs)
OPERATIONAL PERFORMANCE & FUTURE OUTLOOK:
During the year under review the standalone income from operations of the Companyincreased to ' 60173.13/- Lakhs compared to ' 50058.48/- Lakhs in theprevious year registering growth of 20.21%. The standalone profit after tax for the yearincreased to ' 10145.70/- Lakhs as compared to ' 9575.92 /- Lakhs in theprevious year registering growth of 5.95%.
During the year under review the consolidated income from operations of the Groupincreased by 17.48 % from ' 65493.25/- Lakhs of the previous year to '76939.50/- Lakhs in the current year. The consolidated profit after tax for the groupincreased by 10.52% from ' 11184.16/- Lakhs of the previous year to '12361.28/- Lakhs in the current year.
The operating and financial performance of your Company has been covered in theManagement Discussion and Analysis Report which forms part of the Annual Report. Accordingto Frost & Sullivan the Indian diagnostics market was valued at approximately '596/- billion in the financial year 2018 and is projected to grow to approximately '802/- billion by financial year 2020 driven by favourable changes in demographicsimprovements in health awareness increased spend on preventive care and wellnessincrease in medical tourists increase in lifestyle-related ailments and risingpenetration of insurance in India. We believe that the increasing prescription ofdiagnostic tests and services by healthcare providers in India combined with theincreasing awareness and spend on preventive care and wellness
tests as well as a shift from the unorganised providers to the organised providers inthe Indian diagnostics market creates a significant market opportunity for us.
In 2016 13% of India's total population was estimated to be above the age of 54 yearsand it is expected to increase to 15% by the financial year 2022. It is expected that theageing population base in India and its predisposition to various chronic diseases willcreate a huge opportunity for the healthcare sector in the near future and pose asignificant demand on the healthcare infrastructure to provide healthcare access for all.
The growth in the industry is being driven by various factors including which providegrowth direction:
Increase in evidence-based treatments
Test perfection continuously increasing
Huge demand-supply gap
Government is promoting public private partnership (PPP)
Changing disease profiles
Increase in health insurance coverage
Need for greater health coverage as population and life expectancy increase
Rising income levels make quality healthcare services more affordable
Demand for lifestyle diseases-related healthcare services
Increase in preventive health check-ups and awareness amongst people aboutfitness
Technology upgrade dependency on path-lab testing and turnaround time (TAT) andquality is increasing
There is substantial increase in scalability in testing The diagnostics industryis witnessing a great deal of visibility and interest with more organised players drivingregional growth. This is also resulting in gradual shift of the market from unorganised tomore organised players thereby driving quality and efficiency standards. This sector hasalso attracted investments further fuelling competition but at the same time improvingindustry standards. India still has large rural markets which are either under serviced ornot serviced at all by diagnostics and this provides the opportunity for growth in underpenetrated areas although at significantly lower price points. In the urban markets toothere are pockets of growth opportunities given the overall awareness on health care andhealth attitudes.
During the year under review the Board of Directors declared an interim dividend of '13.26 per equity share having face value of ' 2/- each (663%) which amounts to '665369297/-. An amount of ' 136768616/- was paid as dividend distribution taxon the interim dividend declared by the Board.
The interim dividend was paid to the shareholders on 11 February 2019.
The interim dividend be considered as final dividend for FY 2018-2019
The dividend declared is in accordance with the principles and criteria as set out inthe Dividend Distribution Policy of the Company.
DIVIDEND DISTRIBUTION POLICY:
Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Disclosure 2015 ("SEBI Regulations"/ "Listing Regulations") requiretop 500 listed companies based on the market capitalisation to formulate DividendDistribution Policy. As a good corporate governance practice and compliance of the saidregulation the Company has formulated its Dividend Distribution Policy. The Policy isuploaded on the website of the Company viz.:
Your Directors have proposed not to transfer any amount to General Reserves of theCompany for the financial year 2018-19.
MATERIAL CHANGES AFFECTING THE COMPANY:
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of this report. There has beenno change in the nature of business of the Company.
SCHEME OF ARRANGEMENT AND ACQUISITION: Amalgamation 2018
The Board of Directors of your Company at its meeting held on 16 March 2018 and theshareholders at its meeting held on 25 May 2018 as per the direction of National CompanyLaw Tribunal Mumbai Bench (NCLT) approved the scheme of amalgamation ("Scheme")for amalgamation of Bacchus Hospitality Services and Real Estate Private Limited("Bacchus"); Metropolis Healthcare (Chandigarh) Private Limited MetropolisHealthcare (Jodhpur) Private Limited Sanket Metropolis Health Services (India) PrivateLimited Final Diagnosis Private Limited and Golwilkar Metropolis Health Services (India)Private Limited (collectively referred as "Wholly Owned Subsidiaries") with theCompany ("Transferee Company") pursuant to the provisions of Section 230 to 232and other applicable provisions of Companies Act 2013.
National Company Law Tribunal Ahmedabad bench vide its order dated 14 August 2018 andNCLT vide its order dated
30 August 2018 respectively approved the Scheme. The appointed date for the Scheme was01 April 2018 and the Scheme has become effective with effect from 08 September 2018 uponfiling of the certified copy of the Orders by the respective companies with the Registrarof Companies Gujarat & Maharashtra at Mumbai respectively.
Upon the Scheme coming into effect all equity shares held by Transferee Company in theWholly Owned Subsidiaries stand cancelled. Further the Transferee Company on 08 September2018 has allotted 2657731 fully paid up Equity Shares of ' 10/- each in the ratioof 957713 Equity Shares of ' 10/- each to the shareholders of Bacchus for every1000000 Equity Shares of ' 10/- each held in Bacchus (Pre-bonus andSub-division).
During the year under review the Company has acquired the remaining stake in thefollowing subsidiaries: -
"(Pre Sub-Division of Shares)
CHANGE IN NATURE OF BUSINESS:
There was no change in the nature of the business or any activity of business of theCompany during the year under review. SHARE CAPITAL:
Increase in Authorised Share Capital and Sub-Division
a) The authorised share capital of the Company has been increased from '550000000/- divided into 55000000 Equity Shares of ' 10/- each to '591508030/- divided into 59150803 Equity Shares of ' 10/- each by virtue ofOrder passed by NCLT dated 30 August 2018 approving the Scheme of Amalgamation.
b) The authorised share capital of the Company has been sub-divided from '591508030/- divided into 59150803 Equity Shares of ' 10/- each to '591508030/- divided into 295754015 Equity Shares of ' 2/- each with effectfrom 20 September 2018.
Change in Paid-up Share Capital:
During the year under review the Company has made following allotments whose detailsare as under:
The paid up equity share capital of the Company as on 31 March 2019 was '100357360/-.
During the year under review the Company has not issued shares with differentialvoting rights has not bought back any shares it has neither issued sweat equity sharesand does not have any scheme to fund its employees to purchase the shares of the Company.
LISTING OF EQUITY SHARES:
Your Directors are pleased to inform that subsequent to the year under review yourCompany completed the initial public offering of its equity shares ("IPO") byway of an offer for sale of up to 13685095 equity shares of face value of ' 2/-each of the Company by the Selling Shareholders i.e. 6272335 Equity Shares by Dr.Sushil Kanubhai Shah (Promoter Selling Shareholder) and 7412760 Equity Shares by CALotus Investments (Investor Selling Shareholder) for cash at a price of ' 880/-per equity share determined through book building process. Equity shares transferred inthe IPO constituted 27.27% of the post-offer equity share capital of the Company.
Pursuant to listing of equity shares on stock exchanges your Company enjoys thebenefit of enhanced brand name and creation of public market for the equity shares of theCompany.
The IPO opened on 3 April 2019 (for anchor investors the IPO opened and closed on 2April 2019) and closed on 5 April 2019. The IPO received an overwhelming response from allcategories of investors and was subscribed by 5.83 times except Employees quota.
Post allotment / transfer in the IPO the equity shares of your Company got listed andcommenced trading on the BSE Limited and the National Stock Exchange of India Limited on15 April 2019.
MEMORANDUM OF ASSOCIATION:
During the year the Memorandum of Association of the Company was amended for increasein authorised share capital of the Company ' 550000000/- divided into55000000 Equity Shares of ' 10/- each to ' 591508030/- divided into59150803 Equity Shares of ' 10/- each pursuant to the Order passed by NCLT dated30 August 2018 approving the Scheme of Amalgamation and further pursuant to shareholdersapproval in the Extra-ordinary General meeting held on 14 September 2018 for subdivisionof authorised share capital of the Company from ' 591508030/- divided into59150803 Equity Shares of ' 10/- each to ' 591508030/- divided into295754015 Equity Shares of ' 2/- each with effect from 20 September 2018.
ALTERATION OF ARTICLES OF ASSOCIATION:
During the year the shareholders at their meeting held on 24 September 2018 adopted anew set of Articles of Association (comprising of "Part A" and "PartB") pursuant to the proposed Initial Public Offering. Up to the date of listing ofthe Company's equity shares on the recognised stock exchanges in India Part A prevailedover Part B and in the event of any inconsistency contradiction conflict or overlapbetween Part A and Part B (subject to applicable laws) and Part A shall standautomatically terminated and cease to have any force and effect on and from the date oflisting of the Company's equity shares on the recognised stock exchanges i.e. BSE Limitedand the National Stock Exchange of India Limited i.e. 15 April 2019 without requiring anyfurther action by the Company or its shareholders.
Your Company has not accepted/invited deposits from the public falling within the ambitof Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014.
During the year the Company has not taken loan from the promoter directors.
The Company has formulated a Policy for determining Material Subsidiaries. The Companydoes not have any Material Subsidiary as per the parameters laid down under the Policy.The Policy is uploaded on the website of the Company viz.: https://www.metropolisindia.com/about- metropolis/investors
SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES:
The Subsidiary Companies of your Company continued to perform in their respective areasas per plans and thus contributed robustly to the overall growth of the Company in termsof revenue and profits of the Company and overall performance of the Group.
During the year your Company had 10 domestic subsidiaries and 7 overseas subsidiaries(including five step-down subsidiaries) and one foreign branch which is considered as aforeign Company in the respective country. Also your Company has 1 domestic Joint VentureCompany and 1 overseas Associate Company.
A statement containing salient features of the financial statement of subsidiariesassociate companies and joint ventures as per Section 129 (3) of the Companies Act 2013are mentioned in Annexure - 1 to this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL: Appointment/Resignations from the Board ofDirectors
In terms of Section 149 152 read with Schedule IV and all other applicable provisionsof the Companies Act 2013 and The Companies (Appointment and Qualification of Directors)Rules 2014 (including any statutory modifications or re-enactment thereof for the timebeing in force) the Independent Directors are appointed for a term of five years and arenot liable to retire by rotation.
The Company has received declarations from the Independent Directors confirming thatthey meet with the criteria of independence as prescribed under Section 149 (6) of theCompanies Act 2013.
During the year under review the Company has appointed Mr. Vivek Gambhir (DIN:06527810) Mr. Sanjay Bhatnagar (DIN: 00867848) and Mr. Milind Shripad Sarwate
(DIN: 00109854) as Independent Directors of the Company at the annual general meetingof the Company held on 10 September 2018 with effect from 07 September 2018.
Mr. Rajiv Devinder Sahney (DIN 00022896) was acting as an Independent Director on theBoard of the Company. He resigned as an Independent Director from the Board of the Companywith effect from conclusion of the Board Meeting held on 07 September 2018 due to hispre-occupation.
Mr. Mihir Jagdish Doshi (DIN 01283331) was acting as an Independent Director of theCompany. On 10 September 2018 the Shareholders at their meeting re-designated Mr. MihirJagdish Doshi as Non-executive & Nonindependent Director w.e.f. 07 September 2018.
Dr. Duru Sushil Shah (DIN: 00180126) was acting as Nonexecutive Director of theCompany. She resigned as Non executive Director from the Board of the Company with effectfrom conclusion of the Board Meeting held on 07 September 2018 due to her pre-occupation.
Mr. Neeraj Bharadwaj (DIN: 01314963) was acting as NonExecutive Non IndependentDirector of the Company. He resigned as a Non-Executive Non Independent Director from theBoard of the Company with effect from conclusion of the Board Meeting held on 24 September2018.
Pursuant to the Shareholders Agreement dated 24 September 2018 ("Second AmendmentAgreement") entered by and amongst Dr. Sushil Kanubhai Shah Ms. Ameera Sushil ShahDr. Duru Sushil Shah CA Lotus Investments METZ Advisory LLP and the Company; CA LotusInvestments had a right to nominate an observer to the Board to attend and participate inthe Board or any other Committee meetings thereof. Accordingly Mr. Neeraj Bharadwaj wasappointed as an observer of the Board of the Company w.e.f. 24 September 2018.
Pursuant to the letter dated 25 April 2019 received from CA Lotus Investments Mr.Neeraj Bharadwaj ceases to act as an observer to the meetings of the Board and anycommittees of the Company effective from listing of Equity Shares on BSE Limited and theNational Stock Exchange of India Limited on 15 April 2019.
Appointment/Resignation of the Key Managerial Personnel
In accordance with the provisions of Sections 2(51) 203 of the Companies Act 2013read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the following are the Key Managerial Personnel of the Company:
Ms. Ameera Sushil Shah as Managing Director of the Company.
Dr. Sushil Kanubhai Shah as Chairman & Executive Director of the Company
Mr. Vijender Singh as Chief Executive Officer of the Company.
Mr. Tushar Manohar Karnik as Chief Financial Officer of the Company.
Mr. Jayant Prakash as Head Legal Company Secretary and Compliance Officer ofthe Company.
During the year under review there was no change in Key Managerial Personnel.
Directors Retiring By Rotation
In accordance with the provisions of the Companies Act 2013 Dr. Sushil Kanubhai ShahChairman & Executive Director of the Company is liable to retire by rotation and beingeligible offers himself for re-appointment at ensuing Annual General Meeting of theCompany.
On the basis of the written representations received from the directors none of theabove directors are disqualified under Section 164 (2) of the Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanation obtained by them the Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) That in preparation of the Annual Financial Statements for the year ended 31 March2019; the applicable accounting standards have been followed along with proper explanationrelating to material departures if any.
(b) That such accounting policies as mentioned in the notes to the Financial Statementshave been selected and applied consistently and judgements and estimates have been madethat are reasonable and prudent so as to give true and fair view of the Statement ofAffairs of the Company as at 31 March 2019 and of the Profit of the Company for the yearended on that date.
(c) That proper and sufficient care has been taken for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
(d) That the Annual Financial Statements have been prepared on a going concern basis.
(e) That systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
(f) That proper Internal Financial Controls were in place and that the FinancialControls were adequate and were operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report ("MDA") on the operations ofthe Company as required under the SEBI Regulations is provided in a separate section andforms an integral part of this Report.
NOMINATION AND REMUNERATION POLICY:
The Company has a Nomination and Remuneration Policy in place. For details on the sameplease refer to the Corporate Governance Report.
COMMITTEES OF THE BOARD:
Your Company has several committees which have been established as a part of the bestcorporate governance practices and are in compliance with the requirements of the relevantprovisions of laws and statutes applicable to the Company.
In order to ensure focused attention on business and for better governance andaccountability the Board has constituted the following committees:
a) Audit Committee;
b) Nomination and Remuneration Committee;
c) Stakeholder Relationship Committee;
d) CSR Committee;
e) Risk Management Committee.
The details with respect to the composition powers roles terms of reference etc. ofthe aforesaid committees are given in details in the "Report on CorporateGovernance" of the Company which forms part of the Annual Report.
MEETINGS OF THE BOARD:
During the year under review the Board of Directors met Nine (9) times. For details ofthe meetings of the Board of Directors please refer to the Corporate Governance Report.
PERFORMANCE EVALUATION OF THE BOARD:
In compliance with the provisions of the Companies Act 2013 and Regulation 25(4Xa) ofthe SEBI Regulation annual performance evaluation of the Board and its Directorsindividually was carried out. Various parameters such as the Board's functioningcomposition of its Board and Committees execution and performance of specific dutiesobligations and governance were considered for evaluation. The performance evaluation ofthe Board as a whole was carried out by the Independent Directors. The performanceevaluation of each Independent Director was also carried out by the Board.
The Board of Directors expressed their satisfaction with the evaluation process.
FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:
Pursuant to the SEBI Regulations the Company has worked out a Familiarisationprogramme for the Independent Directors with a view to familiarise them with their rolerights and responsibilities in the Company nature of Industry in which the Companyoperates business model of the Company etc.
Through the Familiarisation programme the Company apprises the Independent Directorsabout the business model corporate strategy business plans and operations of theCompany. Directors are also informed about the financial performance annual budgetsinternal control system statutory compliances etc. They are also familiarised withCompany's vision core values ethics and corporate governance practices.
Details of Familiarisation programme of Independent Directors with the Company areavailable on the website of the Company
CONSOLIDATED FINANCIAL STATEMENTS:
In accordance with the provisions of Section 133 of the Companies Act 2013 and Ind AS110 - Consolidated Financial Statement read with Ind AS 28 - Investment in Associates andInd AS 31 - Interests in Joint Ventures the audited consolidated financial statement isforming part of this Annual Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
EXTRACT OF ANNUAL RETURN:
The extract of annual return in Form MGT 9 as required under Section 92(3) of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 is available on the website of the Company at the link: https://
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act
2013 and the Rules made thereunder are given in the notes to Financial Statements.
INSTANCES OF FRAUD IF ANY REPORTED BY THE STATUTORY AUDITORS:
During the year under review the Statutory Auditors had not reported any fraud underSection 143 (12) of the Companies Act 2013 therefore no detail is required to bedisclosed under Section 134 (3) (ca) of the Companies Act 2013.
RELATED PARTY TRANSACTIONS:
The Board has formulated and adopted a Related Party Transactions Policy ("RPTPolicy") for the purpose of identification monitoring and reporting of related partytransactions. The RPT Policy as approved by the Board is uploaded on the Company's websiteviz. https://www. metropolisindia.com/about-metropolis/investorsAll Related Party Transactions entered into during the Financial Year were on arm's lengthbasis and were in the ordinary course of business. There are no materially significantRelated Party Transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company at large.
Further since transactions with the related parties are not material in accordance withthe Related Party Transactions Policy the particulars of such transactions with therelated parties are not required to be reported by the Company in Form AOC-2.
All Related Party Transactions are placed before the Audit Committee.
The members may refer to note no. 40 to the financial statements which set out relatedparty disclosures.
B S R & Co. LLP Chartered Accountants (ICAI Firm No. 101248W/W-100022) wasappointed as Statutory Auditors of the Company for a term of 5 (five) consecutive yearsat the 17th Annual General Meeting (AGM) held on 18 September 2017. They haveconfirmed that they are not disqualified from continuing as Statutory Auditors of theCompany. Further in terms of Companies (Amendment) Act 2017 notified w.e.f. 07 May 2018the requirement of Section 139(1) of Companies Act 2013 stands omitted and theratification of appointment of the Statutory Auditor at every AGM is not required.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer save and exceptmentioned below;
1) With reference to Clause (i) (c) of Annexure A to the Standalone IndependentAuditors Report regarding the title deeds being in the names of the entities which gotmerged with the Company in the past:
The Company is in the process of getting the title deeds registered in the nameof the Company.
2) With reference to Qualified Opinion to the Consolidated Independent Auditors Reportregarding the Company has not consolidated the financial statements of an AssociateCompany Star Metropolis Health Services Middle East LLC:
Due to non-availability of financial information from the J.V. partner accountsof associate company could not be consolidated.
RISK MANAGEMENT POLICY:
The Company has adopted a Risk Management Policy wherein all material risks faced bythe Company are identified and assessed. The Risk Management framework defines the riskmanagement approach of the Company and includes collective identification of risksimpacting the Company's business and documents their process of identification mitigationand optimisation of such risks. The Policy is uploaded on the website of the Companyhttps:// www.metropolisindia.com/about-metropolis/investors
INTERNAL FINANCIAL SYSTEMS AND THEIR ADEQUACY:
The Company has an internal control system. All these controls were operatingeffectively during the year.
The Company has adequate internal financial controls. During the year such controlswere tested to find out any weaknesses in them. Services of professional consultants wereobtained to remove such weaknesses and ensure robust internal financial controls and toensure that these controls are operating effectively.
The Company is complying with all the applicable Indian Accounting Standards (Ind AS).The accounting records are maintained in accordance with generally accepted accountingprinciples in India. This ensures that the financial statements reflect true and fairfinancial position of the Company.
MAINTENANCE OF COST RECORDS:
Provisions of maintenance of cost records as specified by the Central Government underSection 148 (1) of Companies Act 2013 is applicable to the Company. Accordingly suchcost accounts and cost records are made and maintained by the Company.
As per Section 148 of the Act the Company is required to have the audit of its costrecords conducted by a Cost Accountant. The Board of Directors of the Company has on therecommendation of the Audit Committee approved the appointment of Messrs. Joshi Apte& Associates (Registration No. 00240) as the Cost Auditors of the Company to conductcost audit prescribed under the Companies (Cost Records and Audit) Rules 2014 for theyear ending 31 March 2020. The Board of Directors on recommendation of the Audit Committeeapproved remuneration of ' 1 Lakh plus applicable taxes and out of pocket expensessubject to ratification of their remuneration by the Members at the forthcoming AGM.Messrs. Joshi Apte & Associates have under Section 141 of the Act and the Rulesframed thereunder furnished a certificate of their eligibility and consent forappointment. Messrs. Joshi Apte & Associates have vast experience in the field ofcost audit and have conducted the audit of the cost records of the Company for the pastseveral years.
Pursuant to the provisions of Section 138 of the Companies Act 2013 and The Companies(Accounts) Rules 2014 on the recommendation of the Audit Committee Suresh Surana &Associates LLP were appointed by the Board of Directors to conduct internal audit reviewsof the Company.
DISCLOSURE OF REMUNERATION OR COMMISSION RECEIVED BY A MANAGING OR WHOLE-TIME DIRECTORFROM THE COMPANY'S HOLDING OR SUBSIDIARY COMPANY:
The Managing Director and Whole Time Director have not received any remuneration fromthe Company's Holding or Subsidiary Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
The Company has taken initiatives to discharge its CSR duties as required under Section135 of the Companies Act 2013 and has spent part of the amount till date and is in theprocess of spending the balance sum over a period of time. However the Company has notbeen able to spend part of the amount during the year under review.
The complete details on the CSR activities is enclosed herewith as Annexure - 3. TheCSR Policy of the Company is available on the website of the Company https://www.metropolisindia.com/about-metropolis/corporate-social- responsibility-2/
Your Company is committed to achieve the highest standards of Corporate Governance andadheres to the Corporate Governance requirements set by the Regulators. A separate sectionon Corporate Governance practices followed by the Company as stipulated under Regulation43(3) and Schedule V of the SEBI Regulations together with a certificate from M/s. ManishGhia & Associates a firm of Company Secretaries in Practice confirming Compliance tothe conditions as stated in Regulation 34(3) of the SEBI Regulations forms part of thisAnnual Report.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:
Pursuant to Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Board of Directors hadappointed M/s. Manish Ghia & Associates Practicing Company Secretaries Mumbai toundertake the Secretarial Audit of the Company for the financial year ended 31 March 2019.The Secretarial Audit Report in the prescribed Form No. MR-3 is attached as Annexure - 4.
The following are the clarifications to the observations given by the SecretarialAuditor in their Audit report:
(a) The composition of Nomination and Remuneration Committee of the Board of Directorswas not in accordance with the provisions of Section 178 of the Act up to 06 September2018 as the Managing Director was a member of the Committee;
The Company has initiated to take the necessary steps for regularising thenon-compliance. The constitution of the Nomination and Remuneration Committee has beenrevised w.e.f. 07 September 2018.
(b) in respect of one of the meeting of board of directors in which the facility ofvideo conferencing was made available the recording of the same is reported to have beencorrupted and accordingly is unavailable;
Due to technical issue the video recording has got corrupted. The Company willhenceforth take proper measures and care in this regard.
(c) the Company has not fully spent the mandated 2% of average net profits of theCompany on Corporate Social Responsibility (CSR) activities during the financial year;
The reasons for the same are forming part of Annexure - 3 of the Board's Report.
(d) some properties are yet to be mutated in the name of the Company accordingly tothat extent the same are not in compliance with provisions of Section 187 of the Act;
The Company is in the process of getting the title deeds registered in the nameof the Company.
(e) in the consolidated financial statements for the year ended 31 March 2018 thefinancials of Company's overseas Joint Venture viz. Star Metropolis Healthcare MiddleEast LLC Dubai UAE (JV) have not been consolidated as such financial statements have notbeen made available by its overseas JV;
Due to non-availability of financial information from the J.V. partner accountsof associate company could not be consolidated.
(f) the submission of Annual Performance Report in respect of Company's overseas JointVenture (JV) viz.
Star Metropolis Healthcare Middle East LLC Dubai
UAE to RBI during the year under review is not based on the audited annual accounts ofthe preceding financial year of the JV; and
Due to non-availability of financials the Company was unable to file the AnnualPerformance Report.
(g) the submission of revised annual return on foreign liabilities and assets (based onthe audited financials) for the year ended 31 March 2018 to the Reserve Bank of India(RBI) have been made after the due date.
The Company had filed the Provisional foreign liabilities and assets (FLA) ontime but there was an inadvertent delay of few days in filing the final FLA.
The Company has obtained credit rating. For the details on the same please refer tothe Corporate Governance Report.
EMPLOYEE STOCK OPTIONS:
The Company has two ESOP Schemes namely:
1. Revised Metropolis Employee Stock Option Scheme 2007 (MESOS- 2007)
2. Metropolis Employee Stock Option Scheme 2015 (MESOS - 2015)
The details of "Revised Metropolis Employee Stock Options Scheme 2007" (MESOS- 2007) and "Metropolis Employee Stock Option Scheme 2015 (MESOS- 2015)"including the number of outstanding options are given in the Annexure - 5 formingpart of this Report.
The Company's relations with all its employees remained cordial and satisfactory duringthe year under review.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197(12) of The Companies Act 2013 readwith Rule 5(1) and 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respectof employees of the Company are given in Annexures - 6 hereunder and forms part ofthis report.
Pursuant to the provisions of the first proviso to Section 136(1) of the Companies Act2013 the disclosure under Section 197(12) of the Companies Act 2013 read with Rule 5(2)will be sent to the members of the Company on request.
Further the said information is available for inspection at the registered office ofthe Company during working hours and any member interested in obtaining such informationmay write to the Company Secretary at the Corporate Office of the Company.
DEMATERIALIZATION OF SHARES:
All the Shares of your Company are in Dematerialisation mode. The ISIN of the EquityShares of your Company is INE112L01020.
REGISTRAR & SHARE TRANSFER AGENT:
Your Company's Registrar and Share Transfer Agent is:
Link Intime India Private Limited C-101 1st Floor 247 Park
Lal Bahadur Shastri Marg Vikhroli (West)
Mumbai - 400 083 Maharashtra India.
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134(3Xm) of the Companies Act 2013 read with theRule 8(3) of The Companies (Accounts) Rules 2014 is as follows:
VIGIL MECHANISM/ WHISTLEBLOWER:
The Company has in place a vigil mechanism for Director and employees to report theirgenuine concerns about unethical behaviour actual or suspected fraud or violation of theCompany's code of conduct.
The Whistleblower Policy of the Company is available on the website of the Company at
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has measures in place for prevention of sexual harassment in accordancewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013. The Company has complied with provisions relatingto the constitution of Internal Complaints Committee under the Sexual Harassment of womenat workplace (Prevention Prohibition and Redressal) Act 2013. The Company did notreceive any complaint during the Financial year 2018-19.
COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has devised proper systems to ensure compliance with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India and theCompany complies with all the applicable provisions of the same during the year underreview.
Statements in this Report particularly those which relate to Management Discussion andAnalysis as explained in a separate Section in this Report describing the Company'sobjectives projections estimates and expectations may constitute 'forward lookingstatements' within the meaning of applicable laws and regulations. Actual results mightdiffer materially from those either expressed or implied in the statement depending on thecircumstances.
The Directors acknowledge the valuable contribution of all its employees in thecontinuous growth of the Company and making it a dominant player in the market.
Further they on behalf of the Company would like to express their sincere gratitude tothe Medical Profession for their unconditional support.
They would also like to thank the Company's Joint Venture Partners Banks and otherstakeholders for their contribution in the Company's growth and in its operations.