Annexure-1 to the Directors' Report
INDUSTRY STRUCTURE & DEVELOPMENT
The Indian healthcare sector is predicted to reach US$ 280 billion by 2020 withenormous scope for investing in new specialty / multispecialty hospitals with installationof advanced equipments / technology upgradation.
India is amongst the nations that are experiencing the fastest economic growth andprosperity, globally. With higher disposable incomes and increasing awareness on healthrelated issues, patients are likely to increase their discretionary spend on healthcare,especially on preventive healthcare. Further, India's growing population and increasingpreference for private health services over public services is augmenting the growth ofthe healthcare delivery market.
India is the second largest populated country in the world and is expected tosee its population expand from 1.2 billion people currently to 1.5 billion people in 2026.Further with increasing longevity the number of middle-aged and elderly people is expectedto multiply. This will result in an increase in the absolute numbers of persons requiringmedical care and is expected to grow demand for all kinds of healthcare services manifold.
With growing literacy rate in India and availability of information on theInternet, journals and other media avenues, there is a rapid increase in awareness onhealthcare issues and diagnosis, which is expected to lead to a rise in patient volumesfrom primary to secondary or tertiary healthcare services.
Medical tourism is also increasingly becoming a popular option for electivetreatments by patients across the globe, constituting a key factor leading to the rapidgrowth in Indian healthcare sector. The availability of quality healthcare services at afraction of the cost when compared to developed nations provides patients with a valueproposition which blends leisure with medical care in an attractive manner. According tothe Associated Chambers of Commerce and Industry of India (ASSOCHAM) estimates India'smedical tourism market to grow at an annual rate of more than 30% and shall reachapproximately USD 2.1 billion by 2015.
The Government is pushing forward a number of initiatives to promote privatehealthcare in the country by providing various subsidies and incentives to motivateplayers to invest in the healthcare market.
THREATS & CHALLENGES
The major challenge today for Indian Healthcare Sector is that on one hand it is poisedfor growth and better standards of medical care and on the other hand there exist poorinfrastructure, demand - supply gap in healthcare, geographical accessibility andavailability of cheaper funds etc.
There has been a rise in the number of corporate groups with heavy pockets forayinginto healthcare through green field activities, JVs and acquisitions.
Increasing inflation in India is depleting the purchasing power of patients and isintensifying the cost of living. There is also upward pressure on other costs such astransportation, supplies, equipment and other expenses, and an inability to manage costsor pass increased costs onto patients will lead to compressed returns.
The Government has indicated its intent to correct the imbalance in the healthcareindustry through initiative such as the National Rural Health Mission, National UrbanHealth Mission etc. However, these are few and far between and an overhaul of theregulatory framework is required rather than a few sporadic initiatives.
The healthcare sector in India is undergoing a phase of reformed propelled by rapideconomic growth. The future looks bright and promising keeping in view the initiativestaken by both private players and government sector.
NMC is committed to deliver quality healthcare services through the use of cutting edgetechnology to the utmost satisfaction and well being of the patients.
The company is engaged in the healthcare business, which in context of AccountingStandard 17 issued by the Institute of Chartered Accountants of India is considered theonly business segment.
RISKS & CONCERNS
NMC recognizes that risk is an intrinsic part of the business which covers variousaspects viz operational, financial, legal & regulatory etc. These risks can adverselyimpact the functioning of the company through their effect on operating performance, cashflows, financial performance and over all sustainability of the company. The risks thatmay affect the functioning of the company viz. inflationary pressures, increasing cost ofraw material transport and storage, competitive market conditions, compliance ®ulatory pressures including change of tax laws, technological obsolescence in medicalequipment. The hospital has been trying hard to mitigate these risks by taking adequatemeasures.
NMC has always been in the forefront of providing quality healthcare, continualimprovement and technological upgradation, ensuring maximum satisfaction and health of thepatients. NMC is also fully committed to provide eco-friendly environment therebycomplying with all applicable environmental legislations and regulations.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
To ensure internal controls, the company has appointed independent firm of charteredaccountants for reviewing the effectiveness of operations, systems and procedures. Inaddition the audit committee of the Board of Directors reviews, advises and suggestsinternal auditors to continuously improve upon on their reporting process to ensureinter-alia compliance of various rules and regulations.
FINANCIAL OPERATIONS VERSUS OPERATIONAL
During the year under report, the company has recorded turnover of Rs. 3648.25 Lacs ascompared to turnover of Rs. 6181.51 Lacs for the previous year ended 31st March 2013.During the year under review, profit before interest, depreciation and taxation was Rs.847.79 Lacs as compared to Rs. 1647.61 Lacs in the previous year ended 31st March 2013.The company suffered a net loss of Rs. 343.06 Lacs in the current year as compared to thenet profit of Rs. 288.17 Lacs in the previous year ended 31st March 2013.
Human Resource Management is an important and focused area for the company. The successof the organization depends on the satisfaction of human needs, aspirations consistentwith company's objectives. The company also lays emphasis on identifying and developingtalent in the organization with a view to retain them and imparting further training tothose capable of handling additional responsibilities, recruits and train talentedmanpower enabling it to achieve its goals in effective and efficient manner.
The Management Discussion and Analysis Report contain forward looking statements basedon data and information available with the company. These statements are subject tocertain risks and uncertainties. Actual results may differ materially from those expressedin the statements as important factors could influence the company's operations such asgovernment policies, global/ local, political and economic development, risk inherent tothe company's growth and such other factors.
For and on behalf of the Board
|Date : August 12, 2014||Dr. Naveen Chaudhri|
|Place : Noida (U.P.)||Chairman & Managing Director|
Naveen Chaudhri , Chairman & Managing Director
Vikram Prakash , Additional Director
R K Gupta , Company Secretary
Vinod Bhargava , Additional Director
Company Head Office / Quarters:
F-65 1st Floor,Okhla Industrial Are,Phase-I,New Delhi-110020