Chennai Meenakshi Multispeciality Hospital Ltd Directors Report.

The Directors have pleasure in presenting their Twenty Eighth Annual Report and Audited Statement of Accounts of the Company for the year ended 31st March, 2018.

PERFORMANCE ATA GLANCE: (Rs in Lakhs)

Particulars Year ended Year ended
31st Mar, 2018 31st Mar, 2017
Gross Income 2368.92 1913.16
Profit / (Loss) Before Depreciation, Tax Et Financial Expenses 403.05 156.61
Financial Expenses 138.79 135.60
Depreciation 114.53 111.90
Profit / (Loss) Before Tax Et Exceptional Items 149.73 (104.87)
Less: Exceptional Items - -
Profit / (Loss) Before Tax 149.73 (104.87)
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 from continuing operations 149.73 (105.85)
Other Comprehensive Income
(i) Items that will not be reclassified to profit or Loss
(a) Remeasurement of net defined benefit Liability / Asset 6.82 13.97
Total Comprehensive Income for the period
(Comprising Profit (Loss) and other Compreshensive Income for the period) 156.55 (91.88)
Earnings per Equity Share (for continuing operations) Basic(Rs ) 2.00 (1.42)
Diluted (t) 2.00 (1.42)

DIVIDEND

In view of the accumulated losses, your Directors have not recommended any dividend for the year

2017-18.

TRANSFERTO RESERVES:

No transfers were made to Reserves Et Surplus for the year 2017-18.

BUSINESS OPERATIONS:

During the year 2017-18 there was improvement in the overall performance of the company. The gross income during the year under review was Z 2368.92 Lakhs as against Z 1913.16 in the previous year. There was a profit of Z 156.55 Lakhs during the year under review as against a loss of Z (91.88) in the previous year.

OPERATIONAL HIGHLIGHTS

The Number of patients was 4009 during the year 2017-18 as against 3418 in the previous year. The average occupancy was 64.12%. Your Company was under obligation to increase the salary of the employees drastically by implementation of the orders of Government of Tamil Nadu vide GO No.(2D) No.24, Labour and Employment (J1) Department, dated 2nd March 2018 which in turn forced the Company to revise the tariff to meet the additional employee expenditure.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of operations, performance and future outlook of the Company is contained in the

"MANAGEMENT DISCUSSION AND ANALYSIS REPORT" that forms an integral 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 are no material changes and commitments in the business operations of the company since the close of the financial year on 31st March 2018 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 the Companies

(Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is given in

(Annexure-II). This is also available in the Companys website: www.cmmh.in

DI RECTORS AND KEY MANAGERIAL PERSONNEL:

The term of Mrs. R.Gomathi (DIN No: 02900460) who was appointed as an Additional Women Director of the Company with effect from 5th May 2018 and her tenure expires at the ensuing date of the Annual General Meeting. Mrs.R.Gomathi is proposed to be appointed as Women Director of the Company in the ensuing Annual General Meeting. The company had received a notice from a member proposing the appointment of Mrs. R.Gomathi as Woman Director of the Company. The

Nomination and Remuneration Committee has recommended her appointment.

The term of Dr.S.Varadharajan (DIN No: 08015795) who was appointed as an Additional Director of the

Company with effect from 5th December 2017 expires at the ensuing Annual General Meeting.

Dr.S.Varadharajan is proposed to be appointed as Independent Director of the Company in the ensuing

Annual General Meeting. The company had received a notice from a member proposing the appointment of Dr.S.Varadharajan as Independent Director of the Company. The Nomination and Remuneration Committee has recommended his appointment. Dr. S. Varadharajan fulfills the criteria prescribed for appointment as an Independent Director. Taking into account his vast experience in various fields, the Board of Directors have recommended his appointment as Independent Director for a period of 5 (five) consecutive years from 28th September, 2018 to 27th September, 2023.

Dr. S. Kameswaran (DIN No: 00255389) is a Non -Executive Independent Director of the Company and his term expires on 31.03.2019. Dr. S. Kameswaran (DIN No: 00255389) is proposed to be appointed as a Independent Director of the Company in the ensuing Annual General Meeting. The Nomination and Remuneration Committee has recommended his appointment. Taking into account his rich experience in Medical Field, the Board of Directors have recommended his reappointment as

Non -Executive Independent Director for a period of 5 (five) consecutive years from 1st April 2019 to 31st March 2024.

Mr. Ramachandran. B (DIN No. 06397113) is a Non -Executive Independent Director of the Company and his term expires on 31.03.2019. Mr. Ramachandran. B (DIN No. 06397113) is proposed to be reappointed as a Non -Executive Independent Director of the Company in the ensuingAnnual General

Meeting. The Nomination and Remuneration Committee has recommended his appointment. The Board of Directors have recommended his reappointment as an Independent Director for a period of

5 (five) consecutive years from 1st April, 2019 to 31st March, 2024.

Mrs. Premalatha Kanikannan (DIN: 01710387), Woman Director and Chief Financial Officer has resigned on 5th May, 2018. Mr. G.R. Navin Raakesh (DIN: 01692155), Non Executive Director and appointed as Chief Financial Officer from 5th May, 2018 has resigned on 14th August, 2018. Mr.

Damburu Dhar Jena was appointed as the Chief Financial Officer with effect from 14th August, 2018.

Mr. T. Jeyaprakasam, Company Secretary and Compliance Officer (M.No. A4123) has resigned on 6th

June, 2018 and Mr. R. Deenadayalu (M.No.F3850) was appointed as the Company Secretary and Compliance Officer with effect from 7th June, 2018.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of Companies Act, 2013 that the Independent Directors of the company 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 Section 197(12) of the

Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 are provided elsewhere in the annual report.

NUMBER OF MEETINGS OF BOARD:

The details of number of meetings of Board of Directors is included as a part of Corporate

Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The Board Met on 22nd May, 2017, 7th September, 2017, 5th December, 2017 and 13th February, 2018.

COMPOSITION OF COMMITTEES OF BOARD:

Currently the board has following Committees: Audit Committee, Nomination Et Remuneration Committee Et Stakeholders Relationship Committee, Internal Compliants Committee and Whistle Blower Committee.

The Composition Et Activities are as follows:

Name of the Committee Composition of the Committee/ No of times the committee met Highlights of duties, responsibilities Et Activities
Audit Committee Dr. S. Kameswaran , DIN: 00255389 (Independent Director) Chairperson of the Committee 1=> The Audit Committee was mandated with the same Terms of Reference specified in SEBI (LODR) REGULATIONS,2015.
Mr. B. Ramachandran DIN: 06397113 (Independent Director), Member 1=> The current Terms of Reference fully conform to the requirements of the Companies Act.
Mr. A.N. Radhakrishnan DIN: 01508867 (Chairman Et Managing Director), Member 1=> The Audit committee is responsible for overseeing the Companys 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,
Mr. T.Jeyaprakasam Secretary of the Committee (Company Secretary) Resigned w.e.f 06.06.2018 Afternoon
Mr. R.Deenadayalu Secretary of the Committee (Company Secretary) w.e.f 07.06.2018 reviewing the Management Discussion and Analysis of financial condition and result of operations and also statutory compliance issues.
The Committee met 4 times on 1=> The Committee acts as a link between the management, external and internal auditors and the Board of Directors of the Company.
20-05-2017
06.09.2017
04.12.2017
12.02.2018

 

Nomination Et Dr. S. Kameswaran 1=;) To fix salary allowances and
Remuneration Committee DIN :00255389 (Independent Director) Chairperson of the Committee other perks to senior level personnel as and when appointed by the Company. REMUNERATION POLICY: The Remuneration Policy of the Company for the managerial personnel is based on the performance potential and performance of the individual/personnel.
Mr. B. Ramachandran
DIN : 06397113
(Independent Director),
Member of the Committee
Mrs.Premalatha Kanikannan
DIN No: 01710387, (Director
- Chief Financial Officer)
Resigned w.e.f 05.05.2018 CEO/CFO CERTIFICATION by Dr.
Member of the Committee V. Krishnamurthy, Chief Executive
Mr. G.R. Navin Raakesh Officer et Mr. G.R. Navin Raakesh,
DIN : 01692155, (Director - Director and CFO as required under SEBI (LODR) was placed before the Board at its meeting held on 14th August, 2018.
Chief Financial Officer
Member of the Committee
Resigned w.e.f. 14th August, 2018
Mr. S.Varadharajan
DIN : 08015795
Additional Director
Member of the Committee
Appointed w.e.f 05.12.2017
The Committee met on
22.05.2017 / 04.12.2017
Stakeholders Relationship Mr. B. Ramachandran i=> The Company has attended to the investors complaints and redressed them within 15 days from the date of their receipt during the year 2017-2018.
Committee DIN: 06397113
(Independent Director),
Chairperson of the
Committee
Dr. S. Kameswaran
DIN: 00255389
(Independent Director)
Member of the Committee
Dr. S.Varadharajan
DIN: 08015795
Additional Director
Member of the Committee
Appointed w.e.f 05.12.2017
The Committee met on
20.07.2017
28.12.2017

 

Internal Complaints Mrs. Geetha Arumugam To consider Et redress complaints of sexual harassment and any other Complaint.
Committee Presiding Officer
Mrs. P. Sudha Rani
Independent Member
Mr. K. Sekar
Member
Number of Meetings held: NIL
Whistle Blower Committee Mr. B. Ramachandran This provides adequate safeguards against victimization of Directors / Employees or any other person.
DIN: 06397113
(Independent Director),
Member of the Committee
Dr. S. Kameswaran
DIN: 00255389 -
(Independent Director
Member of the Committee)
Mr. S.Varadharajan
DIN: 08015795
Additional Director
Member of the Committee
Appointed w.e.f 05.12.2017
Number of Meetings held: NIL

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harrasment Women at work place (Prevention, Prohibition, Redressal)

Act 2013.

POLICIES OF THE BOARD:

WHISTLE BLOWER POLICY:

As per Section 177 (9) of the Act read with relevant Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI (LODR) 2015, the Company has established a vigil mechanism overseen by the Audit Committee. The Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. This has been uploaded in the Companys website www.cmmh.in. No complaint under this facility was received in FY 2017-18.

REMUNERATION POLICY:

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

Criteria for payment of Remuneration to Non -Executive Directors (Pursuant to Part -D Schedule

II (1) of SEBI (LODR) Regulation 2015.

The Non -Executive Directors will be paid sitting fees for attending the Board and Committee

Meetings as per the stipulations in the Act, and the Articles of Association of the company and as recommended by the Nomination and Remuneration Committee. Different scales 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 to other categories of directors.

In addition to this, the travel and other expenses incurred for attending the meetings are to be met by the Company. Subject to the provisions of the Act and the Articles of Association, the Company in

General Meeting may by special resolution sanction and pay to the Directors remuneration not exceeding 1 % of the net profits of the Company computed in accordance with the relevant provisions of the Act. The company shall have no pecuniary relationship or transactions with any

Non -Executive Directors.

RISK MANAGEMENT POLICY:

The Company has Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage.

RELATED PARTY TRANSACTION POLICY:

The Policy regulates all transactions between the Company and its related parties. Weblink where policy on dealing with related party transactions www.cmmh. in.

I NSIDER TRADI NG POLICY:

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

AUDITORS

M/s. MRC Et Associates (FRN. 004005S), Chartered Accountants, Chennai-600 030 were appointed in the 27th Annual General Meeting as the Statutory Auditors of the Company for a term of five consecutive years, from the conclusion of the 27th Annual General Meeting of the Company till the conclusion of the 32nd Annual General Meeting to be held in the year 2022.

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 andRemuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. T. Murugan, a Practicing Company Secretary (C.R No.4393) to undertake the Secretarial Audit of the Company for the Financial Year 2017-18.

The Secretarial Audit Report was placed before the Board on 28th May 2018. There are no qualifications in the Secretarial Audit Report. (Annexure-III)

PUBLIC DEPOSITS

The Company has not accepted deposits during the year and there are no public deposits fallen due for payment and claimed but not paid as on 31st March, 2018. The total amount of deposit outstanding as at 31st March, 2018 was Nil.

SIGNIFICANT Et MATERIAL ORDERS:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company did not give any Loan or Guarantee or provided any security or make investment covered under Section 186 of the CompaniesAct, 2013 during the year.

CORPORATE SOCIAL RESPONSIBILTY:

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

PARTICULARS OF CONTRACTS ORARRANGEMENTS WITH RELATED PARTY:

Particulars of contracts or arrangements with Related Parties referred in Section 188(1) of the Companies Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (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 and the Directors individually after taking into consideration inputs received from the Directors, covering various aspects on the Boards functioning such as adequacy of the composition of the Board and its

Committees, performance of specific duties, obligations and governance.

The Performance evaluation of the Independent Directors was carried out by the entire Board Et the Performance evaluation of the Chairman was carried out by the Independent Directors.

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

REMUNERATION OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014 in respect of employees of the Company and Directors is furnished hereunder:

(In Rupees)

Name Designation Remuneration for FY 2017-18 Remuneration for FY 2016-17 Increase in remuneration from previous year Ratio / times per median of employees remuneration
1. Mr.A.N.Radhakrislman Chairman & Managing Director 9,00,000 9,00,000 Nil 4:1
2. Dr. V.Krishnamurthy Chief Executive Officer 1,32,90,000 1,32,90,000 Nil 59.05:1
3. Mrs.Premalatha Kanikannan Director - Chief Financial Officer Nil Nil Nil Nil
4. Mr.T.Jeyaprakasam Company Secretary 1,98,000 1,80,000 10% 0.88:1

The percentage increase in remuneration of each Mr. T. Jeyaprakasam, Company Secretary - % of increase

director, Chief Financial Officer, Chief Executive in remuneration : 10%

Officer, Company Secretary or Manager, if any, in the financial year:

The percentage increase in the median remuneration

There is an average increase of 56.28% of employees in the financial year

The number of permanent employees on the rolls of 65 company

The explanation on the relationship between average The average increase in remuneration of the increase in remuneration and company performance employees was based on their performance and this increase in remuneration is in line with the market trends.

Comparison of the remuneration of the key The remuneration fixed in for Key Managerial

Managerial Personnel against the performance of the Personnel is based on the contributions made by Company them for retaining the sustainability 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 Stock 31.03.2018 31.03.2017 change
Price (in Z) 19.25 12.85 49.80%
Market
Cap (Z in crores) 14.38 9.60 49.79%
EPS 2.00 -1.23
P/E 9.62 Negative EPS

 

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. As there is no increase in Managerial Remuneration, justification is not applicable.
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 sustainability 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 Affirmation that the remuneration is as per the remuneration policy of the company : 14.76 1
Directors Highest Salary - Z 75,000/- per month
Employees Highest Salary - Chief Executive Officer
- Z 11,07,500/- per month.
Yes

Transfer to Investor Education and Protection Fund:

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

Particulars of Employees:

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the

Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 are provided elsewhere in the Annual Report.

Directors and Key Managerial Personnel:

The details about the changes in the Directors and Key Managerial Personnel by way of appointment, resignation, etc. and disclosure of relationships between directors inter -se under relevant

Regulation (s) of SEBI (LODR) Regulations, 2015 is included as part of Corporate 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, 2013 read with

Rule 8 of the Companies (Accounts) Rules, 2014 are annexed hereto and the same forms part of this

Report. (Annexure V)

REPORT ON CORPORATE GOVERNANCE

Your Company continues to strive towards highest standards of Corporate Governance. The report of

Board of Directors on Corporate Governance is given in separate section titled "Report on Corporate

Governance" which forms part of this Annual Report. The company has established Whistle Blower

Mechanism. (Annexure VI)

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief, and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(5) of the

Companies Act, 2013.

In pursuance of section 134 (5) of the CompaniesAct, 2013, the Directors hereby confirm that:

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

(b) Reasonable and prudent accounting policies have been applied in the preparation of the financial statements, that they have been consistently applied and that reasonable prudent judgment and estimates have been made in respect of items not concluded by the year end, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the Profit for the year ended on that date;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively;

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

LISTING FEES:

The Company confirms that it has paid the annual listing fees for the year 2017-18 to BSE where shares of the company are listed.

ACKNOWLEDGEMENTS:

The Directors thank the Companys investors, employees, customers and medical professionals for their continuous support. The Directors also thank the Government of India, Government of

Tamilnadu and agencies for their co-operation.

ON BEHALF OF THE BOARD

A.N. RADHAKRISHNAN CHAIRMAN Et MANAGING DIRECTOR

Place: Chennai

Date : 14th August, 2018