Chennai Meenakshi Multispeciality Hospital Ltd Directors Report.

The Directors have pleasure in presenting their 29th Annual Report and Audited Statement of Accounts of the Company for the year ended 31st March, 2019.

PERFORMANCEATAGLANCE:

(र in Lakhs)

Particulars Year ended 31st March, 2019 Year ended 31st March, 2018
Gross Income 2285.73 2368.93
Profit / (Loss) Before Depreciation, Tax & Financial Expenses 260.74 403.05
Financial Expenses 136.21 138.79
Depreciation 119.67 114.53
Profit / (Loss) Before Tax 4.86 149.73
Less: Exceptional Items - -
Tax Expenses:
a. Current Tax - -
b. Fringe Benefit Tax - -
c. Deferred Tax Liability - -
Other Comprehensive Income
(i) Items that will not be reclassified to profit or Loss
(a) Remeasurement of net defined benefit Liability / Asset (0.62) 6.82
Profit/ (Loss) for the year carried to Balance Sheet 4.24 156.55

DIVIDEND

In view of the accumulated losses, your Directors have not recommended any dividend for the year 2018-19.

TRANSFER TO RESERVES:

No transfers were made to Reserves & Surplus for the year 2018-19.

BUSINESS OPERATIONS:

During the year 2018-19 there was decline in the overall performance of the company due to stiff competition. The gross income during the year under review was र 2285.73 Lakhs as against र 2368.93 Lakhs in the previous year. There was a profit of र 4.24 Lakhs during the year under review as against र 156.55 Lakhs in the previous year.

OPERATIONAL HIGHLIGHTS

The Number of patients was 3481 during the year 2018-19 as against 4009 in the previous year. Your management believes that the stiff competition situation will ease in due course and the performance will improve.

MANAGEMENT DISCUSSIONANDANALYSIS

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 & 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 2019 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)

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mrs. R. Gomathi (DIN No: 02900460) retires by rotation and being eligible offers herself for re- appointment. Mr. G.R. Navin Raakesh (DIN: 01692155), Director and Chief Financial Officer resigned with effect from 14th August, 2018. Ms. Premalatha Kanikannan(DIN: 01710387), Woman Director and Chief Financial Officer (Resigned with effect from 5th May, 2018. Mr. G.R. Navin Raakesh (DIN: 01692155) was appointed as Chief Financial Officer with effect from 5th May, 2018 and resigned on 14th August, 2018 due to personal reasons. Mr. Dambaru Dhar Jena was appointed as the Chief Financial Officer with effect from 14th August, 2018. Dr. S. Kameswaran (DIN: 00255389), Independent Director and Chairman of Audit Committee resigned with effect from 13th February, 2019 due to his old age and health conditions. Dr. S.Varadharajan (DIN: 08015795) was appointed as Independent Director with effect from 28th September, 2018.

The Board of Directors placed on record their appreciation for the valuable contribution made by Mr. G.R. Navin Raakesh, Ms. Premalatha Kanikannan & Dr. S. Kameswaran for the growth of the company during their tenure as Directors of the Company.

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 5th May, 2018; 28th May 2018; 14th August, 2018; 12th November, 2018 and 13th February, 2019.

COMPOSITION OF COMMITTEES OF BOARD:

Currently the board has following Committees: Audit Committee, Nomination & Remuneration Committee & Stakeholders Relationship Committee, Internal Complaints Committee, Whistle Blower Committee and Independent Directors Committee.

The Composition &Activities are as follows:

Name of the Committee Composition of the Committee/ No. of times the committee met Highlights of duties, responsibilities & Activities
Audit Committee Dr. S. Kameswaran, The Audit Committee was mandated with the same Terms of Reference specified in SEBI (LODR) REGULATIONS,2015.
DIN: 00255389 (Independent Director, Resigned w.e.f 13th February, 2019) Chairperson of the Committee
Mr. B. Ramachandran The current Terms of Reference fully conform to the requirements of the Companies Act.
DIN: 06397113 (Independent Director), Member, Chairperson of the Committee w.e.f 13th February, 2019
Mr. A.N. Radhakrishnan 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, reviewing the Management Discussion and Analysis of financial condition and result of operations and also statutory compliance issues.
DIN: 01508867 (Chairman & Managing Director), Member
Mr. S. Varadharajan
DIN: 08015795 (IndependentDirector), Member of the Committee w.e.f. 10th November, 2018
Mr. T. Jeyaprakasam
Secretary of the Committee (Company Secretary)
Resigned w.e.f.6th June, 2018
Afternoon
Mr. R.Deenadayalu
Secretary of the Committee (Company Secretary) The Committee acts as a link between the management, external and internal auditors and the Board of Directors of the Company.
w.e.f 7th June, 2018
The Committee met 4 times on
26th May, 2018
13th August, 2018
10th November, 2018
12th February, 2019
Nomination & Remuneration Committee Dr. S. Kameswaran To fix salary allowances and other perks to senior level personnel as and when appointed by the Company.
DIN No:00255389 (Independent Director)
Chairperson of the Committee
(Resigned w.e.f. 13th February, 2019) REMUNERATION POLICY: The Remuneration Policy of the Company for the managerial personnel is based on the performance potential and performance of the individual/
Mr. B. Ramachandran
DIN No: 06397113
(Independent Director), Member of the Committee
Mrs. Premalatha Kanikannan personnel.
DIN No: 01710387, (Director - Chief Financial Officer) Member of the Committee (Resigned w.e.f. 05.05.2018) CEO/CFO CERTIFICATION by
Mr. G.R.Navin Raakesh DIN No: 01692155, Director - Chief Financial Officer) Member of the Committee (Appointed w.e.f 05.05.2018 & resigned w.e.f. 14.08.2018) Dr. V. Krishnamurthy, Chief Executive Officer and Mr. A.N. Radhakrishnan, Chairman & Managing Director as required under SEBI (LODR) was placed before the Board at its meeting held on 13th August, 2019.
Mr. S.Varadharajan
DIN No: 08015795
Appointed w.e.f.13.02.2019
as Member & Chairman of the Committee.
The Committee met 4 times on 05.05.2018, 14.08.2018, 12.11.2018& 12.02.2019
Stakeholders Relationship Committee Mr. B. Ramachandran The Company has attended to the investors complaints and redressed them within 15 days from the date of their receipt during the year 2018-2019.
DIN: 06397113 (Independent Director),
Chairperson of the Committee
Dr. S. Kameswaran
DIN:00255389
(Independent Director)
Member of the Committee
(Resigned w.e.f.
13th February, 2019)
Mr. S.Varadharajan
DIN: 08015795
Member of the Committee
Mrs. R.Gomathi
(DIN: 02900460)
Woman Director
(Member w.e.f 13.02.2019)
The Committee met on
18.06.2018, 16.08.2018, 29.10.2018, 17.11.2018, 17.12.2018, 24.12.2018, 03.01.2019, 10.01.2019, 30.01.2019, 06.02.2019, 07.03.2019, 11.03.2019, 18.03.2019, 25.03.2019, 30.03.2019 & 31.03.2019
Internal Complaints Committee Mr. B. Ramachandran To consider & redress complaints.
DIN: 06397113 (Independent Director)
Member of the Committee
Dr. S. Kameswaran
DIN: 00255389 (Independent Director)
Member of the Committee
(Resigned w.e.f. 13th February, 2019)
Mr. S.Varadharajan
DIN: 08015795 (Independent Director)
Member of the Committee
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
(Resigned w.e.f. 13th February, 2019)
Mr. S.Varadharajan
DIN: 08015795 (Independent Director)
Member of the Committee

Independent Directors Committee: Members - Dr. S. Kameswaran (DIN:00255389), Independent Director, Member till 13th February, 2019; Mr. B. Ramachandran (DIN:06397113), Independent Director, Member and Dr. S. Varadharajan (DIN:08015795), Independent Director, Member.

Internal Complaints Committee under Sexual Harrassment of Women at work place: The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under Sexual Harrassment of Women at work place (Prevention, Prohibition, Redressal) Act, 2013. The Company is committed to provide a safe and conducive work environment to its employees during the financial year. Your directors further state that during the financial year there were no cases filed pursuant to the Sexual Harrassment of Women at work place (Prevention, Prohibition, Redressal) Act, 2013. The composition of members of the above committee is as per the requirement under the above Act and relevant rules/provisions.

Number of complaints received, disposed and pending during the year - Nil

POLICIES OFTHEBOARD:

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)REGULATIONS, 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. No complaint under this facility was received during the Financial Year 2018-19.

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.

RISKMANAGEMENT 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 PARTYTRANSACTION POLICY:

The Policy regulates all transactions between the Company and its related parties.

INSIDERTRADING POLICY:

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

AUDITORS

M/s. MRC & 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.

SECRETARIAL AUDIT:

Pursuant to Section 204(1) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. T Murugan, a Practicing Company Secretary (C.P.No.4393) to undertake the Secretarial Audit of the Company for the Financial Year 2018-19.

The Secretarial Audit Report was placed before the Board on 13th August, 2019. 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, 2019. The total amount of deposit outstanding as at 31st March, 2019 was Nil.

SIGNIFICANT & 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 OFADEQUACY 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 Companies Act, 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 FormAOC-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 & 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)

S.No Name Designation Remuneration for FY 2018-19 Remuneration for FY 2017-18 Increase in remuneration from previous year Ratio / times per median of employees remuneration
1. Mr.A.N. Radhakrishnan Chairman & Managing Director 9,00,000 9,00,000 Nil 4.3:1
2. Dr.V Krishnamurthy Chief Executive Officer 1,43,24,643 1,32,90,000 10,34,643 p.a. 64.28:1
3. Mr.T. Jeyaprakasam (From 1.4.2018 to 6.6.2018) Company Secretary 46,200 1,98,000 6,000 p.m. 1.13:1
4. Mr.R. Deenadayalu (From 7.6.2018 to 31.3.2019) Company Secretary 8,87,215

-

Not Applicable as he joined on 7th June, 2018 5.38:1
5. Mr.Dambaru Dhar Jena (w.e.f.14thAugust, 2018) Chief Financial Officer 2,80,484 Not Applicable as he joined on 14thAugust, 2018 1.99:1
6. Mr. G.R. Navin Raakesh (Resigned w.e.f. 14thAugust, 2018) Director
7. Mrs. Premalatha Kanikannan (Resigned w.e.f. 5th May, 2018) Director
8. Dr. S. Kameswaran (Resigned w.e.f. 13th February, 2019) Independent Director
9. Mr. B. Ramachandran Independent Director

-

-

-

-

10. Dr. S. Varadharajan Independent Director

-

-

 

The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year: Chief Executive Officer : 7.79%
Company Secretary : 40%
Chief Financial Officer : Nil
The percentage increase in the median remuneration of employees in the financial year There is no increase in median remuneration.
The number of permanent employees on the rolls of company 113
The explanation on the relationship between average increase in remuneration and company performance The employees on an average received an annual increase of 3.60% based on their performance and this increase in remuneration is in line with the market trends.
Comparison of the remuneration of the key Managerial Personnel against the performance of the Company The remuneration payable to Key Managerial Personnel and Whole-Time Director is in accordance with Industry and Geographical Standards and as per the Remuneration Policy of the company.

 

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 31.03.2019 31.03.2018 change
Stock Price (in र) 11.75 19.25 -38.96%
Market Cap (र in crores) 8.77 14.38 -39.01%
EPS 0.07 2.00
P/E 167.85 9.62

 

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. The average annual increase in the salaries of employees other than the managerial personnel across the organization was around 3.60%. There is no increase in the managerial remuneration other than CEO and Company Secretary. The remuneration payable to Key Managerial Personnel and Whole-Time Director is in accordance with Industry and Geographical Standards and as per the Remuneration Policy of the company
Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company The remuneration payable to Key Managerial Personnel is in accordance with Industry and Geographical Standards and as per the Remuneration Policy of the company.
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 1 : 15.92
Directors Highest Salary - र 9,00,000/- p.a.
Employees Highest Salary - Chief Executive Officer - र 1,43,24,643/- p.a.
Affirmation that the remuneration is as per the remuneration policy of the company 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, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND 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 Companies Act, 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, 2019 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.

NAMES OF TOP 10 EMPLOYEES OF THE COMPANY IN TERMS OF REMUNERATION DRAWN (OTHER THAN KEY MANAGERIAL PERSONNEL)

Sl. No. Name र p.m.
1. Srinivasan G 47,500/-
2. Joseph Enit Rodrigo 31,000/-
3. RoslineAntony Raj 25,920/-
4. Karthigai S 25,500/-
5. ArulkumarAnpazhagan 24,500/-
5. Selvakili R 24,500/-
6. GunavathyK 24,500/-
7. Lissamma Joseph 24,400/-
8. Sekar K 24,297/-
9. Mohan K 24,200/-
10. Venkatesan G 24,026/-

DUES TO SMALL & MICRO ENTERPRISES

Dues outstanding more than र 1,00,000/- to Small and Micro Industrial Units: Nil

LISTING FEES:

The Company confirms that it has paid the annual listing fees for the year 2018-19 to BSE where shares of the company are listed.

ACKNOWLEDGEMENTS:

The Directors place on record their sincere thanks to the investors, employees, customers and medical professionals for their continuous support. The Directors also thank the Government of India, Government of Tamilnadu and agenciesfortheirco-operation.

ON BEHALF OF THE BOARD
Place: Chennai A.N. RADHAKRISHNAN
Date : 13th August, 2019 CHAIRMAN & MANAGING DIRECTOR
DIN: 01508867