Dear Members,
Your Directors take pleasure in presentingthe Thirty Seventh Annual Report along with
the audited financial statements for the year ended 31st March, 2023.
FINANCIAL HIGHLIGHTS
Particulars |
2022-23 |
2021-22 |
| Revenue from Operations |
101,974.68 |
90,532.67 |
| Other Income |
1,598.77 |
1,249.53 |
Total Income |
103,573.45 |
91,782.20 |
| Earnings before Interest, Tax, Depreciation & Amortisation |
28,450.10 |
26,933.66 |
| (EBITDA) |
|
|
Profit Before Taxation (PBT) |
15,521.99 |
14,067.83 |
| Provision for Taxation |
3,945.38 |
3,641.77 |
Profit After Taxation (PAT) |
11,576.61 |
10,426.06 |
| Add: Other Comprehensive Income |
53.48 |
(166.75) |
Total Comprehensive Income for the year |
11,630.09 |
10,259.31 |
RESULTS OF OPERATIONS
The Revenue from Operations for the financial year 2022-23was 101,974.68 Lakhs
registering an increase of 12.64% over the previous year income of 90,532.67 Lakhs.
Earnings before interest, tax, depreciation and amortization (EBITDA) were 28,450.10
Lakhs over the previous year EBITDA of 26,933.66 Lakhs. Profit after tax (PAT) for the
year was 11,576.61 Lakhs over the PAT of 10,426.06 Lakhs in year 2021-22.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
The Company does not have any Subsidiary Company, Joint Venture or Associate Companies
as definedin the Companies Act, 2013.
DIVIDEND
Based on companys performance, the Board of Directors are pleased to recommend a
dividend of 10/- per share (100%) (Final Dividend 5/- per share and Special Dividend
5/- per share) for the Financial Year 2022-23 for approval of the members. The
dividend on equity shares, if approved by the members would involve a cash outflow of
1,094.23 Lakhs. Pursuant to Finance Act, 2020, dividend income is taxable in the hands of
the Shareholder with effect from 1 st April, 2020 and the Company is required
to deduct tax at source from dividend paid to Shareholders at the prescribed rates. For
the prescribed rates for various categories, Shareholders are requested to refer the
Finance Act, 2020, relevant circulars and amendments thereof, if any.
Further in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, available on the website of the Company at
(ListingRegulations), the link: https://www.kmchhospitals.com/Policy/DD Policy.pdf.
TRANSFER TO RESERVES
The Company does not propose to transfer any amount out of the profit to reserves.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year, there were no changes in the nature of business of the Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no material changes and commitments affecting financial position of the
Company which have occurred between the end of the financial year of the company to which
the Financial Statements relate and date of the report.
BOARD MEETINGS
The Board of Directors met four times during this financial year. The disclosure on
Board meetings and attendance of Directors are provided in the Corporate Governance
Report.
AUDIT COMMITTEE
The composition of Audit Committee, number of meetings held and their attendance
thereto have been provided under an identical head in the Corporate Governance Report.
CSR COMMITTEE
The composition of CSR Committee, number of meetings held and their attendance thereto
have been provided under an identical head in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITIES
During the year under review in pursuance of the recommendations of the CSR Committee,
the Company had commitment of 243.72 Lakhs being 2% of the last three years average net
profit of the Company towards implementingtheCSRactivities. under Section 135 read with
schedule VII and other applicable provisions of the Companies Act, 2013 is appended as
"Annexure - III" to this report.
INFORMATION ON STATUS OF COMPANYS AFFAIRS
Information on operational and financial performance etc. is provided in the Management
Discussion and Analysis Report, which is annexed to the Directors Report and has been
prepared inter-alia in compliance with the terms of SEBI(LODR)Regulations, 2015
SHARE CAPITAL
The paid up equity share capital of the Company as on March 31, 2023 aggregates to
1,094.23 lakhs comprising of 1,09,42,262 equity shares of 10/- each fully paid up. There
is no change in the paid-up share capital of the Company during the Financial Year
2022-23.
CREDIT RATING
CARE Ratings Limited have re-affirmed your Companys Long term bank facilities as
‘CARE A+ (single A+) and short term bank facilities as ‘CARE A1+ (A One plus).
HOSPITAL ACCREDITATION
Your Hospital has been certifiedby National Accreditation Board for Hospitals and
Healthcare providers (NABH) for the delivery of high standards for safety and quality care
to the patients.
BOARD EVALUATION
Pursuant to the provisions of Companies Act, 2013 and SEBI (LODR) Regulations 2015, a
structured administered after taking into consideration of various aspects to the Board
functioning, compositionof the Board and its Committees, culture, execution and
performance of specificduties,obligations and governance to ascertain the efficacy and
functioning of Board and its members.
The performance evaluation of Independent Directors was completed. The Board of
Directors have expressed their satisfaction with the outcome of the evaluation process.
There has been no change in the circumstances affecting their status as Independent
Directors of the Company.
The performance evaluation of the Chairman of the Board and Non-Independent Directors
was carried out by the Independent Directors. The Independent Directors have expressed
their satisfaction with the outcome of the evaluation process.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
Pursuant to the requirement of SEBI (LODR) Regulations 2015, the Company has a
familiarization programme for the Independent Directors with regard to their role, rights,
responsibilities in the company, nature of the industry in which the Company operates,
business model of the company etc. The Board members are provided with all the necessary
documents / reports and internal policies to enable them to familiarize with the companys
procedures and practices and the same is uploaded on the Companys website at https://www
.
DIRECTORS
As per Article 103(b) of the Articles of Association Dr. Nalla G Palaniswami and Dr.
Thavamani Devi Palaniswami, all other Executive and Non-Executive Non-Independent
Directors are subject to retirement by rotation. Accordingly, Dr. Arun N Palaniswami,
Director retires by rotation and being eligible has offered himself for re-appointment.
INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board indicating that
they comply with all the requirements that are stipulated in Section 149 (6) of the
Companies Act, 2013 and Regulation 16 (1) (b) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 so as to qualify themselves to act as Independent
Directors in the company. Further they have also declared that they are not aware of any
circumstance or situation which exist or may be reasonably anticipated that could impair
or impact their ability to discharge their duties with an objective and independent
judgement and without any external influence.
The Independent Directors of the Company have complied with the requirements of the
provisions in relation Independent Directors Databank as stated in the Companies (Creation
and Maintenance of Directors) Rules, 2019 and the Companies (Appointment and Qualification
of Directors) Rules, 2014 as amended from time to time.
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 the Companies Act, 2013 that the Independent Directors of
the Company met with the criteria of their Independence laid down in Section 149(6).
DIRECTORS RESPONSIBILITY STATEMENT
In pursuance of section 134 (5) of the Companies Act, 2013, the Directors a) In the
preparation of the annual accounts, the applicable accounting proper explanation relating
to material departures; b) The Directors had selected such accounting policies and
estimates that are reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the profit and loss of
the company for that period; c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detectingfraudandother
d) The Directors had prepared the annual accounts on a going concern basis and e) The
Directors, had laid down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and 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.
ANNUAL RETURN
Pursuant to Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies
(Management and Administration) Rules, 2014, the Annual Return is available on the website
of the Company on the following link:
https://kmchhospitals.com/wp-content/uploads/2023/06/Annual-return-2023.pdf
COMPLIANCE OF CODE OF CONDUCT
Pursuant to SEBI (Prohibition of Insider Trading) (Amendment) Regulation 2018 dated 31 st
December 2018, the Company amended the "Code of Conduct for Insider Trading" and
"Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive
Information". Consequently, the Board of Directors brought in all the corresponding
amendments to the above two mentioned Codes and necessary disclosures have been made in
our website under: http://www.kmchhospitals.com/Policy/COC.pdf
INSURANCE
The Companys properties, equipment and stocks are adequately insured against all major
risks. The Company has also taken Directors and Officers Liability Policy to provide
coverage against the liabilities arising on them.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME
SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS THEREOF
The disclosure under this clause is not applicable as the Company has not undertaken
any one-time settlement with the banks or financial institutions during the
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of the company as stipulated under the Companies Act, 2013
are Dr. Nalla G Palaniswami, Managing Director, Dr. Thavamani Devi Palaniswami,
Joint Managing Director, Dr. Arun N Palaniswami, Executive Director, CA. P.K.
Gopikrishnan, Chief Financial Officer and CS R.Ponmanikandan, Company Secretary.
CA M.K.Ravindra Kumar, Chief Financial Officer resigned from the services of the
Company with effect from 03/10/2022 and CA P.K.Gopikrishnan joined the Company as Chief
Financial Officer with effect from 11/11/2022. CS S.P.Chitti Babu, Company Secretary
resigned from the services of the Company with effect from 21/11/2022 and CS
R.Ponmanikandan joined the Company as Company Secretary with effect from 22/11/2022.
APPOINTMENT AND REMUNERATION CRITERIA OF KEY MANAGERIAL PERSONNEL
The appointment of Key Managerial Personnel and remuneration paid to Managing Directors
or Executive Directors is within the purview of the provisions of Section 196 and 197 of
the Companies Act, 2013. The Company pays remuneration by way of salary, perquisites etc.,
to its Managing Directors and Executive Director in line with the approvals accorded by
the General Meetings and in pursuance of the recommendation of the Nomination and
Remuneration Committee as per the guiding principles laid down in the Nomination and
Remuneration Policy. The Nomination and Remuneration Policy of the Company is available on
the website of the Company at the link :-
https://kmchhospitals.com/wpcontent/uploads/2016/pdf/Nomination_Remuneration_&_Evaluation_Policy.pdf
PARTICULARS OF 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 the
employees of the company will be provided upon request.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND EXPENDITURE
The particulars regarding conservation of energy, technology absorption and foreign
exchange earnings and expenditure stipulated under Section 134(3)(m) of the Companies Act
2013 read with the Companies (Accounts) Rules, 2014, are as under:
Energy Conservation
Energy conservation means the efforts made to reduce the consumption of energy by using
less of an energy service. Your Company constantlyandcontinuouslyappliesall utilization of
the resources. effortsforoptimum Energy consumption is monitored through Energy Management
System. Through this system, areas which consume high volume of electricity are monitored
and alternate steps are being constantly taken to optimize energy utilization. Other
energy conservation techniques that are employed include using equipment with 5 star
ratings, use of movement sensors in bathrooms of the patient rooms (i.e., the lights are
operated based upon human movement), operating a centralized A/c plant and phasing out
tube lights with LED lights.
Your Company adopts the concept of ‘Sustainable Development i.e. meeting the
needs of the present without compromising the ability of future generations to meet their
own needs. By following this concept, your Company has been operating a 5.25 MW Solar
Power Generation Plant and Wind Mills which caters to 75% of electricity requirement per
annum and through which the Company has been saving 40% on its electricity bills.
Caring for the Environment
Your Company adopts the concept of zero discharge technology, under which an effluent
treatment plant had been set up and the sewage water is treated for toxic effluents. The
treated water is used for horticulture within the premises. A comprehensive waste
management system has been implemented and through this, bio-degradable food wastes are
decomposed and biogas is produced for captive consumption in the hospital canteen which in
turn results in reduced LPG cost.
All the vehicles that are operated for the company adhere to pollution control
regulations. Periodic maintenance activities are undertaken to comply with prescribed
regulations and vehicle efficiency.
Technology Absorption
Your company has continued to invest in new technologies. During the year 2022-23, the
Company introduced advanced functional MR brain imaging study (Clinical fMRI neuroimaging
services).
Functional MRI (fMRI) has special significance when a tumor is removed or surgical
treatment for epilepsy is offered. Neuro navigation system allowing extremely precise
surgery where the pathology is treated without any vital area being touched. Standard
imaging like MRI and CT cannot accurately pickup these areas and thus a surgery can leave
a patient paralyzed if an important area is injured.
To overcome this problem, advanced computers can be incorporated into a regular MRI
system where these vital areas can be clearly demarcated when we stimulate that part of
the body during an MRI scan.
Investment in medical equipment during the year 2022-23 amounts to 1,957.41 Lakhs
Foreign Exchange Earnings & Outgo (i) Earnings in Foreign Currency
Foreign Currency amount realizedfromNREbankaccounts educationduring the year
ended respectoffeefor March 31, 2023: 588.06 Lakhs (Previous Year: 459.00 Lakhs)
(ii) Expenditure in Foreign Currency
Expenditure in foreign currency during the year ended March 31, 2023 was 65.29 Lakhs
(Previous Year: 69.86Lakhs).
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT
2013
As on March 31, 2023, the Company has neither provided nor there were any outstanding
loans or guarantees covered under the provisions of Section 186 of the Companies Act,
2013. The details of Investments covered under the provisions of Section 186 of the Act
are given in Note
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
KMCH has an Internal Control System, commensurate with the size, scale and complexity
of its operations. Your Company has a proper and adequate system of internal controls.
These controls ensure transactions are authorized, recorded and reported correctly and
assets are safeguarded and protected against loss from unauthorized use or disposition.
covering the entire spectrum of internal financial controls. Inaddition, The Audit
committee defines the scope and authority of the Internal Auditor. The Audit Committee
comprises of professionally qualified Directors, who interact with the statutory auditors,
internal auditors and management in dealing with matters within its terms of reference. A
detailed program of internal audits and management review, supplements the process of
internal financial control framework.
Tomaintainitsobjectivity reports to the Chairman of the Audit Committee of the Board.
The internal auditor monitors and evaluates the efficacy and adequacy of internal control
system in the Company, its compliance with operating systems, accounting procedures and
policies at all Based on the report of internal auditor, process owners undertake
corrective action in their respective areas and thereby strengthen the controls.
Significant audit observations and corrective actions proposed to fix the observations are
presented to the Audit Committee of the Board.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has set up vigil mechanism for Directors and Employees to report their
genuine concerns, the details of which are given in the Corporate Governance Report.
During the Financial Year, no complaints or concerns were received by the Chairman of the
Audit Committee under the Vigil Mechanism. Vigil Mechanism and Whistle Blower Policy is
available in the Companys website:
https://kmchhospitals.com/wp-content/uploads/2016/pdf/Whistle_Blower_Policy.pdf
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
The Company has in place a Prevention of Sexual Harassment Policy in line with the
requirements of the Sexual Harassment of Women at the work place (Prevention, Prohibition
and Redressal) Act 2013. An Internal Complaint received regarding sexual harassment.
During the year 2022-23, no complaints were received by the Company related to sexual
harassment.
RELATED PARTY TRANSACTIONS AND POLICY ON RELATED PARTY TRANSACTIONS
All transactions with Related Parties are at arms length and in the ordinary course of
business duly approved by the Audit Committee of the Board. Hence there are no
transactions which are either not in arms length or which are material in nature
requiring disclosure in Form AOC - 2 is annexed herewith as "Annexure - II"
forming part of the report.
The details of related party transactions during financial year 2022-23, including
transactions with person or entity belonging to the Promoter/Promoter Group which holds
10% or more shareholding in the Company are provided in the accompanying financial The
Board has formulated Policy on Related Party Transactionsand the same is uploaded on the
Companys website at http://www.kmchhospitals.com/Policy/RPT_Policy.pdf
RISK MANAGEMENT
The steps taken by the Company to mitigate the risk are disclosed under an identical
head in the Management Discussion and Analysis forming part of Directors Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators / Courts /
Tribunals which would impact the going concern status and the Companys operations in
future.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016 DURING THE YEAR
No applications have been made against the Company during the year under review and no
proceeding are pending against the Company under the Insolvency and Bankruptcy Code, 2016.
The Company has not done any one time settlementwithanyBankorFinancialInstitutions.
HUMAN RESOURCE DEVELOPMENT
Your Company continues to place great importance to the development of human resources
segment and the sustained focus on retention through employee engagement initiatives has
made the employees realize their potential. Learning and Development has provided various
learning platforms which include classroom and online self - learning modules to meet the
development need of employees to help build their skills, knowledge and capability.
The total strength of the employees of the Company as on 31st March, 2023
was 5399.
DEPOSITS
As per Section 73 of the Companies Act 2013 read with the Companies (Acceptance of
Deposits), Rules 2014, the company has not accepted any deposits from the public or its
members during the year. Hence No deposit is outstanding as on 31st March,
2023.
SECRETARIAL AUDIT
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has
appointed M/s KSR & Co. Company Secretaries LLP, Coimbatore, a firm of Company
Secretaries in Practice to undertake the Secretarial Audit of the company for the
Financial Year 2022-23. Secretarial Audit Report is annexed herewith as "Annexure -
IV" forming part of the report.
COMPLIANCE OF SECRETARIAL STANDARDS
The Company has complied with the Secretarial Standards notified under Section 118 of
the Companies Act,
COST AUDIT
In terms of Section148 and other applicable provisions of the Companies Act 2013, read
with Companies (Cost Records and Audit) Rules 2014, Mr.V.Sakthivel, Cost Accountant, M/s
RKMS & Associates, Coimbatore was appointed as Cost Auditor of the company by the
Board on recommendation of Audit Committee for the Financial Year 2022-23. The report of
the cost auditors will be filed with ROC on due date.
STATUTORY AUDITORS
The Statutory Auditor has issued an unmodifiedopinion on the Financial Statements of
the Company as of and for the year ended 31st March 2023. Their report on the
Companies (Auditors Report) Order, 2020 ("CARO"), issued by the Central
Government of India in terms of section 143(11) of the Act, details one qualifications
regarding the following: a) Non-Registration of Lease Agreements Management Response : All
Lease Agreements with more than 11 months tenor, require registration with Department of
Revenue, Ministry of Commercial Taxes and Registration, Government of Tamil Nadu. The
Company is in the process of registering all Lease Agreements and will be completed
shortly.
Under Section 139(2) of the Companies Act, 2013 and the Rules made thereunder, it is
mandatory to rotate the statutory auditors on completion of two terms of five consecutive
years and each such term would require approval of the shareholders. In line with the
requirements of the Companies Act, 2013, Statutory Auditor M/s VKS Aiyer & Co.,
Chartered Accountants (FRN: 000066S) were appointed as Statutory Auditor of the Company at
the 32nd Annual General Meeting to hold office from the conclusion of the said
meeting till the conclusion of the 37 th Annual General Meeting to be held in the year
2023. The term of office of M/s VKS Aiyer & Co., as Statutory Auditors of the will
conclude from the close of the forthcoming AGM of the Company.
The Board of Directors of the Company, based on the recommendation of the Audit
Committee, at its meeting held on May 29, 2023, proposed to reappoint M/s. VKS Aiyer &
Co., Chartered Accountants (FRN: 000066S) as the Statutory Auditor of the Company to hold
office for a second term of five consecutive years from Financial year 2023-24 to 2027-28
and to hold office from the conclusion of the 37 th Annual General Meeting till the
conclusion of the 42nd Annual General Meeting subject to the approval of the shareholders.
Accordingly a suitable resolutionis moved in the notice convening the 37 th Annual
General Meeting to be held on August 25, 2023.
LISTING WITH STOCK EXCHANGE
The equity shares of the Company are listed on BSE Limited and listing fees were paid
upto date.
CORPORATE GOVERNANCE
Your Company has been complying with the provisions of Corporate Governance as
stipulated in Chapter IV and other relevant provisions of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance
along with Practicing Company Secretaryscertificate on compliance of the Corporate
Governance norms as stipulated in Regulation 34(3) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and Management Discussion & Analysis
forming part of this report are provided elsewhere in this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
A Business Responsibility And Sustainability Report describing the initiatives taken by
the Company from an environmental, social and governance perspective, as required in terms
of the provisions of Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 annexed separately forms part of this Annual Report.
ACKNOWLEDGEMENTS
The Board expresses its grateful appreciation for the continued support and
co-operation received from Government and investors. Authorities,FinancialInstitutions,
The Board also places on record its appreciation for the dedication employees at all
levels and their contribution to the growth and progress of the Company.
|
For and on behalf of the Board |
|
Sd/- |
Sd/- |
|
DR. NALLA G PALANISWAMI |
CA.A.M.PALANISAMY |
| Place: Coimbatore |
|
|
|
MANAGING DIRECTOR |
DIRECTOR |
| Date : 29.05.2023 |
|
|
|
DIN: 00013536 |
DIN: 00112303 |
+91-9892691696
