Mar 31, 2015
The Directors hereby present the 23rd Annual Report and Accounts of
the Company for the year ended 31st March, 2015.
1. FINANCIAL RESULTS: (Rs. In Lakhs)
Particulars 2014-15 2013 - 14
Operating Income 37.68 95.86
Other Income 0.06 _
Profit / (Loss) before Int.
Depreciation & Tax (4.47) (10,12)
Depreciation 51.69 71.39
Cash Profit / (Loss) (6.41) (14.70)
Discussion on Financial Performance:
During the year under consideration the Company got a loss of Rs.4.47
Lakhs before interest and depreciation as against loss of Rs.10.12
Lakhs during the previous year.
Management Discussion and Analysis
As mentioned in one of our earlier AGM Reports, the quagmire of
litigation the company was constrained to involve in respect of its
leasehold due to the lower court order against the Company and also
of late due to the mischief of the 1st less or and the 2nd less or has
also substantially contributed to the woes of the company. In view of
the looming uncertainty due to the said litigation, the company is not
able to make optimum use of the premises, as there is the fear of
losing the further investment as may be made for modifications and
renovations to the premises from time to time if the verdict of the
Courts is going to be adverse. This is in addition to the already
invested huge amounts on the premises over a period of many years on
various occasions. The Company is now passing throw a difficult phase
as far as competing with the players in the field. As has been
discussed earlier, the old model and out dated equipment is one of the
main reasons for the lack of the generation of expected revenues of the
company. In addition to this the severe financial stress being faced by
company is also affecting the ability to keep the modernization need
fulfilled. While this is the state of affairs in the operational front,
Canara Bank has assigned its rights on the loan favoring Edelweiss
Asset Reconstruction Company Ltd (EARC). On 18.03.2015 the EARC has
granted a Negotiated Settlement (NS) of dues at a total consideration
of Rs.250.00 lakhs payable in installments specified therein. In terms
of the NS the company has paid an amount of Rs.25.00 lakhs as Upfront
payment. The company has also informed EARC that since the revenues of
the company are not as expected, the Board will be able to pay the
settled amount to EARC only by way of selling the landed property
belonging to the Company near Hyderabad. Accordingly efforts are being
made to sell the land of Ac.13.625 cents belonging to the company in
the open market and utilize the sale proceeds to clear off the settled
amount to EARC. As the market conditions in the Telangana State are not
favourable for the real estate after the division of the combined state
of Andhra Pradesh, the company is finding it difficult to get the
buyers for the expected sale price. However a call will be soon taken
by the Board so that the amount due to EARC may be settled at the
earliest.
Once the EARC amount is settled, the company will be debt free and will
be attractive for new investors to infuse the required capital for
making the company profitable once again and also for taking up new and
different profitable projects. The Board is aiming to reach this stage
at the earliest.
Financial Performance
The Following is the Financial Performance of your Company:
(Rs.in Lakhs)
2014-15 2013-14 Inc/(Dec) %
Income: Operations 37.68 95.86 (60.51)
Other Income 0.06 - 0.06
Total : 37.74 95.86 (60.63)
Expenditure:
Material Consumed 9.77 29.80 (67.21)
Staff Cost 3.73 25.97 (85.63)
Other Expenses 31.70 54.78 (42.13)
Depreciation 51.69 71.39 (27.59)
Total : 96.89 181.94 (46.74)
Profit/(Loss) (59.15) (86.08) (31.28)
Material changes and commitments if any affecting the financial
position of the Company occurred between the end of the financial year
to which this Financial Statements relate and the date of the report
There have been no material changes and commitments, affecting the
financial position of the Company which occurred during between the end
of the financial year to which the financial statements relate and the
date of this report.
Details of significant and material orders passed by the regulators/
courts/ tribunals impacting the going concern status and the Company's
operations in future
There are no significant material orders passed by the Regulators/
Courts which would impact the going concern status of the Company and
its future operations except the one mentioned in detail in the
Management Discussion.
Share Capital:
Authorized Share Capital: During the year under review, there was no
change in authorized share capital of the Company. Authorized share
capital of the company as on March 31, 2015 was Rs.25,00,00,000/-,
comprising of 2,50,00,000 equity shares of Rs.10.00 each.
Paid-up Share Capital: During the year under review, there was no
change in paid up share capital of the Company. Paid up share capital
of the company as on March 31, 2015 was Rs.15,09,99,520/-, comprising
of 1,50,99,952 equity shares of Rs.10.00 each.
Buy Back of Securities: The Company has not bought back any of its
securities during the year under review.
Sweat Equity: The Company has not issued any Sweat Equity Shares during
the year under review.
Bonus Shares: The Company has not issued any bonus shares during the
year under review.
Employees Stock Option: The Company has not provided any Stock Option
Scheme to the employees.
Dividend
Your Directors have not recommended any dividend on Equity Shares for
the year under review.
Transfers to Reserves
Your Board of Directors does not appropriate any amount to be
transferred to General Reserves during the year under review.
Fixed Deposits
During the year under review, your Company has not accepted any fixed
deposits within the meaning of Section 73 of the Companies Act, 2013
read with rules made there under.
Subsidiaries, Joint Ventures and Associate Companies
In accordance with Section 129(3) of the Companies Act, 2013, a
statement containing salient features of the financial statements of
the subsidiary companies in Form AOC-1 is enclosed as Annexure - I of
the Board's Report.
Particulars of Contracts & Arrangements with Related Parties
During the year, the Company has not entered into any contracts or
arrangements with Related Parties.
Related party Transactions
During the year, the Company has not entered into any transactions with
Related Parties.
Particulars of Loans, Guarantees or Investments
During the financial year 2014-15 the Company neither has, directly or
indirectly, given any loan to its Directors nor extended any guarantee
or provided any security in connection with any loan taken by them.
Further, the Company has neither given any inter-corporate loan /
advance nor made any investments in other companies.
Number of Board Meetings held
The Board of Directors duly met 7 times during the financial year from
1st April, 2014 to 31st March, 2015. The dates on which the meetings
were held are as follows:
(1) 22.05.2014, (2) 12.08.2014, (3) 03.09.2014, (4) 30.09.2014, (5)
14.11.2014, (6) 14.02.2015 and (7)27.03.2015
Directors and Key Managerial Personnel
In terms of Section 152 of the Companies Act, 2013, Dr. M. Lakshmi
Sudha, CFO & Director would retire by rotation at the forthcoming AGM
and is eligible for re-appointment. Dr. M. Lakshmi Sudha, CFO &
Director has offered herself for re-appointment.
Mr. Narendra Seena Karkera (DIN:01916929), Mr. Vinay Vishnu Raj Nayak
(DIN:01979345) were appointed as an independent Directors by the
Members at the last Annual General Meeting (AGM) held on September 30,
2014..
Dr. K Ramana Kumar (DIN 00754148) has been appointed as an Additional
Director in the category of Independent director pursuant to section
149 of the Act w.e.f. 30.09.2014 in accordance with the provisions of
the Companies Act, 2013 and Articles of Association of the Company, who
shall hold office till the ensuing Annual General Meeting of the
Company.
Mr. Hemanth Kumar Manikyam resigned from the office of the Director on
24/05/2014.
Dr. M. Lakshmi Sudha has been appointed as the Chief Financial Officer
of the Company pursuant to section 203 of the Act w.e.f. 14.02.2015 in
accordance with the provisions of the Companies Act, 2013 Based on the
confirmations received from Directors, none of the Directors are
disqualified from appointment under Section 164 of the Companies Act
2013.
Declaration by Independent Directors
The Independent Directors of the Company have submitted their
declarations as required under Section 149(7) of the Companies Act,
2013 stating that they meet the criteria of independence as per
sub-section (6) of Section 149 of the Act.
Familiarization programme for Independent Directors
The Company proactively keeps its Directors informed of the activities
of the Company, its management and operations and provides an overall
industry perspective as well as issues being faced by the industry.
Independent Directors' Meeting
The Independent Directors met on 14.02.2015 without the attendance of
Non-Independent Directors and members of the Management. The
Independent Directors reviewed the performance of Non- Independent
Directors and the Board as a whole; the performance of the Chairman of
the Company, taking into account the views of Executive Director and
Non-Executive Directors and assessed the quality, quantity and
timeliness of flow of information between the Company Management and
the Board that is necessary for the Board to effectively and reasonably
perform their duties.
Board Evaluation:
The Board adopted a formal mechanism for evaluating its performance as
well as that of its Committees and individual Directors, including the
Chairman of the Board. The exercise was carried out through a
structured evaluation process covering various aspects of the Board
functioning such as composition of the Board & committees, experience &
competencies, performance of specific duties & obligations,
contribution at the meetings and otherwise, independent judgment,
governance issues etc.
Directors Responsibility Statement as required under Section 134(5) of
the Companies Act, 2013:
Pursuant to the provisions of Section 134(5) of the Companies Act, 2013
the Board of Directors states that:
(a) In the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
(b) They have selected such accounting policies and applied them
consistently and made judgments 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
for that period;
(c) They have 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
detecting fraud and other irregularities;
(d) They have prepared the annual accounts on a going concern basis;
(e) They have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and
were operating effectively and
(f) They have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
Nomination and Remuneration policy
In compliance to the provisions of Section 178 of the Companies Act,
2013 and Clause 49 of the Listing Agreement entered into with the Stock
Exchanges, the Nomination and Remuneration Committee has recommended to
the Board a Nomination and Remuneration policy with respect to
appointment / nomination and remuneration payable for the Directors,
Key Managerial Personnel and senior level employees of the Company. The
said policy has been adopted by the Board and the same will form part
of the Annual Report as Annexure - II to the Board's Report.
Auditors Statutory Auditors
At the Annual General Meeting held on September 30, 2014, M/s.
Pinnamaneni & Co, Chartered Accountants (Firm Reg. No: 002661S), were
appointed as Statutory Auditors of the Company to hold office for a
period of three years i.e., till the conclusion of the Annual General
Meeting to be held in the calendar year 2017. In terms of the first
proviso to Section 139 of the Companies Act, 2013 the appointment of
the auditors shall be placed for ratification at every Annual General
Meeting. Accordingly, the said appointment of M/s. Pinnamaneni & Co,
Chartered Accountants, as statutory auditors of the Company is placed
for ratification by the Shareholders. In this regard, the Company has
received a certificate from the auditors to the effect that if their
appointment is ratified, it would be in accordance with the provisions
of Section 141 of the Act. The Auditors have also confirmed that they
hold a valid certificate issued by the Peer Review Board of the
Institute of Chartered Accountants of India.
Qualification by Statutory Auditor
There were no qualifications, reservations or adverse remarks made by
the Auditors in their report.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Board of Directors has appointed M/s. B S S & Associates, Practicing
Company Secretaries for conducting Secretarial Audit of the Company for
the financial year 2014-2015. The Secretarial Audit Report is annexed
herewith as
Annexure - III.
There were no qualifications, reservations or adverse remarks made by
the Auditors in their report.
The Secretarial Auditor's Report contains qualifications, reservation
or adverse remarks except noncompliance of Section 203 of the
Companies Act, 2013 in respect of appointment of Company Secretary as
Key Managerial Person. The Board has made utmost effort for appointment
of the Company Secretary as KMP but has not been able to appoint a
Company secretary due to lack of suitability of the candidate to the
profile of the Company in terms of Job profile and remuneration.
Company is in the process of filing various e-forms/reports/documents
with Registrar of Companies and stock exchange.
Internal Auditors
In pursuance of Section 138 of the Companies Act, 2013 read with rules
made there under, the Board has appointed Dr. M Lakshmi Sudha, CFO of
the Company as Internal Auditors of the Company to carry out internal
auditing of books of accounts periodically.
Internal Control Systems
The Company has a well-established system of internal control in
operations which complies with the relevant provisions of 'Internal
Control' under the Company's Auditor's Report Order 2003 and as
prescribed under revised Clause 49 of the Listing Agreement with Stock
Exchanges. Internal Audit department put in place and adequate
controls are continuously reviewed and risks of inaccurate financial
reporting and fraud, if any, are dealt with immediately and eliminated.
The status of implementation of recommended solutions are regularly
reviewed and presented to the Audit Committee of the Board.
Vigil Mechanism / Whistle Blower Policy
Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7
of the Companies (Meetings of Board and its Powers) Rules, 2014 and
Clause 49 of the Listing Agreement, the Board has adopted Whistle
Blower Policy. This policy aims for conducting the affairs in a fair
and transparent manner by adopting highest standards of
professionalism, honesty, integrity and ethical behavior.
A mechanism has been established for employees to report concerns about
unethical behavior, actual or suspected fraud or violation of Code of
Conduct and Ethics. The policy also provided adequate safeguards
against the victimization of employees who avail of the mechanism and
allows direct access to the Chairman of the Audit Committee in
exceptional cases.
Your Company hereby affirms that during the year no Director / employee
have been denied access to the Chairman of the Audit Committee and that
no complaints were received.
Management Discussion and Analysis
The Management Discussion and Analysis given below discusses the key
issues concerning the business and carried on by the Company.
Management of Risks
There is considerable pressure to keep up the realization from the
services in view of highly competitive market.
Audit Committee
The Composition of the Audit Committee is provided in the Corporate
Governance Report forming part of this report. All the recommendations
made by the Audit Committee were accepted by the Board.
Risk Management
The Risk Management Committee duly constituted by the Board had
formulated a Risk Management Policy for dealing with different kinds of
risks attributable to the operations of the Company. Risk Management
Policy of the Company outlines different kinds of risks and risk
mitigating measures to be adopted by the Board. The Company has
adequate internal control systems and procedures to combat the risk.
The Risk Management procedure will be reviewed periodically by the
Audit Committee and the Board.
Corporate Social Responsibility (CSR) Initiatives:
Section 135 of the Companies Act, 2013 provides the threshold limit for
applicability of the CSR to a Company ie. (a) network of the Company to
be ' 500 crore or more; or (b) turnover of the company to be ' 1,000
crore or more; or (c) net profit of the company to be ' 5 crore or
more. As the Company does not fall under any of the threshold limits
given above, the provisions of section 135 are not applicable to the
Company.
Extract of Annual Return
In accordance with the provisions of Section 134(3(a) of the Companies
Act, 2013, an extract of the Annual Return in Form MGT-9 is appended as
Annexure - IV to the Board's Report.
Information on Conservation of Energy, Technology Absorption & Foreign
Exchange Earnings and outgo
Pursuant to the provisions of Section 134 (3) (m) of the Companies Act,
2013 read with Rule 3 of Companies (Accounts) Rules, 2014, the relevant
information pertaining to conservation of energy, technology
absorption, foreign exchange earnings and outgo is appended hereto as
Annexure - V and forms part of the Board's Report.
Company's Policy on Prohibition, Prevention and Redressal of Sexual
Harassment of Women at Workplace
The Company prohibits any form of sexual harassment and any such
incidence is immediately investigated and appropriate action taken in
the matter against the offending employee(s) based on the nature and
the seriousness of the offence. The Company has a policy on
Prohibition, Prevention and Redressal of Sexual Harassment of Women at
Workplace (the Policy) and matters connected therewith or incidental
thereto covering all the aspects as contained under The Sexual
Harassment of Women at Workplace (Prohibition, Prevention and
Redressal) Act, 2013" notified by the Government of India vide Gazette
Notification dated 23rd April, 2013. There was no case of sexual
harassment reported during the year under review.
Remuneration ratio of the Directors / Key Managerial Personnel (KMP) /
Employees:
The information required under Section 197 of the Companies Act, 2013
read with rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are provided in separate annexure
forming part of this Report as Annexure - VI.
There were no employee in the company throughout the financial year who
were in receipt of remuneration of Rs.60 lacs or more, employees
employed for part of the year and in receipt of Rs.5 lac or more per
month. Hence the provisions of Rule 5(2) The Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are not applicable.
Corporate Governance
The Company is committed to good corporate governance in line with the
Listing Agreement and Provisions, Rules and Regulations of the
Companies Act, 2013. The Company is in compliance with the provisions
on corporate governance specified in the Listing Agreement with BSE.
The certificate dated 02.12.2015 was obtained from Mr.
P.V.V.Satyanarayana, Partner, Pinnamaneni & Co., Chartered Accountants
and the report on Corporate Governance form part of this Directors'
Report as Annexure - VII.
Disclosures as per the Listing Agreement & SEBI Regulations Cash flow
statement In due compliance of the listing agreements and in accordance
with the requirements prescribed by SEBI, the cash flow statement is
prepared and is appended to this Annual Report.
Stock exchanges
Company's equity shares are listed in the Bombay Stock Exchange
Limited. There is an outstanding Listing Fee of Rs.2,27,453/- to
Bombay Stock Exchange Ltd.
Share transfer agency
The Company has appointed M/s XL Softech Systems Ltd, #3, Sagar
Society, Road No.2, Banjarahills, Hyderabad - 500034 as its share
transfer agency for handling both physical and electronic transfers.
Code of conduct
The Company has adopted Code of Conduct for the Board and for the
Senior level employees of the Company and they are complying with the
said code. A declaration by the Managing Director to this effect is
furnished as Annexure - VIII to the Board's Report.
Acknowledgments
The Directors wish to place on record their gratitude to shareholders
and thank the customers, vendors, bankers, hops of other State and
Central Government Departments, Security Exchange Board of India and
Stock Exchanges at Mumbai, and others for their continued support to
the Company's growth. The Directors also wish to place on record, their
appreciation for the contribution made by the employees at all levels,
for their sincerity, hard work, solidarity and dedicated support to the
Company.
For and on behalf of the Board of Directors of
Dolphin Medical Services Limited
Place: Hyderabad Sd/- Sd/-
Date : 30.11.2015 G.V.Mohan Prasad M.Lakshmi Sudha
Managing Director Whole-time director
Mar 31, 2014
Dear Members,
The Directors are pleased to present the 22nd Annual Report together
with Audited Accounts for the year ended 31st March 2014.
1. FINANCIAL RESULTS:
(Rs. In Lakhs)
Particulars 2013 - 14 2012 - 13
Operating Income 95.86 114.14
Other Income - 0.22
Profit / (Loss) before Int.
Depreciation & Tax (10.12) (59.72)
Depreciation 71.39 64.67
Cash Profit / (Loss) (14.70) (129.92)
During the year under review your company has got an income of Rs.95.86
lakhs and recorded a cash loss of Rs.14.70 lakhs.
2. SUBSIDIARY COMPANIES:
M/s. Bridge Corporate Services Pvt. Ltd. and M/s. Evum Life Sciences
Pvt. Ltd. are the subsidiaries of the Company. During the year under
review the Subsidiary Companies were not able to record any progress
due to lack of financial resources. The Statement pursuant to Section
212 of the Companies Act, 1956, highlighting the summary of the
financial performance of our subsidiaries is annexed to this report.
3. DIVIDEND:
As the Company is in financial losses, the Directors have not
recommended any dividend for the year 2013-14.
4. PUBLIC DEPOSITS:
During the year under review the company has not accepted any ''public
deposit'' as in defined in provision of Section 58A of the Companies
Act, 1956 read with Companies (Acceptance of Deposits) Rules 1975 as
amended from time to time. There are no outstanding unclaimed deposits
as on 31st March 2014.
5. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION & FOREIGN EXCHANGE
EARNINGS AND OUT GO:
The required information as per Sec.217 (1) (e) of the Companies Act
1956 is provided hereunder:
A. CONSERVATION OF ENERGY:
The Company has taken necessary steps to conserve the energy
utilization during the year under review.
B. TECHNOLOGY ABSORPTION:
1. Research and Development (R&D) : NIL
2. Technology absorption, adoption and innovation : NIL
C. FOREIGN EXCHANGE EARNINGS AND OUT GO:
Foreign Exchange Earnings : NIL
Foreign Exchange Outgo : NIL
6.INTERNAL CONTROL AND ITS ADEQUACY:
The Board is committed to ensure that the Company''s ''internal control''
system remains effective and efficient in areas such as operations and
Security. For this purpose proper planning and effective conduct of the
''internal audit'' is given top-most attention.
7. DIRECTORS'' RESPONSIBILITY:
To best of their knowledge and belief and on the basis of information
furnished to them the Directors make following statement, which is
required to be made in terms of Section 217 (2AA) of the Companies Act,
1956:
(i) While preparing Annual Accounts, the applicable accounting
standards have been followed along with proper explanations
(ii) Appropriate accounting policies have been selected and applied
consistently and have made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company as at March 31, 2014 and of the losses of the company
for the year ended on that date.
(iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities
(iv) The Annual Accounts of the Company have been prepared on basis of
a ''going concern''.
8. CORPORATE GOVERNANCE:
As per clause 49 of the Listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance Practices followed by the
Company together with a certificate obtained from the auditors of the
Company is set out in Annexure, forming part of this report.
9. PARTICULARS OF EMPLOYEES:
During the year under review, no employee of the company was in receipt
of remuneration for the whole year which in the aggregate was
Rs.60,00,000/- or more per annum nor was any employee in receipt of
remuneration Rs.5,00,000/- or more per month for any part of the year
in accordance with the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975 as amended..
During the year under review, industrial relations of the company
continued to be cordial and peaceful.
10. BOARD OF DIRECTORS:
Resignation of Mr. M Hemanth Kumar from directorship:
Mr. M Hemanth Kumar, director of the company submitted his resignation
on 24.05.2014 and the Board accepted the resignation of Mr. Hemanth
Kumar with effect from 24.05.2014
Resignation of Dr. Lakshmi Sudha Madala as Whole Time Director
Dr. Lakshmi Sudha Madala resigned from whole time Director of the
Company with effect from 03.09.2014 and continues as Director, liable
to retire by rotation.
Appointment of Mr. Narendra Seena Karkera and Mr. Vinay Vishnuraj Nayak
as Independent directions.
The Board recommends the re-appointment of Mr. Narendra Seena Karkera
and Mr. Vinay Vishnuraj Nayak as Independent Directors of the Company
in the ensuing Annual General Meeting for a period of 5 years, not
liable to retire by rotation.
11. AUDITORS:
M/s. Pinnamaneni & Co, Chartered Accountants, the Company''s auditors
term office will conclude with this Annual General Meeting. They have
expressed willingness to accept the assignment for a further period of
three years as per the new Companies Act, 2013. They have also
confirmed their eligibility for such an appointment under Section 139
of the Companies Act, 2013. The Board recommends the firms
re-appointment as Company''s auditors.
12. LISTING AT STOCK EXCHANGES:
The Equity Shares of the Company are listed on Bombay Stock Exchange
Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 and
the Company has not paid the listing fee for the year 2014-15.
13. ACKNOWLEDGEMENTS:
Your Directors thank and appreciate all the executives, staff, Bankers,
Customers and workers of the company for their dedicated services.
//By Order Of the Board//
For DOLPHIN MEDICAL SERVICES LIMITED
Date: 03.09.2014
Place: Hyderabad Sd/- Sd/-
DR. G. V. MOHAN PRASAD DR. M. LAKSHMI SUDHA
MANAGING DIRECTOR DIRECTOR
Mar 31, 2011
DIRECTORS REPORT TO THE SHARE HOLDERS
The Directors have great pleasure in presenting to you Ã19th Annual
Reportà of your Company along with the Audited Accounts for the year
ended 31st March 2011.
1. FINANCIAL RESULTS:
The Financial Results for the year ended 31 st March 2011 are furnished
below:
(Rs. In Lakhs)
Particulars 2009-10 2010-11
Operating Income 334.38 406.49
Other Income 7.28 14.45
Profit before Depreciation & Tax 116.71 138.32
Depreciation 56.70 59.36
Cash Profit 62.77 69.47
During the year under review your company has recorded a 21.47% growth
in its gross operating income. However the same was offset by increase
in 'marketing overheads'. The growth in the business was possible with
steps initiated by the Board members to enter new markets.
2. SUBSIDIARY COMPANIES:
During the year under review the Subsidiary Companies incorporated were
not able to record any progress since activities undertaken are in the
initial phase. However efforts are being made to utilize the
subsidiaries if necessary by associating with other business partners
(and also by effecting the required changes in the objects as well as
the names) for the new proposals by the boards as mentioned in the
later paragraphs of the 'Management's Perception'.
3. DIVIDEND:
The Directors have taken a decision not to recommend any dividend for
the year 2010-11, mainly with intention of boosting up company owned
funds. While taking such decision the Directors have taken into account
to strengthen Financials of the company by retaining earned profits.
4. PUBLIC DEPOSITS:
During the year under review the company has not accepted any 'public
deposit' as in defined in provision of Section 58A of the Companies
Act, 1956 read with Companies (Acceptance of Deposits) Rules 1975 as
amended from time to time. There are no outstanding unclaimed deposits
as on 31st March 2011.
5. MANAGEMENT'S PERCEPTION:
PRESENT STATE OF AFFAIRS - AN OVERVIEW
Cost Enhancement of the Project and the Delay in obtaining the required
additional funds:
The company raised funds in 2006 by way of rights issue, for the
purpose of expansion including updating the medical equipment by way of
replacing the obsolete and old medical equipment with the new ones. Due
to the time taken for the process involved, newer models of diagnostic
equipment have in the mean time been introduced into the market and the
level of the originally envisaged sophistication for updating has gone
up and so also the cost. In addition, the company opted to establish a
Clinical Research Unit along with the needed diagnostic equipment in
Hyderabad as per the 'business plan' mentioned in the 'Rights Issue
prospectous' of the company. For this your company had to approach the
banks for the additional funds needed to meet the enhanced cost
requirements. Your company has got the loan sanctioned, but due to the
extraordinary delay in the bank at various stages of processing,
sanction as well as the disbursement, the whole process got delayed too
much. This unexpected extraordinary delay for the company to go ahead
with its updating & expansion plans, saw many other new similar centres
with similar sophisticated equipment cropping up in the vicinity of the
unit during this period. Finally after the installation of the updated
new equipment, due to the heavy competition created because of the
mushrooming of the diagnostic centres during this delay period, the
marketing expenditure increased out of proportion and some undue sops
and price discounts had to be extended to most of the supporters and
service providers and also the private/Government organizations which
are in tie up with the company for utilizing the diagnostic services.
Thus, in spite of substantial increase in the income of the company
over the past 6 years, the profits are not reflected proportionately.
Global Recession and Delay in materialization of import of equipment,
and unenvisaged additional Interest Burden:
In addition, the supply and import of some sophisticated high end
equipment got extraordinarily delayed as a consequence of the then
global recession in its peak and other external factors affecting the
import. This resulted in the company incurring huge interest burden
(not provided for in the scheduled budget) during the period between
ordering the equipment by way of payment and the installation and
commencement of commercial operations of various medical equipments
purchased. This also resulted in different equipments getting installed
at different time intervals. The net effect was that, the company
suffered huge amounts of interest burden (unprovided for and
unexpected) as well as the need for the regular organizational
maintenance, even while the revenues suffered heavily due to the non
commencement of many new equipments as per schedule. As such the
company suffered severely in many ways in terms of revenue streams Ã
which had a consequential bearing on the profitability of the company.
Need for more comprehensiveness:
Due to delay in the implementation of the project and installation of
various equipments at different times, the supporters/service providers
had confused knowledge about the details of equipments available and
the total services provided. A lot of marketing expenditure had to be
spent for awareness creation on the services provided in the centre
from time to time.
The Present Problem of stand alone Diagnostic Centres:
It is understood from the market forces that a stand alone Diagnostic
business model is day by day becoming more difficult to sustain. This
business is mostly dependant on referrals from Nursing homes and
General Practitioners. Today with large (corporate) hospitals coming
with their own inhouse diagnostic facilities with high investment and
internal captive clients, it has hit the stand alone diagnostic
business. In addition to this, the introduction of 'Arogyasri' free
health scheme to poor patients by the govt. in association with big &
corporate hospitals, prompted them to have in-house diagnostic
facilities of their own. Because of this, referrals to stand alone
diagnostic centres from big hospitals decreased drastically and as a
consequence, the competition becasue heavy and the marketing expenses
involved shot up beyond the permissible levels. As a net effect the
margins for most of the diagnostic procedures are substantially
decreased.
Withdrawal of the loan sanctioned by the bank for the Hyderabad Unit
and the consequent effects on the company:
When the preliminary operational efforts and activities for
establishing & commencing the Hyderabad unit were in full swing in
2009, the bank has abruptly issued a letter on 07.08.2009 intimating
the withdrawal of the loan for the Hyderabad Unit - citing delay in the
implementation as the reason. However, it was clearly explained to the
bank about the justified reasons for the delay in implementation of the
Hyderabad Unit. Whereas the global financial recession which was at its
peak in 2008-09 casued the withdrawal/reduction of the outsourcing of
the clinical trials from the west, also resulted in delayed approval
and implementation of the MOUs entered into bey the Company with
foreign life sciences companies. The company by then already spent the
required amounts for the preliminary and preoperative works and also a
substantial amount among others for the rennovation & modification of
the leased out huge premises for this purpose. Because of this, the
substantial expenditure spent on the Hyderabad Unit till then become
ineffective and redundant. Thus while we were on the verge of making
things happen even in that difficult scenario, the bank has suddenly
issued the loan withdrawal letter, resulting in loss of time and
efforts and also the amount already spent on the Hyderabad unit till
then. This also had a bearing on the subsequent financial resilience of
the company and adversely impacted the financials and growth of the
company. In addition, because of this, the company also suffered huge
potential loss in terms of 'to have obtained' revenues and
profitability through the unit as originally envisaged by the board and
management.
Concerted Management Efforts:
The Revenues increased year-by-year (i.e, for FY 2005-06-Rs.213.43
lakhs, FY 2006-07-Rs.246.99 lakhs, FY 2007-08-Rs.260.33 lakhs, FY
2008-09-Rs.270.23 lakhs, FY 2009-10-Rs.334.38 lakhs and FY 2010-
11-Rs.406.49 lakhs). Inspite of the unit performing exceedingly well in
terms of increased revenues year-by- year, it has little profit margins
left for the prompt servicing of loans every month for the reasons
mentioned in the above paragraphs in detail. However, as a result of
the focussed efforts of the management, the performance and revenues of
the Company during the completed year also did improve but with higher
marketing expenses. With its concerted efforts, the management has been
paying the bank loans almost regularly, though with some strain on the
finances of the company.
STEPS PROPOSED BY THE BOARD FOR FUTURE BUSINESS DEVELOPMENT AND
ENHANCED PROFITABILITY
To accomplish the Comprehensiveness of Diagnostic Services:
The board proposes to take every step needed to further improve the
operational revenues by making the unit a Specialised Diagnostic
Centre. The provision of high end specialised diagnostic sophisticated
equipment will not normally be available in almost all the hospitals
and hence they would approach the spicality diagnostic centres with
those faciilties. This would result in increasing the operational
profit margins of your company. To achieve this objective, the company
proposes to complete the comprehensiveness of the diagnostic services
by updating the existing clinical laboratory equipment and also
introduce some of the latest and more sophisticated laboratory
equipment for operating the clinical laboratory services on an enhanced
scale including Biochemical, Microbiological, Immunological,
Pathological, Molecular diagnostics etc. As it is a well known fact in
the industry that the profits margins for specialised clinical
laboratory services are sufficiently high, taking the necessary steps
in this direction will enhance the profitability of the company
suitably.
Completion of the comprehensiveness of the existing imaging services of
the company by also adding the remaining required services like
mammography, high end X-ray etc., will add to the completeness and also
enhance the profitability of the services by way of making all the
imaging services under one roof.
Association with others for expanding the operational base:
The company is also contemplating to expand its operational base by
associating with similar centres in new areas especially in potential
places in the region and also by investing/making advance deposits or
make financial commitments/transactions in any suitable manner with
those organisations, if necessary, in return for getting the benefits
like outsourcing of operations etc., expected to be beneficial to our
company. The business potential and the local contacts of the parties
to be associated with, will also be considered while finalizing the
associations.
Establishing 'Cash Green' Projects à Creating separate Business Units
for Medical & Non Medical Projects:
To further enhance the profitability, your company is now making
efforts towards diversifying its activities to more profitable
activities like pyrolysis plants and other 'cash green' activities. The
Board is now working out a detailed plan for this purpose. The Board is
actively considering not only taking-up non medical project/s, but also
separating the business units of medical and non medical projects so
that the medical operations could be hived off or conducted in
association with like minded companies/parties or a portion of services
can be outsourced for the company or associations in any flexible
manner as and when thought and decided fit to be advantageous to the
company.
6. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION & FOREIGN EXCHANGE
EARNINGS AND OUT GO: The required information as per Sec.217 (1) (e) of
the Companies Act 1956 is provided hereunder:
A : CONSERVATION OF ENERGY:
The Company has taken necessary steps to conserve the energy
utilization during the year under review.
B. TECHNOLOGY ABSORPTION:
1. Research and Development (R&D) NIL
2. Technology absorption, adoption and innovation NIL
C. FOREIGN EXCHANGE EARNINGS AND OUT GO:
Foreign Exchange Earnings NIL
Foreign Exchange Outgo NIL
7. INTERNAL CONTROL AND ITS ADEQUACY:
The Board is committed to ensure that the Company's 'internal control'
system remains effective and efficient in areas such as operations and
Security. For this purpose proper planning and effective conduct of the
'internal audit' is given top-most attention.
8. DIRECTORS' RESPONSIBILITY:
To best of their knowledge and belief and on the basis of information
furnished to them the Directors make following statement, which is
required to be made in terms of Section 217 (2AA) of the Companies Act,
1956:
(i) While preparing Annual Accounts, the applicable accounting
standards have been followed along with proper explanations
(ii) Appropriate accounting policies have been selected and applied
consistently and have made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company as at March 31, 2011 and of the profits of the company
for the year ended on that date.
(iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities.
(iv) The Annual Accounts of the Company have been prepared on basis of
a 'going concern'.
9. CORPORATE GOVERNANCE:
a) A note on Management Discussion and Analysis of Report is enclosed.
b) As per clause 49 of the Listing Agreement with the Stock Exchanges,
a separate section on Corporate Governance Practices followed by the
Company together with a certificate obtained from the auditors of the
Company is set out in Annexure, forming part of this report.
10. PARTICULARS OF EMPLOYEES:
During the year under review, no employee of the company was in receipt
of remuneration for the whole year which in the aggregate was
Rs.60,00,000/- or more per annum nor was any employee in receipt of
remuneration Rs.5,00,000/- or more per month for the any part of the
year in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975 as amended.
During the year under review, industrial relations of the company
continued to be cordial and peaceful.
11. DIRECTORS:
In accordance with requirements of the Companies Act, 1956 and Articles
of Association of the Company, Mr. Narendra Seena Karkera retires by
rotation. He however is eligible for reappointment. The board has
therefore recommended his reappointment.
12. AUDITORS:
M/S Pinnamaneni & Co, Chartered Accountants, the Company's auditors
term office will conclude with this Annual General Meeting. They have
expressed willingness to accept the assignment for a further period on
one more year. They have also confirmed their eligibility for such an
appointment under Section 224(1B) of the Companies Act, 1956.The Board
recommends firms re-appointment as Company's auditors.
13. LISTING AT STOCK EXCHANGES:
The Equity Shares of the Company are listed on Bombay Stock Exchange
Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.
The listing fees to the Exchange have been paid up to date.
14. ACKNOWLEDGEMENTS:
Your Directors thank and appreciate all the executives, staff, Bankers,
Customers and Workers of the Company for their dedicated services.
//By Order of the Board//
For DOLPHIN MEDICAL SERVICES LIMITED
Sd/- Sd/-
Dr. G.V. MOHAN PRASAD Dr. M. LAKSHMI SUDHA
MANAGING DIRECTOR WHOLE TIME DIRECTOR
Place Vijayawada,
Date 14.08.2011.
Mar 31, 2010
The Directors have pleasure in submitting to you this Eighteenth
Annual Report together with the Audited Statement of Accounts
for the year ended 31 March 2010.
1. FINANCIAL RESULTS:
The Financial Results for the year ended 31t March 2010 are furnished
below:
(Rs. In Lakh
Particulars 2008-09 2009-10
Operating Income 270.23 334.38
Other Income 4.74 7.28
Profit before Depreciation & Tax 59.76 116.71
Depreciation 38.28 56.70
Cash Profit 52.42 62.77
During the year under review your company has recorded a 23.7% growth
in its gross income, b also incurred higher expenses due to inception
stage of some activities. The growth in the busine was possible with
steps initiated by the Board members. The Directors are further
determined take your company on to a path of substantial growth during
years to come by undertaking ne projects and improve the bottom line.
2. SUBSIDIARY COMPANIES:
During the year under review the Subsidiary Companies incorporated were
not able to not able record progress since activities undertaken are in
the initial phase. The Directors have taken conscious decision to
concentrate on the growth of parent company first and thereafter attend
t other business plan/s of these companies.
3. DIVIDEND:
The Directors have taken a decision not to recommend any dividend for
the year 2009-10. Whi taking such decision the Directors have taken
into account to strengthen Financials of the compan by retaining earned
profits.
4. PUBLIC DEPOSITS:
During the year under review the company has not accepted any Ãpublic
deposità as in defined provision of Section 58A of the Companies Act,
1956 read with Companies (Acceptance of Deposit Rules 1975 as amended
from time to time. There are no outstanding unclaimed deposits as on 31
March 2010.
5. MANAGEMENT PERCEPTION:
After reviewing performance of the Company during completed year and
also taking into accou the difficulties faced by the company in
marketing its Diagnostic services, Directors have taken decision to go
in for diversification of Companies activities. The Board has decided
that instead concentrating on only ÃDiagnostic Servicesà the Company
should engage in many allied activitie such as Ãmedical and non medical
suppliesà to various hospitals and other organisations, Ãmedic auditÃ
and Ãproviding of training of operating staff at various Ãdiagnostic
unitsÃ. One more decisio which has been taken by the Board is to expand
the area of operation of the Company from Vijayawad Hyderabad to India
level. For this purpose the Company may open up office at other centers
such a Bangalore/Mumbai. The Board is working out a detailed plans for
this purpose including taking u other non medical project and will
finalise it very soon in order to implement it in second half current
financial year.
6. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION & FOREIGN EXCHANGE
EARN- INGS AND OUT GO:
The required information as per Sec.217(1) (e) of the Companies Act
1956 is provided hereun- der:
A: CONSERVATION OF ENERGY:
The Company has taken necessary steps to conserve the energy
utilization during the year under review.
B. TECHNOLOGY ABSORPTION:
1. Research and Development (R&D) : Rs.2.83 lakhs
2. Technology absorption, adoption and innovation : NIL
C. FOREIGN EXCHANGE EARNINGS AND OUT GO:
Foreign Exchange Earnings : NIL
Foreign Exchange Outgo : NIL
7. INTERNAL CONTROL AND ITS ADEQUACY:
The Board is committed to ensure that the CompanyÃs Ãinternal controlÃ
system remains effective and efficient in areas such as operations and
Security. For this purpose proper planning and effective conduct of the
Ãinternal audità is given top-most attention.
8. DIRECTORSÃ RESPOSIBILITY:
To best of their knowledge and belief and on the basis of information
furnished to them the Directors make following statement, which is
required to be made in terms of Section 217 (2AA) of the Companies Act,
1956:
(i) While preparing Annual Accounts, the applicable accounting
standards have been followed along with proper explanations
(ii) Appropriate ÃAccounting Policiesà have been selected and applied
consistently. The judgments and estimates made are reasonable and
prudent so as to present a true and fair picture of state of affairs of
the Company.
(iii) Proper and Adequate care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956.
(iv) The Annual Accounts of the Company have been prepared on basis of
a Ãgoing concernÃ.
9. CORPORATE GOVERNANCE:
a) A note on Management Discussion and Analysis of Report is enclosed.
b) As per clause 49 of the Listing Agreement with the Stock Exchanges,
a separate section on Corporate Governance Practices followed by the
Company together with a certificate obtained from the auditors of the
Company is set out in Annexure, forming part of this report.
10. PARTICULARS OF EMPLOYEES:
During the year under review, except Managing Director no employee of
the company was in receipt of remuneration for the whole year which in
the aggregate was Rs 24,00,000/- or more per annum nor was any employee
in receipt of remuneration Rs.2,00,000/- or more per month for any part
of the year in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975 as amended.
During the year under review, industrial relations of the company
continued to be cordial and peaceful.
11. DIRECTORS:
In accordance with requirements of the Companies Act, 1956 and Articles
of Association of the Company, Mr. M. Hemanth Kumar, retires by
rotation and Board recommends his reappointment.
12. AUDITORS:
M/S Pinnamaneni & Co, Chartered Accountants, the CompanyÃs auditors
term office will conclude with this Annual General Meeting. They have
expressed willingness to accept the assignment for a further period on
one more year. They have also confirmed their eligibility for such an
appointment under Section 224(1-B) of the Companies Act, 1956.
13. LISTING AT STOCK EXCHANGES:
The Equity Shares of the Company are listed on Bombay Stock Exchange
Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.
The listing fee to the Exchange has been paid up to date.
14. ACKNOWLEDGEMENTS:
Your Directors thank and appreciate all the executives, staff, Bankers,
Customers and Workers of the Company for their dedicated services.
//By Order of the Board//
For DOLPHIN MEDICAL SERVICES LIMITED
Sd/- Sd/-
Dr. G.V. MOHAN PRASAD Dr. M. LAKSHMI SUDHA
Managing Director Director
Place: Vijayawada
Date: 13.08.2010