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Directors Report of Fortis Malar Hospitals Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twenty Third Annual Report together with the Audited Standalone and Consolidated Financial Accounts of your Company for the financial year ended March 31, 2014.

FINANCIAL RESULTS

The highlights of Consolidated and Standalone financial results of your Company and its subsidiary are as follows:

Rs. in Lacs

Consolidated standalone

Particulars For the For the For the For the year ended year ended year ended year ended March March March March 31,2014 31,2013 31,2014 31, 2013

Total Income 10,837.83 9,856.18 10,837.83 9,856.18

Total Expenditure 9,944.20 8,633.78 9,946.91 8,637.52

Profit before 893.63 1,222.40 890.92 1,218.66 Interest, Tax & Depreciation

Financial cost 45.73 80.04 45.73 80.04 Depreciation/ Provision for Obsolescence/

Impairment 199.27 249.04 199.27 249.04

Interest Income (690.25) (363.42) (661.44) (267.14)

Profits before 1,338.88 1,256.74 1,307.36 1,156.72 exceptional items

Exceptional Items - 296.49 - 353.28

Profit before 1,338.88 1,553.23 1,307.36 1,510.00 Extraordinary Items

Extraordinary item - 4,140.05 - 4,140.05

Profits before Tax 1,33888 5,693.28 1,307.36 5,650.05

Net profits after 877.56 4,347.83 855.78 4,317.96 Tax

OPERATING RESULTS AND PROFITS

During the year ended March 31, 2014, your Company recorded a growth of 10% in consolidated revenues to reach Rs. 10,837.83 Lacs in financial year 2013-14 as compared to Rs. 9,856.18 Lacs in financial year 2012-13. The Company generated Rs. 1,338.88 Lacs in profits before exceptional items, extraordinary items and tax, an increase of 7% over the previous year''s profit of Rs. 1,256.74 Lacs. Profits after tax stood at Rs. 877.56 Lacs in the financial year 2013-14 and the same was at Rs. 4,347.83 Lacs in the previous year. The Previous year figure had one exceptional income of Rs.296.49 Lacs and extraordinary income of Rs.4,140.05 Lacs.

A detailed discussion on Operational and Financial performance of the Company for the year is given in "Management Discussion and Analysis" section of this Annual Report.

OPERATIONS

The Company witnessed growth across all its major specialties. Your Company continued its focus on Quality Parameters, Patient Care and Patient Welfare services resulting in significant improvement in patient satisfaction levels.

DIVIDEND AND TRANSFER TO RESERVES

During the year, the Board had declared Interim Dividend of Re 0.50 (fifty paisa) per share in its Board Meeting held on August 30, 2013 during the financial year 2013-14 which was duly paid to the members of the Company within the prescribed timelines under the statutory provisions. Keeping in view the growth strategy of the Company, the Board has not recommended any final dividend for the same financial year. No amount has been transferred to reserves.

STOCK OPTIONS

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2014 under the "Malar Employees Stock Option Plan 2008" are set out in the Annexure-I to this Directors'' Report.

SUBSIDIARIES

During the Financial Year 2013-14, the Company had only one subsidiary Company viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary include setting up, managing / administering hospital(s) and to provide Medicare and Health care services.

EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956

The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the Subsidiary Company have not been attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the Subsidiary Company and the related detailed information to any member of the Company who may be interested in obtaining the same.

The Annual Accounts of the Subsidiary Company and the related information are open for inspection by any member including the members of Subsidiary Company at the Registered Office of the Company and that of the subsidiary concerned, during working hours on all working days. The members, if they so desire, may write to the Company to obtain a copy of financials of the Subsidiary Company.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greater emphasis on managing its affairs with diligence, transparency, responsibility and accountability. Your Company continues to strive hard to serve the interest of the stakeholders and the society at large, resulting in creation of value and wealth for all stakeholders at all times.

A detailed Report on Corporate Governance pursuant to Clause 49 of the Listing agreement forms part of the Annual Report. A Certificate from M/s. Sanjay Grover & Associates, Company Secretary in Whole-time Practice confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, is annexed with the said Corporate Governance Report.

DEPOSITS

During the year under review, your Company has not accepted any deposits as defined under Section 58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 / Companies Act, 2013 and Articles of Association of the Company, Dr. Nitiya Ramamurthy and Mr. Aditya Vij, retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, seeks re-appointment.

During the year under review, Mr. Ramesh Lakshman Adige, Mr. Sanjay Jayavarthanavelu, Mr. Murari Pejavar, Mr. Rama Krishna Shetty and Mr. Lakshmi Teckchand Nanwani are appointed as Independent Directors of the Company for a term of five consecutive years.

The Company has also received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed, both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchange. Accordingly, the above mentioned Independent Directors are appointed for a fixed tenure as per the details annexed to the notice of the Annual General Meeting.

A brief resume, nature of expertise, details of directorships / committee memberships held in other public limited companies of the directors seeking appointment / re-appointment along with their shareholding in the Company as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange is appended as an annexure to the Notice of the ensuing Annual General Meeting.

STATUTORY AUDITORS AND AUDITORS'' REPORT

M/s. S. R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration No. - 301003E), Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting. They have expressed their inability to continue as the Statutory Auditors of the Company beyond the conclusion of the Annual General Meeting.

It is proposed to appoint M/s. S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. - 101049W) as the Statutory Auditors of the Company at the ensuing Annual General Meeting.

The Company has received letter from the proposed Auditors to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment.

Therefore the Board recommends the appointment of M/s S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. - 101049W), as the Statutory Auditors of the Company for the Financial Year 2014-15.

The Notes on Financial Statements referred to in the Auditor''s Report are self-explanatory and do not call for any further comments.

PARTICULARS OF EMPLOYEES

The Statement containing particulars of the employees as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, in terms of Section 219(1)(b)(iv) of the Companies Act,1956, the Report and financials are being sent to the members excluding this statement. Copies of this statement may be obtained by the members by writing to the Whole-time Directors at the Registered Office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are provided in the Annexure II to this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

1. that in the preparation of the Annual Accounts for the year ended March 31, 2014, the applicable Accounting Standards read with requirements set out under Schedule VI of the Companies Act, 1956, have been followed and there are no material departures from the same;

2. that the directors had 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 as at March 31, 2014 and of the profit or loss of the Company for the year ended on that date;

3. that the directors have taken proper and sufficient care 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; and

4. that the directors have prepared the annual accounts of the Company on a going concern'' basis.

ACKNOWLEDGEMENT

The Board of Directors is grateful for the co-operation and assistance extended by various Banks and the Government of Tamil Nadu. The Board also wishes to place on record its appreciation of the dedicated services of our consultants, employees and other members of the hospital. The Board also places on record its sincere appreciation to the members for their continued faith in the management of the Company.

For and on behalf of the Board of Directors

Date: July 26, 2014 Aditya Vij Place: Chennai Chairman


Mar 31, 2013

Dear Member''s,

The Directors have pleasure in present ing the Twenty Second Annual Report together with the Audited Standalone and Consolidated Financial Accounts of your Company f or the financial y ear ended March 31, 2013

FINANCIAL RESULTS

The highlights of Consolidated and Standalone Financial Results of your Company and its s ubsidiary are as follows:

(Rs. in Lacs) Particulars Consolidated Standalone For the year For the year For the year For the year ended ended ended ended March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012

Total Income 10,516.09 9,612.62 10,476.60 9,607.82

Total Expenditure 8,633.78 8,101.13 8,637.52 8,103.32

Profit Before Interest, Tax & 1,882.31 1,511.49 1,839.08 1,504.50

Depreciation

Less: Financial Cost 80.04 130.72 80.04 130.72

Less: Depreciation/ Provision for Obsolescence/Impairment 249.04 249.04 299.69 299.69

Profits before Extraordinary 1,553.23 1,081.08 1,510.00 1,074.09

items & Tax

Extraordinary item 4,140.05 4,140.05

Profits before Tax 5,693.28 1,081.08 5,650.05 1,074.09

Net Profits after tax 4,347.83 775.94 4,317.96 771.11

OPERATING RESULTS AND PROFITS

The sound performance of your Company is manifested in the Operating Revenue and Net Profits posted for the year under review. During the year ended March 31, 2013, your Company recorded a growth of 9% in consolidated revenues to reach Rs. 10,516.09 Lacs in financial year 2012-13 from Rs. 9612.62 Lacs in financial year 2011 -12. The company generated Rs. 1,553.23 lacs in Profit before extraordinary items and tax, an increase of 44% over the previous year''s profit of Rs. 1,081.08 Lacs. Profits after Tax increased to Rs. 4,347.83 Lacs mainly on account of extraordinary item arising on account of sale of Clinical establishment.

During the year, the Company witnessed moderate growth across all streams with significant growth in international revenues.

A detailed discussion on Operational and Financial Performance of the Company for the year is given in “Management Discussion and Analysis'' Section of this Annual Report.

OPERATIONS

The growth in occupancies and revenues with focus on efficiency and cost control has led to better performance during the quarter and year to date. It is heartening to note that this has been accomplished across each of the specialities. Your Company continued its focus on quality parameters and patient satisfaction.

DIVIDEND AND TRANSFER OF RESERVES

Keeping in view the growth strategy of the Company, the Board of Directors of your Company have decided to plough back the profits and thus, not recommended any dividend for the financial year under review. Also during the said year, no amount has been transferred to reserves.

STOCK OPTIONS

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2013 under the “Malar Employees Stock Option Plan 2008'' are set out in the Annexure – I to this Directors'' Report.

SUBSIDIARY

During the Financial Year 2012-13, the Company had only one subsidiary Company viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary include setting up, managing / administering hospitals and to provide Medicare and health care services.

EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956

The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary company are not been attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who may be interested in obtaining the same.

The Annual Accounts of subsidiary company and the related information are open for inspection by any member including the members of subsidiary company at the registered office of the Company and that of subsidiary concerned, during the working hours on all working days. The members, if they so desire, may write to the Company to obtain a copy of financials of the subsidiary company.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greater emphasis on managing its affairs with diligence, transparency, responsibility and accountability. Your company continues to strive hard to serve the interest of the stakeholders and the society at large, resulting in creation of value and wealth for all stakeholders at all times.

A detailed report on Corporate Governance pursuant of Clause 49 of the Listing Agreement forms part of the Annual Report. A Certificate from M/s. Sanjay Grover & Associates, Company Secretary in Whole-time Practice confirming compliance of conditions of Corporate Governance

as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange is annexed with the said Corporate Governance Report.

DEPOSITS

During the year under review, your Company has not accepted any deposits as defined under Section 58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975.

DIRECTORS

In accordance with the pro visions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Ramesh L. Adige and Mr. Murari P ejavar retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Since the last report, Mr. Sandeep Puri, Mr. Rama Krishna S hetty, Mr. Lakshman Teckchand Nanwani have been appointed as Additional Directors of the Company w.e.f. September 14, 2012, January 30, 2013 and March 29, 2013, respectively. Pursuant to the provisions of Section 260 of the Companies Act, 1956, they hold the office upto the date of the ensuing Annual General Meeting and are eligible for appointment as Director(s) of the Company in terms of Section 257 of the Companies Act,1956.

A brief resume, nature of expertise, details of directorships held in other public limited companies, of the directors seeking appointment / re-appointment along with their shareholding in the Company as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange is appended as an annexure to the notice of the ensuing Annual General Meeting.

Dr. P.S. Joshi had resigned from the Directorship of the Company w.e.f. January 30, 2013. The Board wishes to accord its sincere appreciation for the valuable services and support rendered by him during his tenure as Director of the Company.

STATUTORY AUDITORS / AUDITORS'' REPORT

M/s. S R B C & Co. LLP, Chartered Accountants, Statutory Auditors of your Company will retire at the conclusion of the ensuing Annual General Meeting. They have informed their inability to continue as the Statutory Auditors of the Company beyond the conclusion of the Annual General Meeting.

M/s S.R. Batliboi & Co. LLP, Chartered Accountants have confirmed their willingness and eligibility for appointment and have also confirmed that their appointment, if made, will be within the limits under Section 224(1B) and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Companies Act, 1956.

The Board recommends the appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for the financial year 2013-14.

PARTICULARS OF EMPLOYEES

The Statement containing particulars of the employees as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, in terms of Section 219(1)(b)(iv) of the Companies Act,1956, the Report and Accounts are being sent to the members excluding this Statement. Copies of this statement may be obtained by the members by writing to the Company Secretary at the registered office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/OUTGO:

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are provided in the Annexure II to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

As required under section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm:

(a) that in the preparation of the Annual Accounts for the year ended March 31, 2013, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) that the directors had 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 as at March 31, 2013 and of the Profit or Loss of the company for that period;

(c) that the directors had taken proper and sufficient care 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; and

(d) that the directors had prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for the co-operation and assistance extended by various Banks and the Government of Tamil Nadu. Your Directors also wish to place on record their appreciation for the dedicated services of our consultants, employees and other members of the hospital. The Board also places on record its sincere appreciation to the Shareholders for their continued faith in the management of the Company.

For and on behalf of the Board

Date : July 19, 2013

Place : Chennai Aditya Vij

Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Twenty First Annual Report on business operations together with the Audited Financial Statements and the Auditors' Report thereon of your Company for the financial year ended 31st March 2012.

FINANCIAL RESULTS

The highlights of consolidated financial results of your Company and its subsidiary are as follows:

(Rs. in Lakhs) For the year ended For the year ended Particulars 31st March 2012 31st March 2011

Total Income 9,607.38 8,369.49

Total Expenditure 8,095.89 7,118.29

Profit Before Interest Tax & Depreciation 1,511.49 1,251.20

Less: Financial Cost 130.72 143.43

Less: Depreciation/Provision for Obsolescence/Impairment 299.69 289.81

Profits before Tax 1,081.08 817.96

Net Profits after Tax 775.94 544.30

The highlights of financial results of your Company as a Standalone entity are as follows: (Rs. in Lakhs) For the year ended For the year ended Particulars 31st March 2012 31st March 2011

Total Income 9,602.58 8,369.49

Total Expenditure 8,098.08 7,120.22

Profit Before Interest, Tax & Depreciation 1,504.50 1,249.27

Less: Financial Cost 130.72 143.43

Less: Depreciation/Provision for Obsolescence/Impairment 299.69 289.81

Profits before tax 1,074.09 816.03

Net Profits after tax 771.11 542.97

OPERATING RESULTS AND PROFITS

The sound performance of your Company is manifested in the Operating Revenue and Net Profits posted for the year under review. During the year ended March 31, 2012, your Company recorded a growth of 15% in consolidated revenues to reach Rs. 9607.38 lacs in financial year 2011-12 from Rs. 8,369.49 lacs in financial year 2010-11. The company generated Rs. 775.94 lacs in net profits, an increase of 43% over the previous year's profit of Rs. 544.30 lakhs.

The growth has come from all the streams and mainly driven by Cardiac Sciences, Neuro sciences, Renal sciences, Orthopedics and Gynecology. The Health checks and regular MSOT procedures also showed a significant improvement in their revenue. Your Company has also witnessed significant progress in generating International Revenues.

OPERATIONS

The growth in occupancies and revenues with focus on efficiencies and cost control has led to better performance during the quarter and year to date. It is heartening to note that this has been accomplished across each of the specialities. Your Company continued its focus on quality parameters and patient satisfaction.

DIVIDEND AND TRANSFER OF RESERVES

Keeping in view the growth strategy of the Company, the Board of Directors of your Company have decided to plough back the profits and thus, not recommended any dividend for the financial year under review. Also during the said year, no amount has been transferred to reserves.

STOCK OPTIONS

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2012 under the "Malar Employees Stock Option Plan 2008" are set out in the Annexure-II to this Directors' Report.

SUBSIDIARIES

During the Financial Year 2011-12, the Company had only one subsidiary Company viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary include setting up, managing / administering hospitals and to provide Medicare and health care services.

EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956

The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report. Accordingly, in terms of general exemption, the Board of Directors of the Company, in its Meeting held on May 14, 2012, resolved that the Financial Statements and other required documents of the subsidiary company are not required to be attached with the Balance Sheet of the Company for this fiscal.

The Annual Accounts of subsidiary company and the related information are open for inspection by any member including the members of subsidiary company at the registered office of the Company and that of subsidiary concerned, during the working hours on all working days. The Company will make available these documents to the members including members of subsidiary company upon receipt of request from them. The members, if they so desire, may write to the Company to obtain a copy of financials of the subsidiary company.

DISCLOSURES UNDER SECTION 217(1) & (2) OF THE COMPANIES ACT, 1956

In accordance with Regulation 3(1)(e)(i) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997, 11,752,402 equity shares constituting 63.2% of paid capital of your Company, in terms of inter se transfer of shares amongst group coming within the definition of group as defined in Monopolies and Restrictive Trade Practices Act, 1969 were transferred from International Hospital Ltd. to Fortis Hospitals Limited by way of gift on June 20, 2011.

The Company is in the process of transferring the Clinical Establishment Division (which will own, operate, maintain clinical establishment along with providing out-patient and day care medical and healthcare services and radio-diagnostic services), on a going concern basis by way of a slump sale to Fortis Health Management Limited ("FHML").

In continuation to on-going internal corporate restructuring of the Fortis Healthcare Limited and its subsidiaries (which is being undertaken with an intent to align the Company with globally emerging trends and transforming into an asset light business model) and consequent to transfer of Clinic Establishment Division, the Company intends to focus its resources and energies on its division which shall run Fortis Malar Hospital, at Adyar, Chennai and provide medical services, including in-patient services and emergency services.

Except, as disclosed above or elsewhere in this Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of the financial year and the date of report.

Except as disclosed above or elsewhere in this Annual Report, during the financial year under review, no material changes have occurred in the nature of the Company's business or that of its subsidiaries and generally in the classes of business in which the Company has an interest.

DEPOSITS

During the year under review, your Company has not accepted any deposits as defined under Section 58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975.

DIRECTORS

During the year under review, Mr. Aditya Vij has been appointed as an additional Director and the Chairman of the Company w.e.f. August 03, 2011 and Mr. Ashish Bhatia has been co-opted as an additional Director w.e.f. January 24, 2012. Pursuant to the provisions of Section 260 of the Companies Act, 1956, they hold the office upto the date of the ensuing Annual General Meeting and are eligible for appointment as Director(s) of the Company in terms of Section 257 of the Companies Act,1956.

Mr. V Vijayarathna has been appointed as an additional Director and a Whole-time Director by the Board of Directors at its meeting held on 10th July, 2012. Notice under Section 257 of the Companies Act, 1956, has been received from a member of the Company signifying his intention to propose the appointment of Mr. V Vijayarathna as Director of the Company at the ensuing Annual General Meeting of the Company.

Dr. Llyod Nazareth, Director and Mr. Krish Ramesh, Whole-time Director had resigned from the Directorship of the Company w.e.f January 24, 2012 and June 9, 2012 respectively. The Board wishes to accord its sincere appreciation for the valuable services and support rendered by them during their tenure as Directors of the Company.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Sanjay Jayavarthanavelu and Dr. Nithya Ramamurthy shall retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, they have offered themselves for re-appointment.

STATUTORY AUDITORS / AUDITORS' REPORT

M/s. S R B C & Co., Chartered Accountants, Statutory Auditors of your Company, will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment as Statutory Auditors for the financial year 2012-13.

The Company has received a letter dated May 14, 2012 from them to the effect that their re-appointment, if made, would be within the limit prescribed under Section 224(1B) of the Act, and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Act.

Based on the recommendations of the Audit, Risk & Controls Committee, the Board of Directors of the Company proposes the re-appointment of M/s S R B C & Co., Chartered Accountants, as the Statutory Auditors of the Company.

The Notes on Accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further comments.

DEMATERIALISATION OF SHARES

Your company has entered into agreements with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of the shares of the Company. Accordingly the shares of your company are available for dematerialization and can be traded in Demat form. The ISIN for Equity shares of the Company is INE842B01015.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greater emphasis on managing its affairs with diligence, transparency, responsibility and accountability. Your company continues to strive hard to serve the interest of the stakeholders and the society at large, resulting in creation of value and wealth for all stakeholders at all times.

The report of Board of Directors of the Company on Corporate Governance is given in the section titled "Report on Corporate Governance" forming part of this Annual Report.

Certificate of M/s Sanjay Grover & Associates, Company Secretary in whole-time practice regarding compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange is annexed with the said Corporate Governance Report.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed review of operations, performance and future outlook of the company is given separately under the head "Management Discussion and Analysis" and forms a part of this report.

PARTICULARS OF EMPLOYEES

The Statement containing particulars of the employees as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, in terms of Section 219(1)(b)(iv) of the Companies Act,1956, the Report and Accounts are being sent to the members excluding this Statement. Copies of this statement may be obtained by the members by writing to the Company Secretary at the registered office of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm :

1. that in the preparation of the Annual Accounts for the year ended March 31, 2012, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

2. that the directors had 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 as at March 31, 2012 and of the profit or loss of the company for the period ended on that date;

3. that the directors had taken proper and sufficient care 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;

4. that the directors had prepared the annual accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/OUTGO

The particulars as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are set in the Annexure-I included in this report.

ACKNOWLEDGEMENT

Your company is grateful for the co-operation and assistance extended by various Banks and the Government of Tamil Nadu.

The Board also wishes to place on record its appreciation of the dedicated services of our consultants, employees and other members of the hospital. The Board also places on record its sincere appreciation to the Shareholders for their continued faith in the management of the Company.

For and on behalf of the Board

Date : July 24, 2012 V Vijayarathna Nithya Ramamurthy

Place : Chennai (Whole-Time Director) (Director)


Mar 31, 2011

The Directors have pleasure in presenting the Twentieth Annual Report on business operations together with the Audited Financial Statements and the Auditors Report of your Company for the financial year ended March 31, 2011.

PERFORMANCE HIGHLIGHTS

The financial highlights of your Company on a consolidated basis for the year under review are given below:

(Rs. in Lakhs) Particulars For the year For the year ended March 31, ended March 31, 2011 2011

Total Income 8,369.49 6,424.48

Total Expenditure 7,114.77 5,462.20

Profit Before Interest Tax & Depreciation 1,254.72 962.28

Less: Financial Cost 143.43 163.51

Less: Depreciation/Provision for Obsolescence/Impairment 293.33 265.04

Profits before Tax 817.96 533.73

Net Profits after Tax 544.30 350.29

The financial highlights of your Company on a standalone basis for the year under review are given below: (Rs. in Lakhs)

Particulars For the year For the year ended March 31, ended March 31, 2011 2010

Total Income 8,369.49 6,424.48

Total Expenditure 7,116.70 5,462.64

Profit Before Interest, Tax & Depreciation 1,252.79 961.84

Less: Financial Cost 143.43 163.51

Less: Depreciation/Provision for Obsolescence/Impairment 293.33 265.04

Profits for the period 816.03 533.29

Net Profits 542.97 349.99

FINANCIAL PERFORMANCE

Your Company has done exceedingly well for the successive year, both in terms of Revenue and Profitability. During the year under review, your Company recorded a growth of 30% in consolidated revenues to reach Rs. 8,369.49 lakhs in Financial year 2010-11 from Rs. 6,424.48 Lakhs in Financial year 2009-10. The Company generated Rs. 544.30 lakhs in net profits, an increase of 55% over the previous years profit of Rs. 350.29 lakhs.

The growth in revenues and profits was an outcome of overall growth across various primary specialties which include Cardiac Sciences, Neuro Sciences, Renal Sciences, Gastroenterology, General Surgery and Diagnostics. The Health Checks and regular MSOT procedures contributed significantly to the revenues. Further, your Company also witnessed significant growth in revenues from International patients.

OPERATIONS

Your Company continued its focus on Patient Care and Patient Welfare Services resulting in significant improvement in Patient satisfaction levels. We continued our investment in renovation activities, upgradation of medical and engineering equipment. Your Company has started Tele-medicine services which would make available the best medical care to patients even to the remotest corner of India and abroad.

DIVIDEND AND TRANSFER OF RESERVES

In view of the unavailability of distributable profits, your Directors express their inability to recommend any dividend for the year. During the year under review, no amount has been transferred to reserves.

STOCK OPTIONS

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2011 under the "Malar Employees Stock Option Plan 2008" are set out in the Annexure to this Directors Report.

SUBSIDIARIES

During the Financial Year 2010-11, your Company had only one subsidiary Company viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary includes setting up, managing / administering hospitals and to provide medicare and health care services. Exemption under Section 212(8) of the Companies Act, 1956:

The Ministry of Corporate Affairs, Government of India, vide its General Circular No. 2/2011 dated February 8,2011 has granted general exemption to the Companies from annexing the Accounts and other information of the subsidiaries along with Accounts of the Holding Company subject to the fulfillment of the conditions prescribed in the said Circular.

Claiming the said exemption, your Company has obtained the consent of its Board of Directors for not attaching the balance sheet of its subsidiary and has disclosed in the Consolidated Balance Sheet, the following information in aggregate for its subsidiary: (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend. The Annual Accounts of the Subsidiary Company and the related detailed information are open for inspection by any shareholder including the shareholder of subsidiary Company at the registered office of the Company and its subsidiary during the working hours on all working days. The Company will make available these documents to the shareholders including shareholders of subsidiary company upon receipt of request from them. The shareholders, if they so desire, may write to the Company to obtain a copy of financials of the subsidiary Company.

GROUP

"Persons" constituting "group" as defined under the Monopolies and Restrictive Trade Practices Act, 1969 for the purpose of Regulation 3(1)(e)(i) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997, as amended from time to time, include the following:

a. Mr. Malvinder Mohan Singh;

b. Mr. Shivinder Mohan Singh;

c. Mrs. Japna Malvinder Singh Wife of Mr. Malvinder Mohan Singh;

d. Mrs. Aditi Shivinder Singh Wife of Mr. Shivinder Mohan Singh;

e. Escorts Heart and Super Speciality Hospital Limited;

f. Escorts Heart and Super Speciality Institute Limited;

g. Escorts Heart Centre Limited;

h. Escorts Heart Institute and Research Centre Limited;

I. Escorts Hospital and Research Centre Limited;

j. FortisAsia Healthcare Pte Limited;

k. Fortis C - Doc Healthcare Limited;

I. Fortis Emergency Services Limited;

m. Fortis Global Healthcare (Mauritius) Limited;

n. Fortis Global Healthcare Infrastructure Pte Ltd;

o. Fortis Health Management (East) Limited;

p. Fortis Health Management (North) Limited;

q. Fortis Health Management (South) Limited;

r. Fortis Health Management (West) Limited;

s. Fortis Health Management Limited;

t. Fortis Healthcare (India) Limited;

u. Fortis Healthcare Global Pte Ltd.;

v. Fortis Healthcare Holdings Limited;

w. Fortis Healthcare India Holdings Pte Ltd.;

x. Fortis Healthcare International Limited;

y. Fortis Healthcare International Pte Limited;

z. Fortis Hospital Management Limited;

aa. Fortis Hospitals Limited;

bb. Fortis Hospotel Limited;

cc. Fortis Malar Hospitals Limited;

dd. International Hospital Limited;

ee. Kanishka Healthcare Limited;

ff. Lalitha Healthcare Private Limited;

gg. Malar Stars Medicare Limited;

hh. Malav Holdings Private Limited;

ii. RHC Holding Private Limited;

jj. RHC Holding Pte Ltd.;

kk. Shivi Holdings Private Limited;

II. Super Religare Laboratories Limited.

DEPOSITS

During the year under review, your Company has not accepted any deposits under Section 58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975.

DIRECTORS

During the year under review, Mr. Bhavdeep Singh resigned from the Directorship and Chairmanship of the Company w.e.f January 10, 2011. The Board wishes to place its sincere appreciation for the valuable services and support rendered by him during his tenure as a Chairman and Director of the Company.

Further, in terms of nomination received from International Hospital Limited, the holding company, Dr. Lloyd Nazareth has been appointed as an Additional Director of the Company w.e.f. January 28, 2011. Pursuant to the provisions of Section 260 of the Companies Act, 1956, Dr. Lloyd Nazareth holds the office upto the date of the ensuing Annual General Meeting and is eligible for appointment as Director of the Company in terms of Section 257 of the Companies Act,1956.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Ramesh L. Adige and Mr. P. Murari shall retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, they have offered themselves for re-appointment.

STATUTORY AUDITORS / AUDITORS REPORT

M/s. K. Gopalan & Co, Chartered Accountants, the retiring Auditors have expressed their unwillingness to be appointed as Statutory Auditors of the Company after the conclusion of the ensuing Annual General Meeting on account of their preoccupations.

Accordingly, it is proposed to appoint M/s. S.R. Batliboi & Co, (Firm Registration No.324982E) Chartered Accountants, who, on being approached, have consented to act as Auditors of the Company and from whom a certificate has been received to the effect that their appointment, if made, will be within the limits prescribed under the provisions of section 224 (IB) of the Companies Act, 1956, in place of M/s. K. Gopalan&Co, Chartered Accountants, to hold office until conclusion of the nextAnnual General Meeting at a remuneration to be fixed by the Board.

The Auditors have, in their Report to the Shareholders on the Financial Statements of the Company, made the following comments:

ix) (a.) Except the Service tax covered in the Note 12of Schedule 15, undisputed statutory dues including provident fund, Income Tax, Cess and other material statutory dues have generally been regularly deposited during the period with the appropriate authorities. The Company has not fully remitted the service tax for the payments received. The arrears of service tax outstanding for more than six months as at the last day of financial year is%10.96 lacs.

The Company has been claiming service tax on dues from M/s. Star Health and Allied Insurance Co. Ltd. (TPA) under TNCM insurance scheme. There have been disputes on the quantum and applicability of service tax for Government Scheme patients. The management is in discussion with TPA and an amicable settlement is expected soon, otherwise the entire Service Tax dues will be paid within a weeks time.

VOLUNTARY DELISTING OF SHARES

The Madras Stock Exchange Limited (MSE), Chennai, vide its Letter dated November 18, 2010, approved the voluntary delisting application pending with it for a long time. The Companys Equity Shares shall continue to be listed on Bombay Stock Exchange Limited (BSE) which has nation wide trading terminals.

DEMATERIALISATION OF SHARES

Your Company has entered into agreements with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of the shares of the Company. Accordingly, the shares of your Company are available for dematerialization and can be traded in Dematform.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to strive towards highest standards of Corporate Governance while interacting with all the stakeholders.

The Report of Board of Directors of the Company on Corporate Governance is given in separate section titled "Report on Corporate Governance which forms part of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed review of operations, performance and future outlook of the Company is given separately under the head "Management Discussion and Analysis" and forms a part of this report.

DISCLOSURES UNDERSECTION 217 0F THE COMPANIES ACT, 1956

Except, as disclosed elsewhere in the Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of the financial year and the date of report.

As required under Section 217(2) of the Companies Act, 1956, the Board of Directors informs the shareholders that during the period under review, no changes have occurred in the nature of the Companys business or in the business of the Companys subsidiary or in the nature of the business carried on by them and generally in the classes of business in which the Company has an interest.

Information in accordance with the provisions of section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is annexed to this Report. However, in terms of section 219(1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to the Share holders excluding this Annexure. Any shareholder interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.

DIRECTORSRESPONSIBILITY STATEMENT

As required under section 217(2 AA) of the Companies Act, 1956 the Directors hereby confirm that:

1. in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

2. appropriate accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2011 and of the Profit or Loss of the Company for the period ended on that date;

3. 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;

4. the annual accounts have been prepared on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO:

The particulars as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are set in the Annexure included in this Report.

ACKNOWLEDGEMENTS

Your Company is grateful for the co-operation and assistance extended by various Banks and the Government of Tamil Nadu. The Board also wishes to place on record its appreciation of the dedicated services of our consultants, employees and other members of the hospital. The Board also places on record its Sincere appreciation to the Shareholders for their continued faith in the management of the Company.

For and on behalf of the Board of Directors

Krish Ramesh Dr. Lloyd Nazareth

(WholeTimeDirector) (Director)

Place : Chennai Date : 16th May, 2011


Mar 31, 2000

The directors wish to present the ninth annual report of the company along with the audited accounts for the period ended 31-03-2000.

FINANCIAL RESULTS

For the 18 months ended For the year ended 31.03.2000 30.09.1998 (Rs. in Lakhs)

Turn over 2407.88 1335.65

Profit before Interest & Depreciation 582.53 245.55

Financial Cost 2357.37 1139.52

Depreciati on 246.12 137.30

Income Tax -- --

Net Profit / (Loss) (2020.96) (1031.27)

Prior Period Expenses 0.75 (1.05)

Prior Period Income 0.44 (0.94)

Adjusted Net Profit / (Loss ) (2019-77) (1033.26)

It has been yet another difficult year for the sustenance although your hospital continued to retain the performance level as in the previous period. Inspite of heavy pressure on margins, your hospital continue to maintain its performance level for the period under review. In view of adverse situation and general recessionary trend in economy, the company could not avoid posting negative results. The focussed , friendly and personalised services to the patients continued to be the primary motto of the hospital. Malar Heart Foundation of Malar Hospitals Limited maintained its success stream with 99-55% in heart surgeries; other departments namely neurology, nephrology, oncology, etc also performed well for the period under review.

FINANCIAL RESTRUCTURING

Your board made a very sincere and conscious attempt to restructure the financial activities. The much sought after One Time Settlement proposal mooted by the financial institutions could not be successful during the past two years as there was dis-agreement between Indian Bank, the consortium member and other Financial Institutions.

Consequent upon recalling their loan amounts (Principle and Interest Component) IDBI, IFCI, ICICI and Indian Bank have filed suits in Debt Recovery Tribunal, Chennai / High Court, Mumbai.

Your directors without losing hopes once again put in their efforts and financial institutions responded with a revised package for the One Time Settlement Proposal. As per the revised package the negotiated amount of OTS payable to ICICI, IDBI and IFCI stands at Rs. 17.53 crores, of which your company has already made repayment of Rs. 3 crores as on date. You may kindly observe that the Financial Institutions are agreeable for a substantial portion of the interest dues and the same will be written back if your company makes the entire payment on or before 31.12.2000 as stipulated by the Financial Institutions.

With a view to attach significance to other allied activities, your hospital very recently constructed an auditorium inside the hospital complex so as to enable the consultants to have meaningful interaction on their profession. A nursing school is also likely to be established to impart training in nursing.

DIRECTORS

Prof.S.Kameswaran, Prof.Arcot Gajaraj and Shri. S.Thyagarajan are the directors who retire by rotation at the forthcoming Annual General Meeting and are eligible for re- appointment.

Y2K COMPLIANCE

On account of effective steps taken, the company did not face any problem relating to Y2K front.

NOMINATION

As per section 109 A and 109 B of the Companies Amendment Act, 1999 the shareholders of the company can nominate their successors. Shareholders may contact the registered office for obtaining nomination form, if necessary.

DEPOSITORY SERVICES

The Securities Exchange Board of India ( SEBI ) vide its circular no. SMDRP / POLICY / CIR - 23/2000 dated 29.05.2000 decided that your companys shares should be compulsorily traded in dematerialised form with effect from 25.09-2000. Your company has already entered into an agreement with the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) in this regard. You may also kindly note that Cameo Corporate Services Ltd. have been appointed as Electronic Connectivity Provider for the purpose of providing connectivity with NSDL and CDSL.

AUDITORS

M/s K.Gopalan & Co., Chartered Accountants, the Companys Auditors retire at the forthcoming Annual General Meeting and are eligible for re-appointment.

PARTICULARS OF EMPLOYEES AS PER SECTION 217 (2A) OF THE ACT FORMS PART OF THIS REPORT

None of the employees draw a salary exceeding the limit prescribed under Section 217C2A) of the Companies Act, 1956.

TECHNOLOGY ABSORPTION

As in the previous years the hospital, continues to absorb latest technology in Radiology, Neurology, Caridology, Nephrology, etc.

FOREIGN EXCHANGE EARNINGS AND OUTGO :

Amounts received from foreign patients Rs.9,75,372

Foreign Exchange Outgo Rs.l, 19,343

ACKNOWLEDGEMENT:

Your company is grateful for the co-operation and assistance extended by the Financial Insititutions, Banks and Government of Tamil Nadu. The board also wishes to place on record its appreciation of the dedicated service of our consultants, employees and other members of the hospital.

By Order of the Board

Place : Chennai Dr. S. RAMAMURTHY

Date : 23-08.2000 Chairman & Mg. Director

 
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