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Directors Report of Medinova Diagnostic Services Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twenty First Annual Report of your Company together with the audited accounts for the year ended 31st March, 2014 and Report of the Auditors thereon.

1. FINANCIAL RESULTS:

A statement of the financial and operational results of your Company for the year under review is furnished hereunder:

(Rupees in Lakhs)

Particulars 2013-14 2012-13

Total Income 1115.59 1255.21

Total Expenditure 1146.78 1203.08

Interest 9.79 7.38

Depreciation 57.58 59.37

Profit / (Loss) before (98.56) (14.62)

exceptional Items and Tax

Exceptional Items 128.10 (12.11) Provision for Tax

Current Tax 5.79 0.00

Deferred Tax 26.13 (2.32)

MAT Credit (0.43) 0.00

Profit / (Loss) after Tax (1.95) (24.41)

2. REVIEW OF OPERATIONS:

During the year the total turnover was Rs.1115.59 lakhs and Net loss after taxes was Rs.1.95 lakhs. Although the turnover did not show any improvement over the past years, expenditure in most of the heads were kept under control. During the year, a unit of the company situated at No. 55, Infantry Road, Shivaji Nagar, Bangalore-560001, was sold and transferred as-a-going-concern, on slump sale basis together with all its assets and liabilities on as-is-where-is basis, but excluding the use of Medinova Brand Name, to M/s. Mallya Hospital (managed by Chaparral Health Services Ltd, Bangalore (Purchaser) for a total consideration of Rs.715.00 lakhs. The sale consideration was adjusted against the amounts already advanced by the Purchaser to the company. The sale is effective from the appointed date i.e. January 31, 2014. Thus the company did not have the revenue from its Bangalore unit for the last two months in the financial year. Post sale of the Bangalore unit, the company''s retained business includes the diagnostic service centres at Hyderabad, Pune, Kolkata and a mini centre at Bansdroni (Kolkata).

3. DIVIDEND:

In view of the loss incurred by the Company for the year under review, your Directors have not recommended any dividend on the paid up equity share capital.

4. SHIFTING OF REGISTERED OFFICE:

The company has terminated the lease agreement entered for the registered office premises. Accordingly your Board of Directors decided to shift the registered office from 6-3-652, ''Kautilya'', Somajiguda, Hyderabad - 500082 to 6-3-652, ''Anand Chambers'', Somajiguda, Hyderabad - 500082 at its Board Meeting held on 09.08.2014 effective from 18.08.2014.

5. CHANGES IN MANAGEMENT:

During the year M/s. Vijaya Diagnostic Centre Private Limited had acquired 24.54% shares of the company and had entered into an Agreement for acquiring 27,50,220 equity shares of the company equivalent to 29.01% (29.16% of Voting Capital of MDSL) shareholding from the erstwhile promoter M/s. Standard Medical & Pharmaceuticals Limited and has made open offer for additional 26% of the Equity Shares as mandated under Regulation 3(1) & 4 of the SEBI (SAST) Regulations, 2011. Consequently, M/s. Vijaya Diagnostic Centre Private Limited after completion of the open offer and acquisition of shares has acquired the management control and became the promoter of the company. As on date, the total shareholding of M/s. Vijaya Diagnostic Centre Private Limited is 60.14% (60.46% of the Voting Capital of MDSL)

On receipt of the Detailed Public Statement on 3rd April, 2014 from M/s Vijaya Diagnostic Centre Private Limited (Acquirer/ New Promoter) the Board of Directors had constituted the committee of Independent Directors consisting of Mr. P K Reddy, Chairman and Mrs. A Sailaja, Member to provide reasoned recommendations on such open offer as per Regulation 26(7) of the SEBI (SAST) 2011 and the said recommendation was published on 27th May, 2014.

6. CHANGES IN CONSTITUTION OF THE BOARD:

During the year under report, Mr. D. A. Srinivas ceased to be the Director of your Company consequent upon his resignation. The current constitution of the Board comprises two Directors and two Independent Directors. The Directors being Mr. A. Raghava Reddy and Mr. S Basu Thakur & Mr. PK. Reddy and Mrs. Sailaja Aluru being Independent Directors of the Company.

In accordance with the provisions of Sec 152 of the Companies Act, 2013, Mr. S Basu Thakur Director retires by rotation and being eligible, offers themselves for re-appointment.

The Board now recommends the following appointments for approval of the shareholders at the Annual General Meeting:

a. Appointment of Mr. Sunil Chandra Kondapally and Dr. Sura Surendranath Reddy as Directors of the Company, who are the representatives of Vijaya Diagnostic Centre Private Limited, in accordance with Section 152 read with the relevant rules of the Companies Act, 2013.

b. Appointment of Mr. Sunil Chandra as a Managing Director of the Company in accordance with Section 196, 197 read with Schedule V of the Companies Act, 2013.

c. Appointment of Mrs. A. Sailaja and Mr. P.K. Reddy as Independent Directors from the ensuing Annual General Meeting in accordance with Section 149 and other applicable provisions of the Companies Act, 2013 read with Sch IV and Clause 49 of the Listing Agreement.

The brief profile of the directors/independent directors/ managing director to be appointed/re-appointed form part of the notes and explanatory statement to the notice of the ensuing Annual General Meeting.

7. STATUTORY AUDITORS:

M/s. J B Reddy & Co., Statutory Auditors of your Company, have tendered a notice of unwillingness in writing for their re-appointment. In this regard, the Board recommends the appointment of M/s. Ratnam Dhaveji & Co., Chartered Accountants (Firm Registration No. 006677S), as Statutory Auditors of the Company in place of the retiring Auditors. The Company has received a Certificate 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 re-appointment.

Your Directors recommend the appointment of the Statutory Auditors from the conclusion of this Annual General Meeting till the conclusion of the 26th Annual General Meeting of the Company to be held in the year 2019.

8. LISTING OF SHARES OF THE COMPANY:

The Equity Shares of your Company continue to remain listed with Bombay Stock Exchange Limited (BSE) and the Scrip Code: 526301 and ISIN: INE047C01019. The listing fee for the year 2014-15 has been paid to the Stock Exchange.

9. CORPORATE GOVERNANCE:

A Report on the Corporate Governance is annexed separately as part of this report along with a Certificate of compliance from M/s. J B REDDY & CO., Chartered Accountants Firm Regn No 003256S. Necessary requirements of obtaining certifications/declarations in terms of Clause 49 have been complied with.

10. MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report which forms an integral part of the Annual Report is herewith annexed.

11. PUBLIC DEPOSITS:

During the year, the company has not accepted any deposits in the nature of public deposits.

12. SHARE CAPITAL

During the year under review, there is no change in the authorized share capital, issued, subscribed and paid up capital of the Company.

13. PARTICULARS OF EMPLOYEES:

None of the Employees are in receipt of any remuneration exceeding the limits as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

14. PARTICULARS RELATING TO CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

The particulars of conservation of energy and technology absorption as required to be furnished under Sec. 217(1)(e) of the Companies Act, 1956 read with relevant rules there under, are not applicable to your Company.

15. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company has not earned any foreign exchange during the year. Also, during the year, there was no foreign exchange used.

16. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, in relation to financial statements for the year 2013-14, the Board of Directors reports that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) Accounting policies have been selected 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 or loss of the Company for the year under review;

c) Proper and sufficient care have 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;

d) The Annual Accounts for the financial year ended 31st March, 2014 have been prepared on a ''going concern'' basis.

17. REPLIES TO AUDITORS OBSERVATIONS IN THE AUDITORS REPORT:

With regard to the Auditors'' observation on delays in making payments towards Income Tax dues, ESI and Provident Fund contributions, necessary corrective steps have been taken to remit the amount regularly. Statutory dues, as observed by the Auditors, have already been cleared subsequently.

18. ACKNOWLEDGMENTS:

Your Directors express their gratitude to all the Banks, various Government Agencies and the Investors of the Company, for their support and cooperation. Your Directors also place on record appreciation for all the employees of your company for their contribution.

By order of the Board for Medinova Diagnostic Services Limited

Place : Hyderabad Raghava Reddy Adala Date : 9th August, 2014 Chairman DIN 01838089


Mar 31, 2013

To The Members of Medinova Diagnostic Services Ltd,

The Directors have pleasure in presenting the Twentieth Annual Report of your Company together with the audited accounts for the year ended 31st March, 2013 and Report of the Auditors thereon.

FINANCIAL & OPERATIONAL RESULTS:

A statement of the financial and operational results of your Company for the year under review, is furnished hereunder:

(Rupees in Lakhs)

Particulars 2012-2013 2011-2012

Total Income 1255.21 1306.05

Total Expenditure 1203.08 1257.68

Interest 7.38 8.97

Depreciation 59.37 58.21

Profit / (Loss) before (14.62) (18.81)

Exceptional Items and Tax

Exceptional Items 12.11 8.48

Profit / (Loss) before Tax (26.73) (27.29)

Provision for Deferred Tax (2.32) (0.97)

Profit / (Loss) after Tax (24.41) (26.32)

DIRECTORS'' RESPONSIBILITY STATEMENT:

Your Directors hereby confirm that

a) in the preparation of the annual accounts, the applicable accounting standards had 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 were 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 or loss of the Company for the year under review;

c) they 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.

d) they have prepared the accounts for the financial year ended 31st March, 2013 on a `going concern'' basis.

OPERATIONS:

During the year the total turnover was Rs. 1255.21 lacs and Net loss after taxes was Rs. 24.41 lacs. Despite stiff Competition in the Diagnostic market with new entrants each year in this field, we could manage to keep our business in good stead. However, effective steps were initiated to reduce the expenditure at all levels so as to minimise the losses.

DIVIDEND:

In view of the loss, your directors have not recommended any dividend on the paid up equity share capital of the company, for the year.

DIRECTORS:

Sri S Basu Thakur and Smt. A Sailaja, Directors retire by rotation and being eligible, offer themselves for re-appointment.

AUDIT COMMITTEE:

The Audit Committee consists of Sri A Raghava Reddy, Sri P K Reddy and Smt. A Sailaja. Sri P K Reddy is the Chairman of the Audit Committee. The Committee met four times during the financial year 2012-13 and reviewed the financial results and statements, internal control procedures, accounting procedures etc.

AUDITORS:

M/s. J B Reddy & Co., Auditors of your Company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

With regard to the Auditors'' observation on delays in making payments towards Income Tax dues, ESI and Provident Fund contributions, necessary corrective steps have been taken to remit the amount regularly. Part of statutory dues, as observed by the Auditors, have already been cleared.

PUBLIC DEPOSITS:

During the year, the company has not accepted any deposits in the nature of public deposits.

PARTICULARS OF EMPLOYEES:

None of the Employees is in receipt of remuneration exceeding the limits as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

PARTICULARS RELATING TO CONSERVATION OF ENERGY ETC.,

The particulars of conservation of energy and technology absorption as required to be furnished under Sec. 217(1)(e) of the Companies Act, 1956 read with relevant rules thereunder, are not applicable to your Company.

The Company has not earned any foreign exchange during the year. Also, during the year, there was no foreign exchange used.

CORPORATE GOVERNANCE :

A report on the Corporate Governance together with the Management Discussion & Analysis and the Auditor''s Certificate on compliance with the conditions of Corporate Governance under clause 49 of listing agreement, is given in the Annexure.

ACKNOWLEDGMENTS:

Your Directors express their gratitude to all the Banks, various Government Agencies and the Investors of the Company, for their support and cooperation. Your Directors also place on record appreciation for all the employees of your company for their contribution.

for and on behalf of the Board

Place : Hyderabad A RAGHAVA REDDY

Date : 14th August, 2013 Chairman


Mar 31, 2012

To The Members of Medinova Diagnostic Services Ltd,

The Directors have pleasure in presenting the Nineteenth Annual Report of your Company together with the audited accounts for the year ended 31st Marfch, 2012 and Report of the Auditors thereon.

FINANCIAL & OPERATIONAL RESULTS:

A statement of the financial and operational results of your Company for the year under review, is furnished hereunder:

(Rupees in Lakhs) Particulars 2011-2012 2010-2011

Total Income 1306.05 1329.15

Total Expenditure 1257.68 1293.75

Interest 8.97 20.94

Depreciation 58.21 56.44

Profit / (Loss) before (18.81) (41.98)

Exceptional Items and Tax

Exceptional Items 8.48 5.12

Profit / (Loss) before Tax (27.29) (47.10)

Tax relating to prior years 0.00 0.24

Provision for Deferred Tax (0.97) (24.96)

Profit / (Loss) after Tax (26.32) (22.38)

DIRECTORS' RESPONSIBILITY STATEMENT:

Your Directors hereby confirm that

a) In the preparation of the annual accounts, the applicable accounting standards had 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 were 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 or loss of the Company for the year under review;

c) they ha
d) they have prepared the accounts for the financial year ended 31st March, 2012 on a going concern' basis.

OPERATIONS:

During the year the total turnover was Rs. 1306.05 lacs and Net loss after taxes was Rs.26,32 lacs. Eventhough, there is a marginal drop in turnover when compared to the previous years' turnover, during the year, the company had put in efforts to remain competitive and managed to withstand the market pressures. The Centres were upgraded by acquiring new CT Machine, Digital X-ray & Ultrasound Scanners.

DIVIDEND:

In view of the loss, your directors have not recommended any dividend on the paid up equity share capital of the company, for the year.

DIRECTORS.

Sri R K. Reddy and Sri. D. A. Srinivas, Directors retire by rotation and being eligible, offer themselves for re- appointment. -

AUDIT COMMITTEE:

The Audit Committee consists of Sri A Raghava Reddy, Sri P K Reddy and Smt. A Sailaja. Sri P K Reddy is the Chairman of the Audit Committee. The Committee met four times during the financial year 2011-12 and reviewed the financial results and statements, internal control procedures, accounting procedures etc.

AUDITORS:

M/s. J B Reddy & Co., Auditors of your Company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

With regard to the Auditors' observation on delays in making payments towards Income Tax dues, ESI and Provident Fund contributions, necessary corrective steps have been taken to remit the amount regularly. Part of statutory dues, as observed by the Auditors, have already been cleared.

PUBLIC DEPOSITS:

During the year, the company has not accepted any deposits in the nature of public deposits.

PARTICULARS OF EMPLOYEES:

None of the Employees is in receipt of remuneration exceeding the limits as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

PARTICULARS RELATING TO CONSERVATION OF ENERGY ETC.,

The particulars of conservation of energy and technology absorption as required to be furnished under Sec. 217(l)(e) of the Companies Act, 1956 read with relevant rules thereunder, are not applicable to your Company.

The Company has not earned any foreign exchange during the year. Also, during the year, there was no foreign exchange used.

CORPORATE GOVERNANCE :

A report on the Corporate Governance together with the Management Discussion & Analysis and the Auditor's Certificate on compliance with the conditions of Corporate Governance under clause 49 of listing agreement, is given in the Annexure.

ACKNOWLEDGMENTS:

Your Directors express their gratitude to all the Banks, various Government Agencies and the Investors of the Company, for their support and cooperation. Your Directors also place on record appreciation for all the employees of your company for their contribution.

for and on behalf of the Board Place : Hyderabad P K Reddy

Date : 14tH August, 2012 Director


Mar 31, 2010

The Directors have pleasure in presenting the Seventeenth Annual Report of your Company together with the audited accounts for the period ended 31st March, 2010 and Report of the Auditors thereon.

FINANCIAL & OPERATIONAL RESULTS:

A statement of the financial and operational results of your Company for the year under review, is furnished hereunder:

(Rupees in Lakhs)

Particulars 2009-2010 2008-2009

Total Income 1221.95 1240.50

Total Expenditure 1250.81 1198.28

Interest 25.59 30.19

Depreciation 58.39 55.51

Profit / (Loss) before

Prior period adjustments (112.84) (43.48)

Prior year adjustments 0.49 1.09

Profit / (Loss) before Tax: (113.33) (44.57)

Provision for Taxes:

Fringe Benefit Tax 0.00 2.24

Deferred Tax (21.02) 26.07

Profit / (Loss) after Tax (92.31) (72.88)

DIRECTORS RESPONSIBILITY STATEMENT:

Your Directors hereby confirm that

a) in the preparation of the annual accounts, the applicable accounting standards had 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 were 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 or loss of the Company for the year under review;

c) they 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;

d) they have prepared the accounts for the financial year ended 31st March, 2010 on a `going concern basis.

OPERATIONS:

During the year 2009-10 the total Business Income was Rs.1221.95 lacs and a net loss after taxes was Rs.92.31 lacs. During the year the company had put in efforts to remain competitive and could achieve a very marginal increase in Diagnostic Receipts Income. The revenue generation from the Pune centre is yet to pick up after the shifting of the premises to a new location. The marketing teams are strengthened at Hyderabad and Pune to improve the reach of our services. To upgrade the centers, some equipment have been added namely Computed Radiography System and Semi Auto Analyzers.

DIVIDEND:

In view of the loss, your directors have not recommended any dividend on the paid up equity share capital of the company, for the year.

DIRECTORS:

Sri P K Reddy and Sri D A Srinivas, Directors retire by rotation and being eligible, offer themselves for re- appointment.

AUDIT COMMITTEE:

The Audit Committee consists of Sri A Raghava Reddy, Sri P K Reddy and Smt. A Sailaja. The Committee met five times during the financial year 2009-10 and reviewed the financial results and statements, internal control procedures, accounting procedures etc., Sri P K Reddy is the Chairman of the Audit Committee.

AUDITORS:

M/s. J B Reddy & Co., Auditors of your Company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

With regard to the Auditors observation on delays in making payments towards Income Tax dues, ESI and Provident Fund contributions, necessary corrective steps have been taken to remit the amount regularly. Part of statutory dues, as observed by the Auditors, have already been cleared.

With regard to the Auditors observation on dues to a Scheduled Bank representing the balance amount of the liability taken over by the company from M/s Standard Medical & Pharmaceuticals Ltd., a one time settlement proposal is pending for clearance with the said Bank.

PUBLIC DEPOSITS:

During the year, the company has not accepted any deposits in the nature of public deposits.

PARTICULARS OF EMPLOYEES:

None of the Employees is in receipt of remuneration exceeding the limits as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

PARTICULARS RELATING TO CONSERVATION OF ENERGY ETC.,

The particulars of conservation of energy and technology absorption as required to be furnished under Sec. 217(1)(e) of the Companies Act, 1956 read with relevant rules thereunder, are not applicable to your Company.

The Company has not earned any foreign exchange during the year. Also, during the year, there was no foreign exchange used.

CORPORATE GOVERNANCE :

A report on the Corporate Governance together with the Management Discussion & Analysis and the Auditors Certificate on compliance with the conditions of Corporate Governance under clause 49 of listing agreement, is given in the Annexure.

ACKNOWLEDGMENTS:

Your Directors express their gratitude to all the Banks, various Government Agencies and the Investors of the Company, for their support and cooperation. Your Directors also place on record appreciation for all the employees of your company for their contribution.

for and on behalf of the Board



Place : Hyderabad A Raghava Reddy

Date : 3rd August, 2010 Chairman

 
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