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Directors Report of Medinova Diagnostic Services Ltd.

Mar 31, 2016

To

The Members,

Medinova Diagnostic Services Limited.

The Directors have pleasure in presenting the Twenty Third Annual Report of your Company together with the audited accounts for the year ended 31st March, 2016 and Report of the Auditors thereon.

1. FINANCAL RESULTS:

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

(Rupees in Lakhs)

Particulars

2015-16

2014-15

Total Income

725.84

817.56

Total Expenditure

752.18

1129.26

Interest

38.58

6.26

Depreciation

81.41

103.31

Profit / (Loss) before

(146.33)

(421.27)

exceptional Items and Tax

Exceptional Items

0.00

0.00

Provision for Tax:

Current Tax

0.00

0.00

Deferred Tax

13.28

(62.87)

Tax relating to earlier years

0.00

0.74

Profit / (Loss) after Tax

(159.61)

(359.14)

2. REVIEW OF OPERATIONS:

During the year the total turnover was Rs. 725.84 lakhs and Net loss after taxes was Rs. 159.61 lakhs. Although the turnover did not show any improvement over the past years, expenditure in most of the heads were kept under control. The Company has taken-up revamping of the business operations at Kolkata and Hyderabad by investing additional funds to make the Centers profitable.

The Company believes that Medical diagnostic services, continues to be in its rapid pace and also continued to be an important catalyst in the economic growth of the Country and also for the sustainable growth of your company. Hence your Company concentrates more on its core competence area, medical diagnostic services and the management is confident that the additional investment at Kolkata and Hyderabad centers will generate good revenue in the Financial Year 2016-17.

In view of loss incurred for the Financial Year ended 31st Mach, 2016, no amount is being proposed to be transferred to the Reserves for the said year.

3. DVIDEND:

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. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of the Company

5. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY There are Material changes and commitments in the business operations of the Company from the Financial Year ended 31st March, 2016 to the date of signing of the Director''s Report. In view of Non-viability of the Business Operations and continued losses being incurred relating to the Diagnostic Centre at Hyderabad, a decision is taken to close the Diagnostic service operations with effect from 08.08.2016.The company is making efforts to improve the financial position of the Hyderabad Center by exploring various options.

Your management’s continuous efforts will help the Company to bring down its losses substantially. It shall keep continuing to improve the operational performance and bring down the losses and fetch more positive results in the coming years.

6. INTERNAL CONTROL SYSTEM

The Company has adequate internal control systems and procedures designed to effectively control the operations at its Corporate Office and Branches. The internal control systems are designed to ensure that the financial and other records are reliable for the preparation of financial statements and for maintaining assets. The Company has well designed Standard Operating Procedures considering the essential components of internal control as stated in the Guidance Note on Audit of Internal Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Independent Internal Auditors conduct audit covering a wide range of operational matters and ensure compliance with specified standards. Planned periodic review s are carried out by Internal Audit. The findings of Internal Audit are reviewed by the top management and by the Audit Committee of the Board of Directors.

Based on the deliberations with Statutory Auditors to ascertain their views on the financial statements including the Financial Reporting System and Compliance to Accounting Policies and Procedures, the Audit Committee was satisfied with the adequacy and effectiveness of the Internal Controls and Systems followed by the company.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

As per the provisions of the Companies Act, 2013, Sri. Sunil Chandra Kondapally will retire by rotation at the ensuing AGM and being eligible offered himself for re-appointment. The Board recommends his re-appointment subject to the approval of the members of the Company at the ensuing Annual General Meeting.

The information on the particulars of Director eligible for appointment in terms of Regulation 36 of SEBI (Listing Obligation s and Disclosure Requirement) Regulations, 2015 has been provided in the notes to the notice convening the Annual General Meeting.

However, as the members are aware , the following directors were appointed at previous AGM held on 25th day of September, 2015.

Mr. K. V. Ravindra Reddy (DIN 00083986) who was appointed by the Board of Directors as an Additional Director in an independent category - appointed as Independent Director of the Company to hold office as such for a period of 5 (five) consecutive years and he shall not be liable to retire by rotation.

Mr. P. Kamalakar Rao (DIN 03057676) who was appointed by the Board of Directors as an Additional Director in an independent category - appointed as Independent Director of the Company to hold office as such for a period of 5 (five) consecutive years and he shall not be liable to retire by rotation.

Mrs. Suprita Reddy Sura (DIN 01206491) who was appointed by the Board of Directors as an Additional Director of the Company - appointed as Director of the Company and shall be liable to retire by rotation.

Dr. G. Ramesh Ramayya (DIN 00015424) who was appointed by the Board of Directors as an Additional Director in an independent category - appointed as Independent Director of the Company to hold office as such for a period of 5 (five) consecutive years and he shall not be liable to retire by rotation.”

Dr. Sura Surendranath Reddy (DIN 00108599) w ho was appointed by the Board of Directors as an Additional Director of the

Company - appointed as Director of the Company, and shall be liable to retire by rotation.

There was no other change in the Directors and KMPs of the Company.

8. DECLARATON BY AN INDEPENDENT DIRECTOR:

The Company has complied the provisions of Section 149(6) of the Companies Act, 2013. The Company has also obtained declarations from all the Independent Directors pursuant to Section 149(7) of the Companies Act, 2013.

9. EVALUATION OF THE BOARD''S PERFORMANCE

In compliance with the Companies Act, 2013, and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the performance evaluation of the Board and the directors individually was carried out during the year under review.

The Board and the committees are properly constituted and your Company believes that the Board is achieving to provide a long term vision and policy approach to improve the good governance .And for the performance evaluation of the Board and the committees as a whole and for Individual Directors, which include criteria for determining qualifications, positive attributes and independence of Directors, your Company has formulated the policy in the previous year.

AUDIT COMMITTEE

Audit Committee comprises of Mr. P. Kamalakar Rao as Chairman and Mr. K. V. Ravindra Reddy and Dr. Sura Surendranath Reddy as members. The details of terms of reference of the Committee member, dates of meeting held and attendance of the Directors are given separately in the Corporate Governance Report. All the recommendations made by Audit Committee were accepted by Board.

STAKEHOLDER RELATIONSHIP COMMITTEE

Stakeholder Relationship Committee comprises of Dr. Sura Surendranath Reddy as Chairman and Mr. K. V. Ravindra Reddy and Mr. P. Kamalakar Rao as members. The details of terms of reference of the Committee member, dates of meeting held and attendance of the Directors are given separately in the Corporate Governance Report.

NOMINATION & REMUNERATION COMMITTEE:

Nomination & Remuneration Committee comprises of Mr. K. V. Ravindra Reddy as Chairman and Dr. Sura Surendranath Reddy and Mr. P. Kamalakar Rao as members. The details of terms of reference of the Committee member, dates of meeting held and attendance of the Directors, are given separately in the Corporate Governance Report.

10. Remuneration Policy: Your Directors have on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy forms part of the Corporate Governance Report.

11. INDUSTRIAL RELATONS

During the year under review, your Company maintained cordial relationship with workers and employees at all levels

12 CODE OF CONDUCT

Directors, Key Managerial Personnel and senior management of the Company have confirmed compliance with the Code of Conduct applicable to the Directors and employees of the Company and the declaration in this regard made by the Managing Director is attached as Annexure ‘H'' which forms a part of this Report of the Directors. The Code of Conduct is available on the Company''s website www.medinovaindia.com.

13. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

No Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

14. PERFORMANCE AND FINANCIAL POSTON OF EACH OF THE SUBSIDARIES, ASSOCATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCAL STATEMENT.

Company has a Subsidiary LLP namely M/s. Medinova Millennium MRI Services LLP in West Bengal, which is not a company with in the provisions of the Act. Except this, Company has no Subsidiary or Associate, Associate Company and Joint Venture Companies.

15. Consolidated Financial Statements (CFS) The Consolidated Financial Statements of your Company for the financial year 2015-16 are prepared in compliance with applicable provisions of the Companies Act, 2013 read with the Rules issued there under, applicable Accounting Standards and the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "Listing Regulations"). The consolidated financial statements have been prepared on the basis of audited financial statements of your Company, its subsidiaries, as approved by the respective Board of Directors/Partners.

16. STATUTORY AUDITORS:

As the members are aware, at the 21st Annual General Meeting of the Members of Medinova Diagnostic Services Limited held on 25th day of September, 2014, M/s Ratnam Dhaveji& Co., Chartered Accountants, Hyderabad, were appointed as the Statutory Auditors of your company for a period of 5 years, to hold the office as such till the conclusion of 26th AGM of the Company to be held in the year 2019.

In terms of the provisions of Section 139 of the Companies Act, 2013, the appointment of auditors shall be placed for ratification at every AGM. Accordingly, the appointment of M/s Ratnam Dhaveji & Co., Chartered Accountants, as the Statutory Auditors of the Company is placed for your ratification. In this regard, the Company has received a certificate from the Auditors to the effect that if the said firm is reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

17. INTERNAL AUDITOR:

The Board of Directors based on the recommendation of the Audit Committee has re-appointed Mr. G S N Raju, as the Internal Auditor of your Company. The Internal Auditor is submitting his reports on quarterly basis.

18. SECRETARAL AUDITOR:

M/s. DVM Gopal& Associates, Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies Act, 2013 and Rules there under. The secretarial audit report for financial year 2015-16 forms part of the Annual Report as Annexure ‘C’ to the Board''s report.

19. PUBLIC DEPOSITS:

During the year, the company has not accepted any deposits in the nature of public deposits during the Financial Year ended 31st Mach, 2016.

20. EXTRACT OF THE ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014 as prescribed in Form No. MGT-9 is given in Annexure ‘E’

21. VIGIL MECHANISM

In terms of the provisions of Section 177 (9) & (10) of Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formalized the process and institutionalized ‘Whistle Blower Policy’ within the Company, w hereby employees and other stakeholders can report matters such as generic grievances, corruption, misconduct, illegality and wastage/misappropriation of assets to the Company.

The policy safeguards the whistle blowers to report concerns or grievances and also provides direct access to the Chairman of the Audit Committee.

The Vigil Mechanism and Whistle Blower Policy may be accessed on website of the Company at www.medinovaindia.cot .

22. LISTING & TRADING

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 financial year 2016-17 has been duly paid. You may further note that the listing/ trading w as never suspended at any time during the financial year 2015-16.

23. CORPORATE GOVERNANCE:

We firmly understand and believe the importance of Corporate Governance. We always aim for the growth by adhering to the National and International Corporate Governance Standards. Our philosophy on corporate governance ensures fiscal accountability, ethical corporate behavior and fairness to all stakeholders comprising regulators, employees, customers, vendors, investors and the society at large.

A section on Corporate Governance along with a certificate from the Auditors M/s. Ratnam Dhaveji & Co., Chartered Accountants Firm Regn No 006677S confirming compliance of conditions of Corporate Governance as stipulated under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed and forms part of the Directors’ Report.

24. MANAGEMENT DISCUSSION AND ANALYSIS:

In accordance with the provisions of Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on the Management Discussion and Analysis is herewith annexed as Annexure ‘G’

25. 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.

26. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

The meetings of the Board are scheduled at regular intervals to decide and discuss on business performance, policies, strategies and other matters of significance.

During the year ended March 31, 2016, Four (4) Board Meetings were held. The dates on which the Board meetings were held are 22/05/2015, 13/08/2015, 09/11/2015 and 13/02/2016. The intervening gap between any two consecutive Board Meetings was within the period prescribed by the provisions of the Companies Act, 2013.

Detailed information regarding the meetings of the Board and committees is included in the report on Corporate Governance, which forms part of the Board’s Report.

27. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The Company has given loans and made investment in its Subsidiary LLP namely M/s. Medinova Millennium MRI Services LLP. Except this there are no Loans, Guarantees, Investments given during the Financial Year ended on March31, 2016, which attracts the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

28. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All Related Party Transactions which were entered into during the Financial Year were on an arm''s length basis and in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee and the Board for approval.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 are prepared in Form No. AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is enclosed as Annexure - ‘F’ to this Report.

Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions, as approved and adopted by the Board of Directors may be accessed on the website of the Company www .medinovaindia.com

29. E- DISPATCH OF ANNUAL REPORTS

While adhering to the Green Initiative measures, as suggested by the MCA, we have resolved to dispatch the Annual Reports electronically to such shareholders who have registered and updated their e-mail IDs., with the Registrar & Transfer Agents of the Company. Annual Report, in physical form shall be dispatched to other shareholders.

30. PARTICULARS OF EMPLOYEES:

The Company does not have any employee, whose particulars are required to be given pursuant to the provisions of section 197 of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished hereunder:

S No.

Name

Designation

Remuneration paid FY 2015-16 (Rs. In Lacs)

Remuneration paid FY 2014-15 (Rs. In Lacs)

Increase in (%)

1.

Mr. Sunil Chandra Kondapally

Managing Director

NIL

NIL

NA

2.

Mr. N. Ravi Kumar

Chief Financial Officer

6.98

5.78

20.83%

3.

Mr. Ramana Reddy

Company Secretary

2.40

0.60 (for 3 Months)

NIL

31. DEMATRIALISATON OF SHARES

The shares of your Company are being traded in electronic form and the Company has established connectivity with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the Depository system, Members are requested to avail the facility of dematerialization of shares with either of the Depositories as aforesaid.

77.17% of the total paid up equity shares of your Company is in dematerialized form as on 31st March, 2016

32. CONSERVATON OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure-D to this report.

33. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to the Directors'' Responsibility Statement, the Board of Directors of the Company hereby confirms:

a. That in the preparation of the Annual Accounts for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. That the directors have selected such accounting policies and applied them consistently and made judgment 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 that period.

c. That the directors 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. That the directors have prepared the annual accounts on a ''going concern'' basis.

e. That the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f. That the systems to ensure compliance with the provisions of all applicable law s and those systems were adequate and operating effectively.

34. CORPORATE SOCIAL RESPONSIBILITY

Since your Company does not fall within any of the parameters specified under the provisions of Section 135 of the Companies Act, 2013 read with Rules made there under, reporting pursuant to Section 134(3) (o) is Not Applicable.

35. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS: With regard to the Statutory 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.

With regard to the Secretarial Auditors'' observation the said delays were inadvertent. Measures are being taken to avoid such delays in future.

36. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTON, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace.

The Company has not received any complaint on sexual harassment during the financial year.

37. ACKNOWLEDGEMENTS AND APPRECIATIONS

Your Directors appreciate the contribution made by the employees of the Company and acknowledge their hard work and dedication to ensure that the Company consistently performs well. The Board of Directors wish to express their sincere appreciation and thanks to all customers, suppliers, banks, solicitors, advisors, Government of India, concerned State Governments and other authorities for their consistent support and co-operation.

We are also deeply grateful to our shareholders for the confidence and faith that they have always placed in us.

By Order of the Board

For Medinova Diagnostic Services Limited

Dr. Sura Surendranath Reddy

Place: Hyderabad Chairman

Date: 08.08.2016 DIN 00108599


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, 2011

The Members of Medinova Diagnostic Services Ltd,

The Directors have pleasure in presenting the Eighteenth Annual Report of your Company together with the audited accounts for the year ended 31st March, 2011 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 2010-2011 2009-2010

Total Income 1329.15 1221.95

Total Expenditure 1298.87 1250.81

Interest 20.94 25.59

Depreciation 56.44 58.39

Profit / (Loss) before Prior period adjustments (47.10) (112.84)

Prior year adjustments 0.24 0.49

Profit / (Loss) before Tax (47.34) (113.33)

Provision for Deferred Tax (24.96) (21.02)

Profit / (Loss) after Tax (22.38) (92.31)

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, 2011 on a `going concern' basis.

OPERATIONS:

During the year 2010-11 the total Business Income was Rs.1329.15 lacs and a net loss after Taxes was Rs.22.38 lacs. During the year the company had strived hard and could achieve an increase in the turnover and thereby brought down the net loss after taxes. The business operations of the Pune centre were shifted to a new premises and we expect an increased level of revenues in the coming years. To upgrade the centres, new equipment namely Colour Droppler, Ultra Sound and Stress Test Machines were acquired.

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 2010-11 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

A Raghava Reddy Chairman

Place : Hyderabad Date : 12th August, 2011


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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