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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Directors Report of Kovai Medical Center and Hospital Ltd.

Mar 31, 2025

Your Directors are pleased to present their Twenty Fifth Annual Report on the business and operations of the Company and the annual audited accounts for the year ended March 31, 2025.

FINANCIAL RESULTS (Rs. Lakhs)
Particulars	2024-25	2023-24
Dividend and Other Income	10,953.58	31,864.46
Profit before Interest, Depreciation & Tax (PBIDT)	10548.91	31,650.10
Less: Interest & Finance Charge (Net)	-	-
Gross Profit	10548.91	31,650.10
Less: Depreciation and amortization charge	4.24	6.20
Profit before Tax (PBT)	10,544.67	31,643.90
Less: Provision for Taxes (including provision for deferred tax)	4.06	701.60
Net Profit after Tax (PAT)	10,540.61	30,942.30
Add: Profit brought forward from previous years	59.151.19	39,569.37
Surplus available for appropriation	69,691.80	70,511.67
Appropriations (Rs. Lakhs)
Particulars	2024-25	2023-24
Interim Dividend on Equity shares	(10,830.57)	11,360.06
Other comprehensive income/ loss, net of tax, arising from remeasurement of defined benefit obligation	(0.55)	(0.42)
Amount transferred to General Reserve	-	-
Profit carried to Balance Sheet	58,860.68	59,151.19
Total Appropriation	69,691.80	70,511.67

OPERATIONS REVIEW

Profit before Interest, Depreciation & Tax (PBIDT) decrease by (66.67%) to Rs. 10,548.91 lakhs during 2024-25 from Rs 31,650.10 lakhs during 2023-24. Profit after Tax decrease by (65.93%) to Rs. 10,540.61 lakhs during 2024-25 from Rs. 30,942.30 lakhs during 2023-24 mainly on account profit on sale of investment and increase in interest income.

DIVIDEND

During the year, your Company has announced two interim dividends of Rs. 16 per share and Rs. 17.75 per equity share amounting to Rs. 10,830.57 lakhs. No final dividend is recommended on Equity Shares.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

As on March 31, 2025, your company had the following subsidiaries:-

1. SRF Limited is a subsidiary of the Company engaged primarily in the manufacture of technical textiles, specialty chemicals, fluorochemicals and packaging films. It has eight wholly owned subsidiaries out of which two wholly owned subsidiaries are registered in India and remaining six are registered outside India. Three of these are direct wholly owned subsidiaries and the rest five are step down wholly owned subsidiaries of SRF Limited. The details of the business of these subsidiaries are more particularly given in the Annual Report of SRF Ltd. for 2024-25 which is available on the website www.srf.com

2. SRF Transnational Holdings Ltd. (SRFT) is a registered non deposit taking NBFC engaged in the business of investment in shares and securities.

3. Shri Educare Ltd. (SEL) is a company engaged in the business of rendering assistance for establishing, managing and running of the schools including sublicensing of copyrights, trademarks and software.

4. Shri Educare Maldives Pvt. Ltd. (SEMPL) is managing a school in a public-private partnership with Maldives Government.

5. KAMA Realty (Delhi) Ltd. (KRDL) is a company engaged in acquisition and rental of immoveable properties.

6. KAMA Real Estate Holdings LLP (KREHL) is a limited liability partnership between KAMA Realty (Delhi) Ltd. and Shri Educare Ltd. It is engaged primarily in acquisition and rental of immoveable properties.

The consolidated profit and loss account for the period ended March 31, 2025 includes the profit and accounts for these fourteen subsidiaries for the complete financial year ended March 31, 2025.

The consolidated financial statements of the Company prepared in compliance with applicable Accounting Standards and other applicable laws including all the above subsidiaries duly audited by the statutory auditors are presented in the Annual Report.

No company has become/ceased to be a joint venture or associate during the year. A report on performance and financial position of each of the subsidiaries and associates is presented in a separate section in this Annual Report. Please refer (AOC-1) annexed to the financial statements in the Annual Report. The Policy for determining material subsidiaries as approved by the Board may be accessed on the Companyâs website at the link: https://www.kamaholdings.com/kama/Inv/ Policy MaterialSubsidarvCompanies.pdf

The Company shall make available the annual accounts of the subsidiary companies to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open

for inspection at the registered office of the Company and respective subsidiary companies. Further, the annual accounts of the subsidiaries are also available on the website of the Company viz. www.kamaholdings.com.

DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr. Kartik Bharat Ram (DIN 00008557) is retiring at the forthcoming annual general meeting and being eligible offers himself for re-appointment.

During the year, the members of the Company re-appointed Mr. Jagdeep Singh Rikhy (DIN - 00944954), as Independent Director by passing a special resolution through Postal Ballot for a further period of 5 years w.e.f. 01.04.2024 to 31.03.2029 .

Brief resume of the Directors who are proposed to be appointed/ re-appointed is furnished in the explanatory statement to the notice of the ensuing Annual General Meeting.

All the Independent Director(s) have submitted the declaration of meeting the criteria for independence as provided in section 149 (6) of the Companies Act, 2013 and Listing Regulations. They are also independent of the management.

The Board confirms that independent directors appointed during the year possess the desired integrity, expertise and experience. The Independent Directors of the Company have confirmed that they have enrolled themselves in the Independent Directorsâ Databank maintained with the Indian Institute of Corporate Affairs (âIICAâ) in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014. One of the Director was exempted from the requirement to undertake the online proficiency self-assessment test conducted by IICA and the remaining have cleared the Online Proficiency Test as prescribed under Companies (Appointment and Qualifications of Directors) Rules, 2014 as amended.

In accordance with the requirements of the Act and the Listing Regulations, the Company has formulated a Nomination, Appointment and Remuneration Policy. A copy of the Policy is enclosed as Annexure I and available on the website of the Company at https://www.kamaholdings.com/kama/Inv/2025-26/2019 02 12-NRC Policy-KAMA-V5-F.pdf

In accordance with the aforesaid Policy, the Nomination and Remuneration Committee evaluates the performance of the Executive Director, Non- Independent non-executive Directors and Independent Directors. Board evaluates, its own performance on criteria like discharge of duties and responsibilities under the Companies Act, 2013 (âthe Companies Act) and Listing Regulations, fulfilment of its role with respect to guiding corporate strategy, risk policy, business plans, corporate performance, monitoring companyâs governance practices etc. and number of meetings held during the year and the performance of its Committees on the criteria like fulfilment of role of the Committee with reference to its terms of reference, the Companies Act and the Listing Regulations and the number of committee meetings held during the year.

Performance evaluation of individual Directors is done annually by the NRC as per the structure of performance evaluation prescribed in the Nomination, Appointment and Remuneration Policy.

NRC recommends to the Board appropriate fees / commission to the non-executive directors for its approval. At the time of making its recommendations/ granting its approval, the Committee / Board considers, inter alia, level of remuneration /commission payable by other comparable companies, time devoted, experience, providing guidance on strategic matters and such other factors as it may deem fit.

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link https://www.kamaholdings.com/kama/inv/2025-26/KAMA Familarisation programme.pdf

MEETINGS OF THE BOARD

During the year 2024-25, Six meetings of the Board of Directors were held. For further details, please refer to the report on Corporate Governance on page no. 31 of this Annual Report.

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(3)(c) of the Companies Act, 2013, it is hereby confirmed 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) 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) 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; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/ arrangements/ transactions entered into by the Company during the financial year, with related parties, referred to in sub-section (1) of section 188 were in the ordinary course of business and on an armsâ length basis and in accordance with the basis approved by the Audit Committee. During the year, the Company has not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the Policy on materiality of related party transactions. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 (âthe Actâ) in Form No. AOC-2 is not applicable to the Company for FY 2024-25 and hence the same is not provided.

Your Directors draw attention of the members to Note 24 to the notes to accounts forming part of the financial statements which sets out related party transaction disclosures.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given, investments made, guarantees given and securities provided alongwith the purpose for which the loan, guarantee or security was proposed to be utilized by the recipient are provided in the standalone financial statement. (Please refer Note 25 to the standalone financial statement).

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

As stipulated under the Listing Regulations, the Business Responsibility and Sustainability Report describing the initiatives taken by the Company from an environmental, social and governance perspective has been prepared for 2024-25 and forms a part of the Boardâs Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the requirements of the Companies Act, 2013, during the year the Company constituted Corporate Social Responsibility Committee comprising of Mr. Kartik Bharat Ram, (Chairman of the Committee), Mr. Ashish Bharat Ram, Director and Mr. Gagan Mehta, Independent Director as other members.

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the projects to be undertaken by the Company, which has been approved by the Board.

The CSR Policy may be accessed on the Companyâs website at www.kamaholdings.com

As per the requirements of section 135 (5) of the Companies Act 2013, the CSR Obligation for FY 2024-25 was Rs. 228.64 Lakhs. The Board upon recommendations of CSR Committee approved the Annual CSR budget of Rs. 250 Lakhs (appx.) for the financial year 2024-25 to be spent in accordance with

the Annual Plan as recommended by the CSR Committee and approved by the Board. Out of the said budget, an amount of Rs. 61.74 lakhs was spent during the year and an amount of Rs. 188.26 lakhs has been transferred to Unspent CSR Account for FY 2024-25 within a period of 30 days from the end of financial year which will be spent on the same project during the next three financial years. Annual Report on CSR activities for financial year 2024-25 is annexed herewith as Annexure II.

RISK MANAGEMENT

The Company is a Core Investment Company within the meaning of Core Investment Companies (Reserve Bank) Directions, 2016.

Investment business is always prone to various risks i.e. risk of capital market fluctuations, global developments, competition risk, interest rate volatility, economic cycles and political risks which can affect the fortunes of investment companies in both ways.

To manage these risks the Company is following a sound and prudent risk management policy. The aim of the policy is to minimize risk and maximize the returns.

As the Company is a Core Investment Company with all of its investment held in the shares of group Companies and the value of these shares are, inter-alia, dependent on the performance of these Companies, the efficacy of risk management policy of the Company largely depends on how the risk is managed by these Companies.

In the opinion of Risk Management Committee and the Board, none of the risks, which have been identified, may threaten the existence of the Company.

The Company has a Risk Management Committee consisting of Mr. Ashish Bharat Ram as Chairman, Mr. Kartik Bharat Ram and Mr. Jagdeep Singh Rikhy as members of the Committee.

INTERNAL FINANCIAL CONTROLS

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

LISTING OF EQUITY SHARES

KAMAâs equity shares are listed at the BSE Limited. DIVIDEND DISTRIBUTION POLICY

In compliance with the listing regulations, your Board had formulated a Dividend Distribution Policy. A copy of the said policy is available on the website of the company at www. kamaholdings.com. The Policy is also given in Annexure III.

CORPORATE GOVERNANCE

Certificate of the Statutory Auditor regarding compliance of the conditions of corporate governance as stipulated in

Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to the report as Annexure IV.

In compliance with the requirements of Regulation 17(8) of the aforesaid Regulations, a certificate from Whole Time Director, CFO and Company Secretary was placed before the Board.

All Board members affirmed compliance with the Code of Conduct for Board and Senior Management Personnel. A declaration to this effect duly signed by the Whole Time Director, CFO and Company Secretary is enclosed as a part of the Corporate Governance Report. A copy of the Code is also placed at the website of the Company (www.kamaholdings. com).

CONSOLIDATED FINANCIAL STATEMENT

The consolidated financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting Standards) Rules, 2015 and other relevant amendments issued thereafter of the Act.

AUDIT COMMITTEE

The Audit Committee comprises of Independent Directors namely Mr. Jagdeep Singh Rikhy (Chairman of the Committee), Mrs. Shalini Gupta and Mr. Gagan Mehta as other members. All the recommendations made by the Audit Committee were accepted by the Board.

ACCOUNTS AND AUDIT

M/s V Sahai Tripathi & Co. (VST), Chartered Accountants (Firm Registration No. 000262N) were appointed as the Statutory Auditor of the Company for a term of 5 years in its 20^th Annual General Meeting.

It is proposed to re-appoint M/s V Sahai Tripathi & Co. (VST), Chartered Accountants (Firm Registration No. 000262N) as Statutory Auditors for 5 years from the forthcoming Annual General Meeting till the conclusion of 30^th Annual General Meeting. Their re-appointment shall be as per the provisions of the Companies Act, 2013 and rules made thereunder. They have submitted their certificate to the effect that they fulfill the requirements of section 141 of the Companies Act, 2013.

There are no qualifications, reservations, adverse remarks or disclaimers made by the Statutory Auditor in their Audit Report. The Notes to the financial statements referred to in the Auditors Report are self-explanatory and therefore do not call for any comments under Section 134 of the Companies Act, 2013. The Auditorsâ Report is enclosed with the financial statements in the Annual Report.

COST AUDIT

As per the requirement of section 148(1) and other applicable provisions of the Companies Act, 2013, Maintenance of Cost records is not applicable on the Company.

VIGIL MECHANISM

In compliance of provisions of the Companies Act, 2013 and Listing Regulations, the company has established a vigil mechanism for directors, employees and other stakeholders to report concerns about unethical behaviour, actual or suspected fraud or violation of the companyâs code of conduct.

The Vigil mechanism of the Company consists of Code of Conduct for Employees, Whistleblower Policy, Code of Conduct for Prevention of Insider Trading and Code of Conduct for Directors and Sr. Management Personnel. These taken together constitute the vigil mechanism through which Directors, employees and other stakeholders can voice their concerns. The Whistleblower Policy, Code of Conduct for Prevention of Insider Trading and Code of Conduct for Directors and Sr. Management Personnel can be accessed on the Companyâs website at the link http://www.kamaholdings. com/InvCodesPolicies.aspx.

MANAGEMENT DISCUSSION AND ANALYSIS

Management discussion and analysis on matters as stipulated in Listing Regulations is given as a separate section in the Annual report.

SECRETARIAL AUDITOR

Pursuant to the amended provisions of Regulation 24A of the SEBI (LODR) Regulations and Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee and the Board of Directors have approved and recommended the appointment of M/s. Sanjay Grover & Associates, Peer Reviewed Firm of Company Secretaries in Practice (Firm Registration Number: P2001DE052900) as Secretarial Auditors of the Company for a term of 5(Five) consecutive years to hold office from financial year 2025-26 to financial year 2029-30, for approval of the Members at ensuing AGM of the Company. Brief resume and other details of M/s. Sanjay Grover & Associates, Company Secretaries in Practice, are separately disclosed in the Notice of ensuing AGM.

M/s. Sanjay Grover & Associates have given their consent to act as Secretarial Auditors of the Company and confirmed that their aforesaid appointment (if made) would be within the prescribed limits under the Act & Rules made thereunder and SEBI (LODR) Regulations. They have also confirmed that they are not disqualified to be appointed as Secretarial Auditors in terms of provisions of the Act & Rules made thereunder and SEBI (LODR) Regulations.

The Secretarial Audit Report for the financial year ended March 31, 2025 is annexed herewith as Annexure V to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Further, Annual Secretarial Compliance Report dated May 14, 2025, issued as per regulation 24A of SEBI (Listing Obligation and Disclosure Requirements) Regulations was given by M/s Sanjay Grover & Associates, Practicing Company Secretary which was submitted to BSE Limited.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, a statement showing the names and other particulars of the employees drawing remuneration required to be disclosed under the said rules are provided in Annexure VI.

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 as amended are provided in Annexure VII.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

As the Company is not carrying out any manufacturing activity, the disclosures as required under section 134(3)(m) of the Companies Act, 2013 and rules made thereunder have not been given. There is no foreign exchange earnings and outgo in the financial year ended March 31, 2025.

ANNUAL RETURN

The Annual Return (MGT-7) of the Company as on March 31, 2025 is available on the following web link: www.kamaholdings. com

SECRETARIAL STANDARDS

Applicable Secretarial Standards i.e. SS-1, SS-2 and SS-3, relating to âMeeting of the Board of Directorsâ, âGeneral Meetingsâ and âDividendâ respectively, have been duly followed by the Company.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there was no transactions on these items during the year under review :-

1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

2. Whole-time Director, CFO and Company Secretary has not received any remuneration or commission from any of the Companyâs subsidiaries.

3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.

During the year there were no complaints received under the Sexual Harassment of Women at Workplace (Prevention, prohibition and redressal) Act, 2013.

ACKNOWLEDGEMENTS

Your Directors acknowledge with gratitude the co-operation and assistance received from various stakeholders and statutory agencies. Your Directors thank the shareholders for their support.

Mar 31, 2024

Your Directors take pleasure in presenting the Thirty Eighth Annual Report along with the audited financial statements for the year ended 31^st March, 2024.

FINANCIAL HIGHLIGHTS

Particulars	2023-24	2022-23
Operating Income	1,21,955.27	101,974.68
Other Income	2,094.92	1,598.77
Total Income	1,24,050.19	103,573.45
Earnings before Interest, Tax, Depreciation & Amortization (EBITDA)	36,263.68	28,450.10
Profit Before Taxation (PBT)	23,755.67	15,521.99
Provision for Taxation	5,782.60	3,945.38
Profit After Taxation (PAT)	17,973.07	11,576.61
Add: Other Comprehensive Income	70.57	53.48
Total Comprehensive Income for the year	18,043.64	11,630.09

RESULTS OF OPERATIONS

The income from operations for the financial year 2023-24 was '' 1,21,955.27 Lakhs registering an increase of 19.59% over the previous year income of '' 101,974.68 Lakhs. Earnings before interest, tax, depreciation and amortization (EBITDA) were '' 36,263.68 Lakhs over the previous year EBITDA of '' 28,450.10 Lakhs. Profit after tax (PAT) for the year was '' 17,973.07 Lakhs over the PAT of '' 11,576.61 Lakhs in year 2022-23.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The Company does not have any Subsidiary Company, Joint Venture or Associate Companies as defined in the Companies Act, 2013.

DIVIDEND

Based on company''s performance, the Board of Directors are pleased to recommend a dividend of ^ 10/- per share (100%) for the Financial Year 2023-24 for approval of the members. The dividend on equity shares, if approved by the members would involve a cash outflow of '' 1094.23 lakhs.

Pursuant to Finance Act, 2020, dividend income is taxable in the hands of the Shareholder with effect from 01 April 2020 and the Company is required to deduct tax at source from dividend paid to Shareholders at the prescribed rates. For the prescribed rates for various categories, Shareholders are requested to refer the Finance Act, 2020, relevant circulars and amendments thereof, if any.

Further in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Dividend Distribution Policy of the Company is available on the website of the Company at the link: https://kmchhospitals.com/wp-content/uploads/2021/06/KMCH-Dividend-Distribution-Policy-.pdf.

TRANSFER TO RESERVES

The Company does not propose to transfer any amount out of the profit to reserves.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, there was no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There was no material change and commitments affecting financial position of the Company which have occurred between the end of the financial year of the company to which the Financial Statements relate and date of the report.

BOARD MEETINGS

The Board of Directors met four times during this financial year. The disclosure on Board meetings and attendance of Directors are provided in the Corporate Governance Report.

AUDIT COMMITTEE

The composition of Audit Committee, number of meetings held and their attendance thereto have been provided under an identical head in the Corporate Governance Report.

CSR COMMITTEE

The composition of CSR Committee, number of meetings held and their attendance thereto have been provided under an identical head in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITIES

During the year under review in pursuance of the recommendations of the CSR Committee, the Company had commitment of '' 271.25 Lakhs being 2% of the last three years'' average net profit of the Company towards implementing the CSR activities. Annual Report on CSR as required under Section 135 read with schedule VII and other applicable provisions of the Companies Act, 2013 is appended as "Annexure - III" to this report.

INFORMATION ON STATUS OF COMPANY''S AFFAIRS

Information on operational and financial performance etc. is provided in the Management Discussion and Analysis Report, which is annexed to the Directors'' Report and has been prepared inter-alia in compliance with the terms of SEBI (LODR) Regulations, 2015.

SHARE CAPITAL

The paid up equity share capital of the Company as on March 31, 2024 aggregates to ^ 1,094.23 lakhs comprising of 1,09,42,262 equity shares of ^ 10/- each fully paid up. There is no change in the paid-up share capital of the Company during the Financial Year 2023-24.

CREDIT RATING

CARE Ratings Limited have re-affirmed your Company''s Long term bank facilities as ''CARE A '' (single A ) and short term bank facilities as ''CARE A1 '' (A One plus).

HOSPITAL ACCREDITATION

Your Hospital has been certified by National Accreditation Board for Hospitals and Healthcare providers (NABH) for the delivery of high standards for safety and quality care to the patients.

BOARD EVALUATION

Pursuant to the provisions of Companies Act, 2013 and SEBI (LODR) Regulations 2015, a structured questionnaire was administered after taking into consideration of various aspects to the Board functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance to ascertain the efficacy and functioning of Board and its members.

The performance evaluation of Independent Directors was completed. The Board of Directors have expressed their Satisfaction with the outcome of the evaluation process. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

The performance evaluation of the Chairman of the Board and Non-Independent Directors was carried out by the Independent Directors. The Independent Directors have expressed their satisfaction with the outcome of the evaluation process.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Pursuant to the requirement of SEBI (LODR) Regulations 2015, the Company has a familiarization programme for the Independent Directors with regard to their role, rights, responsibilities in the company, nature of the industry in which the Company operates, business model of the company etc. The Board members are provided with all the necessary documents / reports and internal policies to enable them to familiarize with the company''s procedures and practices and the same is uploaded on the Company''s website at https://www.kmchhospitals.com/Policy/FP ID.pdf.

DIRECTORS

Dr. Mohan S Gounder, Director retires by rotation and being eligible has offered himself for re-appointment.

INDEPENDENT DIRECTORS

All the Independent Directors have submitted their disclosures to the Board indicating that they comply with all the requirements that are stipulated in Section 149 (6) of the Companies Act, 2013 and Regulation 16 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 so as to qualify themselves to act as Independent Directors in the company. Further they have also declared that they are not aware of any circumstance or situation which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective and independent judgement and without any external influence.

All the Independent Directors of the Company have complied with the requirements of the provisions in relation to Independent Directors Databank as stated in the Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019 and the Companies (Appointment and Qualification of Directors) Rules, 2014 as amended from time to time.

Mr. M. Rathinasamy, retired Income Tax Commissioner was appointed as Independent Director of the Company with effect from 10^th January, 2024 through Postal Ballot on 5^th January, 2024 for a period of five (5) years.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that the Independent Directors of the Company met with the criteria of their Independence laid down in Section 149(6).

DIRECTORS RESPONSIBILITY STATEMENT

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors 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) 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 at the end of the financial year and of the profit and loss of the company for that period;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts on a going concern basis;

e) The Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

ANNUAL RETURN

Pursuant to Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available on the website of the Company on the following link: https://kmchhospitals.com/annualreturn/

COMPLIANCE OF CODE OF CONDUCT

Pursuant to SEBI (Prohibition of Insider Trading) (Amendment) Regulation 2018 dated 31^st December 2018, the Company amended the "Code of Conduct for Insider Trading" and "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information". Consequently, the Board of Directors brought in all the corresponding amendments to the above two mentioned Codes and necessary disclosures have been made in our website under: http://www.kmchhospitals.com/Policy/COC.pdf

INSURANCE

The Company''s properties, equipment''s and stocks are adequately insured against all major risks. The Company has also taken Directors'' and Officers'' Liability Policy to provide coverage against the liabilities arising on them.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions during the year under review.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel of the company as stipulated under the Companies Act, 2013 are Dr. Nalla G Palaniswami, Managing Director, Dr. Thavamani Devi Palaniswami, Joint Managing Director, Dr. Arun N Palaniswami, Executive Director, CA. P.K. Gopikrishnan, Chief Financial Officer and CS R.Ponmanikandan, Company Secretary.

APPOINTMENT AND REMUNERATION CRITERIA OF KEY MANAGERIAL PERSONNEL

The appointment of Key Managerial Personnel and remuneration paid to Managing Directors or Executive Directors is within the purview of the provisions of Section 196 and 197 of the Companies Act, 2013. The Company pays remuneration by way of salary, perquisites etc., to its Managing Directors and Executive Director in line with the approvals accorded by the General Meetings and in pursuance of the recommendation of the Nomination and Remuneration Committee as per the guiding principles laid down in the Nomination and Remuneration Policy. The Nomination and Remuneration Policy of the Company is available on the website of the Company at the link

https://kmchhospitals.com/wp-content/uploads/2016/pdf/Nomination Remuneration & Evaluation Policy.pdf PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the employees of the company will be provided upon request.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

The particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure stipulated under Section 134(3) (m) of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014, are as under:

Energy Conservation

Energy conservation involves reducing energy use to save resources and minimize environmental impact. This practice is crucial in the hospital industry due to the high energy demands of medical facilities, which operate 24/7 and require reliable energy for patient care, medical equipment, lighting, heating, and cooling. Key strategies for energy conservation in hospitals include:

1. Energy Management System: Our hospital monitors energy consumption through an Energy Management System. Areas with high electricity usage are closely observed, and alternative solutions are explored to optimize energy utilization.

2. Energy-Efficient Equipment: We deploy 5-star rated energy-saving equipment and use movement sensors in specific areas, ensuring lighting is automatically activated based on human presence.

3. Centralized A/C Plant and LED Lights: Operating a centralized A/C plant and using LED lights help in reducing energy consumption.

4. Solar Power Generation: Generating electric power through a solar power plant further supports our energy conservation efforts.

By implementing these energy conservation strategies, hospitals can significantly reduce energy consumption, lower operational costs, and contribute to a healthier environment.

Your company embraces the principle of "Sustainable Development," which means meeting present needs without compromising the ability of future generations to meet their own. In line with this concept, your company operates a 5.25 MW solar power generation plant and purchases wind-generated power, covering nearly 68% of the annual power requirement. This practice has enabled your company to save approximately 31% on the annual power bill. Additionally, the company has expanded its capacity by adding a further 5 MW solar power plant.

Caring for the Environment

Caring for the environment is essential for ensuring the health and well-being of our planet and future generations. It involves adopting practices that protect and preserve natural resources, reduce pollution, and promote sustainability.

Caring for the environment is a shared responsibility that requires collective action and commitment. By making

conscious choices and adopting sustainable practices, we can protect our planet and ensure a healthy, thriving environment for generations to come. Every effort counts, and together, we can make a significant difference.

Your company embraces the concept of Zero Discharge Technology, under which an effluent treatment plant has been established to treat sewage water for toxic effluents. The treated water is then utilized for horticulture within the premises, promoting sustainable water use.

In addition, a comprehensive waste management system has been implemented. Through this system, biodegradable food waste are decomposed, and biogas is produced for captive consumption in the hospital canteen. This initiative not only effectively manages waste but also results in reduced LPG costs, contributing to both environmental sustainability and cost savings.

All vehicles operated by the company adhere to stringent pollution control regulations. Regular maintenance initiatives are conducted to ensure vehicle efficiency, environmental care, and compliance with these regulations. This proactive approach helps in reducing emissions, improving fuel efficiency, and contributing to a cleaner environment.

Technology Absorption

Your company continues to invest in the latest technologies. In the year 2023-24, the company has installed Al-driven CORI Robotic Joint Replacement equipment and a 3D C-Arm, enhancing our capabilities and commitment to cutting-edge medical advancements.

This intraoperative device assists trauma and orthopaedic surgeons in enhancing and optimizing surgical outcomes in a safe environment, particularly for complex pelvic acetabular fractures and difficult fracture reconstruction surgeries. The 3D technology enables surgeons to plan and manage their surgical work with precision in advance, allowing them to visualize the outcome accurately before the surgery even begins. This advanced technology facilitates precise placement of screws and implants, maximizing success rates and avoiding metal work-related malposition.

Additionally, this platform allows for the real-time creation of a 3D model of the patient''s cardiac anatomy, enabling physicians to easily identify and treat areas of the heart where abnormal rhythms originate. KMCH is proud to be the first in Tamil Nadu to utilize this new cardiac mapping system, furthering our commitment to pioneering medical advancements.

Investment in equipment during the year 2023-24 amounts to '' 5239.02 Lakhs.

Foreign Exchange Earnings & Outgo

(i) Earnings in Foreign Currency

Foreign Currency amount realized from NRE bank accounts in respect of fee for education during the year ended March 31, 2024: '' 661.31 Lakhs (Previous Year: '' 588.06 Lakhs).

(ii) Expenditure in Foreign Currency

During the Financial Year 2023-24 there were no foreign currency expenditure. (Previous Year: '' 588.06 Lakhs)

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

As on March 31, 2024, the Company has neither provided nor there were any outstanding loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of Investments covered under the provisions of Section 186 of the Act are given in Note No.6 to the financial statements.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

KMCH has an Internal Control System, commensurate with the size, scale and complexity of its operations. Our Company has a proper and adequate system of internal controls. These controls ensure transactions are authorized, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition.

In addition, there are operational controls, covering the entire spectrum of internal financial controls.

The Audit committee defines the scope and authority of the Internal Auditor. The Audit Committee comprises of professionally qualified Directors, who interact with the statutory auditors, internal auditors and management in dealing with matters within its terms of reference. A detailed program of internal audits and management review, supplements the process of internal financial control framework.

Based on the report of internal auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions proposed to fix the observations are presented to the Audit Committee of the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has set up vigil mechanism for Directors and Employees to report their genuine concerns, the details of which are given in the Corporate Governance Report. During the Financial Year, no complaints or concerns were received by the Chairman of the Audit Committee under the Vigil Mechanism. Vigil Mechanism and Whistle Blower Policy is available in the Company''s website:

https://kmchhospitals.com/wp-content/uploads/2016/pdf/Whistle Blower Policy.pdf

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the work place (Prevention, Prohibition and Redressal) Act 2013. An Internal Complaint Committee has been set up to redress complaints received regarding sexual harassment. During the year 2023-24, no complaints were received by the Company related to sexual harassment.

RELATED PARTY TRANSACTIONS AND POLICY ON RELATED PARTY TRANSACTIONS

All transactions with Related Parties are at arm''s length and in the ordinary course of business duly approved by the Audit Committee of the Board. Hence there are no transactions which are either not in arm''s length or which are material in nature requiring disclosure in Form AOC - 2 is annexed herewith as "Annexure-II" forming part of the report.

The details of Related Party Transactions during FY 2023-24, including transaction with person or entity belonging to the promoter/ promoter group which hold(s) 10% or more shareholding in the Company are provided in the accompanying financial statements. (Refer Note No. 44).

The Board has formulated Policy on Related Party Transactions and the same is uploaded on the Company''s website at http://www.kmchhospitals.com/Policy/RPT Policy.pdf RISK MANAGEMENT

The steps taken by the Company to mitigate the risk are disclosed under an identical head in the Management Discussion and Analysis forming part of Directors'' Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status and the Company''s operations in future.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR

No applications have been made against the Company during the year under the review and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

The Company has not done any one time settlement with any Bank or Financial Institutions.

HUMAN RESOURCE DEVELOPMENT

Our company continues to prioritize the development of our human resources. By maintaining a strong focus on retention through employee engagement initiatives, we have helped our employees realize their full potential. Our learning and development programs offer various platforms, including classroom and online self-learning modules, to meet employees'' developmental needs and enhance their skills, knowledge, and capabilities.

The total strength of the employees of the Company as on 31^st March 2024 was 5286.

DEPOSITS

As per Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits), Rules 2014, the company has not accepted any deposits from the public or its members during the year. Hence, no deposit is outstanding as on 31.03.2024.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s KSR & Co. Company Secretaries LLP, Coimbatore, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the company for the Financial Year 2023-24. Secretarial Audit Report is annexed herewith as "Annexure - IV" forming part of the report.

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards notified under Section 118 of the Companies Act, 2013. COST AUDIT

In terms of Section 148 and other applicable provisions of the Companies Act 2013, read with Companies (Cost Records and Audit) Rules 2014, Mr.V.Sakthivel, Cost Accountant, M/s RKMS & Associates, Coimbatore was appointed as Cost Auditor of the company by the Board on recommendation of Audit Committee for the Financial Year 2024-25. The report of the cost auditors will be filed with ROC on due date.

STATUTORY AUDITORS

The members had at the 37^th Annual General Meeting held on 25^th August, 2023 approved the appointment of M/s VKS Aiyer & Co., Chartered Accountants (FRN: 000066S), Coimbatore for a period of five years from 2023-24 to 2027-28.

The Statutory Auditor has issued an unmodified opinion on the Financial Statements of the Company as of and for the year ended 31^st March, 2024. Their report on the Companies (Auditor''s Report) Order, 2020 ("CARO"), issued by the Central Government of India in terms of section 143(11) of the Act, details one qualifications regarding the following:

1. Non-Registration of Lease Agreeements

Management Response : All Lease Agreements with more than 11 months'' tenor, require registration with Department of Revenue, Ministry of Commercial Taxes and Registration, Government of Tamil Nadu. The Company is in the process of registering the Lease Agreements.

LISTING WITH STOCK EXCHANGE

The equity shares of the Company are listed on BSE Limited and listing fees were paid upto date.

CORPORATE GOVERNANCE

Your Company continues to comply with the provisions of Corporate Governance as stipulated in Chapter IV and other relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance along with Practicing Company Secretary''s certificate on compliance of the Corporate Governance norms as stipulated in Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Management Discussion & Analysis forming part of this report are provided elsewhere in this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

A Business Responsibility And Sustainability Report describing the initiatives taken by the Company from an environmental, social and governance perspective, as required in terms of the provisions of Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 annexed separately forms part of this Annual Report.

ACKNOWLEDGEMENTS

The Board also wishes to acknowledge the dediction and commitment of its consultants and employees at all levels and express gratitude for thier ongoing contribution to the Company''s growth and progress.

For and on behalf of the Board

Sd/- Sd/-

DR. NALLA G PALANISWAMI CA.A.M.PALANISAMY

Place: Coimbatore

MANAGING DIRECTOR DIRECTOR

Date : 29.05.2024

DIN:00013536 DIN: 00112303

Mar 31, 2023

The Directors take pleasure in presenting the Thirty Seventh Annual Report along with the audited financial statements for the year ended 31^st March, 2023.

FINANCIAL HIGHLIGHTS

(Rs. in Lakhs)
Particulars	2022-23	2021-22
Revenue from Operations	101,974.68	90,532.67
Other Income	1,598.77	1,249.53
Total Income	103,573.45	91,782.20
Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA)	28,450.10	26,933.66
Profit Before Taxation (PBT)	15,521.99	14,067.83
Provision for Taxation	3,945.38	3,641.77
Profit After Taxation (PAT)	11,576.61	10,426.06
Add: Other Comprehensive Income	53.48	(166.75)
Total Comprehensive Income for the year	11,630.09	10,259.31

RESULTS OF OPERATIONS

The Revenue from Operations for the financial year 2022-23 was '' 101,974.68 Lakhs registering an increase of 12.64% over the previous year income of '' 90,532.67 Lakhs. Earnings before interest, tax, depreciation and amortization (EBITDA) were '' 28,450.10 Lakhs over the previous year EBITDA of '' 26,933.66 Lakhs. Profit after tax (PAT) for the year was '' 11,576.61 Lakhs over the PAT of '' 10,426.06 Lakhs in year 2021-22.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The Company does not have any Subsidiary Company, Joint Venture or Associate Companies as defined in the Companies Act, 2013.

DIVIDEND

Based on company''s performance, the Board of Directors are pleased to recommend a dividend of '' 10/- per share (100%) - (Final Dividend '' 5/- per share and Special Dividend '' 5/- per share) for the Financial Year 2022-23 for approval of the members. The dividend on equity shares, if approved by the members would involve a cash outflow of '' 1,094.23 Lakhs.

Pursuant to Finance Act, 2020, dividend income is taxable in the hands of the Shareholder with effect from 1^st April, 2020 and the Company is required to deduct tax at source from dividend paid to Shareholders at the prescribed rates. For the prescribed rates for various categories, Shareholders are requested to refer the Finance Act, 2020, relevant circulars and amendments thereof, if any.

TRANSFER TO RESERVES

The Company does not propose to transfer any amount out of the profit to reserves.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, there were no changes in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting financial position of the Company which have occurred between the end of the financial year of the company to which the Financial Statements relate and date of the report.

BOARD MEETINGS

The Board of Directors met four times during this financial year. The disclosure on Board meetings and attendance of Directors are provided in the Corporate Governance Report.

AUDIT COMMITTEE

The composition of Audit Committee, number of meetings held and their attendance thereto have been provided under an identical head in the Corporate Governance Report.

CSR COMMITTEE

The composition of CSR Committee, number of meetings held and their attendance thereto have been provided under an identical head in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITIES

During the year under review in pursuance of the recommendations of the CSR Committee, the Company had commitment of '' 243.72 Lakhs being 2% of the last three years'' average net profit of the Company towards implementing the CSR activities. Annual Report on CSR as required under Section 135 read with schedule VII and other applicable provisions of the Companies Act, 2013 is appended as "Annexure - III" to this report.

INFORMATION ON STATUS OF COMPANY''S AFFAIRS

SHARE CAPITAL

The paid up equity share capital of the Company as on March 31, 2023 aggregates to ^ 1,094.23 lakhs comprising of 1,09,42,262 equity shares of ^ 10/- each fully paid up. There is no change in the paid-up share capital of the Company during the Financial Year 2022-23.

CREDIT RATING

CARE Ratings Limited have re-affirmed your Company''s Long term bank facilities as ''CARE A '' (single A ) and short term bank facilities as ''CARE A1 '' (A One plus).

HOSPITAL ACCREDITATION

Your Hospital has been certified by National Accreditation Board for Hospitals and Healthcare providers (NABH) for the delivery of high standards for safety and quality care to the patients.

BOARD EVALUATION

The performance evaluation of Independent Directors was completed. The Board of Directors have expressed their satisfaction with the outcome of the evaluation process. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

DIRECTORS

As per Article 103(b) of the Articles of Association and Section 152(6) of the Companies Act, 2013, except Dr. Nalla G Palaniswami and Dr. Thavamani Devi Palaniswami, all other Executive and Non-Executive Non-Independent Directors are subject to retirement by rotation. Accordingly, Dr. Arun N Palaniswami, Director retires by rotation and being eligible has offered himself for re-appointment.

The Independent Directors have submitted their disclosures to the Board indicating that they comply with all the requirements that are stipulated in Section 149 (6) of the Companies Act, 2013 and Regulation 16 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 so as to qualify themselves to act as Independent Directors in the company. Further they have also declared that they are not aware of any circumstance or situation which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective and independent judgement and without any external influence.

The Independent Directors of the Company have complied with the requirements of the provisions in relation to Independent Directors Databank as stated in the Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019 and the Companies (Appointment and Qualification of Directors) Rules, 2014 as amended from time to time.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

DIRECTORS RESPONSIBILITY STATEMENT

In pursuance of section 134 (5) of the Companies Act, 2013, the 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;

d) The Directors had prepared the annual accounts on a going concern basis and

e) The Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ANNUAL RETURN

COMPLIANCE OF CODE OF CONDUCT

INSURANCE

The Company''s properties, equipment and stocks are adequately insured against all major risks. The Company has also taken Directors'' and Officers'' Liability Policy to provide coverage against the liabilities arising on them.

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions during the year under review.

KEY MANAGERIAL PERSONNEL

CA M.K.Ravindra Kumar, Chief Financial Officer resigned from the services of the Company with effect from 03/10/2022 and CA P.K.Gopikrishnan joined the Company as Chief Financial Officer with effect from 11/11/2022.

CS S.P.Chitti Babu, Company Secretary resigned from the services of the Company with effect from 21/11/2022 and CS R.Ponmanikandan joined the Company as Company Secretary with effect from 22/11/2022.

APPOINTMENT AND REMUNERATION CRITERIA OF KEY MANAGERIAL PERSONNEL

https://kmchhospitals.com/wpcontent/uploads/2016/pdf/Nomination Remuneration & Evaluation Policy.pdf PARTICULARS OF EMPLOYEES

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

The particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure stipulated under Section 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014, are as under:

Energy Conservation

Energy conservation means the efforts made to reduce the consumption of energy by using less of an energy service. Your Company constantly and continuously applies all efforts for optimum utilization of the resources.

Energy consumption is monitored through Energy Management System. Through this system, areas which consume high volume of electricity are monitored and alternate steps are being constantly taken to optimize energy utilization.

Other energy conservation techniques that are employed include using equipment with 5 star ratings, use of movement sensors in bathrooms of the patient rooms (i.e., the lights are operated based upon human movement), operating a centralized A/c plant and phasing out tube lights with LED lights.

Your Company adopts the concept of ''Sustainable Development'' i.e. meeting the needs of the present without compromising the ability of future generations to meet their own needs. By following this concept, your Company has been operating a 5.25 MW Solar Power Generation Plant and Wind Mills which caters to 75% of electricity requirement per annum and through which the Company has been saving 40% on its electricity bills.

Caring for the Environment

Your Company adopts the concept of zero discharge technology, under which an effluent treatment plant had been set up and the sewage water is treated for toxic effluents. The treated water is used for horticulture within the premises. A comprehensive waste management system has been implemented and through this, bio-degradable food wastes are decomposed and biogas is produced for captive consumption in the hospital canteen which in turn results in reduced LPG cost.

All the vehicles that are operated for the company adhere to pollution control regulations. Periodic maintenance activities are undertaken to comply with prescribed regulations and vehicle efficiency.

Technology Absorption

Your company has continued to invest in new technologies. During the year 2022-23, the Company introduced advanced functional MR brain imaging study (Clinical fMRI neuroimaging services).

Functional MRI (fMRI) has special significance when a tumor is removed or surgical treatment for epilepsy is offered. Neuro navigation system allowing extremely precise surgery where the pathology is treated without any vital area being touched. Standard imaging like MRI and CT cannot accurately pickup these areas and thus a surgery can leave a patient paralyzed if an important area is injured.

To overcome this problem, advanced computers can be incorporated into a regular MRI system where these vital areas can be clearly demarcated when we stimulate that part of the body during an MRI scan.

Investment in medical equipment during the year 2022-23 amounts to '' 1,957.41 Lakhs

Foreign Exchange Earnings & Outgo

(i) Earnings in Foreign Currency

Foreign Currency amount realized from NRE bank accounts in respect of fee for education during the year ended March 31, 2023: '' 588.06 Lakhs (Previous Year: 459.00 Lakhs)

(ii) Expenditure in Foreign Currency

Expenditure in foreign currency during the year ended March 31, 2023 was '' 65.29 Lakhs (Previous Year: 69.86Lakhs).

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT 2013

As on March 31, 2023, the Company has neither provided nor there were any outstanding loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of Investments covered under the provisions of Section 186 of the Act are given in Note No.6 to the financial statements.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

KMCH has an Internal Control System, commensurate with the size, scale and complexity of its operations. Your Company has a proper and adequate system of internal controls. These controls ensure transactions are authorized, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition.

In addition, there are operational controls, covering the entire spectrum of internal financial controls.

To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board. The internal auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions proposed to fix the observations are presented to the Audit Committee of the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Vigil Mechanism and Whistle Blower Policy is available in the Company''s website:

https://kmchhospitals.com/wp-content/uploads/2016/pdf/Whistle Blower Policy.pdf

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the work place (Prevention, Prohibition and Redressal) Act 2013. An Internal Complaint Committee has been set up to redress complaints received regarding sexual harassment. During the year 2022-23, no complaints were received by the Company related to sexual harassment.

RELATED PARTY TRANSACTIONS AND POLICY ON RELATED PARTY TRANSACTIONS

The details of related party transactions during financial year 2022-23, including transactions with person or entity belonging to the Promoter/Promoter Group which holds 10% or more shareholding in the Company are provided in the accompanying financial statements.

The Board has formulated Policy on Related Party Transactions and the same is uploaded on the Company''s website at http://www.kmchhospitals.com/Policy/RPT Policy.pdf

RISK MANAGEMENT

The steps taken by the Company to mitigate the risk are disclosed under an identical head in the Management Discussion and Analysis forming part of Directors'' Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status and the Company''s operations in future.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR

No applications have been made against the Company during the year under review and no proceeding are pending against the Company under the Insolvency and Bankruptcy Code, 2016. The Company has not done any one time settlement with any Bank or Financial Institutions.

HUMAN RESOURCE DEVELOPMENT

Your Company continues to place great importance to the development of human resources segment and the sustained focus on retention through employee engagement initiatives has made the employees realize their potential. Learning and Development has provided various learning platforms which include classroom and online self - learning modules to meet the development need of employees to help build their skills, knowledge and capability.

The total strength of the employees of the Company as on 31^st March, 2023 was 5399.

DEPOSITS

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s KSR & Co. Company Secretaries LLP, Coimbatore, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the company for the Financial Year 2022-23. Secretarial Audit Report is annexed herewith as "Annexure - IV" forming part of the report.

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards notified under Section 118 of the Companies Act, 2013. COST AUDIT

In terms of Section 148 and other applicable provisions of the Companies Act 2013, read with Companies (Cost Records and Audit) Rules 2014, Mr.V.Sakthivel, Cost Accountant, M/s RKMS & Associates, Coimbatore was appointed as Cost Auditor of the company by the Board on recommendation of Audit Committee for the Financial Year 2022-23. The report of the cost auditors will be filed with ROC on due date.

The Statutory Auditor has issued an unmodified opinion on the Financial Statements of the Company as of and for the year ended 31^st March 2023. Their report on the Companies (Auditor''s Report) Order, 2020 ("CARO"), issued by the Central Government of India in terms of section 143(11) of the Act, details one qualifications regarding the following:

a) Non-Registration of Lease Agreements

Under Section 139(2) of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of two terms of five consecutive years and each such term would require approval of the shareholders. In line with the requirements of the Companies Act, 2013, Statutory Auditor M/s VKS Aiyer & Co., Chartered Accountants (FRN: 000066S) were appointed as Statutory Auditor of the Company at the 32^nd Annual General Meeting to hold office from the conclusion of the said meeting till the conclusion of the 37^th Annual General Meeting to be held in the year 2023. The term of office of M/s VKS Aiyer & Co., as Statutory Auditors of the Company will conclude from the close of the forthcoming AGM of the Company.

The Board of Directors of the Company, based on the recommendation of the Audit Committee, at its meeting held on May 29, 2023, proposed to reappoint M/s. VKS Aiyer & Co., Chartered Accountants (FRN: 000066S) as the Statutory Auditor of the Company to hold office for a second term of five consecutive years from Financial year 2023-24 to 2027-28 and to hold office from the conclusion of the 37^th Annual General Meeting till the conclusion of the 42^nd Annual General Meeting subject to the approval of the shareholders.

Accordingly a suitable resolution is moved in the notice convening the 37^th Annual General Meeting to be held on August 25, 2023.

LISTING WITH STOCK EXCHANGE

The equity shares of the Company are listed on BSE Limited and listing fees were paid upto date.

CORPORATE GOVERNANCE

Your Company has been complying with the provisions of Corporate Governance as stipulated in Chapter IV and other relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance along with Practicing Company Secretary''s certificate on compliance of the Corporate Governance norms as stipulated in Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Management Discussion & Analysis forming part of this report are provided elsewhere in this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

ACKNOWLEDGEMENTS

The Board expresses its grateful appreciation for the continued support and co-operation received from Government Authorities, Financial Institutions, Banks, Customers, Suppliers and investors.

The Board also places on record its appreciation for the dedication and commitment extended by its consultants and employees at all levels and their contribution to the growth and progress of the Company.

Mar 31, 2018

Dear Members,

The Directors take pleasure in presenting the Thirty Second Annual Report along with the audited financial statements for the year ended 31st March 2018.

FINANCIAL HIGHLIGHTS (STANDALONE) Rs. Lakhs

Particulars	2017-18	2016-17
Operating Income	59,236.63	53,107.33
Othe r Income	763.44	617.68
Total Income	60,000.07	53,725.01
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)	13,644.14	13,086.91
Profit Before Taxation (PBT)	8,941.90	9,233.61
Less: Provision for Taxation	3,144.16	3,236.26
Profit After Taxation	5,797.74	5,997.35
Add: Other Comprehensive Income	(3.48)	(22.56)
Total Comprehensive Income for the year	5,794.26	5,974.79

RESULTS OF OPERATIONS STANDALONE

The income from operations for the financial year 2017-18 was Rs. 59,236.63 Lakhs registering a growth of 11.54% over the previous year income of Rs. 53,107.33 Lakhs. Earnings before interest, tax, depreciation and amortization (EBITDA) were Rs.13,644.14 Lakhs registering a growth of 4.26% over the previous year EBITdA of Rs.13,086.91 Lakhs.

Profit after tax (PAT) for the year was Rs. 5,797.74 Lakhs over the PAT of Rs. 5,997.35 Lakhs in year 2016-17. Reduction in PAT is due to enhanced Depreciation and Amortisation (consequent to re-assessment of useful life of Property, Plant & Equipment) amounting to Rs. 703.91 Lakhs.

SUBSIDIARY COMPANY

Idhayam Hospitals Erode Limited is a wholly owned subsidiary of KMCH Limited. Total Income for the Financial Year 2017-18 was Rs. 35.67 Lakhs an increase of 5.04% over the previous year Total income of Rs. 33.96 Lakhs.

A statement of salient features of financials of Idhayam Hospitals Erode Limited pursuant to Section 129(3) of the Companies Act 2013 in Form AOC 1 is annexed as âAnnexure - Iâ and forming part of the report.

Except the above, the Company has no other Subsidiary, Associate or Joint Venture company. Idhayam Hospitals Erode Limited is not a material subsidiary. The Board of Directors have formulated a policy for determining âmaterialâ subsidiaries pursuant to the provisions of the Listing regulations. The same is displayed on the website of the company (http://kmchhospitals.com/wp-content/uploads/2016/pdf/Policy_on_subsidiaries.pdf).

CONSOLIDATED FINANCIAL STATEMENTS

On consolidated basis, income from operations from current year under review was Rs. 59,236.63 Lakhs, higher by 11.54 % over year 2016-17 income of Rs. 53,107.33 Lakhs.

Profit after tax (PAT) for the year was Rs. 5,797.97 Lakhs over the PAT of Rs. 6,006.35 Lakhs in year 2016-17.

MERGER

The Board at its meeting held on 03rd February 2017 approved the scheme of amalgamation of Idhayam Hospitals Erode Limited (Wholly Owned Subsidiary) with Kovai Medical Center and Hospital Limited effective 1st April 2016.

Pursuant to an Order dated 21st November, 2017 passed by the National Company Law Tribunal, Chennai Bench, separate meetings of Unsecured Creditors and Equity Shareholders of Kovai Medical Center and Hospital Limited was convened and held at the Registered Office of the Company, on 04th January, 2018, approving with or without modification(s), the proposed Scheme of Amalgamation and Arrangement between Idhayam Hospitals Erode Limited and Kovai Medical Center and Hospital Limited under Sections 230 to 232 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013.

The secured creditors of the Company had provides their no objection to the scheme of amalgamation.

Statutory Clearances from Regional Director, Company Law Board, Department of Income Tax, Government of India are awaited before the Tribunal hears and disposes the Company Petitions confirming the Scheme of Amalgamation.

DIVIDEND

Based on the Companyâs performance, the Directors are pleased to recommend for approval of the members a dividend of Rs. 3.00 per share (30%) for the year 2017-18.

The dividend on equity shares, if approved by the members would involve the cash outflow of Rs. 395.74 Lakhs including dividend distribution tax.

TRANSFER TO RESERVES

The company does not propose to transfer any amount out of the profit to reserves.

BOARD MEETINGS

The Board of Directors met four times during this financial year. The disclosure on Board meetings and attendance of Directors are provided in the Corporate Governance Report.

AUDIT COMMITTEE

The composition of Audit Committee, number of meetings held and the attendance of Directors there to have been provided under an identical head in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITIES

During the year in pursuance of the recommendations of the CSR Committee the company had contributed Rs.142.42 Lakhs being 2% of the average net profit of the company towards implementing the CSR activities. Annual Report on CSR as required under Section 135 read with schedule VII and other applicable provisions of the Companies Act, 2013 is appended as âAnnexure - IIâ.

INFORMATION ON STATUS OF COMPANYâS AFFAIRS

Information on operational and financial performance etc., is provided in the Management Discussion and Analysis Report, which is annexed to the Directorsâ Report and has been prepared inter-alia in compliance with the terms of SEBI (LODR) Regulations, 2015.

SHARE CAPITAL

The paid up equity share capital of the Company as on March 31, 2018 aggregates to Rs.10,94,22,620/- comprising of 10942262 equity shares of Rs. 10/- each fully paid up.

CREDIT RATING

CARE has affirmed your companyâs Long term bank facilities âCARE A â (single A plus) and short term bank facilities to âCARE A1 â (A One plus) from âCARE A1â ( A One).

HOSPITAL ACCREDITATION

Your Hospital has been certified by National Accreditation Board for Hospitals and Health care providers (NABH) for the delivery of high standards for safety and quality care to the patients.

DIRECTORS RESPONSIBILITY STATEMENT

In pursuance of section 134 (5) of the Companies Act, 2013, the 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) The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The Directors had prepared the annual accounts on a going concern basis; and

(e) The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

BOARD EVALUATION

The performance evaluation of Independent Directors was completed. The Board of Directors have expressed their satisfaction with the outcome of the evaluation process.

The performance evaluation of the Chairman of the Board and Non-independent Directors was carried out by the Independent Directors. The Independent Directors have expressed their satisfaction with the outcome of the evaluation process.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Pursuant to requirement of SEBI (LODR) Regulations 2015, the company has a familiarization programme for the Independent Directors with regard to their role, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company etc. The Board members are provided with all the necessary documents / reports and internal policies to enable them to familiarize with the companyâs procedures and practices and the same is uploaded on the Companyâs website at www.kmchhospitals.com/Familiarization _Programme_for_Independent_Directors.pdf

DIRECTORS

As per Article103(b) of the Articles of Association and Section 152(6) of the Companies Act, 2013, except Dr. Nalla G Palaniswami and Dr. Thavamani Devi Palaniswami, all other Executive and Non-Executive Non-Independent Directors are subject to retirement by rotation. Accordingly, Dr. M.C.Thirumoorthi, Director retires by rotation and being eligible has offered himself for re-appointment.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from each Independent Director of the Company under Section149 (7) of the Companies Act, 2013 that the Independent Directors of the Company met with the criteria of their Independence laid down in Section 149(6).

COMPLIANCE OF CODE OF CONDUCT

The compliance of code of conduct by Directors have been affirmed by the Managing Director and is disclosed in the Corporate Governance Report.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel of the company as stipulated under the Companies Act 2013 are Dr. Nalla G Palaniswami, Managing Director, Dr.Thavamani Devi Palaniswami, Joint Managing Director, Dr. Mohan S Gounder, Joint Managing Director, Dr. Arun N Palaniswami, Whole Time Director, CA M.K.Ravindra Kumar, Chief Financial Officer and CS S.P.Chittibabu, Company Secretary.

CA P.K.Gopikrishnan, Chief Financial Officer resigned from the services of the Company on 31st May 2017 after 12 years of service. The Board of Directors express their gratitude for the services during his tenure. CA M.K.Ravindra Kumar joined the Company as Chief Financial Officer with effect from 01st June 2017.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

The particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure stipulated under Section 134(3)(m) of the Companies Act 2013 read witht he Companies (Accounts) Rule, 2014, are annexed here with asâAnnexure-IIIâand forms part of this Report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, there were no changes in the nature of business of the company or any of its subsidiary.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting financial position of the company which have occurred between the end of the financial year of the company to which the Financial Statements relate and date of the report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT 2013

As on March 31, 2018, the Company has neither provided nor there any outstanding loans or guarantees covered under the provisions of Section 186 of the Act. The details of Investments covered under the provisions of Section 186 of the Act are given in Note No.5 to the financial statements.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The company has set up vigil mechanism for Directors and Employees to report their genuine concerns, the details of which are given in the Corporate Governance Report. The policy on Vigil Mechanism and Whistle Blower Policy have been posted on the website of the Company (http://kmchhospitals.com/wp-content/uploads/2016/pdf/Whistle_Blower_Policy.pdf).

RELATED PARTY TRANSACTIONS AND POLICY ON RELATED PARTY TRANSACTIONS

All transactions with Related Parties are at armâs length and in the ordinary course of business duly approved by the Audit Committee of the Board. Hence there are no transactions which are either not in armâs length or which are material in nature requiring disclosure in Form AOC - 2. Hence Form AOC-2 is not annexed to this report.

The Board has formulated Policy on Related Party Transactions and the same is uploaded on the Companyâs website at http://www.kmchhospitals.com/pdf/PolicyRelated Party Transaction.pdf.

RISK MANAGEMENT

The steps taken by the company to mitigate the risk are disclosed under an identical head in the Management Discussion and Analysis forming part of Directorsâ Report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in MGT 9 is annexed herewith as âAnnexure - IVâ and forming part of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status and the companyâs operations in future.

HUMAN RESOURCE DEVELOPMENT

Learning and Development has provided various learning platforms which include classroom and online self - learning modules to meet the development need of employees to help build their skills, knowledge and capability.

The total strength of the employees of the Company as on 31st March 2018 was 4051 Nos.

INDUSTRIAL RELATIONS

The industrial relations scenario continued to be cordial during the year under review.

PARTICULARS OF REMUNERATION PAID TO KEY MANAGERIAL PERSONNEL

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the remuneration of Directors, Key Managerial Personnel and employees are enclosed as âAnnexure - Vâ forming part of the report.

The Nomination and Remuneration Policy of the company has been disclosed on the website of the company and the web link thereon is http://www.kmchhospitals.com/pdf /Nomination.Remuneration Evaluation policy.pdf.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the work place (Prevention, Prohibition and Redressal) Act 2013. An Internal Complaint Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under the policy.

During the year 2017-18, no complaints were received by the company related to sexual harassment.

DEPOSITS

As per Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits), Rules 2014, the company has not accepted any deposits from the public during the year.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the company has appointed M/s KSR & Co. Company Secretaries LLP, Coimbatore, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the company for the Financial Year 2017-18. Secretarial Audit Report is annexed herewith as âAnnexure -VIâ forming part of the report.

COST AUDIT

In terms of Section 148 and other applicable provisions of the Companies Act 2013, read with Companies (Cost Records and Audit) Rules 2014, Mr.V.Sakthivel, Cost Accountant, M/s RKMS & Associates, Tirupur was appointed as Cost Auditor of the company by the Board on recommendation of Audit Committee for the Financial Year 2018-19. The remuneration of the Cost Auditor is subject to ratification by the members at the ensuing Annual General Meeting.

STATUTORY AUDITORS

M/s. Haribhakti & Co. LLP, Chartered Accountants, (FRN.: 103523W/W100048) were appointed as Statutory Auditors of the Company for five consecutive years at the Annual General Meeting held on 25th September 2015 and the term enures up to the completion of the Audit of the Financial Year 2019-20. However in the context of certain proposed internal restructuring in the Audit Firm, the Company has opted for an early rotation. This was discussed with the Audit Firm and in order to facilitate smooth transition from financial year 2018-19, they have chosen to resign from the position of Statutory Auditors of the Company upon the completion of the audit for the financial year 2017-18 and have conveyed their No-Objection to the Company appointing another Statutory Auditor for the financial year 2018-19 vide their letter dated 11th June 2018.

As per the provisions of Section 139(8) of the Companies Act, 2013, casual vacancy caused by the resignation of auditors can be filled by the Board within 30 days of vacancy and is required to be approved by the Company in general meeting within three months thereof. Hence the Board of Directors at their meeting held on 23rd June 2018 appointed M/s.VKS Aiyer & Co., Chartered Accountants (FRN: 000066S), Coimbatore to fill the casual vacancy and that they will hold office until this Annual General Meeting. The Board proposes that M/s.VKS Aiyer & Co., Chartered Accountants, (FRN: 000066S), may be appointed as the Statutory Auditors of the Company for a period of 5 years in terms of Section 139(1) of the Companies Act, 2013.

M/s. VKS Aiyer & Co., Chartered Accountants, (FRN: 000066S), have conveyed their consent to be appointed as the Statutory Auditors of the Company along with a confirmation that, their appointment, if made by the members, would be within the limits prescribed under the Companies Act, 2013.

Your Board recommends the appointment of M/s VKS Aiyer & Co., Chartered Accountants, (FRN: 000066S) as Statutory Auditors of the Company, to hold office from the conclusion of this Annual General Meeting to the conclusion of the sixth consecutive Annual General Meeting to be held in the year 2023.

LISTING WITH STOCK EXCHANGE

The equity shares of the Company are listed on the Bombay Stock Exchange Limited.

CORPORATE GOVERNANCE

Your Company has been complying with the provisions of Corporate Governance as stipulated in Chapter IV and other relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance along with Practising Company Secretaryâs certificate on compliance of the Corporate Governance norms as stipulated in Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Management Discussion & Analysis forming part of this report are provided elsewhere in this Annual Report.

ACKNOWLEDGEMENTS

The Board expresses its grateful appreciation for the continued assistance and co-operation received from Government Authorities, Financial Institutions, Banks, Customers, Suppliers and investors.

For and on behalf of the Board

Sd/- Sd/-

Place: Coimbatore DR. NALLA G PALANISWAMI CA.A.M.PALANISAMY

Date : 23.06.2018 MANAGING DIRECTOR DIRECTOR

Mar 31, 2017

Dear Members,

The Directors take pleasure in presenting the Thirty First Annual Report along with the audited financial statements for the year ended 31.03.2017.

FINANCIAL HIGHLIGHTS (STANDALONE) (Rs. in lakhs)

	2016-17	2015-16
Operating Income	52562.15	46,529.81
Other Income	783.49	774.67
Total Income	53,345.64	47,304.48
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)	13,039.94	9,945.85
Profit Before Taxation (PBT)	9,203.73	6,215.90
Provision for Taxation	3,225.30	2,172.55
Profit After Taxation (PAT)	5,978.43	4,043.35
Balance of Profit brought forward	12,215.64	8,801.53
Profit available for appropriations	18,194.07	12,844.88
Appropriations
Interim Dividend	-	109.42
Proposed Dividend - Final	-	164.13
Tax on Dividend	-	55.69
Transfer to General Reserve	-	300.00
Balance carried forward to Balance Sheet	18,194.07	12,215.64

RESULTS OF OPERATIONS STANDALONE

The income from operations for the financial year 2016-17 was Rs. 52,562.15 lakhs registering a growth of 12.96% over the previous year income of Rs. 46,529.81 Lakhs. Earnings before interest, tax, depreciation and amortization (EBITDA) were Rs. 13,039.94 lakhs registering a growth of 31.11% over the previous year EBITDA of Rs. 9945.85 Lakhs.

Profit after tax (PAT) for the year was Rs. 5,978.43 lakhs recording a growth of 47.86% over the PAT of Rs. 4043.35 Lakhs in year 2015-16.

SUBSIDIARY COMPANY

Idhayam Hospitals Erode Limited had become a wholly owned subsidiary of KMCH with effect from 23.04.2007.

A statement of salient features of financials of Idhayam Hospitals Erode Limited pursuant to Section129(3) of the Companies Act 2013 in Form AOC 1 is annexed as "Annexure - I" and forming part of the report.

During the financial year ended 31.03.2017, no Subsidiary, Associate or Joint Venture were added. The Board of Directors have formulated a policy for determining ''material'' subsidiaries pursuant to the provisions of the Listing regulations. The same is displayed on the website of the company.

CONSOLIDATED FINANCIAL STATEMENTS

On consolidated basis, income from operations from current year under review was Rs. 52,562.15 Lakhs, higher by 12.96 % over year 2015-16 income of Rs. 46,529.81Lakhs.

Profit after tax (PAT) for the year was Rs. 5,987.42 Lakhs recording a growth of 47.41 % over the PAT of Rs. 4061.74 Lakhs in year 2015-16.

MERGER

The Board at its meeting held on 03.02.2017 approved the scheme of amalgamation of Idhayam Hospitals Erode Limited (Wholly Owned Subsidiary) with Kovai Medical Center and Hospital Limited effective 1st April 2016. The company has filed application seeking the direction of the National Company Law Tribunal inter alia for holding meeting of shareholders for their approval to the scheme of amalgamation. The Company has already obtained no objections to the scheme from its secured creditors.

The Company had filed the scheme with Bombay Stock Exchange Limited as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DIVIDEND

Based on the Company''s performance, the Directors are pleased to recommend for approval of the members a dividend of Rs. 2.50 per share (25 %) for the year 2016-17.

The dividend on equity shares, if approved by the members would involve the cash outflow of Rs. 329.24 Lakhs including dividend distribution tax.

TRANSFER TO RESERVES

The company does not propose to transfer any amount out of the profit to reserves.

BOARD MEETINGS

The Board of Directors met five times during this financial year. The disclosure on Board meetings and attendance of Directors are provided in the Corporate Governance Report.

AUDIT COMMITTEE

The composition of Audit Committee, number of meetings held and the attendance of Directors there to have been provided under an identical head in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITIES

During the year in pursuance of the recommendations of the CSR Committee the company had contributed Rs. 105.94 Lakhs being 2% of the average net profit of the company towards implementing the CSR activities. Annual Report on CSR as required under Section 135 read with schedule VII and other applicable provisions of the Companies Act, 2013 is appended as â Annexure - II â .

INFORMATION ON STATUS OF COMPANY''S AFFAIRS

Information on operational and financial performance etc., is provided in the Management Discussion and Analysis Report, which is annexed to the Directors'' Report and has been prepared inter-alia in compliance with the terms of SEBI (LODR) Regulations, 2015.

SHARE CAPITAL

The paid up equity share capital of the Company as on March 31, 2017 aggregates to Rs. 10,94,22,620/comprising of 10942262 equity shares of Rs. 10/- each fully paid up.

CREDIT RATING

CARE has upgraded your company''s Long term bank facilities to ''CARE A '' (single A ) from ''CARE A'' and short term bank facilities affirmed ''CARE A1'' ( A One).

HOSPITAL ACCREDITATION

Your Hospital has been certified by National Accreditation Board for Hospitals and Health care providers (NABH) for the delivery of high standards for safety and quality care to the patients.

DIRECTORS RESPONSIBILITY STATEMENT

In pursuance of section 134 (5) of the Companies Act, 2013, the 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) 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 at the end of the financial year and of the profit and loss of the company for that period;

(d) The Directors had prepared the annual accounts on a going concern basis; and

(e) The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

BOARD EVALUATION

The performance evaluation of Independent Directors was completed. The performance evaluation of the Chairman of the Board and Non-independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the outcome of the evaluation process.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Pursuant to requirement of SEBI (LODR) Regulations 2015, the company has a familiarization programme for the Independent Directors with regard to their role, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company etc. The Board members are provided with all the necessary documents / reports and internal policies to enable them to familiarize with the company''s procedures and practices and the same is uploaded on the Company''s website at www.kmchhospitals.com/Familiarization_Programme_for_Independent_Directors.pdf.

DIRECTORS

As per Article 103(b) of the Articles of Association and Section 152(6) of the Companies Act, 2013, except Dr.Nalla G Palaniswami and Dr.Thavamani Devi Palaniswami, all other Executive and Non-Executive NonIndependent Directors are subject to retirement by rotation. Accordingly, Dr.Purani P Palaniswami, Director retires by rotation and being eligible has offered herself for re-appointment.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

COMPLIANCE OF CODE OF CONDUCT

The compliance of code of conduct by Directors have been affirmed by the Managing Director and is disclosed under point no.19 of Corporate Governance Report.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel of the company as stipulated under the Companies Act 2013 are Dr.Nalla G Palaniswami, Managing Director, Dr.Thavamani Devi Palaniswami, Joint Managing Director, Dr.Mohan S Gounder, Joint Managing Director, Dr. Arun N Palaniswami, Whole Time Director, CA P.K.Gopikrishnan, Chief Financial Officer and CS S.P.Chittibabu, Company Secretary.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

The particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure stipulated under Section 134(3)(m) of the Companies Act 2013 read with the Companies(Accounts) Rule, 2014, are annexed herewith as "Annexure - IIIâ and forms part of this Report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, there were no changes in the nature of business of the company or any of its subsidiary.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

As on March 31, 2017, there were no outstanding loans or guarantees covered under the provisions of Section 186 of the Act. The details of Investments covered under the provisions of Section 186 of the Act are given in Note No.13 to the financial statements.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

RELATED PARTY TRANSACTIONS AND POLICY ON RELATED PARTY TRANSACTIONS

The Board has formulated Policy on Related Party Transactions and the same is uploaded on the Company''s website at http://www.kmchhospitals.com/pdf/PolicyRelated Party Transaction.pdf.

RISK MANAGEMENT

The steps taken by the company to mitigate the risk are disclosed under an identical head in the Management Discussion and Analysis forming part of Directors'' Report.

EXTRACT OF ANNUAL RETURN

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status and the company''s operations in future.

HUMAN RESOURCE DEVELOPMENT

The total strength of the employees of the Company as on 31st March 2017 was 4044 Nos.

INDUSTRIAL RELATIONS

The industrial relations scenario continued to be cordial during the year under review.

PARTICULARS OF REMUNERATION PAID TO KEY MANAGERIAL PERSONNEL

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

During the year 2016-17, no complaints were received by the company related to sexual harassment.

DEPOSITS

As per Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits), Rules 2014, the company has not accepted any deposits from the public during the year.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the company has appointed M/s KSR & Co. Company Secretaries LLP, Coimbatore, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the company for the Financial Year 2016-17. Secretarial Audit Report is annexed herewith as "Annexure -VI" forming part of the report.

COST AUDIT

In terms of Section 148 and other applicable provisions of the Companies Act 2013, read with Companies (Cost Records and Audit) Rules 2014, Mr.V.Sakthivel, Cost Accountant, M/s RKMS & Associates, Tirupur was appointed as Cost Auditor of the company by the Board on recommendation of Audit Committee for the Financial Year 2017-18. The remuneration of the Cost Auditor is subject to ratification by the members at the ensuing Annual General Meeting.

STATUTORY AUDITORS

The members had at the 29th Annual General Meeting held on 25.09.2015 approved the appointment of M/s.Haribhakti & Co. LLP., Chartered Accountants as Statutory Auditors for a period of five years from 2015 -16 to 2019-20.

Rule 3 (7) of Companies (Audit and Auditors) Rules 2014, states that appointment of Auditor shall be subject to ratification by the members at every Annual General Meeting till the expiry of the term of appointment of Auditor.

In view of the above, the appointment of M/s.Haribhakti & Co. LLP., Chartered Accountants as Statutory Auditors from the conclusion of this meeting, until the conclusion of the next Annual General Meeting is subject to the members ratification.

LISTING WITH STOCK EXCHANGE

The company confirms that it has paid the Annual Listing Fees for the year 2017-18 to BSE where the company''s shares are listed.

CORPORATE GOVERNANCE

ACKNOWLEDGEMENTS

The Board expresses its grateful appreciation for the continued assistance and co-operation received from Government Authorities, Financial Institutions, Banks, Customers, Suppliers and investors.

For and on behalf of the Board

Place : Coimbatore DR. NALLA G PALANISWAMI

Date : 29.05.2017 MANAGING DIRECTOR

Mar 31, 2015

Dear Members,

The Directors are pleased to present their Twenty Ninth Annual Report along with the audited annual accounts for the financial year ended 31stMarch, 2015.

(Rs.in Lacs)

FINANCIAL RESULTS (STANDALONE) 2014-15 2013-14

Operating Income 40162.07 33406.05

Other Income 672.73 469.70

Total Income 40834.80 33875.75

Earnings Before Interest, Tax, Depreciation and

Amortization (EBITDA) 10100.38 7755.70

Profit Before Taxation (PBT) 5942.77 3731.94

Provision for Taxation 2072.87 1360.04

Profit After Taxation (PAT) 3869.90 2371.90

Balance of Profit brought forward 5384.95 3355.07

Profit available for appropriations 9254.85 5726.97

Appropriations:

Adjustments related to fixed assets (Net of Deferred Tax) 55.78 -

Dividend (inclusive of dividend tax) 197.54 192.02

Transfer to General Reserve 200.00 150.00

Balance carried forward to Balance sheet 8801.53 5384.95

RESULTS OF OPERATIONS

The Income increased to Rs. 40834.80 lacs from Rs. 33875.75 lacs in the previous year at a growth rate of 21%. The EBITDA amounted to Rs. 10100.38 lacs as against Rs. 7755.70 lacs in the previous year. The Hospital earned a net profit of Rs. 3869.90 lacs for the year as against Rs. 2371.90 lacs in the previous year registering yearÂ onÂ year (YOY) growth of 63%.

The consolidated Income increased to Rs. 40821.78 lacs compared to Rs. 33857.29 lacs in the previous year, registering a growth of 21%. Consolidated net profit after tax increased to Rs. 3853.36 lacs representing a growth of 62%.

CONSOLIDATED FINANCIAL STATEMENTS

The Directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiary and as prepared in compliance with the Companies Act, 2013, applicable Accounting Standards and the Listing Agreement as prescribed by SEBI.

DIVIDEND

After considering the Company's profitability, Cash flow and overall financial performance, your Directors are pleased to recommend dividend of 15% (Rs.1.50 per share) for the financial year ended 31.03.2015.

The total out flow on account of dividend, if approved by the Members, will be about Rs.197.54 lacs including Rs.33.41 lacs payable towards dividend tax, surcharge and cess on the same.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 200 lacs to the General reserve out of the amount available for appropriation and an amount of Rs. 3416.58 lacs is proposed to be retained in the Statement of profit and loss.

BOARD MEETINGS

The Board of Directors met four times during this financial year. The disclosure on Board meetings and attendance of Directors are provided in the Corporate Governance Report.

AUDIT COMMITTEE

The composition of Audit Committee, number of meetings held and the attendance of Directors there to have been provided under an identical head in the Corporate Governance Report.

CORPORATE SOCIALRES PONSIBILITIES

The Boardon23.05.2014 constituted the CSR Committee and formulated CSR policy of the company and adopted it in accordance with Section 135 read with Schedule VII and other applicable provisions of the Companies Act, 2013. The purpose of the Committee is to formulate and manage the CSR policy of the company. The Committee will be overseeing the CSR activities, programmes and execution of initiatives as per guidelines. The company has initiated CSR activities in line with, CSR policy and have already earmarked to spend an amount of Rs. 57 lacs towards CSR expenditure. The statement in this respect is appended as "Annexure-I" inthe report with regard to the CSR activities.

INFORMATION ON STATUS OF COMPANY'SAFFAIRS

Information on operational and financial performance etc., is provided in the Management Discussion and Analysis Report, which is annexed to the Directors' Report and has been prepared interÂalia in compliance with the terms of clause 49oflisting agreement with Indian Stock Exchanges.

INFECTION CONTROLANDENVIRONMENT

Infection Control is the discipline concerned with preventing No socomial or health care associated infection. One of our key clinical priorities is to protect our patients, visitors and staff from the risk of health care associated infections. Various infection control procedures like effective management of Bio-Medical waste, good hand hygiene, environmental cleaning, antibiotic control and excellent intravenous line care have helped us to effectively tackle the incidence of infections in our hospital.

LIVERTRANS PLANT

Your hospital has successfully launched its Liver Institute during July, 2014 which offers comprehensive, multi-disciplinary disease management, specializing in Liver disease, Liver transplants. It also envisages treating ailments relating to bile ducts and pancreas in the future. So far we have successfully completed 35 liver transplants.

CREDITRATING

CARE has once again upgraded your Company's Long term bank facilities to "CARE A-" (single A minus) from "CAREBBB " and short-term bank facilities to" CAREA2" (A Two) from" CAREA3 ".

AWARDS

Your Hospital was awarded "Nursing Excellence Award" by the Association of Healthcare Providers of India and also was recognized by ICICI Lombard Health Insurance & CNBC TV18 as "The Best Multi-Specialty Hospital" in non-metro city for the second time.

HOSPITALACCREDITATION

Your Hospital has been certified by National Accreditation Board for Hospitals and Health care Providers (NABH) for the delivery of high standards for safety and quality caret the patients.

DIRECTORS RESPONSIBILITY STATEMENT

In pursuance of section 134 (5) of the Companies Act, 2013, the 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) 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 at the end of the financial year and of the profit and loss of the Company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The Directors had prepared the annual account son going concern basis;

(e) 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; and

(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BOARDEVALUATION

Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the listing agreement, a structured questionnaire was administrated after taking into consideration of various aspects to the Board functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governancetoascertain the efficacy and functioning of Board and its members.

The performance evaluation of Independent Directors was completed. The performance evaluation of the Chairmanofthe Board and Non-Independent Directors was carried out bythe Independent Directors. The Board ofDirectors expressed their satisfaction with the outcomeof the evaluation process.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

Pursuant to requirement of Clause 49 of the Listing Agreement, Company has a familiarization programme for the Independent Directors with regard to their role, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc. The Board Members are provided with all the necessary documents / reports and internal policies to enable them to familiarize with the Company's procedures and practices.

DIRECTORS

Dr.P.R.Perumalswami, Director retires at the ensuing AGM andis not opting for re-appointment.

Your Directors place on record the valuable guidance, support and advice extended by Dr.P.R.Perumalswami during his tenure as Director.

As per the provisions of Section 152(6)(e) of the Companies Act, 2013 at the Annual General Meeting at which a Director retires, the Company may fill up the vacancy by appointing the retiring Director or some other person thereto.

The Company has received a notice in writing from a member along with a deposit of requisite amount under Section 160 of the Companies Act, 2013 proposing the candidature of Dr.Arun N Palaniswami for the officeof Director of the Company.

The Board at its meeting held on 29.05.2015 recommended the appointment of Dr. Arun N Palaniswami as Whole Time Director with effect from 25.09.2015 subject to the approval of members. Hence, necessary resolution is placed for approval.

APPOINTMENT OF JOINT MANAGING DIRECTOR

The term of office of Dr.Thavamani DeviPalaniswami, Joint Managing Director of the Company expires on 28th July 2015. The terms and conditions of her re-appointment for a further period of 5 years and payment of remuneration are subject to the approval of the members of the company at the ensuing Annual General Meeting by means of a special resolution.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company met with the criteria of their Independence laid down in Section 149(6).

COMPLIANCEOFCODEOFCONDUCT

The compliance of code of conduct by Directors have been affirmed by the Managing Director and is disclosed under point no.20 of Corporate Governance Report.

KEYMANAGERIALPERSONNEL

The Key Managerial Personnel of the Company as stipulated under the Companies Act, 2013 are Dr.Nalla G Palaniswami, Managing Director,Dr.Thavamani DeviPalaniswami, Joint Managing Director, Dr.Mohan S Gounder, Joint Managing Director, CA.P.K.Gopikrishnan, Chief Financial Officer and CS.S.P.Chittibabu, Company Secretary. There was no appointment or cessation of Key Managerial personnel during the financial year 2014-15.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARINGS AND EXPENDITURE

The particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure stipulated under section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rule, 2014, are annexed herewith as "Annexure-IV"and forms part of this Report.

SUBSIDIARYCOMPANY

Idhayam Hospitals Erode Limited had become a wholly owned subsidiary of the company with effect from 23.04.2007.

The consolidated financial statement of the company including the financial results of the said subsidiary is also included in this report. A statement of salient features of financials of Idhayam Hospitals Erode Limited pursuant to Section 129(3) of the Companies Act, 2013 in Form AOC-1 is annexed and forming part of the report.

CHANGE IN THE NATURE OF BUSINESS,IF ANY

During the year, there wasno change in the nature of business of the Company or any of its subsidiaries.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting financial Position of the Company which have occurred between the end of the financial year of the Company to which the Financial Statements relate and date of the report.

PARTICULARS OF LOANS,GUARANTEES OR INVESTMENTS UNDER SECTION 186

As on March 31, 2015, there were no outstanding loans or guarantees covered under the provisions of Section 186 of the Act. The Company has certain quoted and unquoted investments owned by the Company. The details of changes in Investments covered under the provisions of Section 186 of the Act are given in the Note No.13 to the financial statements.

VIGIL MECHANISM

The company has set up vigil mechanism for Directors and Employees to report their genuine concerns, the details of which are given in the Corporate Governance Report. The policy on Vigil Mechanism and Whistle Blower Policy have been posted on the website of the Company http://www.kmchhospitals.com/pdf/whistleblower.policy.pdf.

EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT9 is annexed herewith as "Annexure-V" and forming part of report.

RISK MANAGEMENT

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Business Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report. The steps taken by company to mitigate the risk are disclosed under an identical head in the Management Discussion and Analysis forming part of Directors' Report.

RELATED PARTY TRANSACTIONS AND POLICY ON RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company which may have a potential conflict with the interest of the Company at large and particulars of Contracts or Arrangements with Related parties referred to in Section 188(1)in FormAOC-2 is annexed as "Annexure - III" and forming part of the report.

The Board has formulated Policy on Related Party Transactions and the same is uploaded on the Company's website at http://www.kmchhospitals.com/pdf/Policy Related Party Transaction.pdf.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status and the Company's operations in future.

HUMAN RESOURCES DEVELOPMENT

KMCH lays paramount importance to human resources development and provides congenial atmosphere and frame work for helping employees to develop their personal and organizational skills, knowledge and abilities. Your Hospital believes in developing the most superior workforce so that organization and individual employees can accomplish their work goals by providing improved service to the patients. The total strength of the employees of the company as on 31st March 2015 was 3387.

INDUSTRIAL RELATIONS

The industrial relations scenario continued to be cordial during the year under review.

PARTICULARS OF REMUNERATION PAID TO KEY MANAGERIAL PERSONNEL

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the remuneration of Directors, Key Managerial Personnel and employees are enclosed as"Annexure - VI" forming part of the report.

The Nomination and Remuneration Policy of the Company has been disclosed on website of the Company and the web link thereon is http://www.kmchhospitals.com/pdf/Nomination.Remuneration Evaluation Policy.pdf.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL ACT, 2013.

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal complaint committee has been setup to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under the policy.

During the year 2014-15, no complaints were received by the Company related to sexual harassment.

DEPOSITS

As per Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits), Rules, 2014, the Company has not accepted any deposits from the public during the year.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s KSR & Co. Company Secretaries LLP, Coimbatore, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2014-15. Secretarial Audit Report is annexed herewith as "Annexure - II" forming part of the report.

COSTAUDIT

In terms of Section 148 and other applicable provisions of the Companies Act, 2013, read with Companies (Cost records and Audit) Rules 2014, Mr.V.Sakthivel, Cost Accountant, M/s.RKMS & Associates, Tirupur was appointed as Cost Auditor of the Company by the Board on recommendation of Audit Committee for the financial year 2014-15 and 2015-16. The Remuneration of the cost auditor is subject to ratification by the member at the ensuing Annual General Meeting.

STATUTORYAUDITORS

M/s Haribhakti & Co. LLP, Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting. M/s. Haribhakti & Co. LLP are eligible for re-appointment and have confirmed that their re-appointment, if approved, will be in compliance with Section 141 of the Companies Act, 2013 for a fresh term of 5 years.

As per Section 139 of the Companies Act, 2013, a Listed Company shall not appoint / re-appoint an Audit firm as Statutory Auditors for more than 2 terms of Five consecutive years. M/s.Haribhakti & Co. LLP have already served as the Company's Statutory Auditor's for a period of 5 years, from 2010-11. They are eligible for re-appointment as Statutory Auditors of the Company for a further period of five years.

Your Board recommends the re-appointment of M/s.Haribhakti & Co. LLP as Statutory Auditor's of the Company, to hold office from the conclusion of this AGM to the conclusion of the sixth consecutive AGM to be held in the year 2020 (Subject to ratification of the appointment by the members at every AGM held after the ensuing AGM).

LISTING WITH STOCK EXCHANGE:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-16 to BSE where the Company's Shares are listed. During the year the company has submitted an application with Madras Stock Exchange Limited for voluntary delisting of its shares and MSE has delisted the shares of the Company from its list of securities.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the listing agreement a report on corporate governance is given in the section titled "Report on Corporate Governance" forming part of Directors' Report.

A Certificate from the Practising Company Secretary confirming that the compliance with the conditions of Corporate Governance as stipulated under Clause49 of the Listing Agreement is attached to this report.

ACKNOWLEDGEMENTS

Your Hospital is entering into the 25th year of commercial operations and continues to serve its patients with motherly care by matching the international standards in health care. The Board has decided to celebrate the Silver Jubilee function during the year 2015-16 and would like to place on record it's heartfelt thanks for the continued support received from all stakeholders especially from our shareholders, who have contributed richly to the success of the Hospital.

The Board expresses its grateful appreciation for the continued assistance and co-operation received from Government authorities, financial institutions, Banks, Customers, Suppliers and investors.

The Board also places on record its appreciation for the dedication and commitment extended by its consultants and employees at all levels and their contribution to the growth and progress of the company.

For and on behalf of the Board

Coimbatore Dr. NALLA G PALANISWAMI

29.05.2015 MANAGING DIRECTOR

Mar 31, 2014

The Directors take pleasure in presenting the Twenty Eighth Annual Report of your company together with Audited Financial Statements for the year ended 31st March 2014.

FINANCIAL RESULTS (STANDALONE)

(Rs.in lacs)

2013-14 2012-13

Operating Income 33414.28 29713.38

Other Income 461.47 305.51

Total Income 33875.75 30018.89

Earnings Before Interest, Tax & Depreciation (EBITDA) 7755.70 7330.24

Profit Before Taxation (PBT) 3731.94 3133.27

Provision for Taxation 1360.04 1008.50

Profit After Taxation (PAT) 2371.90 2124.77

Balance of Profit brought forward 3355.07 1572.32

Profit available for appropriations 5726.97 3697.09

Appropriations:

Dividend (inclusive of dividend tax) 192.02 192.02

Transfer to General Reserve 150.00 150.00

Balance carried forward to Balance Sheet 5384.95 3355.07

RESULTSOFOPERATIONS

During the year under review, the income from operations of the company increased to Rs. 33414.28 lacs compared to Rs. 29713.38 lacs in the previous year, registering a growth of 12.46 percent. Factors like poor macro-economic environment, rising interest rates, failure of monsoon, heavy power shut down all have dampened the industrial activities, causing contraction of liquidity in the economy, which had impacted the current performance of your Hospital resulting in decline in the growth of revenue, when compared to the previous year.

The profit after tax for the year increased to Rs. 2371.90 lacs against the year ago profit of Rs. 2124.77 lacs. The company was able to achieve an operational profit of Rs. 7755.70 lacs (Rs. 7330.24 lacs in 2012-13) in spite of the increase inall input costs.

DIVIDEND

The Board of Directors at their meeting held on 23.05.2014 recommended a dividend of 15 percent ( Rs. 1.50 per share) for the Financial Year ended 31.03.2014 absorbing a sum of Rs. 192.02 lacs including tax payablebythe company.

TRANSFERTORESERVES

The company proposes to transfer Rs. 150 lacs to the general reserve out of the amount available for appropriation and the balance amount of profit for the year of Rs. 2029.88 lacs is proposed to be retained in the Statementof Profit and Loss.

CORPORATESOCIALRESPONSIBILITIES

The company firmly believes in providing high quality health care facility on a continuous basis with a human touch. The Hospital in its endeavour to extend health care facilities, cater not only to poor patients but also reaches out to the society at large. We have been organizing various continuous medical education programmes (CME), medical camps which provide free medical care besides health awareness and education. During the year free consultation camps on Cardiology, Orthopaedics, Gastro- enterology, Dental, General Medicine, Spine, Oncology, Diabetics, Multi-speciality and free General Medical campswereconducted.

INFECTIONCONTROLANDENVIRONMENT

The infection control programme organized by your Hospital has yielded effective control over infection related diseases. The infection control committee actively monitors and reviews every month the incidences and take corrective steps to prevent such occurrences. Patient, Employee safety and precaution against occupational hazards were very effective and have considerably reduced the infection related issues.

TECHNOLOGYABSORPTION

The Hospital always believes in giving the best to the patients and in this regard it continuously invests in cutting edge technology and in the latest and best equipments. During the year, your Hospital added Haemo Dialysis Machines, Ultrasonic Surgical Aspirator, Refrigerated Centrifuge, Mobile X-ray, PHACO Machine, Haemonetics Coagulation Analyser, Arthroscopic Camera Unit, Colour Doppler and other equipments to the tune of Rs. 372 lacs.

CONSERVATIONOFENERGY

Your company has taken numerous steps for conserving energy and has installed building management system (BMS) for continuous monitoring of the power consumption. The power generation and consumption is continuously and closely monitoredto conserve energy.

The company has invested continuously insolar water heaters and power lights.

Close monitoring of power generation, its usage and periodical maintenance of the plants have helped the companytoconserveenergy.

CREDITRATING

CARE has upgraded our company''s debt instruments to ''CARE BBB '' from Rs.CARE BBB'' for its long term facilities and the company continue to have the credit ratingas''CARE A3 '' for its short term facilities.

AWARDS

Your Hospital has been rated as ''No.1 Best Multi-speciality Hospital in Coimbatore'' by a survey conductedby"TheWeekÂ magazineinits November 2013publication.

HOSPITALACCREDITATION

Your Hospital has been certified by National Accreditation Board for Hospitals and Health care Providers (NABH) for the delivery of high standards of safety and quality care to the patients.

HUMANRESOURCESDEVELOPMENT

KMCH recognizes the value of its human resources. We strive hard to provide employee friendly environment in our hospital in developing highly motivated and satisfied work force. We encourage and nurture creativity, innovation and motivate employees for improved performance. The total number of employees increased from2236asonMarch 31, 2013 to 2924asonMarch31, 2014.

INDUSTRIALRELATIONS

The industrial relations scenario continuedto be cordial during the year under review.

DIRECTORSRESPONSIBILITYSTATEMENT

Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors of the Company hereby state and confirm that:

In the preparation of the annual accounts for the year, the applicable accounting standard had been followed along with proper explanations and there wereno material departures;

The Directors had selected such accounting policies and applied them consistently and made judgements 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 endofthe financial year andofthe profit of the company for that period;

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;

The Directors hadpreparedthe annual accountsonagoing concernbasis.

DIRECTORS

As per the provisions of Sections 149, 150, 152 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder read with Schedule IV of the Companies Act, 2013, Mr.Kasi K Goundan (DIN:01145935), Dr.M.Manickam (DIN:00102233), CA. A.M.Palanisamy (DIN:00112303), Mr.A.K.Venkatasamy (DIN:00036191), Mr.K.Saminathan (DIN:01571748), Dr.M.A.Muthusethupathi (DIN:02766069) all existing Independent Directors will be appointed as Independent Directors of the company and shall hold office from the date of Annual General Meeting for a period offive years upto 02.09.2019.

The company has received declaration 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, 2013andunder clause49ofthe listing agreement with theStock Exchanges.

They shall not, henceforthbe liable toretirementbyrotation.

Dr.M.C.Thirumoorthi, Director retires by rotation and being eligible has offered himself for re-appointment.

APPOINTMENTOFMANAGINGDIRECTOR

The term of office of Dr.Nalla G Palaniswami, Managing Director of the Company expires on 30th September 2014. The terms and conditions of his re-appointment for a further period of 5 years and payment of remuneration are subject to the approval of the members of the company at the ensuing Annual General Meeting.

SUBSIDIARYCOMPANY

Idhayam Hospitals Erode Limited had become a wholly owned subsidiary of KMCH with effect from 23.04.2007. The Ministry of Corporate Affairs (MCA) vide its circular No.5/12/2007-CL-III dated 8th February 2011 had granted general exemption under Section 212(8) of the Companies Act, 1956 to companies from attaching the accounts of their subsidiaries in their annual reports subject to fulfillment of certain conditions prescribed.

The Board of Directors of the Company at its meeting held on May 23, 2014 noted the provisions of the circular of the MCA and passed necessary resolution granting the requisite approvals for not attaching the Balance Sheet, Statement of Profit and Loss, Report of the Board of Directors and Report of the Auditor of Idhayam Hospitals Erode Limited to the accounts of the company. A statement of summarized financials of Idhayam Hospitals Erode Limited pursuant to Section 212(8) of the Companies Act, 1956 forms part of this report.

However the Company will provide the annual report and the financial statements of its Subsidiary Company on the specific request made by any investor and the said accounts are open for inspection at the Registered Office of the Company during office hours on all working days between 2.00 p.m. to 4.00 p.m. (except Sundays and holidays).

CONSOLIDATEDFINANCIALSTATEMENTS

As required under Clause 32 of the listing agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standard AS-21 of the Companies (Accounting Standard) Rules, 2006. The Consolidated Financial Statements presented by your company includes the financial information of its subsidiary also.

PARTICULARSOFEMPLOYEES

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 annual report excluding the aforesaid information is being sent to all the members. Such particulars may be obtainedbyanymember,bywritingtothe Company Secretaryatthe RegisteredOfficeofthe Company.

ENERGYCONSERVATION,TECHNOLOGYABSORPTIONANDFOREIGNEXCHANGE

Particulars required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption has been dealt in our Directors'' Report. The particulars regarding foreign exchange inflow and outgo appearasnote no.32 forming partof the accounts.

FIXEDDEPOSITS

As per Section 58A of the Companies Act, 1956, the Company has not accepted any deposits from the public during the year.

AUDITORS

The Auditors M/s Haribhakti & Co., Chartered Accountants, Coimbatore retires at the ensuing Annual General Meeting and are eligible for re-appointment in accordance with the provisions of Section 139(1) andSection 141oftheCompanies Act,2013.

CORPORATEGOVERNANCE

Pursuant to Clause 49 of the listing agreement a report on corporate governance is given in the section titled "Reporton Corporate GovernanceÂ forms part of the Directors'' Report inthe Annual Report.

A certificate from the practising company secretary regarding compliance of the conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges isattached to this report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the continued support to the company extended by bankers, Govt. authorities, customers, vendors, investors, members, consultants and employees.

For and on behalf of the Board

Coimbatore DR. NALLA G PALANISWAMI

23.05.2014 CHAIRMAN AND MANAGING DIRECTOR

Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the Twenty Seventh Annual Report of your company together with Audited Financial Statements for the year ended 31st March 2013.

FINANCIAL RESULTS (STANDALONE)

{Rs.in lacs)

2012-13 2011-12

Operating Income 29713.38 22237.24

Other Income 305.51 156.15

Total Income 30018.89 22393.39

Earnings Before Interest, Tax & Depreciation (EBITDA) 7330.24 4494.51

Profit Before Taxation (PBT) 3133.27 1624.09

Provision for Taxation 1008.50 429.19

Profit After Taxation (PAT) 2124.77 1194.90

Balance of Profit brought forward 1572.32 636.39

Profit available for appropriations 3697.09 1831.29

Appropriations:

Dividend (inclusive of dividend tax) 192.02 158.97

Transfer to General Reserve 150.00 100.00

Balance carried forward to Balance Sheet 3355.07 1572.32

REVIEW OF OPERATIONS

With the sound performance in all its activities, your Company could cross a mile stone of achieving more than Rs. 300 crores revenue during the Financial Year under review, at a growth of 34% over the previous year revenue of Rs. 223.93 crores registering an enhanced profitability with EBITDA for the current year at Rs. 73.30 crores from Rs. 44.95 crores in the previous year, an increase of 63%. Profit after tax increased to Rs. 21.25 crores in the current year from Rs.11.95 crores of the previous the year.

The finance cost has increased to Rs. 21.46 crores during 2013 compared to Rs. 16.57 crores during 2012. The increase was largely due to higher interest charge arising out of commissioning of new projects at Main Center at Coimbatore and also due to the general increase in interest rates during this year.

Erode Center and Erode Speciality Center also contributed to the growth of your company. During the year under review, Erode Center posted a revenue of Rs. 12.74 crores against Rs. 10.79 crores in the previous year. The operating profit for the current year is Rs. 2.93 crores against previous year figure of Rs. 2.22 crores showing a growth of 32%. Erode Speciality Center revenue grew by 32% to Rs. 17.49 crores compared to Rs. 13.20 crores in the previous year. Similarly the operating profit for the current year is Rs. 1.99 crores against previous year figure ofRs. 1.04 crores registering a growth of 92%.

DIVIDEND

In view of the improved performance, the Board of Directors at their meeting held on 18.05.2013 recommended a dividend of 15% (Rs. 1.50 per share) for the Financial Year ended 31.03.2013 absorbing a sum of Rs.1.92 crores including taRs. payable by the company.

TRANSFER TO RESERVES

The company proposes to transfer Rs. 1.50 crores to the general reserve out of the amount available for appropriation and an amount of Rs. 17.83 crores is proposed to be retained in the Statement of Profit and Loss.

CORPORATE SOCIAL RESPONSIBILITIES

The company always places greater importance to manage its affairs with highest levels of transparency, accountability and integrity and is committed to achieve and maintain the high standards of corporate governance on sustained basis.

Your Hospital is committed to the welfare of not only poor patients but also to the society at large. The Hospital has been regularly organizing various continuous medical education programmes, medical camps which provides, not only free medical care, but also promote health awareness and education to general public. During the year, free consultation camps were conducted for various medical specialities, like Cardiac Screening, Blood Screening, General Medicine, Occupational Therapy, Spine, Head & Neck, Gynaecology etc.

INFECTION CONTROLAND ENVIRONMENT

Your Hospital continues to lay greater emphasis on hospital infection control practices. We have established an Infection Control Committee for updating the implemented policies and procedures, which are actively monitored by the Infection Control Team to control the hospital acquired infections. Moreover, all the Hospital staff are being vaccinated for various communicable diseases. These measures have yielded results and are reflected in the reduction of healthcare associated infections.

TECHNOLOGY ABSORPTION

In its continuous endeavour to serve the patients in the best way possible, your Hospital continues to invest in the latest and the best that the world has to offer in terms of technology and sophistication. During the year, your Hospital added a Colour Doppler Ultrasound Scanner system Model VIVID S5, E9 and Voluson S6, a High Definition Laparoscopy System, a High Speed Neuro Drill System and other equipments to the tune of Rs. 2.90 crores.

CONSERVATION OF ENERGY

Considering the current energy scenario in India, especially in Tamil Nadu, your Hospital gives greater importance to conserve energy and has initiated the following measures.

Building Management System (BMS) has been installed for airconditioning and higher energy consumption equipment areas.

By using different capacity chillers for peak and non-peak hours, the hospital is able to save the cost of 1000 units of power per day (approRs.. Rs. 10,000/-).

Old Air Handling Units were replaced by new energy efficient plug fan type Air Handling Units.

Hot water supply for patient rooms are provided with solar power.

Wherever possible we have installed solar power lights and water heaters.

Energy generation and its consumption are continuously monitored and periodical maintenance of the plants helps us to conserve energy.

CREDIT RATING

CARE has rated company''s debt instruments as ''CARE BBB'' for long term facilities of safety and upgraded short term facilities to ''CARE A3 '' from CARE A3''. Both this grades indicates instruments with moderate degree of safety.

AWARDS

Your Hospital has been conferred the "Best Multispeciality Hospital Award" in the Non Metro South India category at the recent India Healthcare Awards at Delhi by ICICI Lombard Health Insurance & CNBCTV 18

Your Hospital has been awarded "Management System Certificate" by DET NORSKE VERITAS, United Kingdom. This confirms that the Hospital Information Security Management Systems follows standard ISO/IEC 27001:2005.

HOSPITAL ACCREDITATION

Your Hospital has been certified by National Accreditation Board for Hospitals and Healthcare Providers (NABH) for the delivery of high standards of patient safety and quality of care to the patients.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors of the Company hereby state and confirm that:

In the preparation of the annual accounts for the year, the applicable accounting standards had been followed along with proper eRs.planations and there were no material departures;

The Directors had selected such accounting policies and applied them consistently and made judgements 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 of the company for that period;

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;

The Directors had prepared the annual accounts on a going concern basis.

DIRECTORS

As per the Companies Act, 1956, atleast 2/3 of the board should consists of retiring Directors. Of these, atleast 1/3 are required to retire every year by rotation. ERs.cept Chairman and Vice Chairman, all other Directors are liable to retire by rotation.

Mr. Kasi K Goundan, Dr. Mohan S Gounder and Mr.M. Manickam retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The Board of Directors deeply regret the sad demise of Mr.K.M. Subramaniam, Alternate Director. The Board places on record the invaluable contribution made by Mr.K.M. Subramaniam towards the progress of the Company during his tenure.

APPOINTMENT OF JOINT MANAGING DIRECTOR

The Board of Directors at their meeting held on 18.05.2013 has appointed Dr. Mohan S Gounder as Joint Managing Director of the Company for a period of five years with effect from 19.07.2013. The terms and conditions of the appointment and payment of remuneration are subject to the approval of the members of the Company at the ensuing Annual General Meeting. Necessary resolution is placed before the members for their approval.

SUBSIDIARY COMPANY

Idhayam Hospitals Erode Limited had become wholly owned subsidiary of KMCH with effect from 23.04.2007. The Ministry of Corporate Affairs (MCA) vide its circular No.5/12/2007-CL-lll dated 8,h February 2011 had granted general eRs.emption under Section 212(8) of the Companies Act, 1956 to companies from attaching the accounts of their subsidiaries in their annual reports subject to fulfillment of certain conditions prescribed.

The Board of Directors of the Company at its meeting held on May 18, 2013 noted the provisions of the circular of the MCA and passed necessary resolution granting the requisite approvals for not attaching the Balance Sheet, Statement of Profit and Loss, Report of the Board of Directors and Report of the Auditor of Idhayam Hospitals Erode Limited to the accounts of the company. A statement of summarized financials of Idhayam Hospitals Erode Limited pursuant to Section 212(8) of the Companies Act 1956 forms part of this report.

However the Company will provide the annual report and the financial statements of its Subsidiary Company on the specific request made by any investor and the said accounts are open for inspection at the registered office of the Company during office hours on all working days between 2.00 p.m. to 4.00 p.m. (eRs.cept Sundays and holidays).

CONSOLIDATED FINANCIAL STATEMENTS

As required under Clause 32 of the listing agreement with the Stock ERs.changes and in accordance with the requirements of Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements presented by your company includes the financial information of its subsidiary also.

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 annual report eRs.cluding the aforesaid information is being sent to all the members. Such particulars may be obtained by any member, by writing to the Company Secretary at the Registered Office of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN ERs.CHANGE

Particulars required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption has been dealt in our Directors'' Report. The particulars regarding foreign eRs.change inflow and outgo appear as note no.32 forming part of the accounts.

FIRs.ED DEPOSITS

As per Section 58A of the Companies Act, 1956, the Company has not accepted any deposits from the public during the year.

AUDITORS

The Auditors M/s Haribhakti & Co., Chartered Accountants, Coimbatore retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the listing agreement a report on corporate governance is given in the section titled "Report on Corporate Governance" forming part of this Annual Report.

A certificate from the Auditors of the Company regarding compliance of the conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement entered into with the Stock ERs.changes is attached to this report.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the health care sector''s objectives, projections, estimates and eRs.pectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results might differ materially from those either eRs.pressed or implied.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the continued support to the company eRs.tended by bankers, Govt, authorities, customers, vendors, investors, members, consultants and employees.

For and on behalf of the Board

Coimbatore DR. NALLA G PALANISWAMI

18.05.2013 CHAIRMAN AND MANAGING DIRECTOR

Mar 31, 2012

The Directors take pleasure in presenting the Twenty Sixth Annual Report of your company together with Audited Financial Statements for the year ended 31 March 2012.

FINANCIAL RESULTS (Rs in lacs)

2011-12 2010-11

Operating Income 22237.24 17472.01

Other income 156.15 123.29

Total Income 22393.39 17595.30

Total Expenditure 17860.90 13868.42

Operating Profit 4532.49 3726.88

Less: Finance Charges & Depreciation 2908.40 1773.94

Profit Before Tax (PBT) 1624.09 1952.94

Less: Taxation 429.19 743.30

Profit After Tax 1194.90 1209.64

DIVIDEND

Your Directors are pleased to recommend the payment of dividend for the year ended 31st March 2012 at Rs 1.25 per share. The proposed dividend absorbs Rs 136.78 lacs for dividend and Rs 22.19 lacs for Dividend Tax. As per Indian Income Tax Act, the dividend payable by the Company is Tax free in the hands of shareholders.

TRANSFER TO RESERVES

The Company proposes to transfer Rs 100 lacs to the general reserve out of the amount available for appropriation and an amount of Rs 935.93 lacs is proposed to be retained in the surplus in statement of Profit and Loss.

OPERATING RESULTS AND PROFITS

During the year under review the total revenue of the company has increased to Rs 22393.39 lacs from Rs 17595.30 lacs in the previous year registering an impressive growth of 27%. The profit after tax stood atRs 1194.90 lacs against Rs 1209.64 lacs in the previous year. The net profit of the company has not increased proportionate to the revenues due to higher finance cost, increased provision for deferred tax liability and depreciation consequent to the major expansion embarked by your Hospital.

CORPORATE SOCIAL RESPONSIBILITIES

In its role as socially responsible corporate citizen, your company reaches out to the needy sections of the society in many ways. We have been continuously organizing various Continuous Medical Education Programmes (CME), medical camps which provides free medical care besides health awareness and education. During the year free consultation camp on endoscopic spine surgery, fertility care, cancer awareness programmes, free camp for diabetes were conducted.

FACILITY I TRsGRADATION AND EXPANSION

In order to add comfort to patients, significant renovation and upgradation was undertaken during this year. This will not only enhance the patient care but also facilitate achieving more operational efficiencies. Among others we have added 7 new operation theaters. Neonatal ICU, separate Cardio Thoracic Unit, Nuclear Medicine Dept., Medical ICU, Modernisation of Surgical ICU, Day Care centers for cancer and cardiac patients. During the year we have added 210 patient beds, an Isolation Ward, two Pharmacy outlets etc.

The expansion envisaged during the year 2007-08 was entirely completed in this current year except for some minor work. The total project spending was Rs 269 crores against which we have borrowed a sum ofRs 214 crores and the balance being from internal accruals.

INFECTION CONTROL AND ENVIRONMENT

Infection control is the discipline concerned with preventing nosocomial or healthcare associated infection in Hospitals. Your Hospital is giving special thrust to infection control and have established an Infection Control Committee to monitor and regulate infection at the Hospital. The improvement exhibited in the infection control indices shows encouraging results. The infection rates are well within the accepted standard level and favourably compares with similar well established hospitals in India.

TECHNOLOGY ABSORPTION

Your Hospital continues to believe in investing in cutting edge technology by bringing world class medical equipments and the latest facilities in the medical care.

PET CT : The Siemens Biograph -6, state of the arts whole body PET Scanner with a diagnostic 6 slice CT Scanner enables whole body staging of cancer in a single step. This revolutionary modality images the metabolic status of the cancer cells through a PET and structural changes with a contrast enhanced CT Scan thus making it a one stop imaging platform. Thus the need for multiple regional scans are eliminated, saving patient time and decreasing the time gap from diagnosis to initiation of appropriate treatment. A whole body PET-CT is currently the gold standard for initial staging, post treatment assessment and evaluation of recurrence in cancer.

SPECT : The Symbia T from Siemens, a dual headed variable angle gamma camera with a diagnostic CT enabling the highest image quality and resolution currently available in the world, reducing radiation exposure to the patient and faster scanning time are some of the features of this Gamma camera equipped with cutting edge technology. SPECT-CT of the skeletal system, cardiac perfusion imaging, cancer thyroid evaluation, neuro psychiatric functional and molecular imaging, renal function & GFR assessment etc. are done with high end precision and negligible inter observer variation, thus redefining the standard in functional imaging.

Your hospital has also recently added 3T MRI, PACS, Mammography and other equipments. Your hospital has added new medical facilities amounting toRs 3754.84 lacs during the current year under review.

CONSERVATION OF ENERGY

Your company has undertaken various measures in conserving energy and has installed Building Management System (BMS) to continuously monitor and control all Air Humidifying Units (AHUs) and the resultant power consumption.

Your hospital continuously reviews the energy generation and its consumption and ensures periodical maintenance of the plant to conserve energy. We have installed solar power lights and water heaters wherever possible.

LED lights and fixtures are introduced in a phased manner to reduce power consumption. Push type water taps are installed in the hospital premises to reduce water wastage.

Waste water is being recycled by Effluent Treatment Plant (ETP) and is being used wherever possible.

CARE RATING

CARE Rating has confirmed the financial credit rating of'CARE BBB' (Triple B) for the revised long term facilities and 'CARE A3' (AThree) for short term facilities.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The growth in high income countries is going to be weak, Developing countries will have to search increasingly for growth within the developing world. Under these conditions prospects and growth rates that seems relatively easy to achieve during the first decade of this millennium may become much more difficult to attain in the second.

HEALTH CARE SCENARIO

The health care economy is generally resilient and is not impacted by recessions. Even though the world economy is weak, the health care industry has remained largely insulated.

The Indian healthcare industry is estimated to be valued at Rs 2.8 trillion in size in Financial Year 2011, growing at a 5 year CAGR of 13,1% p.a. CARE Research estimates healthcare industry has the potential to almost double to Rs 5.0 trillion over the next five years, implying a growth rate of 12% p.a. This will be mainly driven by rise in per capita spending on health care, change in demographic profile, transition in disease profile, increase in health insurance penetration and fast growing medical tourism market.

OUTLOOK AND FUTURE PROSPECTS

The health care sector in India is poised for rapid growth in the medium term. The Hospital has under gone NABH (National Accreditation Board for Hospitals and Healthcare Providers) accreditation process and is quite confident of getting it.

Our domain expertise coupled with the state of the art equipments and the quality of services have made the Hospital a leader. The demand for treatment from the domestic front is encouraging and continues to be robust. The Hospital is also planning to embark on attracting international patients in a big way.

A combination of demographic and economic factors is going to impact health carc industry in India. Increase in population, shift in demographics, rise in disposable income, increase in incidence of lifestyle related diseases, rising literacy are the few drivers that propels the growth of health care industry.

COMPREHENSIVE CANCER CENTER

The Comprehensive Cancer Center was inaugurated by his Excellency Dr.K.Rusaiah, Governor of Tamil Nadu on 07.11.2011. The center is a world class facility with state of the art infrastructure providing the entire range of services including awareness, detection and treatment for different types of cancers. The center has a well knit team across radiation oncology, surgical oncology, medical oncology and nuclear medicine.

OPPORTUNITIES Medical Tourism

Medical Tourism is a highly growing sector in India and is expected to experience an annual growth rate of 30%. Medical tourism is one of the foremost external drivers that fuel the growth of health care industry. The state of the art medical equipments, reputed health care professionals, quality nursing facilities, best in class treatment, low cost treatment etc. attracts foreign patients to look for treatment in India.

Rising Investments

Strong demand for hospital services in tier 2 and 3 cities is bound to fuel the growth of the health care sector in India. In recent years there have been considerable investments from domestic players, financial investors as well as private equity firms in the corporate health care sector.

Health Insurance

The nature of health problems are changing rapidly and the cost of the treatment is also increasing. The increase in organisation has led to higher incidence of life related diseases. Now more number of people in the urban and semi urban areas are opting for health insurance in view of the rising health care costs. The health insurance is one of the fastest growing segments in our country.

RISKS, CHALLENGES AND THREATS Talent Pool

The Indian health care sector is one of the latest service providers and employs millions of work force. Shortage of doctors and skilled manpower like nurses, technicians is plaguing the health care industry.

The urban-rural divide, lack of adequate training to the health care workers, inadequate HR policies in the system are the areas which hampers the growth of the health care industry in our country

Investments

The health care sector is a capital intensive sector and need significant funding to grow.

Inflation and rising cost

The impact of inflation and the ever increasing operating cost of the health care industry like salaries, administrative cost, fuel cost, increase in interest cost are the various factors which affect the health care deliver}' in India.

Competition by private sectors and obsolesce of medical equipments due to rapid technological changes are the various challenges faced by the health care industry.

A. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Financial performance with respect to operational performance has been dealt with in the Directors' Report which should be treated as forming part of this Management Discussion and Analysis Report.

B. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an appropriate system of internal control to ensure that there exists a proper control over all the transactions and that all its assets are properly safeguarded and not exposed to risk arising out of unauthorized use or disposal.

The Company has put in place adequate internal controls to ensure that assets are safeguarded and protected against loss from unauthorized use of disposition and the transactions are authorized, recorded and reported correctly.

The internal audit department together with an independent firm of Chartered Accountants reviews the effectiveness of the systems and procedures. The internal auditors evaluate the adequacy of the internal control systems by analyzing and testing controls and make their recommendations to the management to improve controls wherever necessary.

C.MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Relations with the employees remained cordial throughout the year. In order to optimize the contribution of the employees to the Company's business and operations, in-house training is given to the employees to induce contribution for increased productivity. We have also devised development programmes for all levels of employees. As on 31 st March 2012 the employee strength of the Company was 1647.

DIRECTORS RESPONSIBILITY STATEMENT AS PER SECTION 217(2AA) OF THE COMPANIES ACT 1956

In the preparation of Profit and Loss Account for the year ended 31st March 2012 and the Balance Sheet as on that date, all the applicable accounting standards have been followed. Accounting policies, that are reasonable and prudent, have been selected and applied consistently 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 the Profit and Loss Account of the Company for the year ended 31st March 2012. The said Profit and Loss Account and Balance Sheet have been prepared on a going concern basis. The Company maintains proper records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the Company as also for preventing and detecting fraud and other irregularities.

DIRECTORS

Mr. A.K.Venkatasamy, Mr. A.M.Palanisamy and Dr.P.R.Perumalswami retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The Board places on record the conferment of "DOCTORATE" awarded by the Bharathiar University and also another award viz. "LIFE TIME ACHIEVEMENT AWARD" conferred by Dr.M.G.R. University, Chennai to our Chairman and Managing Director Dr.Nalla G Palaniswami for his excellent and outstanding performance in the field of medicine.

SUBSIDIARY COMPANY

The entire Share Capital of Idhayam Hospitals Erode Limited was acquired on 23.04.2007 and in view of this Idhayam Hospitals Erode Limited has become wholly owned subsidiary of the Company effective from the above date.

The Ministry of Corporate Affairs, Govt, of India vide its circular 2/2011 dated 28th February 2011 has granted an exemption to the Companies under Section 212(8) of the Companies Act 1956 from attaching accounts along with the report of the Board of Directors as required by Section 212( 1) of the Companies Act 1956 of the Subsidiary Companies to the Balance Sheet of the holding Company .for the Financial Year ended 31.3.2012. However the Company will provide the annual accounts of its Subsidiary Company and the related detailed information on the specific request made by any investor and the said accounts are open for inspection at the registered office of the Company during office hours on all working days, except Sundays and holidays between 2.00 p.m. to 4.00 p.m.

Particulars relating to the Subsidiary Company as per the conditions mentioned in the circular issued by the Ministry of Corporate Affairs are annexed to the accounts of the Company.

As required under Clause 32 of the listing agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, the Company has prepared Consolidated Financial Statements of the Company and its Subsidiary are included in the Annual 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.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Particulars 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, regarding Conservation of Energy, Technology Absorption has been dealt in our Directors' Report. The particulars regarding foreign exchange inflow and outgo appear as note no.31 forming part of the accounts.

FIXED DEPOSITS

As per Section 58A of the Companies Act 1956, the Company has not accepted any deposits from the public during the year.

AUDITORS

M/s Haribhakti & Co., Chartered Accountants, Coimbatore are the auditors of the company and holds office upto the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

REPORT ON CORPORATE GOVERNANCE

The Company has already complied with the requirement of the corporate governance in terms of the listing agreement with the Stock Exchanges. The detailed report on corporate governance is annexed and forming part of this report. A certificate from the Auditors of the Company regarding compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges is attached to this report.

HUMAN RESOURCES DEVELOPMENT

As your Company is in the service industry, human resource plays a very crucial role in the operations and as such your Company accords great recognition for its continuous development.

Your Company enjoys cordial relations with Doctors and Employees. Your Board places on record its appreciation for the dedicated services of all the Doctors and Employees.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the company's objectives. Projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the continued co-operation extended by the Bankers of the company and look forward to their continued support in the future.

For and on behalf of the Board

Coimbatore DR. NALLA G PALANISWAMI

May 29, 2012 CHAIRMAN AND MANAGING DIRECTOR

Mar 31, 2011

Dear Members,

The Directors take pleasure in presenting the Twenty Fifth Annual Report together with the Audited Statement of Accounts for the Financial Year ended March 31, 2011.

FINANCIAL RESULTS (Rs. in Lacs)

Particulars 31.3.2011 31.3.2010

Revenues 17595.30 13193.41

EBIDTA 3726.88 2675.66

Less: Finance cost 1111.24 483.71

Depreciation 662.70 468.80

Earnings Before tax 1952.94 1723.15

Less: Provision for Taxation 743.30 564.57

Earnings After Tax 1209.64 1158.58

Add: Balance brought forward 585.72 486.64

Amount available for appropriation 1795.36 1645.22

Dividend (Inclusive of Dividend Tax) 158.97 159.50

Transfer to General Reserve 1000.00 900.00

Balance carried forward to Balance Sheet 636.39 585.72

DIVIDEND

Your Directors are pleased to recommend the payment of dividend for the year ended March 31, 2011 at (Rs.1.25 per share). The proposed dividend absorbs Rs. 137 Lacs for dividend and Rs. 22 Lacs for Dividend Tax. As per Indian Income Tax Act, the dividend payable by the Company is Tax free in the hands of shareholders.

BUSINESS PERFORMANCE

The results for the year 2010-11 continues to be commendable. Your Hospital has achieved a revenue of Rs. 17595.30 Lacs posting a robust growth of 33%. The EBIDTA stood at Rs. 3726.88 Lacs as against Rs. 2675.66 Lacs in 2009-10.

All the Centers have performed well and have improved on their revenues and profitability. The overall after tax profitability of the Hospital is Rs. 1209.64 Lacs for the period under review as against the profit of Rs.1158.58 Lacs of that of the previous year.

The major expansion programme embarked by the Hospital has started yielding dividends and the same is reflected by the impressive growth achieved by it. Though our Hospital could maintain the same operational profit, the increased finance cost, higher depreciation and increased provision for deferred tax liability due to the capital spending has reduced the profit margin after taxation.

TECHNOLOGY ABSORPTION

In our Quest to give the best health care facilities to the patients, your Hospital always believe in upgrading the technology by the state-of-the-art medical equipments.

During the year under review, your Company has added Magnetom Skyra 3T System, PACS, Mammography System, Triology High Energy Linear Accelerator, Artis Zee Biplane, Ventilators, Monitors etc. to deliver health care at par with international standards. SPECT CT and PET CT for cancer treatment will be added very shortly.

We have installed new medical equipments amounting to Rs. 5126.60 Lacs which are the best and latest available in medical world.

CONTINUOUS MEDICAL EDUCATION PROGRAMMES (CME)

Your company gives utmost importance to Continuous Medical Education (CME) Programmes as it is always in the forefront and drives in bringing the latest developments in the medical world to India.

Your company organized many Seminars, Workshops, Camps and Exhibitions in the field of Cancer, Cardiology, Neurology, Paediatric, Urology, General Medicine, Diabetic etc and conducted an International Conference Kovai Lumen 2011, Two National Conferences, ICU Update 2010 and TIP 2010.

Your company has conducted many CME Programmes outside Coimbatore for the benefit of medical professionals who always play a vital role in educating the patients and community at large about the latest developments in the health care industry .

CORPORATE SOCIAL RESPONSIBILITIES

As a responsible corporate citizen, your Company has organized many free medical camps in rural parts of Tamil Nadu and as part of its efforts to propagate healthcare and provide services to the poor at their door step. It has also conducted many awareness programmes among the public.

During the year your company has conducted Health awareness programmes, Cancer awareness programmes, Diabetic awareness campaigns, Disaster Control Management etc. and it will continue to undertake many such programmes as part of its corporate philosophy and social responsibility.

AWARDS

Your Hospital has been awarded the best IT enabled Hospital for the year 2010 by Ministry of Communication & IT, Ministry of Corporate Affairs, Govt. of India.

Your Hospital has been awarded the National Energy Conservation Award for 2010 for excellence in energy conservation in the country from the Bureau of Energy Efficiency (BEE) under the Ministry of Power, Govt. of India.

CARE RATING

CARE Rating has confirmed the financial credit rating of Rs.CARE BBB' (Triple B) for the enhanced long term facilities and Rs.PR 3' (PR Three) for short term facilities.

DIRECTORS RESPONSIBILITY STATEMENT AS PER SECTION 217(2AA) OF THE COMPANIES ACT 1956

In the preparation of Profit and Loss Account for the year ended March 31, 2011 and the Balance Sheet as on that date, all the applicable accounting standards have been followed. Accounting policies, that are reasonable and prudent, have been selected and applied consistently 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 the Profit and Loss Account of the Company for the year ended March 31, 2011. The said Profit and Loss Account and Balance Sheet have been prepared on a going concern basis. The Company maintains proper records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the Company as also for preventing and detecting fraud and other irregularities.

DIRECTORS

Mr.K.Saminathan, Dr.M.C.Thirumoorthi and Dr.K.S.K.Murugaiyan retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

SUBSIDIARY COMPANY

The entire Share Capital of Idhayam Hospitals Erode Limited was acquired on 23.4.2007 and in view of this Idhayam Hospitals Erode Limited has become wholly owned subsidiary of the Company effective from the above date.

The Ministry of Corporate Affairs, Govt. of India vide its circular 2/2011 dated 8th February 2011 has granted an exemption to the Companies under Section 212(8) of the Companies Act 1956 from attaching accounts along with the report of the Board of Directors as required by Section 212(1) of the Companies Act 1956 of the Subsidiary Companies to the Balance Sheet of the holding Company for the Financial Year ended 31.3.2011. However the Company will provide the annual accounts of its Subsidiary Company and the related detailed information on the specific request made by any investor and the said accounts are open for inspection at the registered office of the Company during office hours on all working days, except Sundays and holidays between 2.00 p.m. and 4.00 p.m.

Particulars relating to the Subsidiary Company as per the conditions mentioned in the circular issued by the Ministry of Corporate Affairs are annexed to the accounts of the Company.

As required under Clause 32 of the listing agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, the Company has prepared Consolidated Financial Statements of the Company and its Subsidiary are included in the Annual Report.

PARTICULARS OF EMPLOYEES

As on March 31, 2011, none of the employee was in receipt of remuneration in excess of the limits prescribed in sub-section 2A of Section 217 of the Companies Act 1956, read with Companies (Particulars of Employees) Amendment Rules 1994.

INFORMATION AS PER SECTION 217(1)(E) OF THE COMPANIES ACT, 1956

Since the Company is in service industry and does not do any manufacturing activity, the particulars regarding conservation of energy and technology absorption in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 are not applicable. The particulars regarding foreign exchange inflow and outgo appear as item No.10 in Notes on Accounts.

FIXED DEPOSITS

As per Section 58A of the Companies Act 1956, the Company has not accepted any deposits from the public during the year.

AUDITORS

M/s Haribhakti & Co., Chartered Accountants, Coimbatore are the Auditors of the Company and holds office up to the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re- appointment.

REPORT ON CORPORATE GOVERNANCE

The Company has already complied with the requirement of the corporate governance in terms of the listing agreement with the Stock Exchanges. The detailed report on corporate governance is annexed and forming part of this report.

COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

A certificate from the Auditors of the Company regarding compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges is attached to this report.

HUMAN RESOURCES DEVELOPMENT

As your Company is in the service industry, human resource plays a very crucial role in the operations and as such your Company accords great recognition for its continuous development.

Your Company enjoys cordial relations with Doctors and Employees. Your Board places on record its appreciation for the dedicated services of all the Doctors and Employees.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the continued co-operation extended by the Bankers of the company and look forward to their continued support in the future.

For and on behalf of the Board

COIMBATORE DR.NALLA G PALANISWAMI

18.05.2011 CHAIRMAN AND MANAGING DIRECTOR

Mar 31, 2010

The Directors take pleasure in presenting the Twenty Fourth Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31st March 2010.

FINANCIAL RESULTS (Rs. in Lacs)

Particulars 31.3.2010 31.3.2009

Revenues 13193.41 11152.94

Profit before interest and depreciation 2675.66 1938.29

Less: Finance cost 483.71 443.43

Depreciation 468.80 391.54

Profit Before tax 1723.15 1103.32

Less: Provision for

Current Tax 484.40 311.00

Fringe Benefit Tax - 10.35

Deferred Tax 90.40 67.93

Earlier Year Tax (10.23) -

Profit After Tax 1158.58 714.04

Add: Balance brought forward 486.64 432.63

Amount available for appropriation 1645.22 1146.67

DIVIDEND

Your Directors are pleased to recommend the payment of dividend for the year ended 31st March 2010 at 12.50% (Rs.1.25 per share). The proposed dividend absorbs Rs.136.78 Lacs for dividend and Rs.22.72 Lacs for Dividend Tax. As per Indian Income Tax Act, the dividend payable by the Company is Tax free in the hands of shareholders.

BUSINESS PERFORMANCE

The results for the year 2009-10 is impressive. The Company has achieved an over all growth in revenue by 18% over the previous year. All the Hospital Centers have performed well. The improvement in performance of Erode Speciality Hospital has also contributed to the profitability of the Company. The profit after taxation stood at Rs.1158.58 Lacs for the year under review and the same was Rs.714.04 Lacs for the previous year.

The operational excellence in providing quality healthcare to the patients at affordable costs coupled with increase in bed capacity has contributed to the good performance of the Company. All the Hospital Centers have registered increase in revenue and improvement in profitability.

TECHNOLOGY ABSORPTION

During the year under review, your Company has added the latest Broncho Video Fiberoscope, Endoscopy Unit with Accessories, Colour Doppler, Carl Zeiss Microscope-, Heamodialysis Machines, Ventilators etc. to deliver quality health care at par with international standards. We have installed new medical equipments amounting to Rs.692 Lacs which are the best in medical world and we continue to make large investments in bringing the latest in the medical technology to India.

CONTINUOUS MEDICAL EDUCATION PROGRAMMES (CME)

To keep abreast of the latest developments in medical care, your Hospital has conducted national and international conferences during the year and was well attended by delegates from within the country and abroad. Your company has conducted an International Conference Kovai Lumen 2010 and two National Conferences, ICU Update 2009 and TIP 2009. During the year, your Company has organized many Seminars, Conferences, Workshops and Exhibitions in the field of Cardiology, Critical Care and Gastro Enterology.

CORPORATE SOCIAL RESPONSIBILITIES

In its role as a socially responsible corporate citizen, your Company reaches out to the needy sections of the society in many ways. We have been continuously organizing many free medical camps which provide free medical care besides health awareness and education. During the year, free consultation camp on Endoscopic Spine Surgery, Fertility Care, Cancer awareness Programme, Free camp of Diabetes were conducted.

FINANCE

Your Company holds credit rating of CARE BBB (Triple B) rating to the long term facilities and PR 3 (PR Three) rating to the short term facilities.

Finance continued to be a focus area. Regular project reviews with special focus on cash flow and good working capital management has helped the Company to manage the cash flows effectively. During the year we have availed a term loan of Rs. 4406.49 Lacs.

DIRECTORS RESPONSIBILITY STATEMENT AS PER SECTION 217(2AA) OF THE COMPANIES ACT 1956

In the preparation of Profit and Loss Account for the year ended 31st March 2010 and the Balance Sheet as on that date, all the applicable accounting standards have been followed. Accounting policies, that are reasonable and prudent, have been selected and applied consistently 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 the Profit and Loss Account of the Company for the year ended 31st March 2010. The said Profit and Loss Account and Balance Sheet have been prepared on a going concern basis. The Company maintains proper records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the Company as also for preventing and detecting fraud and other irregularities.

DIRECTORS

Mr.Kasi K Goundan, Dr.Mohan S Gounder and Mr. M. Manickam retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

In accordance with Section 260 of the Companies Act 1956, Dr.M.A.Muthusethupathi has been inducted as an Additional Director by the Board with effect from 25.7.2009.

Mr.K.N.V. Ramani who was appointed as Director of the Company with effect from 29.8.2008 resigned from the Board with effect from 25.7.2009.

Dr.S.Krishnasamy who was appointed as Alternate Director resigned from the Board with effect from 5.6.2009.

The Board of Directors places on record their deep appreciation of the valuable services rendered, advice and guidance provided by Mr.K.N.V.Ramani and Dr.S.Krishnasamy as Directors of the Company during theirtenure.

APPOINTMENT OF JOINT MANAGING DIRECTOR

The term of office of Dr.Thavamani Devi Palaniswami, Joint Managing Director of the Company expires on 28" July 2010. The Board of Directors have re-appointed Dr.Thavamani Devi Palaniswami as Joint Managing Director for a further period of five years from 29.7.2010. The terms and conditions of her re-appointment and payment of remuneration are subject to the approval of the members of the Company. Necessary resolution is placed before the members for their approval.

SUBSIDIARY COMPANY

The entire Share Capital of Idhayam Hospitals Erode Limited was acquired on 23.4.2007 and in view of this Idhayam Hospitals Erode Limited has become wholly owned subsidiary of the Company effective from the above date.

The Ministry of Corporate Affairs, Govt, of India vide its order No.47/316/2010-CL-III dated 9lh April 2010 has granted an exemption to the Company under Section 212(8) of the Companies Act 1956 from attaching the accounts along with the report of the Board of Directors as required by Section 212(1) of the Companies Act 1956, of its Subsidiary Company M/s dhayam Hospitals Erode Limited to the Balance Sheet of the Company for the Financial Year ended on 31.3.2010. The Company will provide the annual accounts of its Subsidiary Company and the related detailed information on the specific request made by any investor and the said accounts are open for inspection at the registered office of the Company during office hours on all working days, except Sundays and holidays between 2.00 p.m. to 4.00 p.m. Particulars relating to the Subsidiary Company as per the condition (iii) of the above mentioned order of the Ministry of Corporate Affairs are annexed to the accounts of the Company.

As required under Clause 32 of the listing agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, the Company has prepared Consolidated Financial Statements of the Company and its Subsidiary are included in theAnnual Report.

PARTICULARS OF EMPLOYEES

As on 315t March 2010, none of the employees were in receipt of remuneration in excess of the limits prescribed in sub-section 2A of Section 217 of the Companies Act 1956, read with Companies (Particulars of Employees) Amendment Rules 1994.

INFORMATION AS PER SECTION 217(1)(E) OF THE COMPANIES ACT, 1956

Since the Company is in service industry and does not do any manufacturing activity, the particulars regarding conservation of energy and technology absorption in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 are not applicable. The particulars regarding foreign exchange inflow and outgo appear as item no.8 in Notes on Accounts.

FIXED DEPOSITS

As per Section 58A of the Companies Act 1956, the Company has not accepted any deposits from the public during the year.

DELISTING OF EQUITY SHARES

The Company has made an application to Madras Stock Exchange Limited for delisting of Shares. The application is still pending with the exchange.

APPOINTMENT OF AUDITORS

M/s. Suri & Co., Chartered Accountants have expressed their unwillingness to continue as Statutory Auditors of the Company.

The Board proposed M/s Haribhakti & Co., Chartered Accountants as Statutory Auditors of the Company in place of retiring auditors M/s Suri & Co. M/s Haribhakti & Co. to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting.

The Board of Directors places on record their warm appreciation of the valuable contribution made by M/s Suri & Co., Chartered Accountants during their association with the Company.

REPORT ON CORPORATE GOVERNANCE

The Company has already complied with the requirement of the corporate governance in terms of the listing agreement with the Stock Exchanges. The detailed report on corporate governance is annexed and forming part of this report.

COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

A certificate from the Auditors of the Company regarding compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges is attached to this report.

HUMAN RESOURCES DEVELOPMENT

As your Company is in the service industry, human resource play a very crucial role in the operations and as such your Company accords great recognition therefore for its continuous development.

Your Company enjoys cordial relations with Doctors and Employees. Your Board places on record its appreciation for the dedicated services of all the Doctors and Employees.

ACKNOWLEDGMENTS

Your Directors place on record their appreciation for the continued co-operation extended by the Bankers of the company and look forward to their continued support in the future.

For and on behalf of the Board

Dr. NALLA G PALANISWAMI CHAIRMAN AND MANAGING DIRECTOR

COIMBATORE 29.05.2010

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