Krishna Institute of Medical Sciences Ltd

To,

The Members,

Your Directors have pleasure in presenting the 22nd Annual Report on the business and operations of the Company along with the audited financial statements (Consolidated as well as Standalone) for the financial year ended March 31,2024.

1. Financial Summary of the Company

2. Results of operations/state of company's affair

During the year under review, the total revenue on standalone basis increased to H 12,375.86 million in FY24 compared to H 11,555.20 million in the previous year, an increase by 7.10%. The profit after tax for the year decreased to H 2,353.41 million in FY24 compared to H 2,524.89 million in the previous year, a decrease by 6.79%.

During the year under review, the consolidated total revenue of the Company increased to H 25,112.00 million in FY24 compared to H 22,235.50 million, an increase of 12.94% Profit after tax for the group decreased to H 3,360.07 million in FY24 compared to H 3,658.13 million in the previous year, a decrease by 8.15%.

3. Consolidated Financial Statements

In accordance with Companies Act, 2013 ("the Act") and Ind AS 110 - Consolidated Financial Statements read with Ind AS 28 - Investment in Associates and Joint ventures, the audited consolidated financial statements form part of the Annual Report.

In terms of provision to sub section (3) of Section 129 of the Act, the salient features of the financial statements of the Subsidiaries and Associates are set out in the prescribed Form AOC-1, which forms a part of the Annual Report.

In accordance with Section 136 of the Act, the audited financial statements, including the consolidated financial statements of the Company and audited accounts of the subsidiaries are available at the Company's website: https://www.kimshospitals.com/ investors/ . The documents will also be available for inspection during business hours at the registered office of the Company.

4. Change in the nature of the business, if any:

There was no change in the nature of Business during the year.

5. Dividend

As the Company, is undertaking multiple semi-brownfield projects (i.e. Nashik, Bangalore, Mumbai etc), for better long-term value creation to shareholders, the Company is not declaring any dividend for the Financial Year 2023-24.

6. Transfer of Reserves

The Company has recorded a profit of H 2,353.41 million (Standalone) for the period 2023-24 and the same was transferred to the head of other Equity.

7. Share Capital

The paid-up share capital as of March 31,2024, is H 80,02,77,870.

During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As of March 31, 2024, the details of shareholding in the Company held by the Directors are set out in the Corporate Governance Report forming part of the Board's Report and none of the directors hold convertible instruments of the Company.

8. Directors and Key Managerial Personnel

Composition of the Board: The Board of Directors ("the Board") of the Company consists of an optimal combination of Executive, Non-Executive and Independent Directors which represent a mix of professionalism, knowledge and experience.

The Board brings in guidance, leadership, and an independent view to the Company's management while discharging its fiduciary responsibilities, thereby ensuring that management adheres to the ethics, transparency, and disclosure norms.

As of the date of this report, the Board comprises of 8 (Eight) Directors, of whom, 3 (Three) are Executive Director and 5 (Five) are Non-Executive Directors. Amongst the Non-Executive Directors, 4 (Four) are Independent Directors and 1 (one) is Non- Independent Director. The Non-Executive Directors bring an external and wider perspective in Board's deliberations and decisions. The size and composition of the Board conforms to the requirements of the Companies Act, 2013.

Independent Directors

Your Independent Directors fulfill all the conditions for being Independent to the Company, as stipulated under the Companies Act, 2013. All Independent Directors have given the declaration that they meet the criteria of Independence as laid down under section 149(6) of the Companies Act, 2013.

The Board is of the opinion that the above Independent Directors possess requisite integrity, experience and expertise (including the proficiency).

Key Managerial Personnel and Change in Directors during the year

a) Mr. Shantanu Rastogi (DIN: 06732021), Non-Executive Director has resigned from the board on 7th November 2023.

b) Mr. Adwik Bollineni was appointed as Non-Executive Director by the Board in its meeting held on 28th November 2023, Subsequently obtained the Shareholder's approval for his appointment through Postal ballot on 30th December, 2023.

c) The 1st Term of 3 years of Mr. Saumen Chakraborty as Independent Director of the Company expired on 7th December 2023. He was reappointed as Independent Director for a further period of 5 years (8th January 2024 to 7th January 2029) by the Board in its meeting held on 28th November 2023, subsequently obtained the Shareholder's approval for his re-appointment through Postal ballot on 30th December 2023.

d) The 1st Term of 3 years of Mr. Kaza Ratna Kishore as Independent Director of the Company expired on 7th December 2023. He was reappointed as Independent Director for a further period of 5 years (8th January 2024 to 7th January 2029) by the Board in its meeting held on 28th November 2023, subsequently obtained the Shareholder's approval for his re-appointment through Postal ballot on 30th December 2023.

e) The 1st Term of 3 years of Mr. J V Ramudu as Independent Director of the Company expired on 7th December 2023. He was reappointed as Independent Director for a further period of 5 years (8th January 2024 to 7th January 2029) by the Board in its meeting held on 28th November 2023, subsequently obtained the Shareholder's approval for his re-appointment through Postal ballot on 30th December 2023.

f) Mr. Pankaj Vaish ceased to be Independent Director of the Company w.e.f 8th January 2024 after completion of his 1st term.

g) Mr. G. Rajeswara Rao ceased to be Independent Director of the Company w.e.f 25th January, 2024 after completion of his 2nd term.

Retirement by Rotation

Pursuant to Section 152 of the Companies Act 2013, Dr. Bhaskara Rao Bollineni, Chairman & Managing Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

9. Board Functioning & Meetings

The Board and Committee meetings are pre-scheduled and a tentative calendar of the meetings is finalized in consultation with the Directors to facilitate them to plan their schedule. However, in case of urgent business needs, approval is taken by passing resolutions through circulation. During the year under review, 10 (Ten) board meetings were held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

The details of the meetings including the composition of various committees are provided in the Corporate Governance Report.

10. Nomination and Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee, approved a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

11. 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, Annual Return is uploaded on the website of the Company at https://www.kimshospitals. com/investors/.

12. Details of Subsidiary/Joint Ventures/Associate Companies

a. Arunodaya Hospitals Private Limited (Subsidiary Company): The subsidiary company has recorded a total revenue of H383.33 million during the financial year 2023-24.

b. KIMS Hospital Enterprises Private Limited (Subsidiary Company): The subsidiary company has recorded a total revenue of Rs. 2902.28 million during the financial year 2023-24.

c. Iconkrishi Institute of Medical Sciences Private Limited (Subsidiary Company): The subsidiary company has recorded a total revenue of H 1314.78 million during the financial year 2023-24.

d. Saveera Institute of Medical Sciences Private Limited (Subsidiary Company): The subsidiary company has recorded a total revenue of H 1068.85 million during the financial year 2023-24.

e. KIMS Hospital Kurnool Private Limited (Subsidiary Company): The subsidiary company has recorded a total revenue of H 811.60 million during the financial year 2023-24.

f. Sarvejana Healthcare Private Limited (Subsidiary Company): The Subsidiary company has recorded a total revenue of H 3090.87 million during the financial year 2023-24.

g. Rajyalakshmi Healthcare Private Limited (Step down Subsidiary): It has recorded a total revenue of H 1568.91 million during the financial year 2023-24.

h. SPANV Medisearch Lifesciences Private Limited (Subsidiary Company): The Subsidiary company has recorded a total revenue of H 1795.95 million during the financial year 2023-24.

i. KIMS Hospitals Private Limited., KIMS Swastha Private Limited. and KIMS Hospital Bengaluru Private Limited (formerly known as KIMS Hospital (Bhubaneswar) Private Limited, KIMS Manavata Hospitals Private Limited.

This are the subsidiaries of your Company, which are still under the process of setting up its infrastructure to run the hospital.

The information on subsidiary Companies pursuant to Section 129(3) of the Act read with rule 5 of the Companies (Accounts) Rules, 2014 is annexed herewith as ANNEXURE - I in Form AOC - 1.

13. Particulars of contracts or arrangements with related parties.

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties that could be considered material in accordance with the policy of the Company on the materiality of related party transactions. The disclosure pursuant to Clause (h) of Sub Section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014) as required is enclosed as ANNEXURE-II.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website https://www.kimshospitals.com/investors/ . Your Directors draw the attention of the members to the Notes to the financial statements which sets out related party disclosures.

None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company except Dr. Bhaskara Rao Bollineni, Chairman & Managing Director who has drawn a professional fee of H 14.98 million for the Financial year 2023- 24.

14. Statutory Auditors

The members at the 17th Annual General Meeting held on 8th August 2019, approved appointment of S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. 101049W/ E300004), as the Statutory Auditors to hold office from the conclusion of the 17th Annual General Meeting till the conclusion of the 22nd Annual General Meeting.

Consequently S. R. Batliboi & Associates LLP will complete their term of five consecutive years as the statutory auditors of the Company at the conclusion of this Annual General Meeting. The Board of Directors of the Company (‘Board'), based on the recommendation of the Audit Committee, in its meeting held on 16th May 2024, unanimously approved the re-appointment of S. R. Batliboi & Associates LLP, as the Statutory Auditors of the Company, for a further consecutive term of five years from the conclusion of 22nd Annual General Meeting till the conclusion of 27th Annual General Meeting, at a remuneration as may be mutually agreed between the Board and the Statutory Auditors and recommended the same for approval of the shareholders.

S. R. Batliboi & Associates LLP have consented to their re-appointment as the Statutory Auditors and have confirmed that the re-appointment, if made, would be within the limits specified under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified to be re-appointed as the Statutory Auditors in terms of the provisions of Sections 139 and 141 of the Companies Act, 2013 and the Rules made thereunder. As required under the Companies Act, 2013, approval of the members is being sought for re-appointment of S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. 101049W/ E300004) as the Statutory Auditors of the Company by means of an Ordinary Resolution. The Board recommends the reappointment of S. R. Batliboi & Associates LLP for approval of the members and delegate the authority to the Audit Committee and Board of Directors to fix their remuneration in this Annual General Meeting.

There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their audit reports on the financial statements for the year ended 31 March 2024.

15. Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Directors on the recommendation of the Audit Committee, appointed M/s. Sagar & Associates, Cost Accountants, Hyderabad (FRN 000118) to audit the cost accounts of the Company for the financial year 2024-2025 on a remuneration of H 6.00 Lakhs.

As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Member's ratification for the remuneration payable to M/s. Sagar & Associates, Cost Accountants, Hyderabad (FRN 000118) will be part of the Notice convening the 22nd Annual General Meeting.

The Company has maintained cost records in accordance with the provisions of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 in respect of healthcare services.

16. Adequacy of Internal Financial Controls:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The details of the internal control system and its terms of reference are set out in the Management Discussion and Analysis Report forming part of the Board's Report.

The Board of Directors has laid down internal financial controls to be followed by the Company and the policies and procedures to be adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to the Company's 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 information. The Audit Committee evaluates the internal financial control systems periodically.

17. Secretarial Auditors Report

The Board had in its meeting held on 18th May, 2023 appointed M/s. IKR & Associates (a Peer-Reviewed Firm), as the Secretarial Auditor for the financial ended 31st March, 2024. In addition, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the secretarial audit of KIMS Hospital Enterprises Private Limited and Sarvejana Healthcare Private Limited, the material subsidiaries, has also been carried out.

As required under Section 204 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the secretarial audit report of the Company and its material subsidiaries are enclosed as ANNEXURE-III and ANNEXURE-IV respectively, which forms part of this report. The audit reports do not contain any qualifications, reservations, or adverse remarks.

18. Vigil Mechanism/Whistle Blower Policy

KIMS Code of Conduct requires directors, officers, and employees to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. The Company has a Whistleblower Policy to enable persons who observe unethical practice (whether or not a violation of law), or violation of the Code of Business Conduct, other than matters covered by the POSH Policy to approach the Whistleblower Custodian without revealing their identity, if they choose to do so. Further the complaint can be reported to the Ombudsperson (Chairman of the Audit Committee) where the Complainant feels that the complaint has not been addressed or actioned in a timely and appropriate manner. Also, if the complaint is against any member of the Whistleblower Committee or the Executive Council, the same would be made to the Ombudsperson. This Policy governs reporting and investigation of allegations that are breach of Code of Business Conduct and violation under code for prevention of Insider Trading.

The policy on Vigil Mechanism and Whistle Blower Policy has been posted on the website of the Company https://www.kimshospitals.com/investors/.

19. Dividend Distribution Policy:

The said Dividend Distribution policy is placed on the website of the Company https:// www.kimshospitals.com/investors/.

20. Performance Evaluation of the Board and the Directors

Pursuant to the provisions of the Companies Act, 2013 and in terms of Regulation 17(10) of the SEBI Listing Regulations, the Board has carried out an annual performance evaluation of the directors individually, Board, Chairperson and Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

21. Risk Assessment and Minimization

The Board of Directors had constituted a Risk Management Committee to identify elements of risk in different areas of operations and to develop a policy for actions associated with mitigating the risks. The Committee on a timely basis informed the members of the Board of Directors about risk assessment and minimization procedures and in the opinion of the Committee there was no risk that may threaten the existence of the Company. The details of the Risk Management Committee are included in the Corporate Governance Report.

22. Material changes and commitments, if any, affecting the 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 the date of the report.

There are no material changes and commitments affecting the financial position of the Company that have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report i.e. between March 31,2023, to March 31,2024.

23. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the company's operations in the future.

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company operations in the future.

24. The details of an application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year:

There are no applications made or pending under the Insolvency and Bankruptcy Code, 2016 during the year under review.

25. The details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the Banks or Financial Institutions along with the reasons thereof :

Not Applicable, as the Company has not done any one-time settlement during the year under review.

26. Deposits

Your Company has not accepted any deposits from the public covered under Chapter V of the Act, during the year under review.

27. Particulars of loans, guarantees, or investments under section 186

The details of loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are given in the notes to the financial statements.

28. Particulars of employees and related disclosures

The information under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

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 in excess of the limits set out in the said rules are provided in the Annual Report, which forms part of this Report.

Disclosures relating 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 are also provided in the Annual Report, which forms part of this Report.

Having regard to the provisions of Section 136(1) read with the relevant provisions of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished free of cost.

29. Corporate Governance

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on corporate governance as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter Listing Regulations), forms an integral part of this report. The requisite certificate from M/s IKR & Associates, Practicing Company Secretaries confirming the compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

30. Management Discussion and Analysis

Management Discussion and Analysis for the year under review, as stipulated under Regulation 34 of the Listing Regulations is presented in a separate section forming part of the Annual Report.

31. Business Responsibility and Sustainability Report (BRSR)

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 is attached as part of the Annual Report.

32. Conservation of energy, technology absorption and foreign exchange earnings and outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

a) Conservation of energy

Particulars required under section 134(3) of the Companies Act, 2013 read with Companies (accounts) Rules, 2014 is not applicable as the Company is not energy conservative; however your company is taking necessary steps to save the energy.

b) Technology Absorption

Over the years, your Company has brought into the country the best that the world has to offer in terms of technology. In its continuous endeavor to serve the patients better and to bring healthcare of international standards, your Company has introduced the latest technology in its hospitals.

c) Foreign exchange earnings and Outgo

Your Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. Your Company does not have any unhedged foreign currency exposure as at March 31, 2024.

Foreign Exchange Earnings: H 44.58 Million Foreign Exchange Outgo: H 69.00 Million

33. Corporate Social Responsibility (CSR)

As per the Provisions of Section 135 of the Companies Act, 2013 read with Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility (CSR) committee has been formed by the company. The Committee has approved the CSR which is stated in the Corporate Governance Report.

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Rural Development, Healthcare, Education & Skill Development and Research in Healthcare. These projects are in accordance with Schedule VII of the Companies Act, 2013. The Report on CSR activities for the financial year 2023-2024 is annexed herewith as ANNEXURE-V.

34. Human Resources

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attracting, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway.

35. Compliance with Secretarial Standards

During the year under review, the Company has duly complied with the applicable provisions of the Revised Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).

36. Obligation of company under the Sexual Harassment of Women at Workplace (prevention, prohibition and redressal) Act, 2013.

In order to prevent sexual harassment of women at work place a new act, The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

The company has adopted a policy for the prevention of Sexual Harassment of Women at the workplace and has set up a Committee for the implementation of said policy. During the year the Company not received any complaints.

37. Directors' Responsibility Statement

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that:

a) In preparation of the annual financial statement for the year ended March 31,2024, applicable accounting standards had been followed along with proper explanation relating to material departures if any;

b) Such accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as of March 31, 2024, and of the profit of the Company for the year ended on that date;

c) Proper and sufficient care has been taken in the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) The annual accounts have been prepared on a going-concern basis;

e) Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant Board Committees, including the Audit, Risk Management Committee, the Board is of the opinion that proper internal financial controls are in place and such internal financial controls are adequate and are operating effectively.

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively;

38. Transfer of Amounts to Investor Education and Protection Fund

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds that were required to be transferred to the Investor Education and Protection Fund (IEPF).

39. Acknowledgment

Your Directors place on record their gratitude to the Central Government, State Governments and all other Government agencies for the assistance, co-operation and encouragement they have extended to the Company.

Your Directors also take this opportunity to extend a special thanks to the medical fraternity and patients for their continued cooperation, patronage and trust reposed in the Company. Your Directors also greatly appreciate the commitment and dedication of all the employees at all levels, that has contributed to the growth and success of the Company.

Your Directors also thank all the strategic partners, business associates, Banks, financial institutions and other stakeholders including the shareholders for their assistance, co-operation and encouragement to the Company during the year.