KMS Medisurgi Ltd Management Discussions.

INDUSTRY OVERVIEW

THE MEDICAL DEVICES AND EQUIPMENT INDUSTRY

The Medical Devices and Equipment industry, valued at US$ 2.5 billion contributes only 6% of Indias US$ 40 billion healthcare sector. Moreover, it is growing at a faster annual rate of 15% than 10-12% growth seen in the Healthcare sector in its entirety. A rise in the number of hospitals and the increased requirement for healthcare facilities creates a need for sophisticated devices and equipment, which can provide accurate treatment to individuals. The Medical Electronics segment of this industry incorporates control, conversion, sensing, processing, storage, display, and transfer of information on anatomy and physiology by making use of the Electronics and Communication Technologies. The Medical Equipment industry is quite wide with > 14,000 different products types, as per the Global Medical Device Nomenclature (GMDN). The products range from wound closure pads to stents and IVD machines of medical devices. Further, it can be reasonably said that Medical Electronics is an area, where Electronics and Information Communication T echnology play a decisive role.

Moreover, significant efforts have been made in the medical technology ecosystem to stimulate innovation in this space so that the opportunities provided in the Indian market can be capitalized by the companies working in this domain and the Indian consumer of healthcare services stands to benefit.

In the past, the sector has significantly brought down the incidence of disease among patients, families, society as well as improved the countrys health system, significantly. However, in India the penetration of medical devices is low and inadequate due to the barriers that prevent their usage.

BUSINESS OVERVIEW

Our Company was incorporated at Mumbai as "KMS Medisurgi Private Limited" on 25th March, 1999. We have been converted in to a Public Limited Company and consequently name was changed to "KMS Medisurgi Limited" on 15th June, 2016.

We manufacture & undertake job work of coating of various substrates like non woven fabrics, PU films, cotton fabrics, and taffeta silk fabrics with adhesive.

We are engaged into the business of ethical marketing and distribution of Surgical Disposable, Haemostat, Medical Devices, Urology Equipments, Surgery Equipments, Orthopedic/Physiotherapy Equipments, Blood Banking Equipments and other such Surgical Equipments in India.

We have been established in 1999 as surgical equipment company and since then we have been successfully launching new concepts through which have helped the Indian Healthcare industry. We bridge the gap between the world technological advancements and Indian Healthcare industry. We are government approved suppliers throughout India.

Our Mission is "To become a leading Medical Device Company specializing in the supply of value-added products contributing to public healthcare and focusing on leading surgical products with a technological edge, at competitive rates".

Our target is "To serve our customers at our very best, constantly improve and upgrade the quality of our production and organizational skills and to develop novel products."

T o facilitate growth, our company has a well-established distribution and export system throughout the world.

The Quality of our products has always been our priority, thanks to our highly qualified and dedicated staff, we have maintained those standards and we will strive towards excellence in future.

We are Government approved supplier. We are representing the World Leaders in Surgical Disposables, Medical & Surgical Equipments for India as their Exclusive Distributors. We also undertake job work of coating of various substrates like non woven fabrics, PU films, cotton fabrics, taffeta silk fabrics with adhesive.

SIGNIFICANT DEVELOPMENTS

In the opinion of the Board of Directors of our Company, following significant developments were made in the last 3 financial years:

1. The company has been converted in to a public limited company vide fresh Certificate of Incorporation dated 15th June, 2016 issued by the Registrar of Companies, Mumbai, Maharashtra.

2. The company has allotted 12,00,000 Equity Shares as bonus issue in ratio of 1:1 to its existing shareholders on 20th July, 2016.

3. The shareholders approved and passed a special resolution on 8th September, 2016 to authorize the Board of Directors to raise funds by making an initial public offering.

4. The Company has given Public Issue of 9,00,000 equity shares of KMS MEDISURGI LIMITED at a price of Rs. 30 per share (the "issue price") and allotted the shares on 20 th April, 2017. The shares of the Company were listed on SME Platform of BSE Limited on 24th April, 2017.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties. Our results of operations and financial conditions are affected by numerous factors including the following:

• Our success depends on the value, perception and marketing of our products;

• General economic and business conditions;

• Companys inability to successfully implement its growth and expansion plans;

• Increasing competition in the Healthcare and surgical equipment Industry;

• Economic, Income and Demographic condition in India;

• Changes in laws and regulations that apply to Industry in which we operate;

• Any change in the tax laws granting incentives to Industry in which we operate;

• Dependency on Healthcare providers for adaptability of our products;

• Interest Rates