Kovai Medical Center & Hospital Ltd Management Discussions

INDIAN HEALTHCARE - OVERVIEW

IndiaRs.s healthcare landscape is undergoing a major transformation, propelled by technological advancements, evolving public policies, and dynamic market forces. The healthcare industry is navigating a complex landscape shaped by technological changes, an aging population, regulatory changes, and the lingering effects of the COVID-19 pandemic. The current scenario presents both challenges and opportunities, with a strong emphasis on innovation, value-based care, and patient-centric approaches.

The healthcare industry encompasses a wide range of services and products aimed at maintaining and improvising health. It includes hospitals, clinics, pharmaceuticals, medical devices, health insurance, and biotechnology. Integration of AI, telemedicine, and wearable technology is revolutionizing patient care, diagnostics, and treatment plans. An increasing elderly population demands more healthcare services, driving growth in chronic disease management and pain management. Tailoring treatments based on individual genetic profiles is gaining traction, promising more effective and efficient care.

The COVID-19 pandemic has had a profound impact on the healthcare industry, highlighting both strengths and vulnerabilities. As the world recovers, the industry is focusing on addressing the backlogs in elective procedures, enhancing infection control measures, and preparing for potential future pandemics.

AI is expected to play a pivotal role in streamlining administration, diagnosis, treatment, and patient care in the coming years. From predictive analytics to automating electronic health records, AI can further enhance the precision and efficiency of health care delivery.

India aims to become a global healthcare hub. Under the Interim Union Budget 2024-25, the Ministry of Health and Family Welfare has been allocatedRs. 90,659 crore (US$ 10.93 billion) an increase of 1.69% compared toRs. 89,155 crore (US$ 10.75 billion) in 2023-24. Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) was allocatedRs. 2,400 crore (US$ 0.29 billion), Human Resources for Health and Medical Education was allottedRs. 5,016 crore (US$ 0.60 billion), National Health Mission was allottedRs. 38,183 crore (US$ 4.60 billion), Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) was allottedRs. 7,500 crore (US$ 0.90 billion).

https://www.ibef.org/download/1715338774 Healthcare March 2024.pdf

Emerging Trends in the Indian Healthcare

1. Technology Advancement in Health Care Landscape.

The role of technology in healthcare delivery has been expanding significantly, driven by advances in digital health tools, data analytics, telemedicine, and medical devices.

The increased spending in technology in healthcare delivery is leading to more efficient, effective, and personalized care, ultimately improving patient outcomes and transforming the healthcare landscape.

2. Health Infrastructure Development.

Health infrastructure development in India has seen significant progress in recent years, driven by government initiatives, public-private partnerships, and technological advancements.

Despite significant progress, challenges remain in areas such as ensuring equitable access to healthcare services, addressing regional disparities, and improving the quality of care. Continuous investment in health infrastructure, innovative solutions, and effective policy implementation are crucial for building a robust healthcare system in India.

3. Increased Investments in Health Care Space.

Continuous and rising investments in the healthcare sector are transforming the landscape of health infrastructure and service delivery. Several factors are driving this growth, including technological advancements, policy support, and increasing demand for quality healthcare.

Surging investments in the healthcare sector are paving the way for innovative solutions, improved infrastructure, and better access to quality care. This growth is driven by the convergence of technology, policy support, and the

increasing demand for efficient and personalized healthcare services. As these investments continue to grow, the healthcare industry is set to undergo significant transformation, enhancing patient outcomes and overall health system performance.

4. Enlarged demand for Health Insurance coverage.

The health insurance market is experiencing significant growth, driven by rising healthcare costs, increasing awareness of the importance of health coverage, and supportive government policies. This expansion is transforming the healthcare sector by improving access to medical services and reducing the financial burden on individuals.

The growing health insurance market is playing a crucial role in improving healthcare access and financial protection for individuals and families. As the market continues to expand, driven by rising healthcare costs, supportive government policies, and technological advancements, it presents numerous opportunities for innovation and growth. Addressing challenges such as affordability and complexity will be key to ensuring that health insurance remains accessible and beneficial for all segments of the population.

5. Medical Tourism

Medical tourism in India is a rapidly growing industry, attracting patients from around the world due to the countryRs.s high-quality healthcare services, cost-effective treatment options, advanced Medical technology. Several factors contribute to IndiaRs.s prominence as a preferred destination for medical tourists. As the industry evolves, focusing on patient experience, leveraging digital health solutions, and expanding market reach will be crucial for maintaining IndiaRs.s position as a leading medical tourism destination.

6. Public Health Initiatives.

Public health initiatives are increasingly focused on addressing a broad range of health challenges, from combating infectious diseases to promoting mental health and tackling the social determinants of health. By addressing the underlying determinants of health, leveraging technology and innovation, and fostering global partnerships, these initiatives aim to create healthier, more resilient populations worldwide.

India has implemented a variety of public health schemes aimed at improving the overall health and well-being of its population. These schemes like, Ayushman Bharat, National Digital Health Mission (NDHM) Mission Indira Dhanush and various other initiatives by the Government address different aspects of healthcare, including maternal and child health, disease control, health insurance, and nutrition.

SWOT Analysis

STRENGTH

1. Adaptation to Technology

At KMCH, quality isnRs.t merely a buzzword; itRs.s the cornerstone of our philosophy. We are committed to investing in the latest technologies to improve healthcare accessibility and enhance patient outcomes.

2. Skilled & talented clinicians and professional management

The brand image of KMCH attracts highly qualified, talented, and experienced doctors, technicians, and medical staff. Our clinical and non-clinical teams possess exceptional expertise, knowledge, and experience, facilitating swift diagnoses, faster outcomes, and streamlined workflows.

3. Patient Centric approach

Our patient-centric approach stands as a cornerstone in delivering compassionate and effective care, with a primary focus on enhancing their overall experience and outcomes.

WEAKNESS

1. Capital intensive industry

In the dynamic realm of healthcare space, there is a growing emphasis on leveraging technology to enhance patient outcomes and improve access to healthcare. This commitment necessitates KMCH to invest substantially in

state-of-the-art facilities and cutting-edge technologies. Significant investments are required to attract and retain qualified medical professionals, technicians, and skilled medical staff which has put pressure on our cash flow.

2. Shortage of skilled and talented medical professionals

The shortage of skilled medical professionals is a pressing issue in the healthcare industry, impacting institutions like KMCH and their ability to deliver quality care effectively. This shortage encompasses various roles, from physicians and nurses to specialized technicians and allied health professionals.

Hiring qualified professionals becomes increasingly difficult as demand outpaces supply. Competition for talent intensifies, in most of the specialized fields.

3. Regulatory requirement.

Regulatory requirements present significant challenges to the healthcare industry. Compliance costs, administrative burdens, lengthy approval processes, and potential legal consequences for non-compliance all work as a deterrent to the organization, demanding substantial investments of time and money to meet the legal requirements.

However, KMCH acknowledges and respects the importance of these regulations in safeguarding patient safety, upholding ethical standards, and building public confidence in healthcare. Balancing these regulatory demands with the imperative for innovation and efficiency remains an ongoing challenge, and KMCH continually strives to meet these obligations.

OPPORTUNITIES

The health care sector offers a wide range of opportunities due to its critical role in society and continuous advancements in technology and medicine. Here are several key areas with promising opportunities:

Hospitals in India have a wide array of opportunities due to the countryRs.s growing population, rising healthcare awareness, increasing prevalence of chronic diseases, and advancements in medical technology.

1. Expansion of Services

• Speciality Care: KMCH being a multi- speciality hospital, efficiently managed by forward looking management, supported by highly skilled doctors and other well trained para medical staff, specialized departments such as cardiology, oncology, neurology, and orthopaedics are continuously being patronised by the highly satisfied patients culminating in to the increased demand for such advanced treatments.

• Preventive Healthcare: KMCH offers preventive health check-ups and wellness programs to promote early diagnosis and better health management.

2. Technological Advancements

• Health Information Technology: KMCH is constantly Investing in Electronic Health Records (EHRs) and Health Information Systems (HIS) to improve patient data management, enhance care coordination, and ensure regulatory compliance resulting in enhanced patient care.

• Medical Equipment: The robust infrastructure, ultra-modern facilities equipped with the latest advanced medical equipment and diagnostic tools deployed at KMCH have resulted in improved treatment accuracy and patient outcomes.

3. Medical Tourism

Medical travel is growing steadily in India and the company is exploring various opportunities to capitalise on the same. More and more international patients are patronising medical travel in India, due to the effective treatment being offered to them which is at par with international standards that too at affordable cost compared to the huge cost and the long waiting time for availing treatment abroad.

THREAT

The healthcare industry faces several significant threats that can impact its stability, efficiency, and overall effectiveness.

1. Rising Costs.

• Shortage of qualified medical experts, technical and healthcare experienced staff due to stiff competition and migration to foreign countries, huge cost is incurred by the company to attract, retain and train the work force adding burden to the cashflows.

• Healthcare Spending: Increasing costs of medical services, pharmaceuticals, and healthcare technology is a strain on our patients and is impacting the footfalls.

• Insurance Premiums: Higher costs lead to increased insurance premiums, making healthcare less affordable and patients postponing the treatment affect the patient inflow.

2. Regulatory and Compliance Challenges

• Changing Regulations: Constantly evolving healthcare regulations and policies require organization to continuously adapt, which can be costly and time-consuming.

• Compliance Costs: Ensuring compliance with laws involves significant expenditure on systems and processes to protect patient data.

3. Workforce Shortages

• Physician and Nurse Shortages: There is a growing shortage of healthcare professionals, which leads to increased workloads, burnout, and decreased quality of care.

• Specialist Shortages: There is shortage of expert doctors and nurses in specialised departments and the Company is continuously working to fill these vacancies, which is a time consuming task resulting in increased cost.

4. Technological and Cybersecurity Risks

• Cyber Attacks: Healthcare organizations are prime targets for cyber-attacks due to the sensitive nature of patient data. Data breaches can result in significant financial and reputational damage.

• Technology Integration: Integrating new technologies with existing systems can be challenging and expensive.

5. Quality and Safety Issues

• Medical Errors: Mistakes in treatment, medication, or procedures can lead to patient harm and increase liability for healthcare providers.

• Infection Control: Healthcare-associated infections (HAIs) remain a persistent threat, requiring stringent control measures.

6. Market Competition

There is stiff completion from both organised and unorganised players. Many business corporates and entrepreneurs

are entering the healthcare business adding undue pressure on our existing limited manpower resources.

ABOUT KMCH

Kovai Medical Center and Hospital Limited (KMCH) was incorporated under The Companies Act, 1956 and started its commercial operation in June 1990, with a capacity of 200 Bed Hospital in the outskirts of Coimbatore.

Nurtured with Indian hospitality and a western mind set, KMCH has grown into a 2,250 beds multi-locational, multi-disciplinary Super specialty hospital, the best and most trusted in Southern India.

Over its more than three-decade journey, the hospital has serviced urban and rural patients from Western Tamil Nadu and parts of Kerala. The Main Center and the Medical College General Hospital is located very proximate to the city airport.

The cornerstones of KMCH legacy are its unstinting focus on clinical excellence, affordable costs, adoption of technology and academics.

TECHNOLOGY, INNOVATION AND FACILITIES

KMCH has been a pioneer in introducing innovative and world class medical technologies. It has efficiently leveraged cutting-edge technology to facilitate best-in-class healthcare delivery. KMCH is also acknowledged as the pioneer in total hip and knee replacement since 1990s.

KMCH has introduced the latest AI-driven CORI Robotic Joint Replacement equipment from USA. Robotic-assisted total knee replacement gives higher precision in bone cuts, optimal component position and alignment. This technique removes minimal native bone and preserves soft tissues helping the patient to recover fast, other advantages of this Robotic technology are greater precision, more surgical accuracy in implant placements on the bone, best customisation to each patientRs.s knee anatomy and, more importantly, lesser pain and swelling post-surgery. This allows the patient to have a quicker recovery with a short hospital stay. Apart from CORI Robotic equipment, for the 1^st time in India KMCH introduced SiemenRs.s 3D C-arm to increase the accuracy and precision in delivering best possible outcomes in fracture fixation surgeries.

KMCH has introduced for the first time in Tamil Nadu the EnSite™ X EP System with EnSite Omnipolar Technology (OT), a new heart mapping platform designed to help physicians treat abnormal heart rhythms, also known as cardiac arrhythmias. This new platform allows for the creation of a 3D model of the patientRs.s cardiac anatomy in real-time, improving how physicians identify and then treat areas of the heart where abnormal rhythms originate. KMCH is the first hospital in Tamil Nadu to use this new cardiac mapping system.

KMCH has a separate Division of Cardiac Pacing Electrophysiology, primarily to deal with patients with cardiac arrhythmias. KMCH was the first hospital in Tamil Nadu to launch a Center of Excellence for Atrial Fibrillation in the year 2020. KMCH has acquired a state-of-the-art cryoablation system for cardiac arrhythmia management, and we are the first in Tamil Nadu to start cryoablation, which is the most advanced and the safest method for treatment of complex cardiac arrhythmias.

Social Responsibility and Affordable Health Care:

1. Paediatric Ward: As a responsible corporate citizen, KMCHRs.s passion for a healthy India has enabled it to extend its healthcare services far beyond pure business. KMCH opened a free Paediatric Oncology Ward in KMCH Medical College General Hospital, to cater to the needs of children with cancer, who cannot afford appropriate therapy.

2. Palliative Care Ward: KMCH has opened an affordable palliative care ward, fulfilling a vitally important but previously unmet need in the community.

3. Low Cost Care: KMCH Medical College General Hospital offers outpatient services across multiple specialties, providing affordable healthcare through high-volume, low-cost care.

OPERATIONAL EXCELLENCE

Healthcare

KMCH remains at the forefront of cancer care through its various initiatives in cardio-oncology, paediatric oncology, and head & neck oncology.

Recently, a one-month-old boy was admitted to our hospital under paediatric care, presenting with noisy breathing and progressive respiratory distress exacerbated by crying and interrupted feeds. He was clinically diagnosed with severe laryngomalacia accompanied by an acute viral infection and was managed conservatively with appropriate antibiotics. An awake fibrotic flexible nasopharyngoscopy revealed a large vallecular cyst obscuring the larynx. Bypassing the cyst, an omega-shaped elongated epiglottis was observed, pushed posteriorly against the posterior pharyngeal wall by the cystic mass.

Although a CT scan was planned, the patientRs.s breathing deteriorated, prompting the paediatric intensivist and airway team to opt for an urgent examination under general anaesthesia and direct laryngoscopy, with the possibility of a tracheostomy if intubation failed. Despite the challenge posed by the cyst obscuring the airway, intubation was successfully performed by an experienced paediatric anaesthetist with the aid of video laryngoscopy.

Rigid direct laryngoscopy confirmed the presence of a large vallecular cyst completely obstructing the view of the glottis. An incision was made, releasing purulent fluid from the cyst, which was then excised completely through endoscopy. Histopathology indicated a squamous epithelial lining without thyroid tissue, consistent with a vallecular cyst.

Post-surgery, the child was electively intubated for a day and extubated the following day. He experienced no postoperative issues, recovered fully, and was discharged in stable condition.

A 4-month-old boy (birth weight 3.2kg) presented with noisy breathing at birth which was reportedly noisier while in the supine position. The child had uneventful antenatal, perinatal and postnatal history. On examination, the child had a severe inspiratory stridor. There were severe chest retractions. He had no retrognathia or craniofacial dysmorphism. Flexible fiberoptic nasopharyngolaryngoscopy revealed grade 3 laryngomalacia with intact, symmetric vocal cord mobility, and no evidence of a glottic or supraglottic mass. Due to failure to thrive, severe chest retractions and persistent inspiratory stridor supraglottoplasty was suggested and under General anesthesia endoscopic supraglottoplasty was performed uneventfully and a nasogastric tube was placed. After two days of intubation the child recovered uneventfully and the nasogastric tube was removed on post op day 5. There were no chest retractions and no noisy breathing. The child was discharged on day 5 and after one week the child gained 400 grams and after a month follow up the child weighs 5.2kg with no respiratory issues.

Medical education

KMCH Medical College welcomed its fifth batch of undergraduate students in November 2022, following a slight delay in the NEET examination. The college currently has an annual intake of 150 students for its MBBS degree course, with all seats filled, adhering to KMCHRs.s tradition of excellence.

Committed to its mission of providing world-class patient care, education, and training, KMCH Medical College is dedicated to developing highly skilled, competent, and compassionate medical professionals. The college creates an environment that fosters excellent learning experiences, supported by robust infrastructure and facilities that promote student learning and overall growth.

The college is backed by a dedicated team of healthcare professionals, including doctors, nurses, and paramedics. Its infrastructure includes 750 general beds, 40 ICU beds, 30 emergency beds, and 14 operation theatres equipped with state-of-the-art medical equipment such as CT scans, MRI, Cath lab, ultrasound, and digital X-ray machines. The Medical College General Hospital offers 24x7 healthcare services to the public.

AWARDS, ACHIEVEMENTS

KMCH Hospital continues to receive numerous accolades, reinforcing its commitment to exemplary patient care and its role as an industry leader. Among its many awards and achievements are:

• Best Performing Hospital by CMCHIS and ABPMJAY - 2023

• Ranked No. 1 in Specialties including Gastroenterology and Hepatology, Urology, Emergency and Trauma, Obstetrics and Gynaecology, Pediatrics, and Oncology by the Times Health Survey 2023

• Times Healthcare Achievers - 2023 by The Times of India

• Ranked No. 1 Multispeciality Hospital in Coimbatore by The Week - Hansa Research Survey 2023

• Diamond Status Award for Stroke Care by the World Stroke Organization - 2023

• Healthcare Excellence in Clinical Operations - 2024 by AHPI

• Healthcare Excellence in Nursing - 2024 by AHPI

• Best Hospital for Emergency Care, Cardiology, Oncology, Gynaecology and Obstetrics, Neurology, Nephrology, Urology, and ENT, honored by The New Indian Express - Financial Express 2024

These awards highlight KMCHRs.s dedication to providing top-notch healthcare services and its continuous efforts to set benchmarks in the medical field.

DISCUSSION ON FINANCIAL AND OPERATIONAL PERFORMANCE

Below detailed table presents summaries of Financial Results of Operations for the Year ended 31 March, 2023 and 2024. The Company operates on two segments - Healthcare Services and Education Services.

(Rs. in Lakhs)

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
Medicines & Hospital Consumables	32,389.87	28,284.31
Consultant charges to Doctors	17,574.88	15,160.43
Employee Benefit Expense	21,946.54	17,969.70
Finance Costs	3,294.39	4,015.61
Depreciation & Amortisation Expense	9,213.62	8,912.50
Other Expenses	15,875.22	13,708.91
Total Expenses	1,00,294.52	88,051.46
Profit Before Taxation (PBT)	23,755.67	15,521.99
Provision for Taxation	5,728.60	3,945.38
Profit After Taxation	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

REVENUE

Total Operating Revenue grew 19.59% fromRs. 1,01,974.68 Lakhs in FY 2022-23 toRs. 1,21,955.27 Lakhs in FY 2023-24.

Healthcare Services: Inpatient Revenues grew by 18.55% fromRs. 67,618.04 Lakhs in FY 2022-23 toRs. 80,161.53 Lakhs in FY 2023-24 and Outpatient Revenue grew by 17.34% fromRs. 27,526.06 Lakhs in FY 2022-23 toRs. 32,299.63 Lakhs in FY 2023-24. Increase in Revenues primarily attributable to increase in Surgeries, Inpatient and Outpatient Volumes.

Education Services: This is the fifth year of reporting on Education Services consequent to the commencement of KMCH Institute of Health Sciences & Research (KMCH Medical College). Revenues under this segment increased fromRs. 6,711.99 Lakhs in FY 2022-23 toRs. 9,365.91 Lakhs in FY 2023-24, which also includes income from Allied Health Sciences and Diplomate of National Board courses

Below Table shows the key drivers of revenue for the periods presented year ended 31^st March, 2024.

Particulars	2023-24	2022-23	Increase/ (Decrease)	% Increase/ (Decrease)
Inpatients (Nos.)	97,978	90,124	7,854	8.71%
Inpatients Revenue (Rs. in Lakhs)	80,161.53	67,618.04	12,543.49	18.55%
Outpatients (Nos.)	11,97,876	10,99,537	98,339	8.94%
Outpatients Revenue (Rs. in Lakhs)	32,299.63	27,526.06	4,773.57	17.34%
KMCH IHSR (No. of Students)	747	600	147	24.50%
AHS Courses (No. of Students)	738	736	2	0.27%
Income from Educational Institutions (Rs. in Lakhs)	9,365.91	6,711.99	2,653.92	39.54%
Other Operating Income (Rs. in Lakhs)	128.20	118.59	9.61	8.10%
Total	1,21,955.27	1,01,974.68	19,980.59	19.59%

• KMCH IHSR - KMCH Institute of Health Sciences and Research

• AHS - Allied Health Sciences Courses

Particulars	2023-24	2022-23
Bed Capacity at the end of the Period (In Nos.)	1,975	2,097
Operating Beds at the end of the Period (In Nos.)	1,787	1,925
Inpatient (In Nos.)	97,978	90,124
Outpatient - New & Review (In Nos.)	11,97,876	10,99,537
Bed Occupancy Rate	60.76%	55.18%
Average Length of Stay (In Days)	4.06	4.30
Average Revenue per occupied bed (inRs. )	20,173	17,442

EXPENSES

MEDICINES AND HOSPITAL CONSUMABLES

During the year ended FY 2023-24, Cost of Medicines and Hospital Consumables increased fromRs. 28,284.31 Lakhs in FY 2022-23 toRs. 32,389.87 Lakhs. Increase of 14.52% is in line with the growth in operating revenues.

CONSULTANT CHARGES:

During the year ended FY 2023-24, Consultant charges increased fromRs. 15,160.43 Lakhs in FY 2023-24 toRs. 17,574.88 Lakhs. Increase of 15.93% is in line with the growth in operating revenues.

EMPLOYEE BENEFITS EXPENSE

Employee Benefit Expenses increased fromRs. 17,969.70 Lakhs in FY 2022-23 toRs. 21,946.54 lakhs. Increase is due to enhanced employee strength subsequent to reduction during pandemic time.

FINANCE COSTS

Finance Costs reduced fromRs. 4,015.61 Lakhs in FY 2022-23 toRs. 3,294.39, a reduction ofRs. 721.22 Lakhs. This decrease in Finance Costs is due to prepayment of loan and regular principal payment in FY 2022-23.

DEPRECIATION AND AMORTIZATION EXPENSE

Depreciation and Amortization Expenses has increased fromRs. 8,912.50 Lakhs in FY 2022-23 toRs. 9,213.62 Lakhs, an increase ofRs. 301.12 Lakhs. Increase is due to capitalization of Property, Plant and Equipment. Additional Medical Equipment bought during the year is another reason for increase in Depreciation Expense.

OTHER EXPENSES

Table below summarizes the operating and other Administrative Expenses for the year ended 31^st March, 2024

Particulars	Year ended 31.03.2024		Year ended 31.03.2023		Increase/ (Decrease)	% Increase/ (Decrease)
	Rs. in Lakhs	% of Revenue	Rs. in Lakhs	% of Revenue
Stores, Dietary, Power & Fuel	4,885.99	4.01	4,030.45	3.95	855.54	21.23%
Hospital Upkeep Expenses	2,768.64	2.27	2,196.58	2.15	572.06	26.04%
Marketing & Advertising	825.96	0.68	624.88	0.61	201.08	32.18%
Repairs & Maintenance	2588.00	2.12	2,148.31	2.11	439.69	20.47%
Rent	5.41	0.00	3.26	0.00	2.15	65.95%
Other Administrative Expenses	4801.22	3.94	4705.43	4.61	95.79	2.04%
Total	15,875.22	13.02	13,708.91	13.44	2,166.31	15.80%

KEY FINANCIAL RATIOS

Key Financial Ratios are detailed in Note No.54 of Notes to Financial Statements.

LIQUIDITY

Primary Sources of Funds are Cash Flows generated from Operations as well as Long Term Borrowings, if required. It is expected that internally generated Cash Flows and our proposed drawdown from sanctioned debt will be adequate to service existing debt, fund internal growth and deploy funds for all Capital Expenditure.

RISK MANAGEMENT

In a rapidly changing business environment with dynamic customer requirements, business risks are constantly evolving. As a result, there is significant variation in the emerging risks landscape across businesses. On account of multi-fold increase in scale and the expanded area of operations, your company gets exposed to a wide range of both internal and external risks and uncertainties.

These internal and external factors may affect achievement of the companyRs.s objectives - whether they are strategic, operational or financial. Risk managementRs.s objective is to assure that uncertainty does not deflect the CompanyRs.s progress from its envisioned business goals.

The Company Risk Management approach is towards striking a balance between managing risks and capitalising opportunities. Its response to identified risks includes acceptance, avoidance, transfer and mitigation. Greater focus is given towards ring-fencing the organisation from major risks that are likely to have a lasting impact on the Company profitability and sustainability.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the health care sectorRs.s objectives, projections, estimates, expectations and predictions contain "forward looking statements" within the meaning of applicable laws and regulations. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. Actual results might differ materially from those either expressed or implied.