Montaje de los Tableros Modificados de los 04 Grupos Nuevos.

B S R & Co. LLP

Chartered Accountants

Annexure to the Independent Auditors' Report

To the members of KMC Speciality Hospitals (India) Limited for the year ended March 31, 2015

(i) (a) The Company has maintained proper records showing full particulars, including quantitative

details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed

assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the aforesaid program, a portion of fixed asset has been physically verified by the management during the year and as per information provided to us, the Company is in the process of reconciling the physical assets with the books and is not expecting any material discrepancy.

(ii) (a) The inventories have been physically verified by the management during the year. In our opinion, the

frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the management

are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification

between the physical stocks and the book records were not material.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms or other parties

covered in the register required under section 189 of the Companies Act, 2013. Accordingly, paragraph 3 (iii) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the

explanation that purchase of certain items of fixed assets are for the specialised requirements of the Company and similarly purchase and sale of certain items of medicines and services rendered are for the specialised requirements of the patients and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit. As per the information and explanations given to us, the Company has appointed an independent expert for carrying out a detailed review of internal financial controls and the work is in progress. The management had confirmed to us that the internal financial controls existing are adequate and are operating effectively and accordingly no material impact is expected to arise on completion of the aforesaid detailed review by an independent expert.

B S R & Co. LLP

Chartered Accountants

(v) In our opinion, and according to the information and explanations given to us, the Company has not

accepted any deposits and accordingly paragraph 3 (v) of the Order is not applicable.

(vi) The Central Government has not prescribed the maintenance of cost records under section 148 (1) of the

Companies Act, 2013 for any of the services rendered by the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the

records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales tax, service tax, value added tax and other material statutory dues have generally regularly been deposited on a regular basis during the year by the Company with the appropriate authorities except for certain delays in remittances of employees' state insurance ranging from 1 to 2 days and with respect to remittances of value added tax ranging from 1 to 4 days. As explained to us, the Company did not have any dues on account of wealth tax, excise duty, customs duty and cess. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income-tax, sales tax, service tax, value added tax and other material statutory dues were in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the following are the dues which have

not been deposited by the Company on account of disputes;

(c) According to the information and explanations given to us, the Company did not have any dues on

account of investor education and protection fund.

(viii) The accumulated losses are not more than 50% of the Company's net worth as at the end of the financial

year. The Company has not incurred cash losses in the current financial year and in the immediately preceding financial year.

Nature of the Statute Nature of the Dues Amount Rs. Period to which the amount relates

Forum where the dispute is pending Customs Act 1962 Customs Duty 8,524,905 * 1989 to 1993 Director General of Health Services * Includes amount paid under dispute amounting to Rs. 913,510/-

Annexure to the Independent Auditors' Report

To the members of KMC Speciality Hospitals (India) Limited for the year ended March 31, 2015

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xi) In our opinion and according to the information and explanations given to us, the term loans taken by the

Company have been applied for the purpose for which they were raised.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed

or reported during the course of our audit. In this connection, we also draw attention to note 40 to the financial statements regarding certain allegations made by a group of shareholders of the parent company on the management.

forB S R & Co. LLP

Chartered Accountants ICAI Firm Registration Number: 101248W/W-100022

Place : Chennai Date : May 29, 2015

B S R & Co. LLP

Chartered Accountants

Annexure to the Independent Auditors' Report

To the members of KMC Speciality Hospitals (India) Limited for the year ended March 31, 2015

Chinnsamy Ganesan Partner

Significant accounting policies

The notes referred to above form an integral part of the financial statements

KMC SPECIALITY HOSPITALS (INDIA) LIMITED