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Directors Report of Kerala Ayurveda Ltd.

Mar 31, 2018

DIRECTORS' REPORT

The Members

Your Directors have pleasure in presenting the 26th Annual Report on the business and operations of the Company and the

Audited Accounts for the Financial Year ended 31st March, 2018.

FINANCIAL RESULTS

The Company's financial performance during the year2017-18 as compared to the previous year 2016-17 is Summarized below:

Rs in Lakhs

Particulars	Standalone		Consolidated
Particulars	2017-18	2016-17	2017-18	2016-17
Product Revenues	3475.10	323 3.00	3692.70	348 3.54
Service Revenues & Other Income	928.12	744.00	2220.88	192 3.14
Gross Income	4403.22	397 7.00	5913.58	540 6.68
Less Indirect Taxes	308.14	351.00	308.14	350.95
Net Income from Sales/Services	4095.07	362 5.00	5605.44	505 5.73
Profit before Interest, Depreciation & Tax (EBITDA)	546.58	486.93	786.65	724.82
Profit Before Tax	340.07	330.24	416.65	424.98
Net Profit/Loss after tax	230.05	227.38	287.95	334.97
Minority interest in Profit	Â	-	7.12	21.99
Net Consolidated Profit	230.05	227.38	280.83	312.98
Loss Brought forward from previous year	(469.11)	(696.4 9)	(2571.98)	(2884.96)
Loss Carried to the Balance Sheet	(239.05)	(469.1 1)	(2291.16)	(2571.98)

REVIEW OF OPERATIONS

During the Financial Year under review, the operational results ended with a profit of" 340.07 Lakhs as against" 330.24 Lakhs during previous year. The Net revenue of the company stands at" 4095.07 Lakhs as against " 3625.00 Lakhs during previous year showing agro wth of 13 %. The consolidated net revenue including its subsidiaries for current year is" 5605.44 Lakhs against " 5055.73 Lakhs during previous year resulting in a growth of 11%.

During Financial Year under review, your company was able to improve the market share in Kerala and made a big progress outside Kerala.

There are no material changes and commitments 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 related and the date of this report.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your company has seven subsidiaries including one step down subsidiary as on 31st March, 2018 and the details are as under:

SL	Name	Location	% of holding
1	Ayurvedagram Heritage Wellness Centre Pvt Ltd.	India	74
2	Ayurvedic Academy Inc .	USA	100
3	Suveda Inc. (formerly known as Nutraveda Inc.)	USA	100
4	AyuNatural Medicine Clinic , P S	USA	100
5	CMS Katra Holdings LLC	USA	81.67
6	CMS Katra Nursing LLC	USA	100*
7	Nutraveda Pte Ltd .	Singapore	100

CMS Katra Holdings LLC holds 100% shareholding in CMS Katra Nursing LLC; hence CMS Katra Nursing LLC is a fully owned step down subsidiary of your company.

PERFORMANCE OF SUBSIDIARIES

Indian Subsidiary

During the year under review,M/s. Ayurvedagram Heritage Wellness Centre Pvt.ltd.has achieved a turnover of .763.94 lakhs Â as against 796.44 lakhs in the previous financial year. Accordingly, the EBIT DA of the company is 206.76 lakhs against 241.00 lakhs in the previous year.

Overseas Subsidiaries

The combined turnover of overseas subsidiaries was " 740 Lakhs as compared to " 681.00 Lakhs in the previous year. Kerala Ayurveda Academy (Ayurvedic Academy Inc.) is currently offering certified courses in the state of Washington and California and also offers a distant learning course across USA.

CONSOLIDATED FINANCIAL STATEMENTS

As per Rule 8 of Companies (Accounts) Amendments Rules, 2016, a report on the highlights of performance of subsidiaries, associates and joint venture companies and their contributions to the overall performance of the company during the period under report is attached as Annexurel Any member indented to have a copy of Balance sheet and other financial statement of these Companies may write to Company Secretary. It shall also be kept for inspection during business hours by any shareholder in the registered office of the Company and the respective offices of its subsidiary companies. It shall also be made available on the website of the Company www.kerala ayurveda.biz/invest or - relationships/ under the Investors" Tab.

COMPANIES WHICH HAVE BECOME OR CEASEDTO BE ITS SUBSIDIARIES DURING THE YEAR

During the financial year ended 31 st March, 2018, no entity became or ceased to be the subsidiary, joint venture or associate of the Company.

DIVIDEND

In view of the accumulated losses of the past, your Directors are not in a position to recommend any dividend for the current year.

RESERVES

During the year the total reserves and surplus of the company has improved to" 969.49 Lakhs from 739.44Lakhs. During the year Â company earned a net surplus of" 230.05 Lakhs. The company does not propose to transfer any amount to reserves during the period.

CHANGE IN THE NATURE OF BUSINESS. IF ANY

There was no change in the nature of business of the Company during the financial year ended 31 st March, 2018

DIRECTORS& KEY MANAGERIAL PERSONS:

Appointment / Reappointment/Resignation of Directors

Pursuant to the provisions of Section 152 of the Companies Act, 2013, and in terms of Articles of Association of the Company, Mr. Gokul Patnaik (DIN 00027915), Director of the company retires by rotation at ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The Board of Directors recommends his re-appointment.

The Board of Directors appointed Ms.Shailaja Chandra, (DIN: 03320688) as an Additional Independent Director with effect from 11th November, 2017 pursuant to the provisions of Sections 152, 161 and other applicable provisions of the Companies Act, 2013 and the rules made there under read with the Articles of Association of the company to hold the office up to the conclusion of the ensuing Annual General Meeting. Board recommends her appointment as Director for the approval of the shareholders.

Board or Directors in its meeting held on 29th May 2018 approved the reappointments of Dr. K. Anilkumar for a period of 3 years with effect from 28th June 2018. The Board recommends the members approval for the appointment.

None of the directors are disqualified u/s164(2) of the Companies Act, 2013.

MEETINGS OF THE BOARD OF DIRECTORS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year five Board Meetings and four Audit Committee Meetings and three Nomination and Remuneration Committee meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. During the financial year 2017-18, the Board of Directors of the Company met on 29 May,2017,11 August,2017, 27 September,2017,11 November,2017and 30January,2018.

Further, separate Meeting of Independent Directors of the Company was held on 30th January, 2018, where at the prescribed items enumerated under Schedule IV to the Companies Act, 2013 and clause 25(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 were discussed.

DECLARATION BY INDEPENDENT DIRECTOR(S)

Mr. M C Mohan (DIN: 00633439), Mr. S Krishnamurthy (DIN: 00140414), Mr. Kshiti Ranjan Das (DIN: 07212449) and Ms. Shailaja Chandra, (DIN: 03320688) are Independent Directors on the Board of the company.

All the Independent Directors have furnished declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and the Rules made there under.

DETAILS PURSUANT TO SECTION 197(12)OF THE COMPANIES ACT. 2013

Details pursuant to section197(12) of the Companies Act,2013 read with the Companies (Appointment And Remuneration of Managerial Personnel) Rules,2014 form part of this Report as Annexure 2.

BOARD EVALUATION

Pursuant to the provisions of The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements)

Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

NOMINATION AND REMUNERATION POLICY OF DIRECTORS. KEY MANAGERIAL PERSONNEL AND OTHER

EMPLOYEES

As required under Section 178(1) of the Companies Act, 2013, the Board of Directors of the Company has approved a policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided u/s 178(3).The broad parameters covered under the Policy are-Company Philosophy, Guiding Principles, Nomination of Directors, Remuneration of Directors, Nomination and Remuneration of the Key Managerial Personnel and Senior Management and the Remuneration of other employees. The Company's Policy furnished as Annexure 3 forms part of this Report.

AUDITORS:

1. Statutory Auditors

The Statutory Auditors BIJU GEORGE & COMPANY, Chartered Accountants, was appointed for five years in the AGM held on 29.09.2014 subject to ratification at every AGM. The requirement of ratification at every AGM has been omitted vide MCA notification dated 07.05.2018. Hence, the auditors would continue forthe remaining term of one Year i.e. up to the conclusion of the AGM to be held for the financial year ended 31.03.2019. Board of Directors seek the authorization from members to fix remuneration of statutory auditor BIJU GEORGE & COMPANY, Chartered Accountants, forthe remaining term of appointment.

Statutory Auditors' Report

The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self- explanatory and do not call for any further comments.

Details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are report able to the Central Government- Nil

2. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with corresponding Rules framed there under, M/s. SVJS & Associates were re-appointed as Secretarial Auditors of the company to carry out the secretarial audit for the year ending 31^st March, 2018.

Secretarial Audit Report

A Secretarial Audit Report issued by the Secretarial Auditors in Form No. MR-3 is annexed with this Report as Annexure 4.

Regarding the requirement of Peer Review Certificate by Statutory Auditors, we were informed by them that they have taken steps to obtain the same.

Internal Audit & Controls

The Company appointed Mr. Mathew Joseph, Chartered Accountant, as its Internal Auditor During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors' findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in coperations.

3. Cost Auditors

According to Companies(Cost Records and Audit)Rules,2014,you Company is not required to get the cost audit done for financial year 2017-18.

VIGIL MECHANISM /WHISTLE BLOWER POLICY:

Pursuant to the provisions of Section 177(9) & (10)of the Companies Act,2013, a Vigil Mechanism / Whistle Blower Policy for directors and employees to report genuine concerns has been established. The Vigil Mechanism/Whistle Blower Policy has been uploaded on the website of the Company at www.keralaayurveda.biz/investor-relationships/ under' Investor Section'.

The Policy is an extension of the Code of Conduct for Directors & Senior Management Personnel and covers any unethical and improper actions or malpractices and events which have taken place/suspected to take place:

As per the policy all Protected Disclosures should be addressed to the Vigilance Officer / Company Secretary or to the Chairman of the Audit Committee in exceptional cases.

RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

The Board of Directors has adopted a risk management policy for the company outlining the parameters of identification, assessment, monitoring and mitigation of various risks which is available on the website of the company.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

CREDIT RATING

Kerala Ayurveda Ltd has been awarded NSIC-CRISIL rating of MSE2 which is valid upto 8thMay, 2019.

There was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. CORPORATE SOCIAL RESPONSIBILITY

Your company always had a deep sense of responsibility towards the community. Company conducted medical camps and free medical checkups at various places. Diabetic Awareness campaigns were held to create awareness. Special Orientation training session was also conducted on Yoga Day to the public. Corporate Social Responsibility provisions of the Companies Act, 2013 are not applicable to the company.

DEPOSITS

In terms of the provisions of Section 73 of the Companies Act, 2013, the company has not accepted any deposits from the public during the financial year under review and there are no outstanding fixed deposits from the pubic as on 31st March, 2018.

UNSECURED LOANS FROM DIRECTOR:

There is no amount received as unsecured loan from directors as per Rule 2(1) (viii) provision of the Companies (Acceptance of Deposits) Rules, 2014.

CORPORATE GOVERNANCE

Your company has complied with corporate governance norms as stipulated by SEBI (Listing Obligations and Disclosure

Requirements) Regulations 2015. A detailed report on Corporate Governance in line with requirements of the Companies Act, 2013 and SEBI (Listing Obligations sand Disclosure Requirements) Regulations 2015 is attached to this report. A certificate from statutory auditors confirming the compliance of Corporate Governance is also attached to this report.

AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the report on corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis Report, which forms part of this report.

EXTRACT OF ANNUAL RETURN

As required under Section 92(3) of the Companies Act, 2013, an extract of Annual Return in Form MGT 9 in Annexure 5 forms part of this report.

PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has provided following loans and guarantees and made following investments pursuant to Section 186 of the Companies Act, 2013:

Name of the entity	Relation	Amtn Rupees Lakhs	Particulars of loans, guarantees and investments	Purpose for which the loan, guarantee and investment are proposed to be utilized
Suveda Inc. USA (formerly known as Nutraveda Inc. USA	100% subsidiary	1,159.80	Working Capital Loan given by KAL to subsidiary	To meet the working capital requirement
Ayurvedic Academy Inc., USA	100% subsidiary	1,162.26	Working Capital Loan given by KAL to subsidiary	To meet the working capital requirement
CM S-Katra Holdings LLC, USA	81.67% subsidiary	828.67	Working Capital Loan given by KAL to subsidiary	To meet the working capital requirement
Nutraveda PTE Ltd, Singapore	100% subsidiary	0.44	Working Capital Loan given by KAL to subsidiary	To meet the working capital requirement

Current borrowings of the company are within the limits of Section 180(1 )(c) of the Companies Act, 2013

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contracts or arrangements entered into by the Company with related parties referred to in subsection (1) of Section 188 of the Companies Act, 2013 including certain arm's length transactions under that proviso attached as Annexure 6 in Form AOC-2 forms an integral part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section134(3)(c) of the Companies Act, 2013,in relation to financial statements of the company, the Board of Directors state that:

1. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. 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;

3. 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;

4. the directors had prepared the annual accounts on a going concern basis;

5. 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

6. 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.

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

Company has adopted a policy for prevention of Sexual Harassment of Women at workplace as per the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgoes required under Section134(3) (m)of the Companies Act,2013 read with Rule8(3 )of the Companies (Accounts) Rules,2014 furnished in Annexure7 forms part of this Report

HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company's thrust is on the promotion of talent internally through job rotation and job enlargement.

RESEARCH AND DEVELOPMENT

The Research and Development (R&D) Center of KAL is well-equipped and is engaged in various Research activities spanning across all areas of Ayurvedic Research. During this year we have received license for Myaxyl Spray, Baby oil and many more Kashayam Tablets.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying in unpaid or unclaimed dividend for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF) under Section 124 of the companies Act, 2013.

LISTING WITH STOCK EXCHANGES:

The equity shares of the company are listed on Bombay Stock Exchange and the Company confirms that it has paid the Annual Listing Fees for the year2018-19 to BSE.

ACKNOWLEDGMENTS

The Board places on record its appreciation for the continued patronage, support and co-operation extended by its shareholders, customers, bankers and all Government and statutory agencies with whose help, cooperation and hard work the Company was able to achieve the results. Your directors would further like to record appreciation to the efforts of every employees for their valuable contribution to the Company.

Â	By order of the Board of Directors
Â	For Kerala Ayurveda Limited
Â	Ramesh Vangal
Place: Bengaluru	Chairman
Date: 14th August, 2018	(DIN 00064018)

ANNEXURE 2

The ratio of the remuneration of each directorto the median employee's remuneration and other details in terms of sub- section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Amendment Rules, 2016.

SI. No	Requirements	Disclosure
1	The ratio of remuneration of each director to the median remuneration of the employees for the financial year	Employee / WTD 1:10.5
2.	The percentage increase in remuneration of each Director, CFO, CS in the Financial Year	ED-0%, CS-0%, CFO-0%
3.	The percentage increase in the median remuneration of employees in the financial year	20%
4.	The number of permanent employees on the rolls of the Company	285
5.	Average percentile increase already made in the salaries of employees other than the managerial personnel	9.4%
6.	Affirmation that the remuneration is as per the remuneration policy	Yes

* No employee was in receipt of remuneration of more than rupees One Crore and Two lakhs for the FY 2017-18 in aggregate

* No employee who was employed for part of the year was in receipt of remuneration of more than Rupees Eight Lakhs and Fifty Thousand Per month for the FY 2017-18 as per Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016.

ANNEXURE-3

NOMINATION AND REMUNERATION POLICY OF KERALA AYURVEDA LIMITED PREAMBLE:

Section 178 ofthe Companies Act, 2013 and the provisions of the Chapter IV, Regulation 19 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations 2015, require the Nomination and Remuneration Committee of the Board of Directors of every listed entity, to

A. Devise a policy on Board diversity;

B. Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal;

C. Formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;

D. Formulate the criteria for evaluation of Independent Directors and the Board and carry out evaluation of every director's performance;

E. The company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.

Accordingly, in adherence to the above said requirements the Nomination and Remuneration Committee of the Board of Directors of Kerala Ayurveda Limited(KAL) herein below recommends to the Board of Directors for its adoption the Nomination and Remuneration Policy forthe directors, key managerial personnel and other employees of the Company as set out below.

A. POLICY ON BOARD DIVERSITY

A.1. Purpose of this Policy:

This Policy on Board Diversity sets out the Company's approach to ensuring adequate diversity in its Board of Directors (the "Board") and is devised in consultation with the Nomination and Remuneration Committee (the "Committee") of the Board.

A.2. Scope of Application:

The aforesaid Policy appliesto the Board of Kerala Ayurveda Limited (the "Company").

A.3. Policy Statement:

The Company believes that a diverse Board will enhance the quality of the decisions made by the Board by utilizing the different skills, qualification, professional experience, knowledge etc. of the members of the Board, necessary for achieving sustainable and balanced development.

For appointments of persons to office of directors and deciding composition of the Board, the Nomination and Remuneration Committee (NRC Committee) and the Board shall also have due regard to this policy on Board diversity.

All Board appointments are made on merit, in the context of the skills, experience, independence, knowledge and integrity which the Board as a whole requires to be effective.

The Board of directors of the Company shall have an optimum combination of executive and non-executive directors. At a minimum, the Board of the Company shall consist of at least one woman Director.

Selection of candidates will be based on a range of diversity perspectives, including but not limited to age, educational background, professional experience, skills, knowledge and length of service. The ultimate decision will be based on merit and contribution that the selected candidates will bring to the Board, having due regard for the benefits of diversity on the Board. The Board's composition (including gender, age, length of service) will be disclosed in the Corporate Governance Report annually.

B. APPOINTMENT AND REMOVAL OF DIRECTOR. KMP AND SENIOR MANAGEMENT B.1 APPOINTMENT CRITERIA AND QUALIFICATIONS:

1. The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend to the Board his / her appointment.

2. A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient/satisfactory for the concerned position.

3. The Company shall not appoint or continue the employment of any person as Managing Director / Whole-time Director/Manager who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years.

B. 2 TERM/TENURE:

1. Managing Director/Whole-time Director/Manager (Managerial Person): The Company shall appoint or re-appoint any personal as its Managerial Person for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.

2. Independent Director: An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re- appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report.

3. No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.

4. At the time of appointment of Independent Director it should be ensured that number of Boards on which such

Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company.

B.3 REMOVAL

Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or under any other applicable Act, rules and regulations, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management subject to the provisions and compliance of the said Act, rules and regulations.

B.4 RETIREMENT

The Director, KMP and Senior Management shall retire as per the applicable provisions of the Companies Act, 2013 and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management in the same position / remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

C. REMUNERATION OF THE DIRECTORS. KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES REMUNERATION POLICY

C.1 GENERAL

The remuneration / compensation / commission etc. to Managerial Person, KMP and Senior Management Personnel will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required.

The remuneration and commission to be paid to Managerial Person shall be as per the statutory provisions of the Companies Act, 2013, and the rules made there under for the time being in force.

Increments to the existing remuneration / compensation structure may be recommended by the Committee to the Board which should be within the slabs approved by the Shareholders in the case of Managerial Person.

Where any insurance is taken by the Company on behalf of its Managerial Person, KMP and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel.

C.2 REMUNERATION TO MANAGERIAL PERSON. KMP AND SENIOR MANAGEMENT

1. Fixed pay: Managerial Person, KMP and Senior Management shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee in accordance with the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force. The break-up of the pay scale and quantum of perquisites including, employer's contribution to PF, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board on the recommendation of the Committee and approved by the shareholders or /and Central Government, wherever required.

2. Minimum Remuneration: If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Managerial Person in accordance with the provisions of Schedule V of the Companies Act, 2013 and if it is not able to comply with such provisions, with the prior approval of the Central Government.

3. Provisions for excess remuneration: If any Managerial Person draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Companies Act, 2013 or without the prior sanction of the Central Government, where required, he/she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government.

Senior Management: "senior management" shall mean personnel of the company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management one level below the executive directors, including all functional heads.

C.3 REMUNERATION TO NON-EXECUTIVE/INDEPENDENT DIRECTOR:

1. Remuneration / Commission: The remuneration / commission shall be in accordance with the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force.

2. Sitting Fees: The Non- Executive / Independent Director may receive remuneration byway of fees for attending meetings of Board or Committee thereof as decided by the board from time to time. Provided that the amount of such fees shall not exceed the maximum amount as provided in the Companies Act, 2013, per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time.

3. Further, the Company may pay or reimburse to Non-Executive / Independent Director such fair and reasonable expenditure, as may have been incurred by them while performing their role as an Independent Director of the Company. This could include reimbursement of expenditure incurred by them for attending Board/Committee meetings.

4. Limit of Remuneration /Commission: Remuneration /Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the net profits of the Company computed as per the applicable provisions of the Companies Act, 2013.

5. Stock Options: An Independent Director shall not be entitled to any stock option of the Company.

C.4 REMUNERATION TO OTHER EMPLOYEES:

Apart from the Directors, KMP's and senior Management, the remuneration for rest of the employee is determined on the basis of the role and position of the individual employee, including professional experience, responsibility, job complexities and local market conditions.

Decisions on Annual Increment shall be made on the basis of the annual appraisal carries out by HODs of various departments.

D. Evaluation of Independent Directors and the Board

1. INDEPENDENT DIRECTORS:

The Independent Directors shall be evaluated on the basis of the following criteria i.e. whetherthey:

a) act objectively and constructively while exercising their duties;

b) objectively evaluate Board's performance, rendering independent, unbiased opinion

c) exercise their responsibilities in a bona fide manner in the interest of the company;

d) strive to Attend and participate in the Meetings.

e) devote sufficient time and attention to their professional obligations for informed and balanced decision making;

f) refrain from any action that would lead to loss of his independence and inform the Board immediately when they lose their independence,

g) assist the company in implementing the best corporate governance practices.

h) moderate and arbitrate in the interest of the company as a whole, in situations of conflict between management and shareholder's interest.

i) abide by Company's Memorandum and Articles of Association, company's policies and procedures including code of conduct, insider trading guidelines etc.

Apart from the above criterion below-mentioned indicative list of factors may be evaluated as a part of this exercise:

j) Participation and contribution,

k) Commitment (including guidance provided to senior management outside of Board/Committee meetings),

I) Effective deployment of knowledge and expertise,

m) Effective management of relationship with stakeholders,

n) Integrity and maintenance of confidentiality,

o) Independence of behavior and judgment, and Impact and influence.

Also, once a year, the Board will conduct a self-evaluation. It is the responsibility of the Chairman of the Board to organise the evaluation process and act on its outcome.

2. NON-INDEPENDENT DIRECTORS/EXECUTIVE DIRECTORS

The Executive Directors and Non- independent directors shall be evaluated on the basis of criteria given to them by the board from time to time and their performance will also be reviewed by Independent directors of the Company in their meeting as per Schedule IV of the Companies Act, 2013.

Annexure 4 Form No. MR-3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31.03.2018

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

The Members

KERALA AYURVEDA LIMITED

VII/415,Nedumbaserry,

Athani PO .AIuva,

Ernakulam-683585, Kerala

We, SVJS & Associates, Company Secretaries, have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by KERALAAYURVEDA LIMITED [CIN: L24233KL1992PLC006592] (hereinafter called "the Company"). Secretarial Audit was conducted in a mannerthat provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31.03.2018 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company forthe financial year ended on 31.03.2018 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-Laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings. There is no new Foreign Direct Investment during the period under review. There are no External Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992:-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

Â© The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(d) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (to the extent applicable);

(vi) As informed to us, the following other laws are specifically applicable to the Company:

1. The Drugs and Cosmetics Act, 1940 and The Drugs and Cosmetics Rules, 1945

2. The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 and the Drugs and Magic Remedies (Objectionable Advertisements) Rules, 1955

3. The Medicinal and Toilet Preparations (Excise Duties) Act, 1955

4. Food Safety And Standards Act, 2006

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards 1 and 2 issued by The Institute of Company Secretaries of India;

(ii) The Listing Agreements entered into by the Company with Bombay Stock Exchange Limited.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above except to the extent as mentioned below:

7776 limited review and audit reports are given by an auditor who has not subjected himself to the peer review process of Institute of Chartered Accountants of India as per Regulation 33 (1) (d) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All decisions of the board were unanimous and the same was captured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period there were no instances of:

i. Public/Right/Preferential issue of shares/debentures/sweat equity; ii. Redemption/buy-back of securities; ill. Merger/amalgamation/reconstruction; iv Foreign technical collaborations.

During the aforesaid period, a resolution was passed under Section 180(1)(c)of the Companies Act, 2013, at the Annual General Meeting held on 27.09.2017 increasing the borrowing powers to" 100 Crores over and above the paid up capital and free reserves.

This report is to be read with Annexure A of even date and the same forms an integral part of this report.

Â	For SVJS & Associates
Â	Company Secretaries
Â	sd/-
Knrhi	CS Vincent P.O.
Â	Senior Partner
14.08.2018 XâN.	CP No.: 7940, PCS: 3067

ANNEXURE A

ANNEXURE TO THE SECRETARIAL AUDIT REPORT OF EVEN DATE To

The Members

KERALA AYURVEDA LIMITED VII/415, Nedumbaserry, AthaniP.O, Aluva, Ernakulam-683585, Kerala

Our Secretarial Audit Report of even date is to be read along with this letter.

1. Maintenance of the secretarial records is the responsibility of the management of the Company. Our responsibility as Secretarial Auditors is to express an opinion on these records, based on our audit.

2. During the audit, we have followed the practices and processes as were appropriate, to obtain reasonable assurance about the correctness of the contents of the secretarial records. We believe that the process and practices we followed provide a reasonable basis for our report.

3. The correctness and appropriateness of financial records and Books of Accounts of the Company have not been verified.

4. We have obtained the Management Representation about the compliance of laws, rules and regulations and happening of events etc., wherever required. We relied on managment representation where we were unable to verify the underlying documents.

5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards etc. is the responsibility of management. Our examination was limited to the verification of the procedures and compliances on test basis.

6. While forming an opinion on compliance and issuing the Secretarial Audit Report, we have also taken into consideration the compliance related actions taken by the Company after 31a March 2018 but before issue of the Report.

7. We have considered actions carried out by the Company based on independent legal/professional opinion as being in compliance with law, wherever there was scope for multiple interpretations.

Â	For SVJS & Associates
Â	Company Secretaries
Â	sd/-
Kochi	CS Vincent P.O. Senior Partner
14.08.2018	CP No.: 7940, PCS: 3067

ANNEXURE-5

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2018

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.

I. REGISTRATION & OTHER DETAILS:

1.	CIN	L24233KL1992PLC006592
2.	Registration Date	6tnJuly 1992
3.	Name of the Company	Kerala Ayurveda Limited
4.	Category / Sub-category of the Company	Drugs and Pharmaceuticals
5.	Address of the Registered office & contact details	VII/415, Nedumbassery Athani P O, Aluva 683585 +91-484-2476301
6.	Whether listed company	Yes
7.	Name, Address & contact details of the Registrar & Transfer Agent, if any.	M/s. Integrated Registry Management Service Pvt Ltd Kences Towers, No.1 Ramakrishna Street T Nagar, Chennai-600 017 Ph:044-28140801-03 Fax:044-28142479 Email: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

S. No.	Name and Description of main products / services	NIC Code of the Product/service	% to total turnover of the company
1	Ayurvedic Medicine	21003	81%
2	Health Care Services	86901	19%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SL	Name And Address Of The Company	CIN/GLN	Holding/ Subsidiary /Associate	% of Shares Held	Applicable Section
1	Katra Holdings Ltd, Mauritius	NA	Holding	61.52%	2(46)
2	Ayurvedagram Heritage Wellness Centre Pvt Ltd	U74140KA2003 PTC031511	Subsidiary	74%	2(87)
3	Suveda Inc., USA (Formerly known as Nutraveda Inc)	NA	Subsidiary	100%	2(87)
4	Ayu Natural Medicine Clinic PS, USA	NA	Subsidiary	100%	2(87)
5	Ayurvedic Academy Inc., USA	NA	Subsidiary	100%	2(87)
6	CMS Katra Holdings LLC, USA	NA	Subsidiary	100%	2(87)
7	CMS Katra Nursing LLC, USA	NA	Subsidiary	81.67%	2(87)
8	Nutraveda Pte Ltd, Singapore	NA	Subsidiary	100%	2(87)

I.SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

Â l) Category-wise Share Holding

Category		No. of shares hed at the beginning of the year				No. of shares held at end of the year				Â
Category		Dani.	Physfca1	Total	% of total shares	Demat	Physical	Total	% of total shares	% change during the year
A	SHAREHOLDING OF PROMOTE RAND PROMOTER GROUP	0	Â	0	0.000	Â	Â	Â	Â	Â
(D	Indian	0	Â	0	Â	Â	Â	Â	Â	Â
A	Individual/Hindu Undivided Family	0	Â	0	Â	Â	Â	Â	Â	Â
B	Central Government	0	Â	0	Â	Â	Â	Â	Â	Â
C	State Government	Â	Â	Â	Â	Â	Â	Â	Â	Â
D	Bodies Corporate	0	Â	0	Â	Â	Â	Â	Â	Â
E	Financial Institutions/Banks	0	Â	0	Â	Â	Â	Â	Â	Â
F	Any other(specify)	0	Â	0	Â	Â	Â	Â	Â	Â
Â	SUB TOTAL A(1)	0	0	0	0.000	0	0	0	0.00	0.00
(2)	Foreign	0	Â	0	Â	Â	Â	Â	Â	Â
A	lndividual(Non resident/foreign)	0	Â	0	Â	Â	Â	Â	Â	Â
B	Bodies corporate	6493435	0	6493435	61.52	6493435	0	6493435	61.52	0.00
C	Institutions	0	Â	0	Â	Â	Â	Â	Â	Â
D	Qualified Foreign Investor	0	Â	0	Â	Â	Â	Â	Â	Â
E	Any other(specify)	0	Â	0	Â	Â	Â	Â	Â	Â
Â	SUB TOTAL A(2)	6493435	0	6493435	61.52	6493435	0	6493435	61.52	0.00
Â	Total Shareholding of promoter and Promoter Group(A)=A(1)+A(2)	6493435	0	6493435	61.52	6493435	0	6493435	61.52	0.00
B	Public Shareholding	0	Â	0	Â	Â	Â	Â	Â	Â
(D	Institutions	0	Â	0	Â	Â	Â	Â	Â	Â
A	Mutual funds/UTI	0	2976	2976	0.03	0	2976	2976	0.03	0.00
B	Financial Institutions/Banks	0	1709	1709	0.02	1103	1709	2812	0.03	0.01
C	Central Government	0	Â	0	Â	Â	Â	Â	Â	Â
D	State Government(s)	Â	Â	Â	Â	Â	Â	Â	Â	Â
E	Venture Capital Funds	0	Â	0	Â	Â	Â	Â	Â	Â
F	Insurance Companies	0	Â	0	Â	Â	Â	Â	Â	Â
G	Foreign Institutional Investors	0	Â	0	Â	Â	Â	Â	Â	Â
H	Foreign Venture Capital Investors	0	Â	0	Â	Â	Â	Â	Â	Â
I	Qualified Foreign Investor	0	Â	0	Â	Â	Â	Â	Â	Â
J	Any other(specify)	0	Â	0	Â	Â	Â	Â	Â	Â
Â	SUB TOTAL B(1)	0	4685	4685	0.04	1103	4685	5788	0.05	0.01
(2)	Non-Institutions	0	Â	0	Â	Â	Â	Â	Â	Â
A	Bodies Corporate(lndian/foreign/Over seas)	243443	8986	252429	2.39	301358	8986	310344	2.94	0.55
B	lndividuals(Resident/NRI /Foreign National)	0	Â	0	Â	Â	Â	Â	Â	Â
(i)	Individual shareholders holding Nominal share Capital upto Rs.1 Lakh	1499732	243919	1743651	16.52	1822499	234384	2056883	19.49	2.97
(ii)	Individual sharehodlers holding Nominal share Capital above Rs.1 Lakh	1326892	656841	1983733	18.79	985844	668421	1654265	15.67	-3.12

c	Any other(specify)	77737	0	77737	0.74	34955	0	34955	0.33	-0.41
Â	SUB TOTAL B(2)	3147804	909746	4057550	38.44	3144656	911791	4056447	38.43	-0.01
Â	Total Public Share Holding (B)=B(1)+B(2)	3147804	914431	4062235	38.48	3145759	916476	4062235	38.48	0.00
Â	TOTAL (A)+(B)	0	Â	0	Â	Â	Â	Â	Â	Â
c	Shares held by Custodians and against which Depository Receipts have been issued	0	Â	0	Â	Â	Â	Â	Â	Â
Â	GRAND TOTAL (A)+(B)+(C)	9641239	914431	10555670	61.93	9639194	916476	10555670	87.93	0.00

ii) Shareholding of Promoter-

SN	Shareholder's Name	Shareholdng at the beginning of the year			Sharehddng at t he end of the year			% change in shareh olding during the year
Â	Â	No. of Shares	%of total Shares of the company	%of Shares Hedged/ encumberedto total shares	No. of Shares	%of total Shares of the company	%of Shares Pledged/ encumber ed to total shares	% change in shareh olding during the year
1	Katra Holdings Ltd., , Mauritius	6493435	61.52	61.93	6493435	61.52	87.93	NIL

iii) Change in Promoters' Shareholding (please specify, if there is no change)

SI No.	Â	Shareholding at the beginning of the year		Cumulative Shareholding during the year
SI No.	Particulars	No. of shares	% of total shares of the company	5 No. of shares	% of total shares of the company
Â	At the beginning of the year	Â	Â	Â	Â
Â	Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment/ transfer/ bonus/ sweat equity etc.	Â	Â	No Change	Â
Â	At the end of the year	Â	Â	Â	Â

iv) Shareholding pattern of top ten shareholders (Other than Directors, Promoters and Holders GDR's & ADR's)

REM1	OP_BAL	OP_PER	DIFF	DIFF_PER	CL_BAL	CL_PER	Reason for Difference
SI No.1 Name:SHON RANDHAWA	Â	Â	Â	Â	Â	Â	Â
PAN :3693	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	497642	4.714	Â	Â	Â	Â	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	497642	4.714	NA
SI No.2 Name:KAVITA VIPULBHAGAT	Â	Â	Â	Â	Â	Â	Â
PAN :ASRPB4563C	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	103970	0.985	Â	Â	Â	Â	Â
07/04/2017	Â	Â	263	0.002	104233	0.987	Â
14/04/2017	Â	Â	-188	-0.002	104045	0.986	Â
28/04/2017	Â	Â	-1600	-0.015	102445	0.971	Â
05/05/2017	Â	Â	-651	-0.006	101794	0.964	Â
12/05/2017	Â	Â	1348	0.013	103142	0.977	Â
19/05/2017	Â	Â	728	0.007	103870	0.984	Â
26/05/2017	Â	Â	-100	-0.001	103770	0.983	Â
09/06/2017	Â	Â	-8608	-0.082	95162	0.902	Â
23/06/2017	Â	Â	-2800	-0.027	92362	0.875	Â
07/07/2017	Â	Â	150	0.001	92512	0.876	Â
04/08/2017	Â	Â	9437	0.089	101949	0.966	Â
11/08/2017	Â	Â	956	0.009	102905	0.975	Â
18/08/2017	Â	Â	850	0.008	103755	0.983	Â
25/08/2017	Â	Â	10	0.000	103765	0.983	Â
01/09/2017	Â	Â	-100	-0.001	103665	0.982	Â
15/09/2017	Â	Â	-647	-0.006	103018	0.976	Â
22/09/2017	Â	Â	594	0.006	103612	0.982	Â
30/09/2017	Â	Â	-499	-0.005	103113	0.977	Â
13/10/2017	Â	Â	199	0.002	103312	0.979	Â
20/10/2017	Â	Â	-13	0.000	103299	0.979	Â
31/10/2017	Â	Â	-40	0.000	103259	0.978	Â
10/11/2017	Â	Â	-242	-0.002	103017	0.976	Â
24/11/2017	Â	Â	157	0.001	103174	0.977	Â
01/12/2017	Â	Â	-1361	-0.013	101813	0.965	Â
08/12/2017	Â	Â	1000	0.009	102813	0.974	Â
22/12/2017	Â	Â	-100	-0.001	102713	0.973	Â
05/01/2018	Â	Â	-270	-0.003	102443	0.971	Â
12/01/2018	Â	Â	-630	-0.006	101813	0.965	Â
16/02/2018	Â	Â	2	0.000	101815	0.965	Â
23/02/2018	Â	Â	139	0.001	101954	0.966	Â
02/03/2018	Â	Â	1	0.000	101955	0.966	Â
09/03/2018	Â	Â	-8221	-0.078	93734	0.888	Â
16/03/2018	Â	Â	-2524	-0.024	91210	0.864	Â
23/03/2018	Â	Â	15913	-0.151	75297	0.713	Â
30/03/2018	Â	Â	-7000	-0.066	68297	0.647	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	68297	0.647	Sale
SI No. 3 Name:K.SWAPNA	Â	Â	Â	Â	Â	Â	Â
PAN :AMXPK4845Q	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	102000	0.966	Â	Â	Â	Â	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	102000	0.966	NA
SI No. 4 Name:AMIT BHUTRA	Â	Â	Â	Â	Â	Â	Â
PAN :ADTPB1150A	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	81766	0.775	Â	Â	Â	Â	Â
01/12/2017	Â	Â	18341	-0.174	63425	0.601	Â
12/01/2018	Â	Â	10000	-0.095	53425	0.506	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	53425	0.506	Sale
SI No. 5 Name:KRISHNA KODALI	Â	Â	Â	Â	Â	Â	Â
PAN :ADFPK4034L	Â	Â	Â	Â	Â	Â	Â

Opening Balance as on 01/04/2017	75000	0.711	Â	Â	Â	Â	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	75000	0.711	NA
SI No. 6 Name:B. SASHIKANTH	Â	Â	Â	Â	Â	Â	Â
PAN :AADPB5742M	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	67372	0.638	Â	Â	Â	Â	Â
08/09/2017	Â	Â	13639	0.129	81011	0.767	Â
30/03/2018	Â	Â	5953	0.056	86964	0.824	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	86964	0.824	Purchase
SI No. 7 Name:RAKESH KUMAR JAIN	Â	Â	Â	Â	Â	Â	Â
PAN :AAFPJ6867K	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	61000	0.578	Â	Â	Â	Â	Â
16/06/2017	Â	Â	-2000	-0.019	59000	0.559	Â
11/08/2017	Â	Â	-5000	-0.047	54000	0.512	Â
15/09/2017	Â	Â	-2000	-0.019	52000	0.493	Â
27/10/2017	Â	Â	-500	-0.005	51500	0.488	Â
29/12/2017	Â	Â	-1767	-0.017	49733	0.471	Â
02/03/2018	Â	Â	-575	-0.005	49158	0.466	Â
30/03/2018	Â	Â	-3000	-0.028	46158	0.437	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	46158	0.437	Sale
SI No. 8 Name:SAILESH VIKRAMSINH THAKKER	Â	Â	Â	Â	Â	Â	Â
PAN :AAAPT3100G	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	53000	0.502	Â	Â	Â	Â	Â
28/04/2017	Â	Â	4000	0.038	57000	0.540	Â
26/05/2017	Â	Â	1000	0.009	58000	0.549	Â
13/10/2017	Â	Â	-8000	-0.076	50000	0.474	Â
01/12/2017	Â	Â	-1000	-0.009	49000	0.464	Â
08/12/2017	Â	Â	-1000	-0.009	48000	0.455	Â
26/01/2018	Â	Â	2000	0.019	50000	0.474	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	50000	0.474	Sale
SI No. 9 Name:RAMESHWAR NATH PANDEY	Â	Â	Â	Â	Â	Â	Â
PAN :AEKPP5636F	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	51237	0.485	Â	Â	Â	Â	Â
13/10/2017	Â	Â	-1550	-0.015	49687	0.471	Â
10/11/2017	Â	Â	17067	-0.162	32620	0.309	Â
17/11/2017	Â	Â	-4729	-0.045	27891	0.264	Â
24/11/2017	Â	Â	-4700	-0.045	23191	0.220	Â
01/12/2017	Â	Â	-2191	-0.021	21000	0.199	Â
08/12/2017	Â	Â	11001	-0.104	9999	0.095	Â
15/12/2017	Â	Â	-9000	-0.085	999	0.009	Â
05/01/2018	Â	Â	-999	-0.009	0	0.000	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	0	0.000	Sale
SI No.10 Name:LEELA ANN LINDNER	Â	Â	Â	Â	Â	Â	Â
PAN :NA	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	42995	0.407	Â	Â	Â	Â	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	42995	0.407	NA

e) Shareholding of Directors and Key Managerial Personnel:

REM1	OP BAL	OP P ER	DIFF	DIFF PER	CL BAL	CL PER	Reason for Difference
SI No.1 Name:ANIL KUMAR K	Â	Â	Â	Â	Â	Â	Â
PAN :AGFPK6227J	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	342019	3.240	Â	Â	Â	Â	Â
15/09/2017	Â	Â	-4000	-0.038	338019	3.202	Â
06/10/2017	Â	Â	-138000	-1.307	200019	1.895	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	200019	1.895	Sale
SI No. 2 Name:Mr.Gokul Patnaik	Â	Â	Â	Â	Â	Â	Â
PAN :AGFPK6227J	Â	Â	Â	Â	Â	Â	Â
Opening Balance as on 01/04/2017	65	0	Â	Â	Â	Â	Â
Closing Balance as on 31/03/2018	Â	Â	Â	Â	65	0	NA

V) INDEBTEDNESS -Indebtedness of the Company including interest outstanding/ accrued but not due for payment.

Â	Secured Loans excluding deposits	Unsecured Loans	Deposits	Total Indebtedness
Indebtedness at the beginning of the financial Year	Â	Â	Â
i) Principal Amount	1657.03	3545.82	Â	5202.85
ii) Interest due but not paid	Â	Â	Â	Â
iii) Interest accrued but not due	Â	Â	Â	Â
Total (i+ii+iii)	1657.03	3545.82	Â	5202.85
Change in Indebtedness during the financial year	Â	Â	Â	Â
* Addition	2067.75	Â	Â	2067.75
* Reduction	Â	-307.40	Â	-307.40
Net Change	2067.75	-307.4	Â	1760.35
Indebtedness at the end of the financial year	Â	Â	Â	Â
i) Principal Amount	3724.78	3238.42	Â	6963.20
ii) Interest due but not paid	Â	Â	Â	Â
iii) Interest accrued but not due	Â	Â	Â	Â
Total (i+ii+iii)	3724.78	3238.42	Â	6963.20

V) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-

Remuneration to Managing Director, Whole-Time Directors and/or Manager:

Amount in

SN.	Particulars of Remuneration	Name of MD/WTD/ Manager	Total Amount
Â	Â	Dr K Anilkumar, ED	Â
1	Gross salary	Â	Â
	(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961	30,00,000/-	30,00,000/-
	(b) Value of perquisites u/s 17(2) Income-tax Act, 1961	Nil	Nil
	(c) Profits in lieu of salary/section 17(3) Income- tax Act,	Nil	Nil
2	Stock Option / Sweat Equity	Nil	Nil
3	Commission- as % of profit / others,	Nil	Nil
4	Others, please specify	Nil	Nil
Â	Total (A)	30,00,000/-	30,00,000/-
Â	Ceiling as per the Act	Within Limit*	Within Limit*

* Ceiling as per Schedule V of the companies Act 2013 is up to 42 Lakhs per Annum B. Remuneration to other directors.

SN	Particulars of Remuneration	Name of Directors		Â	Â	Total Amount
Â	Â	Mr. S. Krishnamurthy	Mr. Kshiti Ranjan Das	Vlr. M.C.Mohan	Ms. Shailaja Chandra	Â
Â	Independent Directors	Â	Â	Â	Â	Â
1	Fee for attending board/ committee meetings	210000	185000	65000	50000	510000
	Commission / others	Â	Â	Â	Â	Â
	Total (1)	210000	185000	65000	50000	510000
	Other Non-Executive Directors	Â	Â	Â	Â	Â
2	Fee for board committee meetings	Â	Â	Â	Â	Â
	Commission / Others	Â	Â	Â	Â	Â
	Total (2)	Â	Â	Â	Â	Â
Â	Total (B)=(1+2)	210000	185000	65000	50000	510000
Â	Total Managerial Remuneration	210000	185000	65000	50000	510000
Â	Overall Ceiling as per the Act	Within Limit	Within Limit	Within Limit	Within Limit	Within Limit

Ceiling is maximum 1,00,000 per meeting which can be paid to independent Directors as sitting fee. C. Remuneration To Key Managerial Personnel Other Than MD/Manager/WTD

SN	Particulars of Remuneration	Key Managerial Personnel
Â	Â	CS	CFO	Total
1	Gross salary in "	K.Raghunadhan	Arvind Agarwal	Â
	(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961	571308	2893584	3464892
	(b) Value of perquisites u/s 17(2) Income-tax Act, 1961	0	0	0
	(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961	0	0	0
2	Stock Option / Sweat Equity	0	0	0
3	Commission/- as % of profit	0	0	0
4	Others, please specify	0	0	0
Â	Total	571308	2893584	3464892

VII) PENALTIES /PUNISHMENT/ COMPOUNDING OF OFFENCES:

There were no penalties/ punishments/ compounding offences under the Companies Act for the year ending 31 st March, 2018 except for late filing fees paid for delayed e-filing of form amounting to " 12.000/-

ANNEXURE-6

FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Â Amendments Rules, 2016.

Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

1. Details of contracts or arranqements or transactions not at Arm's lenqth basis.

SL. No.	Particulars	Details
a)	Name (s) of the related party & nature of relationship	Ayurvedagram Heritage Wellness Centre Pvt Ltd, Subsidiary company
b)	Nature of contracts/arrangements/transaction	Sale of Ayurvedic Medicines
c)	Duration of the contracts/arrangements/transaction	01 .04.201 7 to 31.03.2020
d)	Salient terms of the contracts or arrangements or transaction including the value, if any	15% discount on MRP of Company Products
e)	Justification for entering into such contracts or arrangements or transactions	Being a subsidiary of the company, KAL is offering such discount.
f)	Date of approval by the Board	11th August, 2017
g)	Amount paid as advances, if any	NIL
h)	Date on which the special resolution was passed in General meeting as required under first proviso to Section 188	27th September. 2017
i)	Total Value of Transaction during the year	49.23 lakhs

Details of contracts or arrangements or transactions at Arm's length basis.

SI. No	Name ofthe Related Party/ Nature of contracts/ arrangements/ Transactions	Nature of relationship	Duration of the contracts/ arrangement s / transactions	Salient terms of the contracts/ Arrangements/ Transaction including value for one year	Date of approval by the Board/ Audit committee	Amount paid as advance
1	Durchase of Raw Materials- All Season Herbs Pvt Ltd	Directors' relative	Need Based	25.25	14th Feb, 2017	N II
2	Receiving services oy Ayuvedagram Heritage Wellness Centre P Ltd	Subsidiary	Need Based	9.00	14th Feb, 2017	NIL
3	Rendering Services to Ayurvedagram Heritage Wellness Centre Pvt Ltd	Subsidiary	Need Based	62.50	14th Feb 2017	Nil
4	Advance to Ayuvedagram Heritage Wellness Centre P Ltd	Subsidiary	Need Based	174.90	14th Feb 2017	174. 9C
5	nterest on Advance to Ayurvedagram Heritage Wellness Centre Pvt Ltd	Subsidiary	Need Based	10.18	14th Feb, 2017	9.16
6	Purchase of Raw Material - CARe Keralam Pvt Ltd	Common Director	Need Based	2.59	14thFeb.2017	N IL
7.	Sale of Raw Materials -CARe Keralam Pvt. Ltd.	Common Director	Need Based	1.31	14thFeb.2017	N IL
8.	Rendering of services- Mason & Summ ers Leisure P Ltd	Common Director	Need Based	7.28	14thFeb.2017	5.69
9	Reimbursement of Expenses to / by KAL Subsidiaries	Subsidiary	Need Based	13.75	14thFeb.2017	NIL
10	Reimbursement of Expenses By/to Katra Phytochem India Pvt Ltd	Common Director	Need Based	2.06	14thFeb.2017	NIL
11	Repayment of Loans-to Katra Holding Pvt Ltd	Common Director	Need Based	424.98	14thFeb.2017	NIL
12	Repayment of Loan by Subsidiaries in USA	Subsidiary	Meed Based	300.95	14thFeb.2017	NIL
13	Managerial Remuneration-Dr K Anilkumar, Director	Whole Time Director	3 year from 28.06.2015	30.00	29th May 2015	NIL

Â	By order of the Board of Directors
Â	For Kerala Ayurveda Limited
Â	Ramesh Vangal
Place: Bengaluru	Chairman
Date: 14th August, 2018	(DIN 00064018)

ANNEXURE 7

Information in accordance with Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Amendment Rules, 2016 and forming part of the Board's Report for the year ended 31March, 2018.

A. CONSERVATION OF ENERGY

I. The Steps taken or Impact on conservation of energy - NIL

II. The Steps taken By the Company for utilizing alternate source of energy - NIL

III. The Capital Investment on energy conservation equipments - NIL

B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

I. The efforts made towards technology absorption All developments were done indigenously

II. The benefits derived like product improvement, cost reduction, product development or import substitution During the year company added 2 more softgel capsules to the product basket.

III. Details of imported technology

During the year, company has not imported any technology. All developments were done indigenously. IV The expenditure incurred on research and development

a)	Capital	NM
b)	Deferred Rev Exp	59.76 Lacs
c)	Revenue Expenditure	3.27 Lacs
d)	Total	63.19 Lacs
e)	Total R&D expenditure as a % of turnover	1.54%

C. FOREIGN EXCHANGE EARNINGS & OUTGO

The details of foreign exchange earnings and outgo are as under:

Foreign Exchange earnings & outgo Earnings	Current year 57.47 Lacs
Outgo	NIL

Â	By order of the Board of Directors
Â	For Kerala Ayurveda Limited
Â	Ramesh Vangal
Place: Bengaluru	Chairman
Date: 14th August, 2018	(DIN 00064018)

Mar 31, 2016

The Members

The Directors have pleasure in presenting the 24^th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended 31^st March, 2016.

FINANCIAL RESULTS

The Company''s financial performance during the year 2015-16 as compared to the previous year 2014-15 is summarized below: Rs. in Lakhs

	Standalone		Consol	dated
Particulars	2015-16	2014-15	2015-16	2014-15
Product Revenues	2757.67	2399.72	2869.97	2427.22
Service Revenues & Other Income	774.20	670.68	1999.38	1720.96
Gross Income	3531.87	3070.40	4869.35	4148.18
Less: VAT & Excise Duty	267.47	241.71	267.47	241.71
Net Income from Sales/Services	3264.40	2832.37	4601.88	3906.47
Profit before Interest, Depreciation & Tax	416.38	329.54	763.64	607.71
(EBITDA)
Profit/Loss before extraordinary items	249.92	157.44	410.83	317.43
Extraordinary Items		â		â
Profit Before Tax	249.92	157.44	410.83	317.43
Net Profit/{Loss) after Tax	172.6	110.58	273.68	251.50
Minority Interest in Profit		...	3.56	15.94
Net Consolidated Profit/(Loss)	172.60	110.58	270.12	235.56
Loss brought forward from previous year	(869.09)	(906.36)	(3056.34)	(3291.90)
Loss Carried to the Balance Sheet	(696.49)	(869.09)	(2884.96)	(3056.34)

REVIEW OF OPERATIONS

During the Financial Year under review, the operational results ended with a Profit before Extraordinary items at Rs.250 Lakhs as against Rs.157 lakhs in the previous year. The Net revenue of the company stands at Rs.3,264 Lakhs as against Rs.2,832 Lakhs in the previous Financial Year reporting an 15% growth. The consolidated net revenue including its subsidiaries for the year is Rs.4,602 Lakhs against Rs.3,906 Lakhs during previous year report an 18% growth.

During the Financial Year under review, your company was able to improve the market share in Kerala and made a big progress outside Kerala.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your company has seven subsidiaries including one step down subsidiary as on 31^st March, 2016 and the details are as under:

SL	Name	Location	% of holding
1	Ayurvedagram Heritage Wellness Centre Pvt. Ltd.	India	74%
2	Ayurvedic Academy Inc.	USA	1 00%
3	Nutraveda Inc.	USA	1 00%
4	Ayu Natural Medicine Clinic, P.S.	USA	1 00%
5	CM S Katra Holdings LLC	USA	81.67%
6	CM S Katra Nursing LLC	USA	1 00%*
7	Nutraveda Pte Ltd.	Singapore	1 00%

* CMS Katra Holdings LLC holds 51% shareholding in CMS Katra Nursing LLC and Nutraveda Inc. holds the balance 49% shareholding; hence it is a fully owned step down subsidiary of your company.

PERFORMANCE OF SUBSIDIARIES Indian Subsidiary

During the year under review, M/s. Ayurvedagram Heritage Wellness Centre Pvt. Ltd. has achieved a turnover of Rs.721 Lakhs against a turnover of Rs.571 Lakhs in the previous financial year clocking a sound growth of 26%. The Net EBITDA of the company is Rs.241Lakhs against Rs.179 Lakhs in the previous year.

Overseas Subsidiaries

The combined turnover of overseas subsidiaries was Rs.681 Lakhs as compared to Rs.530 Lakhs in the previous year. Kerala Ayurveda Academy is currently offering certified courses in the state of Washington and California and also offers a distant learning course across USA.

CONSOLIDATED FINANCIAL STATEMENTS

As per Rule 8 of Companies (Accounts) Amendments Rules, 2016, a report on the highlights of performance of subsidiaries, associates and joint venture companies and their contributions to the overall performance of the company during the period under report is attached as Annexure 1. Any member indented to have a copy of Balance sheet and other financial statement of these Companies may write to Company Secretary. It shall also be kept for inspection during business hours by any shareholder in the registered office of the Company and the respective offices of its subsidiary companies.

It shall also be made available on the website of the Company www.keralaayurveda.biz /investor-relationship under the âInvestorsâ Tab.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES DURING THE YEAR

During the financial year ended 31^st March, 2016, no entity became or ceased to be the subsidiary, joint venture or associate of the Company.

DIVIDEND

In view of the accumulated losses of the past, your Directors are not in a position to recommend any dividend for the current year.

RESERVES

During the year the total reserves and surplus of the company has improved to Rs.512 Lakhs from Rs.339 Lakhs. During the year company earned a net surplus of Rs.173 Lakhs.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements related and the date of this report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the financial year ended 31st March, 2016.

BOARD OF DIRECTORS

Appointment / Reappointment / Resignation of Directors

Pursuant to the provisions of Section 152 of the Companies Act, 2013, and in terms of Articles of Association of the Company, Ms. Katarzyna Zimpel, (DIN 00264084) Director of the company retires by rotation at ensuing Annual General Meeting and being eligible, offer herself for re-appointment. The Board of Directors recommends her re-appointment. Mr.

M S Seetharaman (DIN 07109974), Additional Director has resigned with effect from 13^th August, 2015. Mr. A. T. Jacob (DIN 01663815), Director has resigned with effect from 28^th May, 2016. Mr. Kshiti Ranjan Das (DIN 07212449), was appointed as an Additional Independent Director on 6^th November, 2015. He offers himself as Non Executive Independent Director in this Annual General Meeting. Mr. Gokul Patnaik (DIN 00027915) was appointed as an Additional Non Independent Director with effect from 28^th May, 2016. He offers himself as Non Executive, Non independent Director in this Annual General Meeting.

Ms. Anusha Rajeswaran, Company Secretary has resigned w.e.f.30^th June, 2015 and Ms. Itti Bhargava has joined as Company Secretary on 13^th August, 2015. Due to some personal reasons Ms. Itti Bhargava, Company Secretary has resigned w.e.f. 11^th June, 2016.

None of the directors are disqualified u/s 164(2) of the Companies Act, 2013.

MEETINGS OF THE BOARD OF DIRECTORS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year five Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the listing agreement with the Bombay Stock Exchange. During the financial year 2015-16, the Board of Directors of the Company, met 5 (five) times on 29^th May, 2015, 13^th August 2015, 29^th September, 2015, 6^th November, 2015 and 4^th February, 2016.

Further, a separate Meeting of the Independent Directors of the Company was also held on 23^rd December, 2015, whereat the prescribed items enumerated under Schedule IV to the Companies Act, 2013 and clause 25(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 were discussed.

DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT

Mr.Ronald George Pearce (DIN 00260166), Mr. M C Mohan (DIN 00633439), Mr. S Krishnamurthy (DIN 00140414), Mr.Kshiti Ranjan Das (DIN 07212449) are Independent Directors on the Board of the company.

All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under Section 149 (6) of the Companies Act, 2013 and the Rules made there under.

DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013

Details pursuant to section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed herewith as Annexure 2.

FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

NOMINATION AND REMUNERATION POLICY OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In adherence of Section 178(1) of the Companies Act, 2013, the Board of Directors of the Company approved a policy on directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided u/s 178(3), based on the recommendations of the Nomination and Remuneration Committee.

The broad parameters covered under the Policy are - Company Philosophy, Guiding Principles, Nomination of Directors, Remuneration of Directors, Nomination and Remuneration of the Key Managerial Personnel (other than Managing/ Whole-Time Directors), Key-Executives and Senior Management and the Remuneration of other employees. The Company''s Policy relating to appointment of Directors, payment of Managerial remuneration, Directors'' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure 3 and forms part of this Report.

AUDITORS:

1.Statutory Auditors

M/s. Biju George & Co, Chartered Accountants, Vellaringattu Towers, Thodupuzha 685 584 were appointed as Statutory Auditors of the company upto the conclusion of Annual General Meeting in 2019 subject to ratification at every Annual General Meeting. Company has received a letter, pursuant to Section 139 of the Companies Act, 2013, from M/s. Biju George & Co., Chartered Accountants, Vellaringattu Towers, Thodupuzha 685 584 confirming consent and their eligibility for acting as Statutory Auditors of the Company, if the appointment is ratified at the ensuing Annual General Meeting. The Board also recommends their appointment as Statutory Auditors for the ensuing financial year.

Statutory Auditors'' Report

The Auditors'' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self explanatory and do not call for any further comments.

2. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with corresponding Rules framed there under, M/s. SVJS & Associates were re-appointed as the Secretarial Auditors of the Company to carry out the secretarial audit for the year ending 31^st March, 2016.

Secretarial Audit Report

A Secretarial Audit Report issued by the Secretarial Auditor in Form No. MR-3 is annexed with this Report as Annexure 4.The said report is self-explanatory and does not call for any comments. The Secretarial Auditors'' Report does not contain any qualification, reservation or adverse remark other than Disclosures related requirements in Directorâs Report in the Financial year 2014-15, which have been complied with in Financial year 2015-16.

3. Internal Audit & Controls

The Company appointed Mr. Mathew Joseph, Chartered Accountant, as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

4. Cost Auditors

In terms of the Cost Audit Order dated 31^st December, 2014 notified by the Ministry of Corporate Affairs which exempted certain industries from the purview of Cost Audit, your Company is not required to get the cost audit done for financial year 2015-16.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism / Whistle Blower Policy for directors and employees to report genuine concerns has been established. The Vigil Mechanism / Whistle Blower Policy has been uploaded on the website of the Company at www.keralaayurveda.biz under âInvestorsâ Section. The Policy is an extension of the Code of Conduct for Directors & Senior Management Personnel and covers any unethical and improper or malpractices and events which have taken place/ suspected to take place:

As per the policy all Protected Disclosures should be addressed to the Vigilance Officer of the Company or to the Chairman of the Audit Committee in exceptional cases.

RISK MANAGEMENT POLICY

The Board of Directors has adopted a risk management policy for the company outlining the parameters of identification, assessment, monitoring and mitigation of various risks.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

NSIC CRISIL RATING

Kerala Ayurveda Ltd has been awarded NSIC-CRISIL rating of SE 2A which is valid up to 24^th March, 2017.

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

There was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

CORPORATE SOCIAL RESPONSIBILITY

Your company always had a deep sense of responsibility towards the community. Company conducted medical camps and free medical checkups at various places. Diabetic Awareness campaigns were held to create awareness. Special Orientation training session conducted on Yoga Day to the public. Corporate Social Responsibility provisions of the Companies Act, 2013 are not applicable to the company.

DEPOSITS

CORPORATE GOVERNANCE

Your company has complied with corporate governance norms as stipulated by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A detailed report on Corporate Governance in line with requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is attached to this report. A certificate from statutory auditors confirming the compliance of Corporate Governance is also attached to this report.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company, comprises 4 (Four) Members, namely Mr. S . Krishnamurthy Chairman , Mr.M.C. Mohan, Mr.Kshiti Ranjan Das and Ms.Katarzyna Zimpel are the members of Audit Committee.

Majority of them being Independent Directors except Ms.Katarzyna Zimpel who is a Non-Independent Non-Executive Director. The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis, which forms part of this report.

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 Form MGT 9 as a part of this Annual Report as Annexure 5 is annexed.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has provided following loans and guarantees and made following investments pursuant to Section 186 of the Companies Act, 2013:

Name of the entity	Relation	Amt in Rupees Lakhs	Particulars of loans, guarantees and investments	Purpose for which the loan, guarantee and investment are proposed to be utilized
Nutraveda Inc., USA	100% subsidiary	1,159.80	Interest free Working Capital Loan given by KAL to subsidiary	To meet the working capital requirement
Ayurvedic Academy Inc., USA	100% subsidiary	1,162.26	Interest free Working Capital Loan given by KAL to subsidiary	To meet the working capital requirement
CMS-Katra Holdings LLC, USA	81.67% subsidiary	828.67	Interest free Working Capital Loan given by KAL to subsidiary	To meet the working capital requirement
Nutraveda PTE Ltd, Sngapore	100% subsidiary	0.44	Interest free Working Capital Loan given by KAL to subsidiary	To meet the working capital requirement

Current borrowings of the company are within the limits of Sec. 180(1) (c) of the Companies Act, 2013

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in subsection (1) of Section 188 of the Companies Act, 2013 including certain arm''s length transactions under third proviso is attached as Annexure 6 in Form AOC-2 that forms an integral part of this report.

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 thatâ

(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.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 7 and forms part of this Report

HUMAN RESOURCES

Your Company treats its âhuman resourcesâ as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

RESEARCH AND DEVELOPMENT

The Research and Development (R&D) Center of KAL is well-equipped and is engaged in various Research activities spanning across all areas of Ayurvedic Research. During this year Ghritham conversion into Soft Gelatin Capsules and Kashayam into Kashayam Tablets were carried out successfully and are actively engaged in extending the range of existing products.

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 which were required to be transferred to Investor Education and Protection Fund (IEPF).

LISTING WITH STOCK EXCHANGES:

The equity shares of the company are listed on Bombay Stock Exchange and the Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 to BSE.

ACKNOWLEDGEMETS

The Board places on record its appreciation for the continued patronage, support, co-operation extended to the Company by its shareholder, customers, bankers and all the Government and statutory agencies with whose help, cooperation and hard work the Company is able to achieve the results. Your directors would further like to record appreciation to the efforts of every employees for their valuable contribution to the Company.

By order of the Board of Directors

For Kerala Ayurveda Limited

Sd/-

Ramesh Vangal

Place: Bengaluru Chairman

Date :9^th August, 2016 (DIN 00064018)

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 23rd Annual Report on the business and operations of the Company and the accounts for the Financial Year ended 31st March, 2015.

FINANCIAL RESULTS

The Company's financial performance during the year 2014-15 as compared to the previous year 2013-14 is summarized below:

Particulars Standalone

2014-15 2013-14

Product Revenues 2399.72 2231.05

Service Revenues & Other Income 670.68 538.62

Gross Income 3070.40 2769.67

Less: VAT & Excise Duty 241.71 214.61

Net Income from Sales/Services 2832.37 2555.05

Profit before Interest, Depreciation & 329.54 285.72 Tax (EBITDA)

Profit /Loss before extraordinary items 157.44 127.90

Extraordinary Items Â 20.93

Profit Before Tax 157.44 148.83

Net Profit/(Loss) after Tax 110.58 102.82

Minority Interest in Profit Â Â

Net Consolidated Profit/(Loss) 110.58 102.82

Loss brought forward from previous year (906.36) (1009.17)

Loss Carried to the Balance Sheet 869.09 (906.36)

Particulars Consolidated

2014-15 2013-14

Product Revenues 2427.22 2251.39

Service Revenues & Other Income 1720.96 1448.87

Gross Income 4148.18 3700.26

Less: VAT & Excise Duty 241.71 214.62

Net Income from Sales/Services 3906.47 3485.64

Profit before Interest, Depreciation & 607.71 388.32 Tax (EBITDA)

Profit /Loss before extraordinary items 317.43 153.74

Extraordinary Items Â 20.93

Profit Before Tax 317.43 174.66

Net Profit/(Loss) after Tax 251.50 91.87

Minority Interest in Profit 15.94 17.47

Net Consolidated Profit/(Loss) 235.56 74.40

Loss brought forward from previous year (3291.90) (3366.30)

Loss Carried to the Balance Sheet (3056.34) (3291.90)

REVIEW OF OPERATIONS

During the financial year under review, the operational results ended with a Profit before Extraordinary items at Rs. 111 Lacs as against Rs. 82 Lacs in the previous year. The Net revenue of the company stands at Rs. 2832 Lacs as against Rs. 2555 Lacs in the previous financial year reporting an 11% growth. The consolidated net revenue including its subsidiaries for the year is Rs. 3906 Lacs against Rs. 3486 Lacs during previous year.

During the financial year under review, distribution of Ayurveda Formulation has shown a growth of 13%. Your company was able to improve the market share in Kerala and made a big progress outside Kerala.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your company has seven subsidiaries including one step down subsidiary as on 31st March, 2015 and the details are as under:

SL Name Location % of holding

1 Ayurvedagram Heritage Wellness Centre Pvt. Ltd. India 74%

2 Ayu Natural Medicine Clinic, P.S. USA 100%

3 Ayurvedic Academy Inc. USA 100%

4 Nutraveda Inc. (Formerly known as Ayu Inc.) USA 100%

5 CMS Katra Holdings LLC USA 81.67%

6 CMS Katra Nursing LLC USA 100%*

7 Nutraveda Pte Ltd. Singapore 100%

* CMS Katra Holdings LLC holds 51% shareholding in CMS Katra Nursing LLC and Ayu Inc holds the balance 49% shareholding; hence it is a fully owned step down subsidiary of your company.

PERFORMANCE OF SUBSIDIARIES Indian Subsidiary

During the year under review, M/s. Ayurveda Gram Heritage Wellness Centre Pvt. Ltd. has achieved a turnover of Rs. 637 Lacs against a turnover of Rs. 564 Lacs in the previous financial year clocking a sound growth of 13%. The Net profit of the company, after providing for tax is Rs. 61 Lacs against Rs. 66 Lacs in the previous year.

Overseas Subsidiaries

The combined turnover of overseas subsidiaries was Rs. 530 Lacs as compared to Rs. 454 Lacs in the previous year. Kerala Ayurveda Academy under Ayurvedic Academy Inc is currently offering certified courses in the state of Washington and California and also offers a distant learning course across USA.

CONSOLIDATED FINANCIAL STATEMENTS

A report on performance and financial position of each of the subsidiaries, associates and joint venture companies is attached as Annexure 1. Accordingly, this annual report does not contain the reports and other statements, of the subsidiary companies. Any member intented to have a copy of Balance sheet and other financial statement of these Companies may write to Company Secretary. It shall also be kept for inspection during business hours by any shareholder in the registered office of the Company and the respective offices of its subsidiary companies.

It shall also be made available on the website of the Company www.keralaayurveda.biz under the "Investors" section. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES DURING THE YEAR

During the financial year ended 31st March, 2015, no entity became or ceased to be the subsidiary, joint venture or associate of the Company.

DIVIDEND

In view of the accumulated losses of the past, your Directors are not in a position to recommend any dividend for the current year.

RESERVES

During the year the total reserves and surplus of the company has improved to Rs. 325 Lacs from Rs. 288 Lacs. Based on the Companies Act, 2013 Rs.73 Lacs of reserves was adjusted towards depreciation of the assets whose useful life as on 1st April, 2014 was nil. During the year company earned a net surplus of Rs. 110 Lacs.

MATERIAL CHANGES AND COMMITMENTS

With a view to broad base the reach of the company & to propagate Ayurveda, your company has revamped its website by adding useful articles, blogs, videos related to Ayurveda and companies products. Your company is providing access to people who are currently not served by our centers or our distribution network by providing Ecommerce option to pay online or by making offline payments at any of the ICICI bank branches across India and receive products at their doorsteps.

Company believes that this will help building knowledge, communication and will increase Purchase of Company' products. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the financial year ended 31st March, 2015.

BOARD OF DIRECTORS

Appointment / Reappointment / Resignation of Directors

Mr. A T Jacob, Director of the company retire by rotation at ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

During the year, Dr. K Rajagopalan, Mr. M C Mohan, Mr. Ronald George Pearce and Mr. S Krishnamurthy have been appointed as an Independent Directors for a term of 5 years. Dr. K Rajagopalan Independent Director of the company had passed away on 10th January, 2015. Dr. K Rajagopalan had contributed immensely for the growth of the company. The Board placed on record its appreciation for the valuable services rendered and the wholehearted support and advice given by him to the board during his tenure. Mr. M S Seetharaman was appointed as Additional Independent Director with effect from 10th February, 2015. He offers himself as Non Executive Independent Director in this Annual General Meeting.

Also, Mr. Arvind Agarwal has been appointed as Chief Financial Officer of the company with effect from 24th May 2014. Mr. K Raghunadan, Company Secretary has resigned from the post of Company Secretary on 10th February, 2015. Pursuant to his resignation, Ms. Anusha Rajeswaran was appointed as Company Secretary from 10th February, 2015.

MEETINGS OF THE BOARD OF DIRECTORS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year five Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the listing agreement with the Bombay Stock Exchange.

During the financial year 2014-2015, the Board of Directors of the Company, met 5 (five) times on 24th May, 2014, 6th August 2014, 29th September, 2014, 14th November, 2014 and 10th February, 2015.

Further, a separate Meeting of the Independent Directors of the Company was also held on 14th November, 2014, whereat the prescribed items enumerated under Schedule IV to the Companies Act, 2013 and clause 49 of the Listing Agreement were discussed.

DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT

All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under section 149 (6) of the Companies Act, 2013.

DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013

Details pursuant to section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed herewith as Annexure 2.

FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

NOMINATION AND REMUNERATION POLICY OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In adherence of section 178(1) of the Companies Act, 2013, the Board of Directors of the Company approved a policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided u/s 178(3), based on the recommendations of the Nomination and Remuneration Committee.

The broad parameters covered under the Policy are - Company Philosophy, Guiding Principles, Nomination of Directors, Remuneration of Directors, Nomination and Remuneration of the Key Managerial Personnel (other than Managing/ Whole-time Directors), Key-Executives and Senior Management and the Remuneration of Other Employees. The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure 3 and forms part of this Report.

AUDITORS:

1. Statutory Auditors

M/s.Biju George & Co, Chartered Accountants, Vellaringattu Towers, Thodupuzha 685584 were appointed as Statutory Auditors of the company upto the conclusion of Annual General Meeting in 2019 subject to ratification at every Annual General Meetng. Company has received a letter, pursuant to Section 139 of the Companies Act, 2013, from M/s.Biju George & Co., Chartered Accountants, Vellaringattu Towers, Thodupuzha 685584 confirming consent and their eligibility for acting as Statutory Auditors of the Company, if the appointment is ratified at the ensuing Annual General Meeting. The Board also recommends their appointment as Statutory Auditors for the ensuing financial year.

Statutory Auditors' Report

The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are selfexplanatory and do not call for any further comments.

2. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with corresponding Rules framed there under, M/s. SVJS & Associates were appointed as the Secretarial Auditors of the Company to carry out the secretarial audit for the year ending 31st March, 2015.

Secretarial Audit Report

A Secretarial Audit Report given by the Secretarial Auditors in Form No. MR-3 is annexed with this Report as Annexure 4. There are few qualifications, reservations or adverse remarks made by Secretarial Auditors in their Report and the company has taken steps to ensure that it complies in future and corrective action has been taken to rectify the observation made in the report.

3. Internal Audit & Controls

The Company appointed Mr.Mathew Joseph, Chartered Accountant, as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

4. Cost Auditors

In terms of the Cost Audit Order dated 31st December, 2014 notified by the Ministry of Corporate Affairs which exempted certain industries from the purview of Cost Audit, your Company is not required to get the cost audit done for financial year 2014-15. VIGIL MECHANISM :

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.keralaayurveda.biz under "Investors" Section.

RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

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

There was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

CORPORATE SOCIAL RESPONSIBILITY

Your company always had a deep sense of responsibility towards the community. Company conducted medical camps and free medical check ups at various places. Diabetic Awareness campaign was held on world Diabetic Awareness day to create awareness.

DEPOSITS

In terms of the provisions of Section 73 of the Companies Act, 2013, the company has not accepted any deposits from the public during the financial year under review and there are no outstanding fixed deposits from the pubic as on 31st March, 2015.

CORPORATE GOVERNANCE

Your company has complied with corporate governance norms as stipulated by Listing Agreement entered into with the Bombay Stock Exchange. A detailed report on Corporate Governance in line with requirements of the Companies Act, 2013 and clause 49 of the Listing Agreement entered into with stock exchange is attached to this report. A certificate from statutory auditors confirming the compliance of Corporate Governance is also attached to this report.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company, comprises 4 (Four) Members, namely Mr. S Krishnamurthy, Mr. M C Mohan, Ms. Katarzyna Zimpel and Dr. K Rajagopalan, majority of them being Independent Directors except Ms. Katarzyna Zimpel who is a Non-Independent Non-Executive Director. Dr. K Rajagopalan expired on 10th January, 2015 and subsequently Mr. M S Seetharaman was appointed in his place. The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis, which forms part of this report.

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 MGT 9 as a part of this Annual Report as Annexure 5.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has provided following loans and guarantees and made following investments pursuant to Section 186 of the Companies Act, 2013:

Name of the Amt in entity Relation Rupees Lacs

Nutraveda Inc., 100% USA subsidiary 1,105.25

Ayurvedic 100 Academy Inc., subsidiary 1,162.26 USA

CMS-Katra 81.67% Holdings LLC, subsidiary 828.67 USA

Nutraveda PTE 100% Ltd, Singapore subsidiary 0.44

Name of the Particulars of loans, Purpose for which the entity guarantees and loan, guarantee and investments investment are proposed to be utilised

Nutraveda Inc., Interest free Working To meet the working USA Capital Loan given by capital requirement KAL to subsidiary

Ayurvedic Interest free Working To meet the working Academy Inc., Capital Loan given capital requirement USA by KAL to subsidiary

CMS-Katra In terest free Working To meet the working Holdings LLC, Capital Loan given by capitalrequirement USA KAL to subsidiary

Nutraveda PTE Interest free Working To meet the working Ltd, Singapore Capital Loan given by capital requirement KAL to subsidiary

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in subsection (1) of Section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso is attached as Annexure 6.

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 thatÂ

(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.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

Company has adopted a policy for prevention of Sexual Harassment of Women at workplace (prevention, prohibition and redressal Act, 2013) and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 7 and forms part of this Report.

HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

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 which were required to be transferred to Investor Education and Protection Fund (IEPF).

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to Bombay Stock Exchange where the Company's Shares are listed.

ACKNOWLEDGEMENTS

The Board places on record its appreciation for the continued patronage, support, co-operation extended to the Company by its shareholder, customers, bankers and all the Government and statutory agencies with whose help, cooperation and hard work the Company is able to achieve the results. Your directors would further like to record appreciation to the efforts of every employees for their valuable contribution to the Company.

By order of the Board of Directors For Kerala Ayurveda Limited

Ramesh Vangal Place: Bengaluru Chairman Date :29th May, 2015 DIN 00064018

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 22nd Annual Report on the business & operations ol the company together with the Audited accounts for the financial year ended 31 st March. 2014.

FINANCIAL RESULTS

The Annual results of the company tor the financial year ended 31 st March. 2014 as compared with the previous years are summarized below:

(Rs. In Lacs)

Standalone

PARTICULARS 2013-14 2012-13

Product Revenues 2231.05 1858.11

Service Revenues & Other Income 538.62 551.37

Gross Income 2769.67 2409.48

Less: VAT & Excise Duty 214.61 160.93

Not Income from Salos/Services 2555.05 2248.55

Profit before Interest, Depreciation & Tax (EBITDA) 285.72 260.60

Profit/Loss before extraordinary items 127.90 116.07

Extraordinary Items 20.93 19.70

Profit Before Tax 148.83 135.77

Not ProfiV(Loss) after Tax 102.82 90.40

Minority Interest in Profit Â Â

Net Consolidated ProflV(Loss) 102.82 90.40

Loss brought forward from previous year 1009.17) (1099.58)

Loss Carried to the Balance Sheet (906.36) (1009.17)

Consolidated

PARTICULARS 2013-14 2012-13

Product Revenues 2251.39 1878.15

Service Revenues & Other Income 1448.87 1407.01

Gross Income 3700.26 3285.16

Less: VAT & Excise Duty 214.62 160.93

Not Income from Salos/Services 3485.64 3124.23

Profit before Interest, Depreciation & Tax (EBITDA) 388.32 304.20

Profit/Loss before extraordinary items 153.74 (3.27)

Extraordinary Items 20.93 19.69

Profit Before Tax 174.66 16.43

Not ProfiV(Loss) after Tax 91.87 (49.37)

Minority Interest in Profit 17.47 11.38

Net Consolidated ProflV(Loss) 74.40 (60.75)

Loss brought forward from previous year (3366.30) (3305.55)

Loss Carried to the Balance Sheet (3291.90) (3366.30)

PERFORMANCE ANALYSIS

During the financial year under review, the operational results ended with a Profit before Extraordinary items at Rs..128 Lacs as against Rs. .116 Lacs in the previous year. The total revenue of the company stands at Rs.2555 Lacs as against Rs. 2249 Lacs in the previous financial year. The consolidated revenue including its subsidiaries for the year is 7 3486 Lacs against Rs. 3124 Lacs during previous year.

DIVIDEND

In view of the accumulated losses in the past, your Directors are not in a position to recommend any dividend for the current year.

BUSINESS REVIEW

During the financial year under review, distribution of Ayurveda Formulation has shown a growth of 25%. Your company was ablo to increase the market share in Kerala and made a big progress outside Kerala also.

PERFORMANCE OF SUBSIDIARIES Indian Subsidiary

During Ihe year under review, M/s. Ayurvedagram Heritage Wellness Centre Pvt. Ltd. has achieved a turnover of 7.564 Lacs against a turnover of 7. 443 Lacs in the previous financial year clocking a sound growth of 27.31%. The Net profit of the company, after providing for tax has Increased to Rs. 66 Lacs from 7.44 Lacs in the previous year.

Overseas Subsidiaries

The combined turnover of overseas subsidiaries was 7 454 Lacs as compared to Rs. 492 Lacs in the previous year. Kerala Ayurveda Academy is currently offering certified courses in the state of Washington and California and also offer a distant learning course across USA.

CORPORATE SOCIAL RESPONSIBILITY

Your company always had a deep sense of responsibility towards the community. Company conducted medical camps and free medical check ups at various places. Diabetic Awareness campaign was held on world Diabetic Awareness day to create awareness

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act, 2013, the Directors do hereby confirm that:

a) In Ihe preparation of the Annual Accounts for the year ended 31" March 2014, the applicable accounting standards had been followed along with proper explanations and there were no 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 as on 31r March 2014 and of the profit of the company for the year ended 31st March 2014.

c) Proper and sufficient care has been taken for 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.

DEPOSITS

In terms of Ihe provisions of Section 73 of the Companies Act, 2013, the company has not accepted any deposits from the public during the financial year under review and there are no outstanding fixed deposits from the pubic as on 31st March 2014.

HUMAN RESOURCE MANAGEMENT/1NDUSTRIAL RELATIONS

Employee relations in the company continued to be positive though out the year. We are building a global company positioned and poised to reach out for ever greater achievements Our culture speaks of inclusiveness, empowerment, innovation and a thrust on continuous improvement.

ENERGY CONSERVATION. RESEARCH & DEVELOPMENT. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescnbed under Section 134 of the Companies Act, 2013. read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are set out in the annexure to this report.

PARTICULARS OF EMPLOYEES

There are no employees coming under the purview of Sec 134 of the Companies Act 2013 read with the rules made there under.

CORPORATE GOVERNANCE

Your company has complied with corporate governance norms as stipulated by Listing Agreement entered Into with Stock Exchanges. A detailed report on Corporate Governance In line with requirements of Companies Act 2013 and clause 49 of the Listing Agreement is attached to this report. A certificate from statutory auditors confirming the compliance of Corporate Governance is also attached to this report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of operations, performance and future outlook of your company and Its businesses is

given in the Management Discussion and Analysis, which forms part of this report

DIRECTORS

Mr. Ramesh Vangal, Dr. K Rajagopalan, Mr. M C Mohan, Mr. Ronald George Pearce and Mr S Krishnamurthy, Directors of the company retire by rotation at ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared In accordance with the Accounting Standard AS-21 on consolidated financial statements read with Accounting Standard AS-23 on Accounting for Investments In Associates. These financial statements are based on the audited financial statements of the respective subsidiaries.

SUBSIDIARIES

Your company has seven subsidiaries including one step down subsidiary as on 31" March 2014 and the details are as under:

SL No Name Location % of holding

1 Ayurvodagram Herilago Wellness Centre Pvt. Ltd. Bangalore. India 74%

2 Ayu Natural Medicine Clinic. P.S. USA 100%

3 Ayurvedic Academy Inc. USA 100%

4 Ayu Inc. USA 100%

5 Nutraveda Pte Ltd. Singapore 100%

6 CMS Katra Holdings LLC USA 81.67%

7 CMS Katra Nursing LLC USA 100%*

* CMS Katra Holdings LLC holds 51% shareholding in CMS Katra Nursing LLC and Ayu Inc holds the balance 49% shareholding; hence it is a fully owned step down subsidiary of your company.

Summarized financial statement of all subsidiaries in accordance with said government approval, forms part of this annual report. Copy of annual accounts of the subsidiary companies and other related Information shall be made available to the members who seek such information, at any point of time. The annual accounts of subsidiary companies are kept at the registered office of the company and at the subsidiaries concerned, for Inspection of the members

AUDITORS

The term of Auditors, M/s. Maharaj Rajan & Mathew. Chartered Accountants. Kochi, expires at ensuing Annual General Meeting and they have expressed their inability to continue as Auditors of the company due to shortage of manpower. M/s. Blju George & Company. Chartered Accountants. Vellaringattu Towers. Thodupuzha-685584 has shown their willingness to be appointed as Statutory Auditors of the company. Company has received a letter, pursuant to Section 139 of the Companies Act. 2013, from M/s. Biju George & Company expressing their consent and eligibility for acting as Statutory Auditors of the Company. The Board recommends their appointment as Statutory Auditors for the ensuing Financial year.

ACKNOWLEDGMENTS

The Board of Directors place on record its gratitude to shareholders, customers, bankers and all Government and statutory agencies, which had extended unstinted support and co-operation to the company during the year. Your Directors would further like to record appreciation of the efforts of every employee for their valuable contribution to the company.

For and On behalf of the Board of Directors Kerala Ayurveda Ltd.

Place: Bangalore Ramesh Vangal Date : 24th May, 2014 Chairman

Mar 31, 2013

The Directors have pleasure in presenting the 21st Annual Report on the business and operations of the company together with the Audited accounts forthe financial year ended 31st March, 2013.

FINANCIAL RESULTS

The Annual results of the company for the financial year ended 31st March 2013 as compared with the previous years are summarized below:

(Rs. in Lacs)

standalone Consolidated

2012-13 2011-12 2012-13 2011-12

Gross Income 2409.48 2833.06 3285.16 3570.51

Less: VAT & Excise Duty 160.93 142.70 160.93 142.70

Net Income from Sales/ Services 2248.55 2690.36 3124.23 3427.81

Profit before Interest, Depreciation & Tax (EBITDA) 260.60 177.88 310.74 84.85

Profit/(Loss) before extraordinary items 116.07 13.77 (3.27) (190.35)

Extraordinary Items 19.69 - 19.69 -

Profit/(Loss) Before Tax 135.76 13.77 16.43 (190.35)

Net Profit/(Loss) after Tax 90.40 7.86 (49.37) (208.01)

Minority Interest in Profit - - 11.38 6.17

Net Consolidated Profit/(Loss)'' 90.40 141.20 (60.75) (214.19)

Loss brought forward from previous year (1099.58) (1107.44) (3305.55) (3091.36)

Loss Carried forward to the Balance Sheet (1009.17) (1099.58) (3366.30) (3305.55)

PERFORMANCE ANALYSIS

During the financial year under review, the operational results ended with a Profit before Extraordinary items at Rs. 116 Lacs as against Rs. 14 Lacs in the previous year, showing a marked improvement. The total revenue of the company stands at Rs. 2,249 Lacs as against Rs. 2,690 Lacs in the previous financial year. The consolidated revenues including its subsidiaries for the year stands at Rs. 3,124 Lacs against Rs. 3,428 Lacs during previous year.

DIVIDEND

In view of the accumulated losses in the past, your Directors are not in a position to recommend any dividend for the current year.

BUSINESS REVIEW

During the financial year under review, your company started a wellness resort by the side of river periyar at Aluva under the name "Kerala Ayurveda River Retreat" with a view to provide authentic ayurveda treatments in the natural and soothing environment of a river bank. Company also established a new Treatment center at Mangalore in order to improve the presence in Karnataka. During the year Aluva Hospital was awarded "Green Leaf" certification by the Kerala Tourism Department and also won award for "Innovative introductions in clinical practice" by AHMA (Ayurveda Hospital Managements Association).

Proprietary Ayurvedic formulations after being put through the rigors of modern scientific validation were shortlisted and patents have been filed to protect the significant intellectual property that we have built through our efforts and Clinical studies have been initiated with Banaras Hindu University on two promising compositions in the areas of Diabetes and Inflammation. We expect these studies to be successfully concluded during the current fiscal.

PERFORMANCE OF SUBSIDIARIES

Indian Subsidiary

During the year under review, M/s. AyurvedaGram Heritage Wellness Centre Pvt. Ltd. has achieved a turnover of Rs.443 Lacs against a turnover of Rs. 365 Lacs in the previous financial year clocking a growth of 21 %. The Net profit of the company, after providing for tax has increased to Rs. 44 Lacs from Rs. 24 Lacs in the previous year. Ayurvedagram has been awarded the "Dun & Bradstreet - Axis Bank Business Gaurav Awards 2012" as the best Micro Enterprise underthe Hospitality Sector.

Overseas Subsidiaries

The combined turnover of overseas subsidiaries was Rs. 492 Lacs as compared to Rs. 426 Lacs in the previous year. During the year a new Kerala Ayurveda Academy and Wellness Center was started at Fremont in California which is the most Pro-ayurveda state in USA. A state of art ayurveda teaching facility and treatment center has been established to propagate ayurveda in USA.

CORPORATE SOCIAL RESPONSIBILITY

Your company always have a deep sense of responsibility towards the community. Company conducted medical camps and free medical check ups at various places.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, the Directors do hereby confirm that:

a) In the preparation of the Annual Accounts for the year ended 31s" March 2013, the applicable accounting standards had been followed along with proper explanations and there were no 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 as on 31sl March 2013 and of the profit of the company for the year ended 31s'' March 2013.

c) Proper and sufficient care has been taken 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.

d) The Annual accounts have been prepared on a going concern basis.

DEPOSITS

In terms of the provisions of Section 58A of the Companies Act, 1956, the company has not accepted any deposits from the public during the financial year under review and there are no outstanding fixed deposits from the pubic as on 31s''March 2013. HUMAN RESOURCE MANAGEMENT/INDUSTRIAL RELATIONS

Employee relations in the company continued to be positive though out the year. We are building a global company positioned and poised to reach out for ever greater achievements. Our culture speaks of inclusiveness, empowerment, innovation and a thrust on continuous improvement.

ENERGY CONSERVATION, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under sub-section (1) (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are set out in the annexure to this report.

PARTICULARS OF EMPLOYEES

There are no employees coming under the purview of Sec 217(2A) of the Companies Act 1956 read with the rules made there under.

CORPORATE GOVERNANCE

Your company has complied with corporate governance norms as stipulated by Listing Agreement entered into with Stock Exchanges. A detailed report on Corporate Governance in line with requirements of clause 49 of the Listing Agreement and a certificate of statutory auditors confirming the compliance of Corporate Governance are attached to this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis, which forms part of this report.

DIRECTORS

Mr. A T Jacob, Mr. S. Krishnamurthy and Ms. Katherin Zimpel Vangal, Directors of the company retire by rotation at ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared in accordance with the Accounting Standard (AS-21) on consolidated financial statements read with Accounting Standard (AS-23) on Accounting for Investments in Associates. These financial statements are based on the audited financial statements of the respective subsidiaries.

SL No Name Location % of holding 1 Ayurvedagram Heritage Wellness Centre Pvt. Ltd. Bangalore, India 74%

2 Ayu Natural Medicine Clinic, P.S. USA 100%

3 Ayurvedic Academy Inc. USA 100%

4 Ayu Inc. USA 100%

5 Nutraveda Pte Ltd. Singapore 100%

6 CMS Katra Holdings LLC USA 81.67%

7 CMS Katra Nursing LLC USA 100%*

* CMS Katra Holdings LLC holds 51% shareholding in CMS Katra Nursing LLC and Ayu Inc holds the balance 49% shareholding; hence it is a fully owned step down subsidiary of your company.

The Annual Reports of the subsidiary companies are not annexed pursuant to the general exemption under sec. 212(8) of Companies Act, 1956, granted by the Central Government. However, summarized financial statement of all subsidiaries in accordance with said government approval, forms part of this annual report. Copy of annual accounts of the subsidiary companies and other related information shall be made available to the members who seek such information, at any point of time. The annual accounts of subsidiary companies are kept at the registered office of the company and at the subsidiaries concerned, for inspection of the members.

AUDITORS

The term of Auditors, M/s. Maharaj Rajan & Mathew, Chartered Accountants, Kochi, expires at ensuing Annual General Meeting and they are eligible for re-appointment. The Audit Committee has recommended their reappointment. The requisite certificate from Auditors, pursuant to Section 224(1 B) of the Companies Act, 1956 has been received. Your directors recommend their re-appointment for the ensuing financial year.

ACKNOWLEDGEMENTS

The Board of Directors place on record its gratitude to shareholders, customers, bankers and all Government and statutory agencies, which had extended unstinted support and co-operation to the company during the year. Your Directors would further like to record appreciation of the efforts of every employee for their valuable contribution to the company.

For and On behalf of the Board of Directors

Kerala Ayurveda Ltd.

Place : Bangalore Ramesh Vangal

Date : 29th May, 2013 Chairman

Mar 31, 2011

The Directors have pleasure in presenting the 19th Annual Report on the business and operations of the company together with the Audited accounts for the financial year ended 31th March, 2011.

FINANCIAL RESULTS

The Annual results of the company for the financial year ended 31st March 2011 as compared with the previous years are summarized below;

(Rs in Laks)

GROSS INCOME Standalone Consolidated

2010-11 2009-10 2010-11 2009-10

Gross Income 2068.49 2106.35 2705.66 3364.69

Loss: VAT & Excise Duty 96.73 81.06 96.73 81.05

Net Income from Sales/ Services 1971.76 2025.30 2609.13 3283.84

Other Operational Ionone 22.17 23.16 44.57 46.13

TOTAL Income 1983.93 2048.46 2653.70 3329.97

Profit before Interest, Depredation 4 Tax (EBITDA) 59.81 83.67 (121.02) 90.32

Other Income 1.40 1.07 1.40 1.07

Finance Charges 74.69 148.58 115.81 232.60

Depreciation & Amortisation 221.63 255.04 330.40 367.60

Profit/(Loss) before exceptional items (235.11 ) (31B.98) (565.83) (508.81)

Exceptional Items 435.16 103 33 435.16 103 33

Profit/ (Loss) Before Tax 200.05 (215.65) 111.37 (405.46)

Provision for Deferred Tax Asset 58.85 52.46 (130.67) 32 28

Provision for MAT 0 0 0.19 (3.61)

Not Profit(Loss) 141.20 (163 19) (193.93) (369 59)

Minority Interest In Profit 2.37 10.80

Net Consolidated Profit/(Loss) 141.20 (163.19) (196.30) (380.38)

Balance brought forward from previous year (1248.64) (1065.44) (2965.71) (2630.36)

For ex Fluctuations (29.34) 145.02

Appropriations NIL NIL NIL NIL

Balance Carried to The Balance Sheet (1107.44) (1248.63) (3091.36) (2865.71)

PERFORMANCE ANALYSIS

During the financial year under review, the total revenue of the company decreased marginally to Rs 1994 Lacs from Rs 2048 Lacs in the corresponding previous financial year. The total revenue including its subsidiaries on a consolidated basis for the year is Rs 2654 Lacs against Rs 3330 Lacs, and the drop is mainly on account of restructuring of operations of KAL US entities m order to slam the losses

The operational results for the financial year ended with a net profit of Rs. 141.20 Lacs as against a net loss of Rs.163.19 Lacs in the previous year, with a marked Improvement in EBITDA.

DIVIDEND

In view of the accumulated losses in the past, your Directors are not in a position to recommend any dividend for the current year.

BUSINESS REVIEW

your company entered into a Memorandum of Understanding with Tata Global Beverages Limited, with the intention of exploring the formation of a joint venture tor focusing on development of a range of Beverages and Food Products based on proven Ayurvedic recipes, actives and formulations for the Global market where there is worldwide recognition of the benefits of Ayurveda for good health and wellness.

Your company entered into a memorandum of Understanding with Banaras Hindu University (BHU), a reputed university. Under the proposed arrangement, faculty of Ayurveda, Institute of Medical Sciences, BHU will collaborate with KAL to undertake research and development in areas like geriatric care, cancer, anaemia, metabolic diseases, Including diabetes and epidemic prevention under a PPP model.

During the year. In order to channelize funds as required for the business, the company has disposed of certain idle and non-productive assets located at Poolani, Kerala and Thatly and also the rights of part of the software projects.

The above steps taken by the company are expected to Improve the growth of the company in future years.

your company has launched new products like Gtymln Drink, K M Lepam, Liposem Arlshtam and received manufacturing licenses for 14 new PRD Products from the Drug Control Authority, Modem packaging was adopted for a few of the products with an aim to Improve product visibility and retain medicine potency.

In order to enhace the research skills of Phd students, your company invited thesis paper from Phd students across India and evaluated the same with eminent panel of Ayurveda exports and awarded the Best Thesis award Gaveshak Ratna' to the student and Acharya Ratna" to the guide, along with cash prize of Rs. 2,00,000 and Rs. 50,000 respectively. Your company had actively participated In the 4th World Ayurveda Congress held at Bangalore as one of the sponsors and had a stall at the event to exhibit the range of products and services offered by your company which was wed received by the public. Papers were also presented during the congress by our research scholars.

PERFORMANCE OFSUBSIDIARIES

Indian Subsidiary

During the year under review, M/s. Ayurveda GrBm Heritage Wellness Centre Pvt. Ltd has achieved a turnover of Rs. 345 Lacs against a turnover of Rs 365 Lacs in the previous financial year. The Net profit of the company, after providing for tax has decreased to Rs,9.13 Lacs from 7.33.17 I In the previous year, mainly due to increased costs. Ayurvedagram has won the prestigious Frost & Sullivian award "Integrated Wellness Service Provider Company for the year2010 as a recognition for our commitment to wellness.

overseas Subsidiaries

The combined turnover of overseas subsidiaries was Rs 382.38 Lacs as compared to Rs 964.85 Lacs In the previous year Operations of the US Ayu subsidiaries namely Ayurvedic Academy Inc, Ayu Natural Medicine Clinic PS and Ayu inc. have stabilized after restructuring and has led to reduction in losses considerably Web presence of Kerala ayurveda academy in USA has tremendously grown due to Initiatives taken to build likeminded community on the web around Face book and Twitter. The company has Integrated Model e-tearing platform with our website And thereby Improved the reach and scalability of the academy

The nursing business under CMS Katra Nursing LLC continues to be Impacted due to visa retrogression and consequently nurse domestic staffing business remained temporarily suspended.

CORPORATE SOCIAL RESPONSIBILITY

"four company always had a deep sense of responsibility towards the community. Company conducted medical camps and free medical check ups at various places.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 217(2 AA) of the Companies Act, 1958. the Directors do hereby confirm that

a) In the preparation of the Annual Accounts for the year ended 31 * March 2011, the applicable accounting standards had been followed along with proper explanations and there were no malarial 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 as on 31st March 2011 and of the profit or loss of the company for the year ended 31st March 2011.

c) Proper and sufficient care has been taken 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 tor preventing and defecting fraud and other irregularities.

d) The Annual accounts have been prepared on a going concern basis

DEPOSITS

In terms of the provisions of Sec.SSA, the company has not accepted any deposits from the public during the financial year under review and there are no outstanding fixed deposits from the pubic as on 31* March 2011.

HUMAN RESOURCE MANAGEMENT/INDUSTRIAL RELATIONS

KAL continued Its effort to strengthen the human resource system, realizing the fact that human resource is the Key facto* of future growth strategy. Company focuses to upgrade skills of human resources and boost their motivation levels so as to achieve organization excellence and to enhance their contributions to meet company's goals. We remain dedicated to maintain a workplace that respect and values people from diverse backgrounds and facilitates all employees to do their very best. During the year your company concluded 3 yea; long term wage settlement with its employees.

ENERGY CONSERVATION, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under sub-section (1) (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988. are set out in the annexure to the report*

PARTICULARS OF EMPLOYEES

There am no employees coming under the purview of Sec 217(2A) of the Companies Act 1956 read with the rules made there under.

CORPORATE GOVERNANCE

Your company has complied with corporate governance norms as stipulated by Listing Agreement entered Into with Stock Exchanges. A detailed report on Corporate Governance In line with requirements of clause 49 of the Listing Agreement and a certificate of statutory auditors confirming the compliance of Corporate Governance are attached to this report*

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of operations, performance and future outlook of your company and Its businesses Is given m the Management Discussion and Analysis, which forms part of this report

DIRECTORS

Mr. A T Jacob, Mr. S Krishnamurthy and Mr. M C Mohan, Directors of the company retire by rotation at ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared in accordance will the Accounting Standard AS-21 on consolidated financial statements read with Accounting Standard AS 23 on Accounting tor Investments in Associates These financial statements are based on the audited financial statements of the respective subsidiaries.

SUBSIDIARIES Your company has seven subsidiaries including one step down subsidiary as on 31* March 2011 and the details of which are as under:

SL No Name Location % of holding

1 Ayurvedagram Heritage Wellness Central Pvt. Ltd. Bangalore, India 74%

2 Ayu Natural Med-dne Clinic,P.S USA 100%

3 Ayurvedic Academy Inc. USA 100%

4 Ayu Inc. USA 100%

5 Nutraveda Pte Ltd. Singapore 100%

6 CMS Katrn Holdings LLC USA 81.67%

7 CMS Katra Nursing LLC USA 51%*

* CMS Katra Holdings LLC holds 51 % shareholding in CMS Katra Nursing LLC, hence it is a step down subsidiary of your company.

The company through Its WOS. Ayu Inc has entered into an agreement will Jo Management LLC to acquire 48% stake in CMS Katra Nursing LLC and the same is expected to be completed in the current financial year The Annual Reports of the subsidiary companies are not annexed pursuant to the general exemption under sec. 212(8) of Companies Act, 1956, granted by the Central Government However, summarized financial statement of all subsidiaries In accordance with said government approval, forms pan of this annual report Copy of annual accounts of the subsidiary companies and other related Information shall be made available to the members who seek such Information, at any point of time. The annual accounts of subsidiary companies are kept at the registered office of the company and at the subsidiaries concerned, tor Inspection of the members.

AUDITORS

The term of Auditors, M/s. Maharaj Rajan & Mathew, Chartered Accountants, Kochi, expires at ensuing Annual General Meeting and they are edge for re-appointment The Audit Committee has recommended their reappointment. The requisite certificate from Auditor, pursuant to Section 224(1B) of the Companies Act 1956 has been received. Your directors recommend their re-appointment for the ensuing financial year.

ACKNOWLEDGEMENTS

The Board of Directors place on record its gratitude to shareholders, customers bankers and all governmental and statutory agencies, which had extended unstinted support and co-operation to the company during t he year your Directors would further like to record appreciation of the efforts of every employee for their valuable contribution to the company.

On behalf of the Board of Directors

Place: Bangalore

Data : 12/06/2011 Ramesh Vangai

Chairman

Mar 31, 2010

The Directors have pleasure in presenting the 18th Annual Report on the business and operations of the company together with the Audited accounts for the financial year ended March 31, 2010.

FINANCIAL RESULTS

The Annual results of the company for the financial year ended 31st March 2010 as compared with the previous years are summarized below:

(Rupees in Lacs)

Particulars Standalone Consolidated 2009-10 2008-09 2009-10 2008-09

Gross Income 2106.35 1,898.83 3364.89 4552.06

Less: VAT & Excise Duty 81.05 100.36 81.05 100.36

Net Income from Sales/Services 2025.30 1798.47 3283.84 4451.70

Other Operational Income 23.16 30.00 46.13 46.02

TOTAL Income 2048.46 1828.47 3329.97 4497.72

Profit before Interest, Depreciation & Tax (EBITDA) 83.57 (172.95) 90.32 (754.27)

Other Income 1.07 0.79 1.07 0.79

Finance Charges 148.58 210.69 232.60 356.37

Depreciation & Amortisation 255.04 261.69 367.60 374.87

Profit/(Loss) before exceptional items (318.98) (644.54) (508.81) (1484.72)

Exceptional Items 103.33 140.55 103.33 169.06

Profit/Loss Before Tax (215.65) (503.99) (405.48) (1315.66)

Provision for Deferred Tax Asset 52.46 115.07 32.28 111.38

Provision for FBT & MAT 0 (5.74) 3.61 (8.22)

Net Profit/(Loss) (163.19) (394.66) (369.58) (1212.50)

Minority Interest in Profit 10.80 1.64

Net Consolidated Profit/(Loss) (163.19) (394.66) (380.38) (1214.14)

Balance brought forward from previous year (1085.44) (690.78) (2630.35) (1266.36)

Forex Fluctuations 145.02 (149.85)

Appropriations NIL NIL NIL NIL

Balance Carried to the Balance Sheet (1248.64) (1085.44) (2865.71) (2630.35)

PERFORMANCE ANALYSS

During the financial year under review, the total revenue of the company increased to Rs. 2048 Lacs from Rs. 1828 Lacs in the corresponding previous financial year, registering a growth rate of 12%. The total revenue including its subsidiaries on a consolidated basis for the year is Rs. 3330 Lacs againstRs. 4498, and the drop is mainly on account of restructuring of operations of KAL US entities in order to stem the losses.

The operational results for the financial year ended with a net loss of Rs. 163.19 lacs as against a net loss of Rs. 394.66 lacs in the previous year, with a marked improvement in EBITDA. The results on standalone basis and consolidated basis have become EBITDA positive during the year. EBITDA on standalone basis registered an improvement of Rs. 257 lacs as compared to previous year, which in the current year stands at Rs. 84 lacs profit and on consolidated basis registered improvement of f 844.59 Lacs as compared to previous year and now stands at Rs. 90 lacs profit.

DIVIDEND

In the absence of profits for the period under review, your Directors are not in a position to recommend any dividend to the members of the company.

BUSINESS REVIEW

The financial year under review was a remarkable year for your company in terms of business development as it has opened new franchise wellness centers at Goa, Bangalore (R T Nagar) & Jammu and restructured its business model by creating partnership with Doctors in India and USA.

Your Company has also rationalized organization system to improve productivity and reduce the overheads and these efforts contributed significant reduction of 24% in overheads during the year.

The companys non-productive assets located at Poolani, Kerala and Puttaparthy were disposed off in order to channelise the funds required for the business and the term loans were fully repaid during the year and thus substantial savings in interest cost was achieved.

Your Company has invested behind establishing purity of the ingredient supply chain, which ensures standardization, product integrity and consistency. KAL has invested during the year aggressively on research, aimed at establishing scientific validation for proprietary Ayurvedic formulations and plan to continue the investments on research in FY 2010-11. The research consultancy income has improved from Rs. 122 lacs to Rs. 458 lacs, showing an increase of Rs. 336 lacs.

PERFORMANCE OF SUBSIDIARIES Indian Subsidiary

During the year under review, M/s. AyurvedaGram Heritage Wellness Centre Pvt. Ltd. has achieved a turnover of Rs. 366 Lacs against a turnover of Rs. 345 Lacs in the previous financial year. The Net profit of the company, after providing for tax has increased substantially to Rs. 46.27 Lacs from Rs. 6.30 Lacs in the previous year, mainly due to cost control measures, despite the global meltdown and travel advisory warnings issued by western countries including USA.

Overseas Subsidiaries

The combined turnover of overseas subsidiaries was Rs. 984.85 Lacs as compared to Rs. 2426.67 Lacs in the previous year, registering a downslide of 59% during the year. Operations of the US Ayu subsidiaries namely Ayurvedic Academy Inc, Ayu Natural Medicine Clinic PS and Ayu Inc, have stabilized after restructuring and has shown improvement by reducing the losses considerably. The nursing business under CMS Katra Nursing LLC was severely impacted due to visa retrogression and consequently nurse domestic staffing business was temporarily suspended since unviable.

CORPORATE SOCIAL RESPONSIBILITY

Your company always had a deep sense of responsibility towards the community. A summary of some of the programs conducted by the company during the year is given under:

- Conducted free Ayurveda Health Check-up Camps in Kerala at Eloor, Nedumbassery and Palarivattom.

- Free medicines supplied to Old Age Home and other charitable institutions in Kerala.

- Company in participation with Union of Residents Association of Aluva propagated the concept of AYURAROGYAM to general public at Aluva.

- Conducted free Medical campaigns at Aluva on Climate Disease Management and Swine Flu Awareness.

- Conducted diabetic camp at our Aluva Hospital and conducted medical camps in association with DYFI at Chendamangalam and with KCYM at Njarackal.

- Free Yoga Training sessions conducted at Nedumbassery and Kakkanad.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, the Directors do hereby confirm that:

a) In the preparation of the Annual Accounts for the year ended 31st March 2010, the applicable accounting standards had been followed along with proper explanations and there were no 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 as on 31st March 2010 and of the profit or loss of the company for the year ended 31st March 2010.

c) Proper and sufficient care has been taken 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.

d) The Annual accounts have been prepared on a going concern basis.

DEPOSITS

In terms of the provisions of Sec.58A, the company has not accepted any deposits from the public during the financial year under review.

HUMAN RESOURCE MANAGEMENT/INDUSTRIAL RELATIONS

Your company had always been committed to maintain healthy, cordial and harmonious industrial relations at all levels. The work environment of the company is constantly being upgraded and training has been conducted for employees, focusing on individual growth. Labor relations continued to be cordial throughout the year and industrial relations were excellent and harmonious.

ENERGY CONSERVATION, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under sub-section (1) (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are set out in the annexure to this report.

PARTICULARS OF EMPLOYEES

The particulars of employees as stipulated under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are set out in the annexure to this report.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your company has complied with corporate governance norms as stipulated under Listing Agreement entered with Stock Exchanges. A detailed report on Corporate Governance in line with requirements of clause 49 of the Listing Agreement and also the Management Discussion and Analysis report are attached to this report. A certificate from statutory auditors confirming the compliance of governance is attached to corporate governance report.

DIRECTORS

Mr. Ronald George Pearce, Dr. K Rajagopalan and Ms. Katharin Zimpel Vangal, Directors of the company retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Tarun N Sheth, Independent Director, vacated the office on 18/07/2010 due to his demise. He has contributed immensely for the growth of the company. The Board places on record its appreciation for the valuable services rendered by him and for the wholehearted support & advice given to the company during his tenure.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared in accordance with the Accounting Standard AS-21 on consolidated financial statements read with Accounting Standard AS-23 Accounting for Investments in Associates. These financial statements are based on the audited financial statements of the respective subsidiaries.

SUBSIDIARIES

Your company has seven subsidiaries including one step down subsidiary as on 31s March 2010 and the details of which are as under:

SL No Name Location % of holding

1 Ayurvedagram Heritage Wellness Centre Pvt. Ltd. Bangalore, India 74%

2 Ayu Natural Medicine Clinic, PS USA 100%

3 Ayurvedic Academy Inc. USA 100%

4 Ayu Inc. USA 100%

5 Nutraveda Pte Ltd. Sngapore 100%

6 CMS Katra Holdings LLC USA 81.67%

7 CMS Katra Nursing LLC* USA 51%

* CMS Katra Holdings LLC holds 51% shareholding in CMS Katra Nursing LLC, hence it is a step down subsidiary of your company.

The Annual Reports of the subsidiary companies are not annexed pursuant to the exemption order under sec. 212(8) of Companies Act, 1956, granted by the Central Government. However, summarized financial statement of all subsidiaries in accordance with said Government approval, forms part of this annual report. Copy of annual accounts of the subsidiary companies and other related information shall be made available to the members who seek such information, at any point of time. The annual accounts of subsidiary companies are kept at the registered office of the company and at the subsidiaries concerned, for inspection of the members.

AUDITORS

The term of Auditors, M/s. Maharaj Rajan & Mathew, Chartered Accountants, Cochin, expires at the end of the ensuing Annual General Meeting and they are eligible for re-appointment. The audit committee has recommended their reappointment and annual audit fees. The requisite certificate from Auditors, pursuant to Section 224(1B) of the Companies Act, 1956 has been received.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to shareholders, customers, bankers and all governmental and statutory agencies, which had extended unstinted support and co-operation to the company during the year. Your Directors would further like to record appreciation of the efforts of every employee for their valuable contribution to the company.

For and on behalf of the Board of Directors

Place: Bangalore

Date : 21/08/2010 Ramesh Vangal

Chairman

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