Krsnaa Diagnostics Ltd

Dear Members,

Your Directors are pleased to present the 14^th Annual Report ("this report") on the business and operations of Krsnaa Diagnostics Limited ("the Company") ("your Company"), along with the Audited Financial Statements for the fiscal year ending March 31, 2024.

Below is a summary of the key highlights from the Standalone and Consolidated Audited Financial Statements of your Company for the year ended March 31, 2024:

( Rs. in million)

During the year under review, the revenue from operations of the Company stood at Rs.6,196.33 million with an increase of 27% as against the previous year, which is amongst of the highest in the industry.

Your Company has a well-diversified business mix, where Radiology and Pathology contributed 57% and 43% to the total revenue respectively.

EBITDA for the year stood at Rs.1,442 Million, representing a 2% decline against the previous year. The EBITDA margin for the year under review stood at 23%. Your company achieved a Profit after Tax stands at Rs.568.37 Millions.

During the year under review, the total number of test conducted exceeded 44 million, a growth of 85% on a year-on-year basis.

In the recent years, your company has achieved significant growth, establishing itself as one of India's fastest-growing diagnostic service providers, surpassing its peers. The company expanded its geographical presence from over 660 centers in FY18 to more than 3,600 centers in FY24 almost a six-fold increase. During this period, Revenue from Operations grew at a CAGR of 38%, while Net Profits increased at a CAGR of 46%.

Your Directors are pleased to recommend a Dividend of Rs.2.50 (Two Rupees and Fifty Paisa Only) per equity share on the face value of Rs.5/- (Rupees Five only) each as Final Dividend for the financial year ended March 31, 2024, subject to approval by the Members at the 14^th Annual General Meeting ("AGM") of the Company.

The dividend recommended is in accordance with the Company's Dividend Distribution Policy. The policy includes the parameters as set out in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI Listing Regulations"). The policy is available on the Company's website at https://krsnaadiagnostics. com/investors/

The dividend payout ratio, including the proposed final dividend, would be 14.74%.

During the year under review, no amount has been transferred to the General Reserves of the Company from current year profit.

During the year under review, there was no change in the Authorized Share Capital of the Company, as on March 31, 2024. The authorized share capital of the Company stood at Rs.1,47,15,76,922 (Rupees One Hundred Forty-seven Crore Fifteen Lakh Seventy-Six Thousand Nine Hundred Twenty-Two Only) divided into- 29,43,15,384 (Twenty-Nine Crore Forty-three Lakh Fifteen

Thousand Three Hundred Eight-Four) Equity Shares of face value of Rs.5/- (Rupees Five only) and;

- Unclassified Share Capital Rs.2/- (Rupees Two Only)

During the year under review, the paid-up equity share capital was increased from Rs.15,69,88,065 (Rupees Fifteen Crores Sixty- Nine Lakhs Eighty-Eight Thousand and Sixty-Five Only) divided into 3,13,97,613 equity share of Rs.5 (Rupees Five only) each to Rs.16,14,48,815 (Rupees Sixteen Crores Fourteen Lakhs Forty- Eight Thousand Eight Hundred and Fifteen Only) divided into 3,22,89,763 equity shares of Rs.5 (Rupees Five only) each pursuant to allotment of Equity Shares under Krsnaa Employee Stock Option Scheme 2020 ("ESOS 2020").

The Company on November 27, 2023 has allotted 8,92,150 equity shares under ESOS 2020.

These Equity Shares rank pari passu with the existing Equity Shares of the Company.

During the year under review, your Company has not issued any Equity Shares with differential voting rights, Bonus Shares and Sweat Equity Shares.

During the year under review, ICRA, a credit rating agency has given a rating "ICRA A1" as short-term rating and "ICRA A" with the "Stable" outlook as the Long-term rating.

As on March 31, 2024, the Company had 7 (Seven) Wholly- Owned subsidiaries as mentioned below.

There has been no material change in the nature of the business of the subsidiaries during the period under review:

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, (hereinafter referred to as "the Act") your Company has prepared the consolidated financial statements of the Company and all its subsidiary companies, which forms a part of this report. Further, a statement containing the salient features of the financial statements of the subsidiaries in Form AOC-1 is annexed to this Report as "Annexure 1".

Further pursuant to the provision of Section 136(1) of the Act, the audited financial statements along with the consolidated financial statements are available on Company's Website at, https://krsnaadiagnostics.com/investors/

Your Company has formulated a Policy for determining Material Subsidiaries. Further, as per the Policy, your Company does not have any Material Subsidiary as on March 31, 2024.

The Policy is available on the website of your Company which can be accessed at https://krsnaadiagnostics.com/investors/

The composition of the Board of Directors of your Company is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Executive Director, Non-Executive Directors and Independent Directors. The complete list of Directors of the Company has been provided as part of the Corporate Governance Report.

The appointment and remuneration of Directors are governed by the Policy devised by the Nomination and Remuneration Committee of your Company. The detailed Nomination and Remuneration Policy is contained in the Corporate Governance Section of the report.

Further, in terms of the regulatory requirements, the name of every Independent Director is to be registered in the online database of Independent Directors maintained by Indian Institute of Corporate Affairs, Manesar ("IICA"). Accordingly, the Independent Directors of the Company have confirmed that they have registered themselves with the IICA for the said purpose.

Pursuant to the provision of section 152 of the Act, Mr. Yash Prithviraj Mutha, Director, is liable to retire by rotation and being eligible for re-appointment at the ensuing Annual General Meeting ("AGM") of the Company, has offered himself for reappointment. His details as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards on General Meetings issued by the Institute of Company Secretaries of India are contained in the accompanying Notice convening the ensuing AGM of the Company. An appropriate resolution seeking the shareholders' approval to his re-appointment as Director is included in the Notice of the AGM.

During the year under review, following changes has taken place in the Board of Directors of the Company.

*Ms. Bhatevara has resigned from the position of Managing Director of the Company and she will continue to act as Whole-Time Director designated as Executive Director of the Company.

**Mr. Mutha has been designated as Joint Managing Director of the Company. Further Mr. Mutha has also been appointed as the Manager of the Company with effect from April 01, 2024.

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149 of the Act and Rules made thereunder read with Schedule IV as well as Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In the opinion of the Board, all the Independent Directors fulfil the criteria of independence as specified in the Act and Rules made thereunder read with Schedule IV as well as Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are independent from the Management.

In accordance with the provisions of the Section 2(51) and 203 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following persons have been designated as Key Managerial Personnel of the Company as on March 31, 2024.

*Ms. Bhatevara has resigned from the position of Managing Director of the Company and she will continue to act as Whole-Time Director designated as Executive Director of the Company;

**Mr. Mutha has been designated as Joint Managing Director of the Company. Further Mr. Mutha has also been appointed as the Manager of the Company with effect from April 01, 2024;

***Mr. Nikhil Deshpande has resigned from the Company w.e.f. April 24, 2023;

****Mr. Sujoy Sudipta Bose has been appointed as the Company Secretary of the Company w.e.f August 12, 2023;

***** Dr. Prashant Pandurangrao Deshmukh has been appointed as the Chief Executive Officer of the Company w.e.f. February 12, 2024.

Your Board of Directors met 7 (Seven) times during the year under review. The details of the meeting of Board are given in the Corporate Governance Report, which forms an integral part of this Annual Report.

The Board of Directors of your Company have formed various Committees, as per the provisions of the Act and as SEBI Listing Regulations and as a part of the best corporate governance practices, the terms of reference and the constitution of these Committees is in compliance with the applicable laws and to ensure focused attention on business and for better governance and accountability. The constituted Committees are as below:

a) Audit Committee;

b) Nomination and Remuneration Committee;

c) Stakeholders Relationship Committee;

d) Corporate Social Responsibility Committee and;

e) Risk Management Committee;

f) Operation Committee

The details with respect to the composition, terms of reference, number of meetings held and business transacted by the aforesaid Committees are given in the "Corporate Governance Report" of the Company which is presented in a separate section and forms a part of the report of the Company.

During the year under review, a separate meeting of the Independent Directors was held on Thursday, February 08, 2024, with no participation of Non- Independent Directors or the Management of the Company. The Independent Directors had discussed and reviewed the performance of the Non-Independent Directors and the Board as a whole and also assessed the quality, quantity and timeliness of the flow of information between the Management and the Board, which is necessary for the Board to effectively and reasonably perform its duties

In compliance with the provision of Section 178 of the Act, the Board has, on the recommendation of the Nomination & Remuneration Committee of the Company, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration. The policy on The Nomination and Remuneration Policy is available on the website of the Company at https://krsnaadiagnostics.com/investors/

During the year, all the recommendations of the Audit Committee were accepted by the Board. The composition of the Audit Committee is as mentioned in the Report on Corporate Governance, which forms part of this report.

Your Company's CSR Policy statement and report on the CSR activities undertaken during the financial year ended March 31

2024, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed to this report as "Annexure 4".

As per the provisions of Section 135 of the Act, every Company falling under the applicability of Corporate Social Responsibility is required to spend 2% of its average net profits of previous three years on the activities given under Schedule VII of the Act, and CSR policy adopted by the Board of Directors.

During the year under review your Company has been actively involved in CSR activities. Your Company has carried out CSR activities in field of Healthcare, Education, and other Sectors. Your Company has spent the requisite amount in line with the recommendations by the CSR Committee and approval of the Board of Directors of your Company.

The Composition of CSR Committee and meetings of the CSR Committee held during the year has been disclosed in the Corporate Governance Report. The CSR Policy is available on the Company's website at https://krsnaadiagnostics.com/investors/

Your Company has a vigil mechanism/whistle blower policy in place and has established the necessary vigil mechanism for directors and all employees in conformation with Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations, to report concerns about unethical behavior. The Policy is available on the Company's Website at https://krsnaadiagnostics.com/investors/

Pursuant to the provisions of Section 139(1) of the Act, read with the Companies (Audit and Auditors) Rules, 2014, M/s. MSKA & Associates, Chartered Accountants, were appointed as the Statutory Auditors of the Company in eleventh Annual General Meeting held on July 13, 2021 for a period of five years from the conclusion of that AGM till the conclusion of the sixteenth AGM to be held in the year 2026.

M/s. MSKA & Associates, Chartered Accountants, Statutory Auditors have confirmed that they have not been disqualified to act as Statutory Auditors of the Company and that their contribution is within the ceiling limit as per prescribed under section 141 of the Act.

The Auditors have issued an unmodified opinion on the audited financial statements of the Company for the year ended March 31, 2024. The Report given by the Auditors on the financial statements of the Company is part of the report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Pursuant to the provisions of Section 204 of the Act and the Rules made thereunder, M/s. Dinesh Birla & Associates, Practicing Company Secretaries, Pune, was appointed by the Board of Directors in their meeting held on August 12, 2023 to conduct the secretarial audit of the Company

for the year ended March 31, 2024. The Secretarial Audit Report is annexed as "Annexure 5" to this Report. The same does not contain any qualification, reservation, adverse remark or disclaimer.

The Company has a robust internal audit system for assessment of audit findings and its mitigation. The Internal Audit function includes center audit, inventory audit, process audit, audit of supportive functions, etc.

Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts) Rules, 2014, and on the recommendation of the Audit Committee, M/s. Mahajan & Aibara, Chartered Accountants LLP was appointed by the Board of Directors in their meeting held on August 12, 2023 to conduct the internal audit function of the Company for the Financial Year 2023-24. The Internal Auditor functionally reports to the Audit Committee to ensure independence of the Internal Audit function.

The Audit Committee reviews internal audit reports in quarterly meetings and ensure independence of the auditors. The Continuous internal monitoring mechanism ensures compliance with internal controls efficiency and effectiveness of operations as well as the key process risks.

In terms of the Section 148 of the Act read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year. Accordingly, such accounts and records were made and maintained for the financial year 2023-24.

M/s. Harshad S. Deshpande & Associates, Cost and Management Accountants, were appointed as the Cost Auditors of the Company to examine the Cost Records and submit the Cost Audit Report. The Company has maintained the required cost accounting records as per the Companies (Cost Records and Audit) Rules, 2014 and is in compliance therewith.

The Board of Directors on the basis of recommendations from Audit Committee has appointed M/s Harshad S. Deshpande & Associates, Cost and Management Accountants, as Cost Auditors of the Company for the Financial Year 2024-25 at a fee of Rs.1,25,000 (One Lakh Twenty-Five Thousand Only) plus applicable taxes and out of pocket expenses subject to the ratification of their remuneration by the shareholders of the Company at the ensuing AGM.

During the year under review, no incidence of any fraud has occurred against the Company by its officers or employees. Neither the Audit Committee nor the Board of the Company has received any report involving any fraud from the Statutory Auditors, Internal Auditors, Secretarial Auditors and Cost Auditors of the Company. Your Board has nothing to report, as required under Section 134 (3) (ca) of the Act.

The Company is committed to maintaining the highest standards of internal controls. The Company have deployed controls through appropriate policies, procedures and implemented a robust Internal Financial Control system that encompasses the following:

- Key processes affecting the reliability of the Company's financial reporting together with the required controls

- Periodic testing of controls to check their operational effectiveness

- Prompt implementation of remedial action plans arising out of tests conducted

- Regular follow-up of these action plans by senior management

In addition, the Internal Auditor performs periodic audits in accordance with the pre-approved plan. They report on the adequacy and effectiveness of the internal control systems and provide recommendations for improvements.

Audit findings along with management response are shared with the Audit Committee. Status of action plans are also presented to the Audit Committee which reviews the steps taken by the management to ensure that there are adequate controls in design and operation.

The Certificate provided by Chief Executive Officer and Chief Financial Officer in the Certification Section of the Annual Report discusses the adequacy of the internal control systems and procedures.

In compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on the Corporate Governance for the Financial Year ended March 31, 2024 along with a certificate from the Practicing Company Secretary on its compliance, forms part of this Report.

In compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility and Sustainability Report ("BRSR") for Financial Year 2023-24, forms part of this Annual Report.

A Management Discussion and Analysis Report giving detailed information on operations, performance and future outlook of the Company and its business forms a part of this Annual Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Actread with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014 are provided in the prescribed format and annexed herewith as "Annexure-2" and forms an integral part of this Annual Report.

As per the provisions of Section 136 of the Act, the Annual Report is being sent to the Members and others entitled thereto, excluding the information on employees' remuneration particulars as required under Rule 5 (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosure is available for inspection by the Members at the Registered Office of your Company during business hours on all working days of the Company up to the date of the ensuing AGM. Any Member interested in obtaining a copy thereof, may write an email to cs@krsnaa.in.

The Directors affirm that the remuneration is as per the remuneration policy of the Company.

During the year under review, there has been no material change in the existing ESOP Scheme of the Company and the same have been implemented in compliance with relevant/applicable ESOP Regulations/Guidelines.

During the year under review, 8,92,150 options were exercised by the eligible employees under Krsnaa Employees Stock Option Scheme 2020 ("ESOS 2020").

The details of ESOS 2020 pursuant to Section 62 of the Act read with Rules made thereunder and SEBI (Share Based Employee Benefits) Regulations, 2014 are annexed to this Annual Report as "Annexure 3".

Your Company has a policy on Prevention of Sexual Harassment ("POSH") at workplace and has put in place a Redressal mechanism for resolving complaints received with respect to sexual harassment and discriminatory employment practices for all genders. The Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment. During the year under review, no case was filed with the POSH committee. Thus, there were no complaints pending as on March 31, 2024.

Not Applicable

Not Applicable

During the year under review your Company has not accepted any deposits from the public in terms of Section 73 and Section 74 of the Act read with The Companies (Acceptance of Deposits) Rules 2014.

As required by the Act, read with the Companies (Accounts) Rules, 2014, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given as below:

The Company has always been on the lookout for energy efficient measures of operation and values energy conservation through efficient utilization of the latest technologies. Efforts have been made to ensure optimal usage of energy, avoid wastage and conserve energy. As an ongoing process the Company continues to undertake energy conservation measures to minimize the usage of energy. Continuous monitoring of floor areas after normal working hours and switching off lights. Gradual transition to minimal paper-based processes, Periodic UPS and AC maintenance to ensure efficient working of equipment. All machinery and equipment are being continuously serviced, updated and overhauled to maintain them in good and energy efficient condition.

There is no material action on technology absorption under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014

C. Expenditure incurred on Research & Development: NIL

(in H Million)

In terms of the provisions of section 186 of the Act read with Companies (Meeting of Board and its Powers) Rules, 2014 and Schedule V of the Listing Regulations, details of Investments are set out in Note No. 8 and details of Loans are set out in Note Nos. 16 of the Standalone Financial Statements of the Company.

In compliance with the requirements of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a Policy on Related Party

Transactions which is available on Company's website at https://krsnaadiagnostics.com/investors/

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and its Related Parties. All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions, which are of repetitive nature and / or entered in the Ordinary Course of Business and are at Arm's Length.

All related party transaction entered during the year were in Ordinary Course of the Business and on Arm's Length basis. No Material Related Party Transaction as per the limits specified under Companies Act, 2013 and/ or SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, was entered during the year under review by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

No material changes and commitments, other than disclosed as part of this report, affecting the financial position of the Company have occurred between March 31, 2024 and the date of the report.

During the period under review, there is no change in the nature of business of the Company.

A formal evaluation of the performance of the Board, its Committees and the Individual Directors was done in for Financial Year 2023-24 pursuant to the provisions of the Act and Listing Regulations. The evaluation was carried out by the Board of (i) its own performance; (ii) Individual Directors Performance; (iii) Chairperson of the Board; and (iv) Performance of all Committees of Board.

A separate exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Non-Independent Directors and Chairperson of the Board was carried out by the Independent Directors

The Directors expressed their satisfaction with the evaluation process.

Further, the evaluation process confirms that the Board and its Committees continue to operate effectively and the performance of the Directors and the Chairperson is satisfactory.

No significant material orders were passed by the Regulators/ Court /Tribunal which would impact the going concern status of the Company and its future operations.

The Company had appointed ICICI Bank Limited as the Monitoring agency in accordance with Regulation 41(1) of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (hereinafter referred as "SEBI ICDR Regulations") to monitor the utilization of IPO proceeds and Company has obtained monitoring reports from the Monitoring agency and filed the same with both stock exchanges where equity shares of the Company are listed.

The proceeds realized by the Company from the initial public offering has been utilized as per objects of the offer as disclosed in the Prospectus of the Company.

(in H Million)

*The Company has obtained approval of Board of Director and Audit Committee dated Feb 12, 2024 for change in utilization of IPO proceeds within the specified objects i.e, from Proposed expansion to General Corporate purposes for H150 Million (813.05+150 = 963.05).

During the period under review, the Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors (SS-1) and Shareholders (SS-2).

The Company has adopted a Risk Management Policy wherein all material risks faced by the Company are identified and assessed. The Company has formed a Risk Management Committee which defines the risk management approach of the Company and includes collective identification of risks impacting the Company's business their process of identification, mitigation and optimisation of such risks. The Risk Management Policy is uploaded on the website of the Company and the said policy is available on the website of the Company at https:// krsnaadiagnostics.com/investors/.

view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for the year ended March 31, 2024;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual financial statements have been prepared on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

The draft of Annual Return of the Company in form MGT- 7 in accordance with Section 92(3) of the Act is available on the website of the Company at https://krsnaadiagnostics. com/investors/.

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability confirm that:

a. in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards and Schedule III of the Act, have been followed along with proper explanation relating to material departures, if any;

b. they have 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

Certificate by Dr. Prashant Panduragrao Deshmukh, Chief Executive Officer and Mr. Pawan Balkisan Daga, Chief Financial Officer, pursuant to the provisions of regulation 17(8) of the Listing Regulations, for the year under review was placed before the Board of Directors of the Company at its meeting held on May 18, 2024.

A copy of the certificate forms a part of the Report on Corporate Governance.

During the year under review, the Company had not transferred any amount or Shares to the Investor Education and Protection Fund.

The Company has in place an insurance policy for its Directors & Officers with a quantum and coverage as approved by the Board.

Your Company has adopted a Code of Conduct for Prevention of Insider Trading, in accordance with the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015, as amended from time to time.

The Company Secretary is the Compliance Officer for monitoring adherence to the said Regulations. The Code is displayed on the Company's website at https://krsnaadiagnostics.com/investors/

Statements in the Board's Report and the Management Discussion & Analysis Report describing the Company's objectives, expectations or forecasts may be forward-looking

within the meaning of applicable laws and regulations. Actual results may differ from those expressed in the statements.

Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.