Krsnaa Diagnostics Ltd Auditor Reports

To The Members of Krsnaa Diagnostics Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Krsnaa Diagnostics Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2024, and the Statement of Profit and Loss, including Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information (hereinafter referred to as the "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, of its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with

the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note No. 50 of the financial statements in respect of additions made by the Income Tax Authorities consequent to an assessment order passed in relation to search and seizure conducted under section 132(1) and section 133A of the Income Tax Act 1961. The Company has filed an appeal with the Joint Commissioner (Appeals) or Commissioner of Income Tax (Appeals) of Income Tax against the said Order. As there is uncertainty on the ultimate outcome of the assessment proceedings, the impact on the current and previous period financial statements including income tax, interest and other charges if any, is currently unascertainable.

Our opinion is not modified in respect of the above matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in

our audit of the standalone financial statements for the year ended March 31, 2024. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters
Sr.Key Audit Matter No.	How the Key Audit Matter was addressed in our audit
1 Allowance for expected credit loss for trade receivables	In view of the significance of the matter, we have applied the following audit procedures in this area, among others to obtain sufficient and appropriate audit evidence:
As of March 31, 2024, trade receivables amounted to H1,835.16 million against which provision of H54.50 million was made towards expected credit loss in the books of account. Refer Note 13 of standalone financial statements for disclosures of trade receivables	1. Obtained understating of the Companys accounting policy on assessment of impairment of trade receivables, including design and implementation of related management controls around it.
Calculation of expected credit losses is a complex area and requires management to make significant assumptions on customer payment behaviour and estimate the level and timing of expected future cash flows.	2. Tested the operating effectiveness of key controls for samples selected.
Hence, we have identified allowance for expected credit loss as a key audit matter in view of the significant management judgment and estimation uncertainty involved.	3. Obtained aging report of trade receivables and verified the completeness and accuracy of the same. Also reperformed aging for a sample of customer balances.
	4. Verified the appropriateness of the method and model used for computing the ECL provision and tested the reasonableness of the underlying assumptions used therein. Ensured the same is consistent with previous years.
	5. Tested the mathematical accuracy of the computation and compared the Companys provisioning rates against the historical trend of actual collection.
	6. Evaluated management comments and recovery plans for trade receivables outstanding for more than 180 days, including validation of the same.
	7. Requested for and obtained independent balance confirmations from the Companys customers on a sample basis. Verified subsequent receipts after the year-end on a sample basis.
	8. Verified the adequacy and accuracy of the disclosures made in the financial statement in relation to such provision is in accordance with the requirements of the relevant Ind AS.

 

2 Revenue Recognition from contracts with customers.	In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient and appropriate audit evidence:
The Companys revenue significantly relates to diagnostic services provided by the large number of diagnostics centres set up across various states in India through Public Private Partnership ("PPP") agreements with government authorities and agreements with private hospitals.	1. Obtained an understanding of the systems, processes and controls implemented by the Company. Evaluated the design and implementation and the operating effectiveness of key internal financial controls with respect to revenue recognition including information and technology control environment, key IT application control over the Companys IT systems which governs revenue recognition, authorisation of agreements & Invoices and those related to the reconciliation of revenue to cash.
Revenue from diagnostics services is recognised at a point in time when the tests are conducted, and samples are processed.	2. Obtained list of revenue contracts and read the terms of contract.
Owing to the high volume of sales transactions with customers and significant value of revenue being cash and carry basis increases the risk of revenue being recognised inappropriately and which highlights the criticality of sound internal processes of summarising and recording revenue to mitigate error and fraud risk.	3. Tested the reconciliation of revenue as per the billing system to the revenue recorded as per the accounting records and the reconciliation of total revenue generated through cash to the amount deposited into the bank statements.
In view of the above, we have identified revenue recognition as a key audit matter.	4. Tested on a sample basis, manual journal entries relating to revenues to identify and inquire on unusual items, if any.
	5. Performed substantive testing on samples selected using statistical sampling for revenue transactions recorded during the year by testing the underlying contracts, and patient test reports issued to verify the occurrence of the transaction and assess whether criteria for revenue recognition are met.
	6. Ensured cut-off assertion by reviewing the Companys revenue recognition policies, understanding the frequency and period of invoicing, and comparing the invoice counts to the invoices raised during the reporting period to ensure that the revenue is completely recorded in the correct accounting period.
	7. Performed analytical procedures on revenue recognised during the year to identify and inquire about unusual variances, if any, and obtained reasons for variances from the management of the Company.
	8. Assessed the adequacy and appropriateness of the disclosures made in the financial statements to ensure they are accurate, complete, and comply with the requirements of Ind AS 115.

 

Sr. Key Audit Matter No.	How the Key Audit Matter was addressed in our audit
3 Capitalisation of Property, Plant, and Equipment.	In view of the significance of the matter, we applied the following audit procedures in this area, among others to obtain sufficient and appropriate audit evidence:
During the year the Company has made additions to property, plant, and Equipment amounting to H2,530.42 million (Refer Note 5 to the standalone financial statements) which mainly relates to the cost of setting up the diagnostics centres across various geographies for contracts entered during the year with government authorities and private parties. These costs include the cost of plant & machinery, civil & infrastructure, furniture & fixtures, and other ancillary costs. Further, during the current year, the Company has re-assessed the useful life of assets and considered residual value in the computation of depreciation resulting in a change in estimates(Refer Note No. 5.1).	1. Performed an understanding of the systems, processes and controls implemented by the Company. Evaluated the design, implementation and the operating effectiveness of key internal financial controls over the costs capitalised to property, plant and Equipment and those included in capital work in progress, including approvals for Purchase Orders, Invoices, GRN and capitalisation of employee costs.
Further, it has also applied judgements on estimating the life to be considered for depreciating the civil, infrastructure, and other ancillary costs taking into consideration the revenue contract term, lease terms, and other factors including the history of the extension period for revenue contracts.	2. Tested the reconciliation of balance as per fixed assets register to the balance as per general ledger from the accounting records.
In addition to this, the Company has also identified employee costs incurred for the set-up of new centres and has applied judgment to assess if the costs incurred about new centre meet the recognition criteria of Property, Plant, and Equipment in accordance with Ind AS 16	3. Obtained physical verification reports of assets physically verified by the management and performed reconciliation on sample basis to the fixed assets register.
This has been determined as a key audit matter due to the significance of the capital expenditure incurred during the year and significant management judgment in the capitalisation of employee costs and estimating the life for depreciating the civil, infrastructure, and other ancillary costs.	4. Obtained the understanding of the employee cost capitalised and assessed whether the same meets the recognition criteria in accordance with Ind AS 16.
	5. Ensured existence and accuracy assertion by performing substantive testing on selected samples of capital expenditure recorded during the year by testing the underlying documents including purchase orders, invoices, GRN, working related to employee and other incidental costs capitalised, wherever applicable.
	6. Obtained the technical evaluation for life of assets and residual value from the Company and tested the reasonableness of the management assessment relating to the life of assets as assessed by the management for depreciation of the assets.
	7. Evaluated the management assessment on whether there are indicator of impairments and assessment performed by the management for no impairment provision.
	8. Assessed the adequacy and appropriateness of the disclosures made in the financial statements to ensure they are accurate, complete, and comply with the relevant IND AS.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the Directors Report including Annexures to the Directors Report, Management Discussion and Analysis, Corporate Governance Report but does not include the standalone financial statements and our auditors report thereon. The other information is expected to be made available to us after the date of this auditors report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance under SA 720 The Auditors responsibilities Relating to Other Information.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

We give in "Annexure A" a detailed description of Auditors responsibilities for Audit of the Standalone Financial Statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matters stated in the paragraph 2(h)(vi) below on reporting under Rule 11(g).

(c) The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of accounts.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.

(e) The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph 2(b) above on reporting under Section 143(3)(b) and paragraph 2(h)(vi) below on reporting under Rule 11(g).

(f) On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) With respect to the adequacy of the internal financial controls with reference to standalone financial

statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure C".

(h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 49 to the standalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (1) The Management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(2) The Management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, as on the date of this audit report, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(3) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, and according to the information and explanations provided to us by the Management in this regard nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (1) and (2) above, contain any material mis-statement.

v. The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Companies Act 2013 to the extent it applies to payment of dividend.

The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend. (Refer Note 61 to the Standalone financial statements.

vi. Based on our examination, the Company has used an accounting software for maintaining its books of accounts during the year ended March 31, 2024, which has a feature of recording audit trail (edit log) facility and the same has been enabled and operated throughout the year for all relevant transactions recording in the software. During the course of our examination, we did not come across any instance of the audit trail being tampered with.

Based on our examination, the Company has used two accounting software for maintaining its revenue and purchase records and processing its payroll transactions during the year ended March 31, 2024, which has a feature of recording audit trail (edit log) facility except that no audit trail feature was enabled at the database level in the accounting software to log any direct data changes throughout the period. Further, the audit trail facility has been operated throughout the year for all relevant transactions recorded in the accounting software, except at the database level as stated above, in respect of which the audit trail facility has not operated throughout the year for all relevant transactions recorded in this accounting software as it was not enabled. During the course of our examination, we did not come across any instance of the audit trail being tampered with.

3. In our opinion, according to information, explanations given to us, the remuneration paid by the Company to its directors is within the limits laid prescribed under Section 197 read with Schedule V of the Act and the rules thereunder.

For M S K A & Associates

Chartered Accountants ICAI Firm Registration No. 105047W

	Shraddha D Khivasara
	Partner
Place: Pune	Membership No. 134285
Date: May 18, 2024	UDIN : 24134285BKEZBG7828

Annexure A to the Independent Auditors Report on even Date on the Standalone Financial Statements of Krsnaa Diagnostics Limited

For the year ended March 31, 2024.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management and Board of Directors.

• Conclude on the appropriateness of management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended March 31, 2024 and are therefore, the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

For M S K A & Associates

Chartered Accountants ICAI Firm Registration No. 105047W

	Shraddha D Khivasara
	Partner
Place: Pune	Membership No. 134285
Date: May 18, 2024	UDIN : 24134285BKEZBG7828

Annexure B to Independent Auditors Report of even Date on the Standalone Financial Statements of Krsnaa Diagnostics Limited

for the year ended March 31, 2024

[Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements in the Independent Auditors Report]

i. (a) A The Company has maintained proper records showing full particulars including quantitative details and situation of property, plant and equipment and relevant details of right-of-use assets.

(a) B The Company has maintained proper records

showing full particulars of intangible assets.

(b) Property, Plant and Equipment, and right of use assets were physically verified by the management according to a phased programme designed to cover all items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of Property, plant and equipment, and right of use assets have been physically verified by Management during the year. No material discrepancies were noticed on such verification.

(c) According to the information and explanations

given to us, there are no immovable properties, and accordingly, the provisions stated under clause 3(i)(c) of the Order are not applicable to the Company.

(d) According to the information and explanations

given to us, there are no immovable properties, and accordingly, the provisions stated under clause 3(i)(c) of the Order are not applicable to the Company.

(e) According to the information and explanations given to us, no proceeding has been initiated or pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988, as amended and rules made thereunder. Accordingly, the provisions stated under clause 3(i)(e) of the Order are not applicable to the Company.

(a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency, coverage and procedure of such verification is reasonable. No discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories. The discrepancies noticed on physical verification of inventory as compared to book records were not 10% or more in aggregate for each class of inventory.

(b) The Company has been sanctioned working capital limits in excess of H5 crores in aggregate from Banks on the basis of security of current assets. Based on the records examined by us in the normal course of audit of the standalone financial statements, quarterly statements are filed with such Banks are not in agreement with the books of accounts of the Company. Details of the same are as below.

Quarter Ended	Particulars of security *	Amount as per books of accounts	Amount as per revised quarterly statement*	Variance	Discrepancy (give details)
June	Trade Receivable	1,152.33	1,154.73	(2.40)	Variance on account of book closure effect
	Trade Payables	135.17	135.06	0.11
September	Trade Receivable	1,481.97	1,456.17	25.80
	Trade Payables	472.21	472.75	(0.54)
December	Trade Receivable	1,683.27	1,463.57	219.69
	Trade Payables	714.48	709.26	5.22
March	Trade Receivable	1,248.73	1,237.76	10.97
	Trade Payables	443.71	448.66	(4.95)

# The balance of Trade Payable reported is upto an aging of 90 Days and the balance of Trade Receivable as reported is upto an aging of 120 Days, pursuant to the requirement in the sanction letter of the banks.

* Post quarter/year-end, the company has filed the revised statement/returns for all the quarters with figures matching with books of accounts which is considered for above reporting.

iii. According to the information and explanation provided to us, the Company has not made any investments in, or provided any guarantee or security, or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties. Accordingly, the provisions stated under clause 3(iii) of the Order are not applicable to the Company.

iv. According to the information and explanations given to us, there are no loans, investments, guarantees, and security

in respect of which provisions of sections 185 and 186 of the Companies Act, 2013, (the "Act") are applicable and accordingly, the provisions stated under clause 3(iv) of the Order is not applicable to the Company.

v. According to the information and explanations given to us, the Company has neither accepted any deposits from the public nor any amounts which are deemed to be deposits, within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under. Accordingly, the provisions stated under clause 3(v) of the Order is not applicable to the Company. Also, there are no amounts outstanding as on March 31, 2024, which are in the nature of deposits.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its services. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, undisputed statutory dues including Goods and Services tax, provident fund, employees state insurance, custom duty, value added tax, cess, and other statutory dues have generally been regularly deposited with the appropriate authorities during the year, though there has been a slight delay in few cases.

There are no undisputed amounts payable in respect of Goods and Services tax, provident fund, employees state insurance, custom duty, cess, and other statutory dues in arrears as at March 31, 2024, outstanding for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us and examination of records of the Company, details of statutory dues referred to in sub-clause (a) above which have not been deposited as on March 31, 2024, on account of any dispute, are as follows:

Name of the statute	Nature of dues	Amount Demanded	Amount Paid	Period to which the amount relates	Forum where the dispute is pending	Remark, if any
Income Tax Act, 1961	Income Tax	H196.3 million	H Nil	Assessment Year 2022-23	Joint Commissioner/ Commissioner of Income Tax (Appeals)	NA

viii. According to the information and explanations given to us, there are no transactions which are not accounted in the books of account which have been surrendered or disclosed as income during the year in Income-tax Assessment of the Company. Accordingly, the provision stated under clause 3(viii) of the Order is not applicable to the Company.

ix. (a) In our opinion and according to the information and explanations given to us and the records of the Company examined by us, the Company has not defaulted in repayment of loans or borrowings or in payment of interest thereon to any lender.

(b) According to the information and explanations given to us and on the basis of our audit procedures, we report that the Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(c) In our opinion and according to the information and explanations provided to us, no money was raised by way of term loans. Accordingly, the provision stated under clause 3(ix)(c) of the Order is not applicable to the Company.

(d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the standalone financial statements of the Company, we report that no funds raised on short-term basis have been used for longterm purposes by the Company.

(e) According to the information and explanation given to us and on an overall examination of the standalone financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries. Further, the Company do not have any associate or joint ventures. Accordingly, reporting under clause 3(ix)(f) of the order is not applicable to the Company.

x. (a) In our opinion and according to the information and explanation given to us, the Company has utilized the money raised by way of initial public offer for the purposes for which they were raised (refer Note No. 48 to the financial statement), except for the following cases:

Nature of the fund raised	Purpose for which funds were raised		Total amount raised (net of actual IPO expenses)	Amount utilized for the purpose		Unutilized /(Excess utilized) balance	Details of deviation		Subsequent rectification (Yes/ No) and details
Initial Public Offer	Finance the cost of establishing diagnostics centres at Punjab, Karnataka, Himachal Pradeshand Maharashtra		1,508.10	1,358.10		150	The Company has utilised the balance of unutilised amount allocated for Financing the cost of establishing diagnostics centres amounting to H150 million towards		Not Applicable
Nature of the fund raised	Purpose for which funds were raised	Total amount raised (net of actual IPO expenses)			Amount utilized for the purpose	Unutilized / (Excess utilized) balance	Details of deviation	Subsequent rectification (Yes/ No) and details
Initial Public Offer	General corporate purposes	813.05			963.05	(150)	General Corporate Purpose based on the legal counsel opinion and approval obtained from the Board of Directors and Audit Committee of the Company dated February 12, 2024.	Not Applicable

x. (b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully, partly, or optionally convertible debentures during the year. Accordingly, the provisions stated under clause 3(x)(b) of the Order are not applicable to the Company.

xi. (a) Based on our examination of the books and records

of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we report that no material fraud by the Company or on the Company has been noticed or reported during the year in the course of our audit.

(b) Based on our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, a report under Section 143(12) of the Act, in Form ADT-4, as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 was not required to be filed with the Central Government. Accordingly, the provisions stated under clause 3(xi) (b) of the Order is not applicable to the Company.

xi. (c) As represented to us by the Management, there are no whistle-blower complaints received by the Company during the year.

xii. The Company is not a Nidhi Company. Accordingly, the provisions stated under clause 3(xii)(a) to (c) of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013 where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv. (a) In our opinion and based on our examination, the

Company has an internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports of the Company issued till the date of our audit report, for the period under audit.

xv. According to the information and explanations given to us, in our opinion, during the year, the Company has not entered into any non-cash transactions with directors or persons connected with its directors and accordingly, the reporting on compliance with the provisions of Section 192 of the Companies Act, 2013 in clause 3(xv) of the Order is not applicable to the Company.

xvi. (a) The Company is not required to be registered under

Section 45 IA of the Reserve Bank of India Act, 1934 (2 of 1934) and accordingly, the provisions stated under clause 3(xvi)(a) of the Order are not applicable to the Company.

(b) The Company is not engaged in any Non-Banking Financial or Housing Finance activities during the year and accordingly, the provisions stated under clause 3 (xvi)(b) of the Order are not applicable to the Company.

(c) The Company is not a Core investment Company (CIC) as defined in the regulations made by Reserve Bank of India. Accordingly, the provisions stated under clause 3 (xvi)(c) of the Order are not applicable to the Company.

(d) According to the information and explanations provided to us, the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) does not have any Core Investment Company (as part of its group). Accordingly, the provisions stated under clause 3(xvi)(d) of the order are not applicable to the Company.

xvii. Based on the overall review of standalone financial statements, the Company has not incurred cash losses in the current financial year and in the immediately preceding financial year. Accordingly, the provisions stated under clause 3(xvii) of the Order are not applicable to the Company.

xviii. There has been no resignation of the statutory auditors during the year. Accordingly, the provisions stated under clause 3(xviii) of the Order are not applicable to the Company.

xix. According to the information and explanations given to us and on the basis of the financial ratios (as disclosed in note 62 to the standalone financial statements), ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the

Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. (a) According to the information and explanations given to us and based on our verification, the provisions of Section 135 of the Act are applicable to the Company. The Company has made the required contributions during the year and there are no unspent amounts which are required to be transferred either to a Fund specified in schedule VII of the Act or to a Special

Account as per the provisions of Section 135 of the Act read with schedule VII to the Act. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable to the Company.

(b) There are no ongoing projects and accordingly reporting under Clause 3(xx)(b) of the Order is not applicable to the Company.

xxi. The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of standalone financial statements. Accordingly, no comment in respect of the said Clause has been included in the report.

For M S K A & Associates

Chartered Accountants ICAI Firm Registration No. 105047W

	Shraddha D Khivasara
	Partner
Place: Pune	Membership No. 134285
Date: May 18, 2024	UDIN : 24134285BKEZBG7828

Annexure C to the Independent Auditors Report of even Date on the Standalone Financial Statements of Krsnaa Diagnostics Limited

[Referred to in paragraph 2(g) under Report on Other Legal and Regulatory Requirements in the Independent Auditors Report of even date to the Members of Krsnaa Diagnostics Limited on the Standalone Financial Statements for the year ended March 31, 2024]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls with reference to the standalone financial statements of Krsnaa Diagnostics Limited ("the Company") as of March 31, 2024 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2024, based on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI) (the "Guidance Note").

Managements and Board of Directors Responsibility for Internal Financial Controls

The Companys Management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in

accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls With reference to Standalone Financial Statements

A companys internal financial control with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company

are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls With reference to Standalone financial statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For M S K A & Associates

Chartered Accountants ICAI Firm Registration No. 105047W

	Shraddha D Khivasara
	Partner
Place: Pune	Membership No. 134285
Date: May 18, 2024	UDIN : 24134285BKEZBG7828

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