Vijaya Diagnost. Director Discussions


Dear Shareholders,

Your Directors have pleasure in presenting the Twenty First (21st) Annual Report on the business and operations of Vijaya Diagnostic Centre Limited (the Company or VDCL) and the Audited Financial Statements for the financial year ended March 31, 2023.

FINANCIAL SUMMARY

The financial performance of the Company for the year ended March 31, 2023, is summarized below:

(Rs. in Lakhs)
Particulars

Standalone

Consolidated

2022-23 2021-22 2022-23 2021-22
Revenue from Operations 44,957.93 45,087.93 45,922.27 46,236.99
Earnings Before Depreciation, Interest, Tax and Exceptional Items 17,897.01 19,985.58 18,202.73 20,369.01
Finance Cost 2,087.61 1,625.56 2,094.79 1,645.03
Depreciation 6,139.43 5,213.65 6,172.01 5,268.61
Profit before Tax 11,127.30 14,438.08 11,351.00 14,738.43
Provision for Tax 2,803.91 3,627.61 2,830.30 3,671.67
Profit after Tax 8,323.39 10,810.47 8,520.70 11,066.76
Other Comprehensive Income 19.39 19.10 20.16 20.66
Total Comprehensive Income for the Period 8,342.78 10,829.57 8,540.86 11,087.42
Basic EPS 8.16 10.60 8.29 10.76
Diluted EPS 8.12 10.54 8.26 10.69

FINANCIAL PERFORMANCE

The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the applicable Indian Accounting Standards (Ind-AS) and the provisions of Companies Act, 2013.

Standalone Performance

During the year under review, your Company Generaled revenue of Rs.44,957.93 Lakhs as compared to Rs.45,087.93 Lakhs in the previous year registering a decline of 0.29%. EBITDA for the year declined by 10.45% to Rs.17,897.01 lakhs against Rs.19,985.58 lakhs in the previous year. The Profit before the Tax for the year is at Rs.11,127.30 lakhs as against Rs.14,438.08 Lakhs in the previous year. The Net Profit after tax is Rs.8,323.39 Lakhs as against Rs.10,810.47 Lakhs in the previous year. The diluted earnings per share stood at Rs.8.12 compared to Rs.10.54 in previous year.

Consolidated Performance

During the year under review, your Company Generaled consolidated revenue of Rs.45,922.27 Lakhs as compared to Rs.46,236.99 Lakhs in the previous year registering a decline of 0.68%. EBITDA for the year declined by 10.64% to Rs.18,202.73 lakhs against Rs.20,369.01 lakhs in the previous year. The Profit before Tax for the year is at Rs.11,351.00 lakhs as against Rs.14,738.43 Lakhs in the previous year. The Net Profit after tax is Rs. 8,520.70 Lakhs as against Rs.11,066.76 Lakhs in the previous year. The diluted earnings per share stood at Rs.8.26 compared to Rs.10.69 in previous year.

CONSOLIDATED FINANCIAL STATEMENTS

The Standalone and Consolidated Financial Statements of the Company for Financial year 2022-23 are prepared in accordance with the applicable provisions of Companies Act 2013 ("Companies Act"), Indian Accounting Standards ("Ind-AS") and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The consolidated financial statements have been prepared based on the audited financial statements of the Company and its subsidiaries as approved by their respective Board of Directors.

DIVIDEND

The Board of Directors of your Company has recommended final dividend for the Financial Year 2022-23 @100%, i.e. Re.1/- per equity share of face value of Re. 1/- each, as final dividend for the Financial Year 2022-23, for approval by the shareholders at the ensuing Annual General Meeting ("AGM") of the Company.

As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the Company has adopted a Dividend Distribution Policy which is available on the website of the Company at https://images.viiayadiagnostic.com/ investor/corporategovernance/DIVIDEND-DISTRIBUTION- POLICY.pdf

The dividend declared by the Company for the financial year ended March 31, 2023 is in compliance with the Dividend Distribution Policy of the Company.

TRANSFER TO GENERAL RESERVES

During the year under review, Rs.75.52 Lakhs have been transferred to the General Reserves of the Company.

SUBSIDIARY COMPANIES

Your Company has the following five (5) subsidiaries (including step down subsidiaries) as on March 31, 2023.

1. Medinova Diagnostic Services Limited

2. Doctorslab Medical Services Private Limited

3. Namrata Diagnostic Centre Private Limited

4. VDC Diagnostics (Karnataka) LLP

5. Medinova Millennium MRI Services, LLP

There was no material change in the nature of the business carried on by the subsidiaries during the year under review.

As per the provisions of Section 129 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary Companies is prepared in Form AOC-1 and is annexed herewith as Annexure - I.

Your Company does not have any Associate Company or Joint Venture as on March 31, 2023. None of the Companies have become or ceased to become subsidiary, associate and joint ventures during the year under review.

The Company has placed separately, the audited accounts of its subsidiaries on its website at https://www.viiayadiagnostic. com/investors/financials-subsidiaries in compliance with the provisions of Section 136 of the Companies Act, 2013. Audited financial statements of the Companys subsidiaries will be provided to the Members, on request.

The Company has formulated a policy for determining material subsidiaries. The said policy is also available on the website of the Company at https://imaqes.viiayadiaqnostic.com/investor/ corporategovernance/MATERIAL-SUBSIDIARY-POLICY.pdf

CHANGES IN SHARE CAPITAL OF THE COMPANY

Your Companys Equity Share Capital position as at the beginning of the Financial Year 2022-23 (i.e., as on April 1, 2022) and as at the end of the said Financial Year (i.e., as on March 31, 2023) was as follows:

Authorised Share Capital

Issued, Subscribed & Paid-up Share Capital

Category of Share Capital No. of Shares Face Value Per Share (Rs.) Total Amount (Rs.) No. of Shares Face Value Per Share (Rs.) Total Amount (Rs.)
As on April 1, 2022:
Equity Share 12,05,00,000 1/- 12,05,00,000/- 10,19,65,926 1/- 10,19,65,926/-
Total 12,05,00,000 12,05,00,000/- 10,19,65,926 10,19,65,926/-

Changes during the year under review:

‘Allotment of equity shares under Employee Stock Option plan 2018 (ESOP 2018):

June 06, 2022 64,832 1/- 64,832/-
July 25, 2022 13,989 1/- 13,989/-
September 17, 2022 19,049 1/- 19,049/-
November 07, 2022 5,466 1/- 5,466/-
February 13, 2023 1,913 1/- 1,913/-
Total no. of equity shares allotted under ESOP 2018 1,05,249 1,05,249/-

As on March 31, 2023:

Equity Share 12,05,00,000 1/- 12,05,00,000/- 10,20,71,175 1/- 10,20,71,175/-
Total 12,05,00,000 12,05,00,000/- 10,20,71,175 10,20,71,175/-

‘During the Financial Year 2022-23, your Company has allotted 1,05,249 (One Lakh Five Thousand Two Hundred and Forty Nine only) Equity Shares of Face Value of Re.1/- (Rupees One only) each under the VDCL Employees Stock Option Plan, 2018 ("ESOP 2018"), pursuant to exercise of options by Eligible Employees under ESOP 2018.

The aforementioned 1,05,249 (One Lakh Five Thousand Two Hundred and Forty Nine only) Equity Shares rank pari passu with the existing Equity Shares of the Company and have been listed for trading on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).

Apart from the above, your company has not issued equity shares with differential rights as to dividend, voting or otherwise.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

DIRECTORS

As on March 31, 2023, our Board consists of two (2) Executive Directors, one (1) Non Executive Non Independent Director and four (4) Independent Directors. The constitution of the Board of the Company is in accordance with Section 149 of the Companies Act 2013 and Regulation 17 of the SEBI Listing Regulations.

Further the Board of Directors of the Company has based on the recommendation of the Nomination and Remuneration Committee approved the appointment of Ms. Sura Suprita Reddy (DIN: 00263618) as Managing Director & Chief Executive Officer ("MD & CEO"), not liable to retire by rotation, for a term of five (5) years i.e. from July 01, 2023 to June 30, 2028, which is subject to the approval of the shareholders at the ensuing AGM.

In the opinion of the Board, all the Independent Directors of the Company possesses requisite expertise, integrity and experience including proficiency. Further all the Independent Directors have confirmed that their respective names have been included in the Independent Directors Database as required under Section 150 of the Companies Act, 2013.

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Sura Geeta Reddy, will retire by rotation at the ensuing AGM and being eligible offered herself for re-appointment. The Board recommends the same to the shareholders for their approval.

In compliance with Regulation 36(3) of the SEBI Listing Regulations and the applicable provision of the Companies Act, 2013, brief resume and other details of all the directors proposed to be appointed / re-appointed are attached along with the Notice of the ensuing Annual General Meeting.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than the commission, and reimbursement of expenses, if any, incurred by them for the purpose of allending meetings of the Board / Committee of the Company.

On the basis of the written representations received from the directors, none of the above directors are disqualified under Section 164 (2) of the Companies Act, 2013, and are also not debarred by SEBI or any other statutory authority for holding office of a Director. As required by Listing Regulations, a certificate from Company Secretary in practice, that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of the Company, by SEBI, MCA or any such statutory authorities, is annexed to the Corporate Governance report which is forming part of the Annual Report. Apart from the above, there have been no changes in the Directors.

KEY MANAGERIAL PERSONNEL

During the year under review, Ms. Anusha Kanumuru had resigned as Company Secretary & Compliance Officer of the Company effective from December 03, 2022 and Mr. Hansraj Singh was appointed as Compliance Officer the Company from December 22, 2022 by way of circular resolution of the Board and appointed as Company Secretary of the Company with effect from February 13, 2023 by the approval of the Board of Directors at their meeting.

In accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following were the Key Managerial Personnel of the Company as on March 31, 2023:

1. Dr. Sura Surendranath Reddy - Executive Chairman

2. Mr. Sunil Chandra Kondapally - Executive Director

3. Ms. Sura Suprita Reddy - Chief Executive Officer

4. Mr. Narasimha Raju KA - Chief Financial Officer

5. Mr. Hansraj Singh - Company Secretary & Compliance Officer

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all its Independent Directors, confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties. In the opinion of the Board, Independent directors fulfill the conditions as specified in Companies Act and SEBI Listing Regulations and are independent from the management.

FAMILIARIZATION PROGRAMME

The Company has put in place a system to familiarize its Independent Directors. During the year under review the Independent Directors were familiarized with the Company, its business and the senior management.

Periodic presentations were made at the Board meetings apprising the Board Members about the finer aspects of the Companys businesses, the challenges posed and an overview of future business plans, including:

• Macro-economic view of the industry in which the Company operates.

• Budgets, operations and performance of the business and relevant regulatory/legal updates in the statutes applicable to the Company.

• Business model of the Company, risks and opportunities for the businesses and the growth levels for them; and

• Strategic future outlook and the way forward.

MEETINGS OF BOARD OF DIRECTORS

The Meetings of the Board of Directors are prescheduted and intimated to all the Directors in advance, in order to help them ptan their schedute. However, in case of special and urgent business needs, approval is taken either by convening meetings at a shorter notice with consent of all the Directors or by passing a Resotution through Circulation, as permitted by taw. Video conferencing facilities are provided to enabte active participation by Directors who are unable to attend the meetings in person.

There were five (5) Meetings of the Board of Directors held during the Financial Year 2022-23. The details of Board Meetings and the allendance of the Directors thereat are provided in the Corporate Governance Report, which forms a part of the Annual Report. The provisions of Act and the SEBI Listing Regutations were adhered to, white considering the time gap between any two meetings.

COMMITTEES OF THE BOARD

The Board Committees are set up by the Board and are governed by its terms of reference which exhibit the scope, composition, tenure, functioning and reporting parameters. The Board Committees ptay a cruciat rote in the governance structure of the Company and they deat with specific areas of concern for the Company that needs a ctoser review. The Committees operate under the direct supervision of the Board and Chairpersons of the respective Committees report to the Board about the detiberations and decisions taken by the Committees. The recommendations of the Committees are submitted to the Board for approvat.

The Board of Directors of your Company has formed various Committees, as per the provisions of the Companies Act, 2013 and SEBI Listing Refutations. The various committees of the Board are as provided hereunder:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

The details of all the Committees along with their charters, composition and meetings held during the year, are provided in the "Report on Corporate Governance", which forms part of this Annual Report. During the year under review, all the recommendations of the Audit committee were accepted by the Board.

STATUTORY AUDITORS

The shareholders at their 16th Annual General Meeting (AGM), approved the appointment of B S R & Associates LLP, (Firm Registration No.116231W/W-100024) as the Statutory Auditors of the Company, for a term of five (5) years to held the office from the conclusion of the 16th AGM untit the conclusion of the 21st AGM of the Company on such remuneration as may be determined by the Board of Directors.

M/s. B S R and Co, Chartered Accountants (ICAI Firm No. 128510W), a networking firm of B S R & Associates LLP, based on the recommendation of the Audit Committee and the Board of Directors at their meetings held on May 29, 2023, witt be re-appointed as the Statutory Auditors by the Company in the ensuing 21st AGM to be held for the Financial Year 2022-23 for a period of five (5) years, as per the provisions of the Companies Act, 2013. They have indicated their wittingness to continue as the Statutory Auditors of the Company for the next term, and hence their reappointment is being recommended to the Members of the Company, for a further period of five (5) years, from the conclusion of 21st AGM until the conclusion of 26th AGM of the Company to be held in the Catendar year 2028 on such remuneration as may be agreed by the Board, in addition to the applicable taxes, reimbursement of out-of-pocket expenses as may be incurred in connection with the audit of the accounts of the Company.

The Notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any quatification, reservation, adverse remark, or disctaimer.

No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013 requiring disctosure in the Boards Report.

COST RECORDS AND COST AUDITORS

M/s. Santhosh & Associates, Cost Accountants, Hyderabad (Firm Registration No.: 003955) was appointed by the Board of Directors at its Meeting held on May 26, 2022, as the "Cost Auditors" of the Company for the Financial Year 2022-23, for all the appllicable products, pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014. The Shareholders of the Company, at their 20th AGM held on September 28, 2022, had ratified the remuneration payabte to the Cost Auditors in terms of Rule 14 of the Companies (Audit & Auditors) Rules, 2014.

The Company has prepared and maintained cost accounts and records for the Financial Year 2022-23, as per sub-section (1) of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014.

The Cost Auditor has submitted the Cost Audit Report for the financial year 2022-2023 to the Board of Directors and the Board of Directors considered and examined the said report. The Cost audit report does not contain any qualification, reservation, adverse remark, or disclaimer.

M/s. Santhosh & Associates, Cost Accountants, Hyderabad has been re-appointed by the Board of Directors, at its Meeting held on May 29, 2023, as the "Cost Auditors" of the Company for the Financial Year 2023-24, for all the applicable products, pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014. The Shareholders are requested to ratify the remuneration payable to the Cost Auditors at their ensuing 21st AGM, in terms of Rule 14 of the Companies (Audit & Auditors) Rules, 2014. There is no change in the remuneration payable to the cost auditor for the FY 2023-2024.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

The Board of Directors of your Company, at its Meeting held on August 9, 2022, had appointed Mr. D Balaramakrishna, Practicing Company Secretary (C.P. No. 22414), as the "Secretarial Auditor" of the Company, to conduct the Secretarial Audit for the Financial Year 2022-23, pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Audit Report submitted by Mr. D. Balaramakrishna, for the Financial Year 2022-23 is annexed as Annexure - II to this Boards Report.

The Secretarial Auditors Report is self-explanatory and does not contain any qualification, reservation, adverse remark, or disclaimer.

Pursuant to Regulation 24A of SEBI Listing Regulations, the Company has also obtained Annual Secretarial Compliance report for the financial year 2022-23 from Mr. D. Balaramakrishna, Practicing Company Secretary and submitted the same to the Stock Exchanges where the shares of the Company are listed.

The Annual Secretarial Compliance report as submitted to the stock exchanges does not contain any qualification, reservation, adverse remark, or disclaimer.

INTERNAL AUDITOR

Your Company has robust internal audit team for carrying out the internal audit. Further, pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, M/s. Laxminiwas & Co, Chartered Accountants, are the internal auditors of the company. The Internal Auditors allend the respective Audit Committee Meetings, where internal audit reports are discussed.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

Your Company has in place an adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, safeguarding of its assets, the prevention and detection of frauds the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The internal control is supplemented by an extensive programme of internal, external audits and periodic review by the Management. This system is designed to adequately ensure that financial and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets.

The Statutory Auditors and the Internal Auditors are, inter alia, invited to allend the Audit Committee Meetings and present their observations on adequacy of Internal Financial Controls and the steps required to bridge gaps, if any. Accordingly, the Audit Committee makes observations and recommendations to the Board of Directors of your Company.

LOANS, GUARANTEES OR INVESTMENTS

As required to be reported pursuant to the provisions of Section 186 and Section 134(3)(g) of the Companies Act, 2013, the particulars of loans, guarantees and investments by your Company under the aforesaid provisions during the Financial Year 2022-23, have been provided in the notes to the Financial Statement.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all contracts/arrangements/ transactions entered into by the Company with related parties were in ordinary course of business and on an arms length basis. There were no material related party transactions by the Company during the year under review. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable. The details of transactions with related parties are provided in the notes to the Financial Statement.

Systems are in place for obtaining prior omnibus approval of the Audit Committee on an annual basis for transaction with related parties which are of a foreseeable and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted and a statement giving details of all transactions with related parties are placed before the Audit Committee for their review on a periodic basis.

In compliance with the requirements of the Companies Act, 2013 and SEBI Listing Regulations, the Board has formulated and adopted a Related Party Transactions Policy ("RPT Policy") for the purpose of identification, approval, monitoring and reporting of related party transactions. The RPT Policy as approved by the Board is available on the Companys website at https://images.viiayadiagnostic.com/investor/ corporateqovernance/Retated-Party-Transaction-Poticy.pdf

CHANGE IN NATURE OF BUSINESS

There was no change in the nature of business carried on by the Company during the year under review.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this Report.

However, with effect from January 01, 2023, the Company has changed its method of depreciation on all Property, Plant and Equipment from Written Down Value ("WDV") method to Straight Line Method ("SLM"), based upon the technical assessment of expected pallern of consumption of the future economic benefits embodied in the assets. Consequently, the depreciation on such assets has been charged as per WDV method from April 01, 2022 to December 31, 2022. However, with effect from January 01, 2023, the carrying value of the assets as on December 31, 2022 has been depreciated as per SLM over the remaining useful lives of the assets.

ANNUAL EVALUATION OF BOARDS PERFORMANCE

The Board of Directors of your Company has carried out an Annual Performance Evaluation of its own, the Directors individually as well as the evaluation of the working of its Committees. The performance evaluation of the Board as a whole, the Chairman of the Board and Non-Independent Directors was carried out by the Independent Directors.

A structured questionnaire was prepared after taking into consideration various aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The confidential questionnaire was responded to by the Directors and vital feedback was received from them on how the Board currently operates and ways and means to enhance its effectiveness.

The Board of Directors has expressed its satisfaction with the entire evaluation process.

Further Independent directors had separately met to evaluate the performance of Non Independent Directors, Board as a whole, Chairperson and to assess the quality, quantity and timeliness of flow of information between the Company management and the Board.

PUBLIC DEPOSITS

During the year under review, your Company has neither accepted nor renewed any deposit within the meaning of Section 73 and 76 of the Companies Act, read with Companies (Acceptance of Deposits) Rules, 2014.

RISK MANAGEMENT

Your Company through its Risk management policy periodically assesses the risk elements, mitigates the different kinds of risks which the Company faces in its day-to-day operations and incorporates such risk mitigation plans in its business operational plans. As on date of this report, your Company does not foresee any critical risk, which threatens its existence.

Further, information on the risk management process of the Company is contained in the Management Discussion & Analysis Report which forms part of the Annual Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

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

The information in respect of matters pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in the Annexure - III to this Directors Report.

ANNUAL RETURN

The Annual Return for financial year 2022-23 is available on the website of the Company at https://www.viiayadiagnostic.com/ investors/annual-return

SIGNIFICANT AND MATERIAL ORDERS

During the year under review no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

PARTICULARS OF EMPLOYEES

The disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in the prescribed format and annexed herewith as Annexure- IV.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Annual Report. In terms of the provisions of the first proviso to Section 136 (1) of the Companies Act, 2013, the Annual Report is being sent to Shareholders, excluding the aforementioned information. Any shareholder interested in obtaining a copy of such statement may write to the Company Secretary of the Company at cs@viiayadiagnostic.in

CORPORATE GOVERNANCE

In accordance with Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), a detailed report on Corporate Governance is included in the Annual Report.

Mr. D. Balaramakrishna, Practicing Company Secretary, who is also the "Secretarial Auditor" of your Company, has certified your Companys compliance with the requirements of Corporate Governance in terms of Regulation 34 of the SEBI Listing Regulations and their Compliance Certificate is annexed to the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the

Financial Year 2022-23, as prescribed under Regulation 34(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Securities Exchange Board of India (SEBI) had introduced new requirements for sustainability reporting by listed entities. The new reporting called the Business Responsibility and Sustainability Report (BRSR) has replaced the existing Business Responsibility Report. In terms of the aforesaid amendment, with effect from the financial year 2022-23, reporting of BRSR is made mandatory for the top 1000 listed companies (by market capitalization).

The BRSR of the Company for financial year 2022-23 as required under SEBI Listing Regulations is presented as a separate section and forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act, 2013 read with CSR Rules, the Company has constituted the Corporate Social Responsibility (CSR) Committee. The details of CSR Committee are detailed in the Corporate Governance Report, which forms part of this Annual Report.

The Board, on the recommendation of the CSR Committee, adopted a CSR Policy. The aid CSR Policy is available on the website of the Company at https://images.viiayadiagnostic. com/website/CSR-POLICY.pdf

The Annual Report on Corporate Social Responsibility as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure-V to this Report.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has always believed in providing a safe and harassment free workplace for every individual working in Companys premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Board of Directors of your Company has constituted Internal Complaints Committees ("ICC") at Head/Corporate Office as well as Centre/Branch levels, pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The ICC at the Head Office level comprised of the following Members as on March 31, 2023:

Sl. No. Name of the Committee Members Designation Category
1. Ms. Nandini Koindala Manager-Lab services (Biochemistry) Chairperson
2. Dr. Geeta R Jahagirdar AGM-Lab Services (Pathology) Member
3. Ms. Vijaya Sree Mathe DGM-Quality Assurance Member
4. Dr. Bikash Kumar Chaudhury Director-Lab Services Member
5. Mr. Damodher Reddy Manager-HR Operations Member
6. Mr. Hansraj Singh Rajput Company Secretary & Compliance Officer Member
7. Ms. Renu Kapoor External Advisor Member-Social Worker

The Company has adopted a policy against sexuat harassment in tine with the provisions of Sexuat Harassment of Women at Workplace (Prevention, Prohibition and Redressat) Act, 2013 and the Rules framed thereunder. The Company has constituted Internal Complaints Committee for redressat of complaints on sexuat harassment. During the year, the Company had not received any comptaints on sexuat harassment.

NOMINATION AND REMUNERATION POLICY

In comptiance with the provisions of Companies Act, 2013 and SEBI Listing Regulations, the Board had framed a Nomination and Remuneration Poticy for setection and appointment of Directors, Key Manageriat Personnet, senior management and their remuneration. The Company affirms that the remuneration paid is as per Nomination and Remuneration Poticy of the Company. The said Poticy is avaitabte on the website of the Company at https://imaqes.viiayadiaqnostic.com/investor/ corporategovernance/NOMINATION-REMUNERATION- POLICY.pdf

Further, neither the Managing Director nor the Whote-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

WHISTLE BLOWER / VIGIL MECHANISM

The Company has estabtished a Vigit Mechanism, which inctudes a Whistte Btower Poticy, for its Directors and Employees, to provide a framework to facititate responsibte and secure reporting of concerns of unethicat behaviour, actuat or suspected fraud or viotation of the Companys Code of Conduct & Ethics. All employees shall be protected from any adverse action for reporting any unacceptabte or improper practice and/ or any unethicat practice, fraud, or viotation of any taw, rute or regutation.

This Poticy is atso appLicabte to your Companys Directors and employees and it is avaitabte on the website of your Company at https://images.viiayadiagnostic.com/investor/ corporategovernance/WHISTLE-BLOWER-POLICY.pdf

EMPLOYEE STOCK OPTION PLAN

VDCL Emptoyee Stock Option Ptan 2018 ("ESOP Ptan) has

been formutated and approved by the Board of Directors and Shareholders of the Company on May 3, 2018 and subsequentty amended on March 25, 2021 and August 16, 2021

to be in tine with the SEBI (Share Based Emptoyee Benefits and Sweat Equity) Regutations, 2021 ("ESOP Regutations"). The said ESOP Ptan have atso been ratified subsequentty by the shareholders through postat ballot post tisting of shares, on January 11, 2022 in terms of ESOP Regutations. The Nomination and Remuneration Committee of the Board of Directors of the Company, inter atia, administers and monitors the ESOP Ptan of the Company. During the year under review, no new ESOPs were granted to any employees of the Company.

The detaits in respect of ESOPs as required under Companies Act, 2013 and ESOP Regutations are annexed herewith as Annexure-VI and avaitabte on the website of the company at https://www.viiayadiagnostic.com/investors/disctosure-of-events

Further the certificate from the Secretariat Auditors of the Company certifying that the Companys Stock Option Ptan is being imptemented in accordance with the ESOP Regutations and the resotution passed by the Members, is ptaced on the Companys Website at https://www.viiayadiagnostic.com/ investors/disctosure-of-events

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Companies Act, with respect to Directors Responsibitity Statement, the Directors, to the best of their knowtedge and abitity, hereby confirm that:

a) In the preparation of the Annual accounts, the applicable accounting standards had been fottowed atong with proper exptanation retating to materiat departures;

b) Directors have setected such accounting poticies and apptied them consistentty and made iudgments and estimates that are reasonabte and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit and toss of the Company for the year ended on that date;

c) Directors have 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 irregutarities;

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

e) The Company had taid down internat financial controts to be fottowed by the Company and that such internat financial controts are adequate and were operating effectivety; and

f) Directors have devised proper systems to ensure comptiance with the provisions of all applicable taws and that such systems were adequate and operating effectivety.

DISCLOSURE RELATED TO INSOLVENCY AND BANKRUPTCY

During the year under review, neither any apptication was made, nor is any proceeding pending under the Insotvency and Bankruptcy Code, 2016 against the Company.

GREEN INITIATIVES

In commitment to keep in Line with the Green Initiatives and going beyond it, electronic copy of the Notice of the 21st Annual General Meeting of the Company including the Annual Report for the FY 2022-23 are being sent to all Members whose e-mail addresses are registered with the Company / Depository Participant(s).

ACKNOWLEDGEMENT

Your directors thank various departments of CentraL and State Government, Organizations and Agencies for the continued help and co-operation extended by them to your Company. Your

directors aLso gratefuLLy acknowLedge aLL stakehoLders of the Company viz. members, customers, deaLers, vendors, financiaL institutions, banks and other business partners for the excellent support received from them during the year.

Your directors pLace on record their sincere appreciation to aLL employees of the Company for their unstinted commitment and continued contribution to the Company.

By order of the Board
For Vijaya Diagnostic Centre Limited
Dr. Sura Surendranath Reddy
Place: Hyderabad Executive Chairman
Date: May 29, 2023 DIN: 00108599

Annexure - II

FORM NO. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31St MARCH 2023

[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]

To,

The Members,

Vijaya Diagnostic Centre Limited

CIN: L85195TG2002PLC039075 Hyderabad.

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good

corporate practices by Vijaya Diagnostic Centre Limited (hereinafter called "the Company").

Secretarial Audit was conducted in a manner that provided

me a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing my opinion thereon.

Based on my verification of the Companys 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, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on 31st March 2023, 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:

1. I have examined the books, papers, minute books, forms and returns filed and other records maintained by the

Company for the financial year ended on 31st March 2023, according to the provisions of:

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

1.2. The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made there under;

1.3. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

1.4. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

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

1.5.1. The Securities and Exchange Board of India

(Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

1.5.2. The Securities and Exchange Board of India

(Prohibition of Insider Trading) Regulations, 2015;

1.5.3. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018

1.5.4. The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021;

1.5.5. The Securities and Exchange Board of India

(Issue and Listing of Non-Convertible Securities) Regulations, 2021; [NOT APPLIACBLE AS THERE WAS NO NON-CONVERTIBLE SECURITIES LISTED ON THE STOCK EXCHANGE]

1.5.6. 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;

1.5.7. The Securities and Exchange Board of India

(Delisting of Equity Shares) Regulations, 2021;[NOT APPLICABLE AS THERE WAS NO DELISTING OF EQUITY SHARES DURING THE YEAR]and

1.5.8. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;[NOT APPLICABLE AS THERE WAS NO BUYBACK OF SECURITIES BY THE COMPANY DURING THE YEAR]

2. I have also examined compliance with the applicable

clauses of the following:

2.1. Secretarial Standards issued by The Institute of Company Secretaries of India.

2.2. SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015.

3. The Company is engaged in the Business of Medical

diagnostic services. Accordingly, the following Industry

Specific Acts are applicable to the Company, in view of the

Management and as per the Guidance Note issued by the

ICSI. Based on the explanation given, there are adequate

system and process in the company to monitor and ensure the compliance of following sector specific Law, rule, regulation and guidelines:

3.01. Pre-Conception and Pre-Natal Diagnostic Techniques Act, 1994 read with the relevant rules and amendments.

3.02. The Clinical Establishments (Registration and

Regulations) Act, 2010.

3.03. The Clinical Establishments (Central Government) Rules, 2012 ("CECG Rules").

3.04. Telangana Allopathic Private Medical Care Establishments (Registration and Regulation) Act, 2002and rules there under, as applicable.

3.05. Andhra Pradesh Allopathic Private Medical Care Establishments (Registration and Regulation) Act, 2002 and rules there under, as applicable.

3.06. Indian Atomic Energy Act 1962 & Atomic Energy (Radiation Protection) Rules 2004.

3.07. Atomic Energy (Safe Disposal of Radioactive Wastes) Rules, 1987 ("Radioactive Waste Rules").

3.08. Radiation Surveillance Procedures for Medical Application of Radiation, 1989 ("Surveillance Procedures").

3.09. Safety Code for Medical Diagnostic X-Ray Equipment and Installations, 2001 (the "X-Ray Safety Code").

3.10. Atomic Energy Regulatory Board- Safety Code on

Safe Transport of Radioactive Material AERB/NRF- TS/SC- 1, 2015 ("Transport Code").

3.11. Atomic Energy Regulatory Board - Safety code on Nuclear Medicine Facilities dated November 4, 2010 ("Nuclear Medicine Code").

3.12. Radiation Surveillance Procedure for Medical Applications of Radiation, 1989 ("RSPM Notification").

3.13. The Environment Protection Act, 1986 (the "Environment Protection Act") and The Environment (Protection) Rules, 1986(the "Environment Protection Rules").

3.14. Bio-Medical Waste Management Rules, 2016 ("BMW Rules").

3.15. National Accreditation Board for Testing and Calibration Laboratories ("NABL").

3.16. Guidelines for Exchange of Human Biological

Material for Biomedical Research Purposes, 1997 ("HBM Guidelines").

3.17. Consumer Protection Act, 2019 ("COPRA, 2019").

4. I further report that:

4.01. 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.

4.02. 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.

4.03. Majority decision is carried through while the dissenting members views, if any, are captured and recorded as part of the minutes.

4.04. 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.

5. I further report that during the audit period there were following specific events / actions having a major bearing on the companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards:

5.01. The Company has allotted 64,832 shares on 06th June, 2022, against the options exercised under VDCL Employee Stock Option Plan 2018.

5.02. The Company has allotted 13,989 shares on 25th July, 2022, against the options exercised under VDCL Employee Stock Option Plan 2018.

5.03. The Company has allotted 19,049 shares on 17th September, 2022, against the options exercised under VDCL Employee Stock Option Plan 2018.

5.04. The Company has allotted 5,466 shares on 07th November, 2022, against the options exercised under VDCL Employee Stock Option Plan 2018.

5.05. The company has shifted its registered office from "3-6-16 & 17, Street No. 19, Himayat Nagar, Hyderabad, Telangana - 500029" to "6-3-883/F, FPA Building, Near Topaz Building, Punjagutta,

Hyderabad, Telangana - 500082" with effect from 10th November, 2022.

5.06. Ms. Anusha Kanumuru has resigned from the position of Company Secretary and Compliance Officer of the Company w.e.f. 03rd December, 2022.

5.07. Mr. Hansraj Singh Rajput, a qualified Company Secretary has been appointed as the Compliance Officer of the Company w.e.f. 22nd December, 2022 and as the Company Secretary of the Company w.e.f. 13th February, 2023.

5.08. The Company has allotted 1,913 shares on 13th February, 2023, against the options exercised under VDCL Employee Stock Option Plan 2018.

UDIN: F008168E000408986
Balaramakrishna Desina
Company Secretary in Practice
M. No.: FCS 8168
Date: 29.05.2023 C.P No.: 22414
Place: Hyderabad. Peer Reviewed UIN. 12019TL1988700

Note: This letter is to be read with our letter of even date, which is annexed, and form an integral part of this report.

ANNEXURE

To,

The Members,

Vijaya Diagnostic Centre Limited,

CIN: L85195TG2002PLC039075

Hyderabad.

Subject: My Report of even date is to be read along with this Letter.

1. Maintenance of secretarial records is the responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices followed, provide a reasonable basis for my opinion.

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

4. Wherever required, I have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of the Management. My examination was limited to the verification of procedures.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

UDIN: F008168E000408986
Balaramakrishna Desina
Company Secretary in Practice
M. No.: FCS 8168
Date: 29.05.2023 C.P No.: 22414
Place: Hyderabad. Peer Reviewed UIN. 12019TL1988700