GENERAL INFORMATION
Dr. Lalchandani Labs Limited (“the Company”) is a public company domiciled in India
and incorporated on August 02, 2017 under the provisions of the Companies Act, 2013.
The Company is engaged in the business of running laboratories for carrying out
pathological investigations of various branches of bio-chemistry, hematology,
histopathology, microbiology, electrophoresis, immunology, virology, cytology, and
other pathological and radiological investigations.
The Company was incorporated as a Public Limited Company with effect from August
02, 2017 and consequently the Company has taken over the running business of Dr A
Lalchandani Pathology Laboratories (Partnership firm) on going concern basis with effect
from August 31, 2017. The equity shares of the Company are listed on the Bombay Stock
Exchange.
The registered address and principal place of business of the Company is M-20,
Basement, Greater Kailash -I, New Delhi- 110048.
SIGNIFICANT ACCOUNTING POLICIES
2.1 Statement of compliance
In accordance with the notifications issued by the Ministry of Corporate Affairs, the
aforesaid financial statements comply with the Accounting Standards specified
under section 133 of the Companies Act, 2013 & read with Rule 7 of the Companies
(Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment
Rules, 2016.
2.2 Basis of preparation and presentation
These financial statements have been prepared on the accrual and going concern
basis, and the historical cost convention except for certain financial instruments that are
measured at fair values at the end of each reporting period, as explained in the
accounting policies below.
Historical cost is generally based on the fair value of the consideration given in
exchange for goods and services.
Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date
under current market conditions.
2.3 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable.
Revenue is reduced for trade allowances for deduction, rebates and other similar
allowances. Revenue is recognized tothe extent that it is probable that the economic
benefits will flow to the Company and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognized:
2.3.1. Laboratory income
Medical testing charges consists of fees received for various tests conducted in the field
of pathology and radiology and are recognized on accrual basis when the samples
are registered for the purpose of conducting the tests, net of discounts, ifany.
2.3.2 Interest
Interest income from a financial asset is recognised when it is probable that the
economic benefits will flow to the Company and the amount of income can be
measured reliably. Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial
asset to that asset’s net carrying amount on initial recognition.
2.4 Leasing
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other leases are
classified as operating leases.
Rental income from operating leases is recognised on a straight-line basis over the
term of the relevant lease. Where the rentals are structured solely to increase in line
with expected general inflation to compensate for the Company’s expected inflationary
cost increases, such increases are recognised in the period in which such benefits
accrue.
2.4.1. The Company as lessee
Rental expense from operating leases is generally recognised on a straight-line basis over
the term of the relevant lease. Contingent rentals, if any, arising under operating leases
are recognised as an expense in the period in which they are incurred.
2.4.2 Functional and presentation currency
Items included in the financial statements are measured using the currency of the
primary economic environment in which the entity operates (‘the functional
currency’). The financial statements are presented in Indian rupee (INR), which is
the Company’s functional and presentation currency
2.5 Employee benefits
Employee benefits include provident fund, gratuity, ESIC, Group Health Insurance,
Accidental Insurance for runners and compensated absences.
2.5.1 Defined contribution plan
Employee benefit under defined contribution plan comprising of provident fund is
recognised based on the amount of obligation of the Company to contribute to the
plan. The provident fund contribution is paid to provident fund authorities. The
amounts are expensed during the year.
2.5.2. Defined benefit plan
The Company’s gratuity plan is a defined benefit plan. The present value of the
obligation under such defined benefit plan is determined based on actuarial valuation
using the projected unit credit method, which recognizes each period of service as
giving rise to additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured at the present
value of the estimated future cash flows. The discount rate used for determining the
present value of the obligation under defined benefit plans, is based on the prevailing
market yields on government securities as at the balance sheet date.
Re-measurement, comprising actuarial gains and losses, the effect of the changes
to the asset ceiling (if applicable) and the return on plan assets (excluding net
interest), is reflected immediately in the balance sheet with a charge or credit
recognised in other comprehensive income in the period in which they occur. Re¬
measurement recognised in other comprehensive income is reflected immediately
in retained earnings and is not reclassified to profit or loss. Past service cost is
recognised in Statement of profit and loss in the period of a plan amendment. Net
interest is calculated by applying the discount rate at the beginning of the period to
the net defined benefit liability or asset. The company was incorporated in August
2017 and had recruited the employees with effect from September 01, 2017. The
company has not provided for any provision for gratuity in their books of accounts
for the financial year ended March 31, 2025.
Defined benefit costs are categorized as follows:
• Service cost (including current service cost, past service
cost, as well as gains and losses on curtailments and
• Net interest expense or income; and
• Re-measurement
The Company presents the first two components of defined benefit costs in profit or
loss in the line item ‘Employee benefits expense’. Curtailment gains and losses are
accounted for as past service costs.
The Company intends to take the various policies with insurer managed funds to
meet its obligation towards gratuity. Liability with respect to the gratuity plan is
determined based on an actuarial valuation done by an independent actuary.
The gratuity benefit obligation recognised in the standalone Balance Sheet represents
the actual deficit or surplus in the Company’s defined benefit plans. Any surplus
resulting from this calculation is limited to the present value of any economic
benefits available in the form of refunds from the plans or reductions in future
contributions to the plans.
A liability for a termination benefit is recognised at the earlier of when the entity can
no longer withdraw the offer of the termination benefit and when the entity recognizes
any related restructuring costs.
Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in
exchange for the services rendered by employees are recognised during the year
when the employees render the service. These benefits include performance
incentive and compensated absences which are expected to occur within twelve
months from the end of the period in which the employee renders the related service.
The cost of short-term compensated absences is accounted as under:
a) In case of accumulated compensated absences, when
employees render the servicesthat increase their entitlement of
future compensated absences; and
b) In case of non-accumulating compensated absences, when the absences occur.
Long-term employee benefits
Compensated absences which are not expected to occur within twelve months from the
end of the period in which the employee renders the related service are recognised as a
liability at the present value of the obligation as at the Balance Sheet date.
Income tax expense represents the sum of the tax currently payable and deferred tax.
2.7.1 Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs
from ‘profit before tax’ as reported in the Statement of profit and loss because of items of
income or expense that are taxable or deductible in other years and items that are
never taxable or deductible. The Company’s current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of the reporting period.
2.7.2 Deferred tax
Deferred tax is recognised on temporary differences between the carrying
amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be utilized. Such
deferred tax assets and liabilities are not recognised if the temporary difference
arises from the initial recognition (other than in a business combination) of assets
and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each
reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the period in which the liability is settled or the asset
realized, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets include Minimum Alternate Tax (‘MAT’) paid in
accordance with the tax laws in India, which is likely to give future economic
benefits in the form of availability of set off against future income tax liability.
Accordingly, MAT is recognised as deferred tax asset in the Balance Sheet
when the asset can be measured reliably and it is probable that the future
economic benefit associated with asset will be realized.
The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Company
expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.
Current and deferred tax for the year
Current and deferred tax arerecognised in profit or loss, except when they relate to
items that are recognized in other comprehensive income or directly in equity, in
which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively.
2.8 Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction less
accumulated depreciation less accumulated impairment, if any.
The cost of Property, plant and equipment (PPE) comprises its purchase price net of any
trade discounts and rebates, any import duties and other taxes (other than those
subsequently recoverable from the tax authorities), any directly attributable
expenditure on making the asset ready for its intended use, other incidental expenses,
present value of decommissioning costs (where there is a legal or constructive
obligation to decommission) and interest on borrowings attributable to acquisition of
qualifying fixed assets up to the date the asset is ready for its intended use.
Subsequent costs are included in the asset’s carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognized when replaced. The other repairs and maintenance of revenue
nature are charged to profit or loss during the reporting period in which they are
incurred.
Property, plant and equipment are tested for impairment whenever events or changes
in circumstances indicate that an asset may be impaired. If an impairment loss is
determined, the remaining useful life of the asset is also subject to adjustment. If the
reasons for previously recognised impairment losses no longer exists, such impairment
losses are reversed and recognised in income. Such reversal shall not cause the carrying
amount to exceed the amount that would have resulted had no impairment taken place
during the preceding periods.
Depreciation methods, estimated useful lives and residual value
Depreciation on all assets is provided using the Written Down Value (WDV) Method
at the rates computed based on the useful lives of the assets estimated by the management
on a pro- rata basis from the month in which each asset is put to use to allocate their
cost, net of their residual values, over their estimated useful lives.
Estimated useful life of assets are as follows which is based on technical evaluation of
the useful lives of the assets:
The assets’ residual values, estimated useful lives and depreciation method are
reviewed at the end of each reporting period, with the effect of any changes in estimate
accounted for on a prospective basis.
All assets, the individual written down value of which at the beginning of the year is
Rs. 5,000 or less, are depreciated at the rate of 100%. Assets purchased during the year
costing Rs. 5,000 or less are depreciated at the rate of 100%.
Gains and losses on disposal are determined by comparing proceeds with carrying
amount and are credited / debited to profit or loss.
2.9 Intangible assets
2.9.1. Intangible assets acquired separately
Trademarks and software are carried at cost which is incurred and stated in the
relevant license agreement with the technical know-how provider less
accumulated amortization and accumulated impairment losses. Amortization is
recognised on a straight line basis over their estimated useful lives. The estimated
useful lives and amortization method are reviewed at end of each reporting period,
with the effect of any changes in estimate being accounted for on a prospective
basis.
2.9.2 Amortization methods and useful lives
Trademarks and software are amortized on a straight line basis over its estimated
useful life i.e. 5 years. An intangible asset is derecognized when no future
economic benefits are expected from use.
2.10 Inventories
Inventories comprise of reagents, chemicals, surgical and laboratory supplies and
stores and others and are valued at lower of cost and net realizable value. Cost is
determined on moving weighted average basis.
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