m. Provisions
A provision is recognised if, as a result of a past event,
the Company has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will be
required to settle the obligation. When the Company
expects some or all of a provision to be reimbursed,
the expense relating to a provision is presented in
statement of profit and loss, net of any reimbursement.
I f the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to
the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised
as a finance cost.
n. Contingent liabilities and contingent assets
A contingent liability exists when there is a possible
but not probable obligation, or a present obligation
that may, but probably will not, require an outflow
of resources, or a present obligation whose amount
cannot be estimated reliably. Contingent liabilities do
not warrant provisions but are disclosed unless the
possibility of outflow of resources is remote.
Contingent assets are neither recognised nor
disclosed in the Standalone Financial Statements.
However, contingent assets are assessed continually
and if it is virtually certain that an inflow of economic
benefits will arise, the asset and related income are
recognised in the period in which the change occurs.
o. Statement of cash flows
Cash flows are reported using the indirect method,
whereby net profit/ (loss) before tax is adjusted for the
effects of transactions of a non-cash nature and any
deferrals or accruals of past or future cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from regular revenue generating (operating activities),
investing activities and financing activities of the
Company are segregated.
p. Cash and cash equivalents
For the purpose of presentation in the statement
of cash flows, cash and cash equivalents includes
cash on hand, deposits held at call with banks, other
short-term, highly liquid investments with original
maturities of three months or less that are readily
convertible to known amounts of cash and which
are subject to an insignificant risk of changes in
value. Where bank overdrafts/ cash credits which
are repayable on demand form an integral part
of an entity's cash management, bank overdrafts
are included as a component of cash and cash
equivalents. Bank overdrafts are shown within short
term-borrowings in the balance sheet.
q. Events after reporting date
Where events occurring after the balance sheet
date provide evidence of conditions that existed at
the end of the reporting period, the impact of such
events is adjusted within the financial statements.
Otherwise, events after the balance sheet date of
material size or nature are only disclosed.
r. Share capital
Equity shares incremental costs directly attributable to
the issue of equity shares are recognised as a deduction
from equity. Income tax relating to transaction costs of
an equity transaction is accounted for in accordance
with Ind AS 12.
s. Share issue expenses
Share issue expenses are adjusted against the
securities premium account as permissible under
Section 52 of the Companies Act, 2013, to the extent
any balance is available for utilisation in the securities
premium account.Any refund of share issue expenses
will be adjusted against securities premium.
t. Segment reporting
As defined in Ind AS 108, Operating Segments,
the Chief Operating Decision Maker i.e. Board of
Directors of the Company evaluates the Company's
performance and allocates resources based on an
analysis of various performance indicators by business
segment. Medical and Healthcare services has been
considered as the only reportable segment. Hence, no
separate final disclosure have been provided for the
segment reporting.
u. Climate - related matters
The Company considers climate-related matters
in estimates and assumptions, where appropriate.
This assessment includes a wide range of possible
impacts on the Company due to both physical and
transition risks. Even though climate-related risks
might not currently have a significant impact on
measurement, the Company is closely monitoring
relevant changes and developments.
Trade receivables are unsecured and are derived from revenue earned from providing medical, healthcare and other
ancillary services. No interest is charged on the outstanding balance, regardless of the age of the balance. The Company
applies Expected Credit Loss (ECL) model under simplified approach for measurement and recognition of impairment
loss towards expected risk of delays and default in collection.
The Company has used a practical expedient by computing the expected credit loss allowance based on a provision
matrix. Management makes specific provision in cases where there are known specific risks of customer default in
making the repayments. The provision matrix takes into account historical credit loss experience and adjusted for
forward- looking information. The expected credit loss allowance is based on the ageing of the days the receivables
are due and the rates as per the provision matrix.
The Company is subject to concentration of credit risk in its trade receivables for one customer comprising of 39% (31
March 2024: 42%) of total trade receivables. Although the Company is directly affected by the financial condition of
its customer, management does not believe significant credit risks exist at the balance sheet date. The Company does
not require collateral or other securities to support its accounts receivable.
(a) The Company's exposure to credit risk and loss allowances related to trade receivables are disclosed in note 2.39.
(b) Trade receivables are non-interest bearing and are generally on terms of 30-45 days
Nature and purpose
Securities premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the
provisions of the Companies Act, 2013.
General reserve
The general reserve is a free reserve which is used from time to time to transfer profits from retained earnings. As the
general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive
income, items included in the general reserve will not be reclassified subsequently to statement of profit and loss.
Other comprehensive income
Remeasurements of defined benefit plans comprises of actuarial gains and losses.
Retained earning
The amount that can be distributed by the Company as dividends to its equity and preference shareholders.
Share options outstanding account
The share options outstanding account is used to recognise the value of equity settled share based payments provided
to employees under Employee Stock Unit Plan 2023 (refer note 2.45).
* The Company is involved in the disputes, law suites, claims from patients/patient relatives that arise from time to time in ordinary
course of business. Based on external legal advise, management believes none of the matters, either in individual or in aggregate
will have any material effect on its standalone financial statements, as the management believes it has a reasonable case in its
defence of proceedings and hence, no provision is recognised in the standalone financial statements.
The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business
including litigation before tax authorities and including matters mentioned above. The uncertainties and possible
reimbursements are dependent on the outcome of the different legal processes which have been invoked by the
claimants or the Company, as the case may be, and therefore cannot be predicted accurately. The Company engages
reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such
disputes. The Management believes that it has a reasonable case in its defence of the proceedings and accordingly no
further provision is required.
2.30 EMPLOYEE BENEFIT PLANS
The employee benefit schemes are as under:
(a) Defined contribution benefit plans
The Company makes contributions, determined as a specified percentage of employee salaries, in respect of
qualifying employees towards Provident fund and Employee state insurance (ESI), which is a defined contribution
plan. The contribution is charged to the Statement of standalone profit and loss as they accrue. The amount
recognised as an expense towards contribution to Provident fund and ESI for the year ended 31 March 2025
amounts to ' 79.21 million and ' 4.96 million respectively (31 March 2024: ' 55.28 million and ' 8.07 million
respectively) (refer note 2.23).
(b) Defined benefit plans
The Company provides its employees with benefits under a defined benefit plan, referred to as the “Gratuity Plan”.
The Gratuity Plan entitles an employee, who has rendered at least five years of continuous service, to receive
15 days' salary for each year of completed service (service of six months and above is rounded off as one year)
at the time of retirement/exit, restricted to a sum of ' 2.00 million. The Company contributes all ascertained
liabilities towards gratuity to the Fund. The plan assets have been primarily invested in insurer managed funds.
The Company's obligation in respect of gratuity plan, which is a defined benefit plan is provided for based on
actuarial valuation carried out by an independent actuary using the projected unit credit method.
2.33 SEGMENT REPORTING
The Company is engaged in the business of rendering medical and healthcare services.
Ind AS 108 “Operating Segment” establishes standards for the way that public business enterprises report
information about operating segments and related disclosures about products and services, geographic areas, and
major customers. As defined in Ind AS 108, Operating segments are to be reported in a manner consistent with the
internal reporting provided to the Chief Operating Decision Maker (CODM) i.e the Chairman and Managing Director.
The CODM evaluates the Company's performance and allocates resources on overall basis. The Company's sole
operating segment is therefore ‘Medical and Healthcare Services'. Accordingly, there are no additional disclosures to
be provided under Ind AS 108 other than those already provided in the standalone financial statements.
Further the business operation of the Company are concentrated in India, and hence, the Company is considered
to operate only in one geographical segment. There are no individual customer contributing more than 10% of
Company's total revenue.
2.39 FINANCIAL RISK MANAGEMENT
Risk management framework
The Company's financial risk management is an integral part of how to plan and execute its business strategies.
The Company's management risk policy is set by the Board of directors. The Company's activities expose it to a
variety of financial risks like credit risk, liquidity risk and market risk. The Company's primary focus is to foresee the
unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
A summary of the risks have been given below:
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the Company's receivables from customers and loans
given. Credit risk arises from cash held with banks, as well as credit exposure to trade receivables and other financial
assets. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of
managing counter party credit risk is to prevent losses in financial assets. The Company assesses the credit quality of
the counterparties, taking into account their financial position, past experience and other factors.
Trade and other receivables
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
Trade receivables and unbilled revenue are typically unsecured and are derived from revenue earned from customers
primarily located in India. The Company has a process in place to monitor outstanding receivables on a monthly
basis. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including
government entities, insurance companies, corporates, individual and others. The default in collection as a percentage
to total receivable is low.
Cash and bank balances, loans and other financial assets
Cash and bank balances comprises of deposits with bank, interest accrued on deposits and other financial assets
consists of security deposits,. These deposits are held with credit worthy banks. The credit worthiness of such banks
are evaluated by the Management on an ongoing basis and is considered to be good with low credit risk. Further, the
Company maintains exposure in money market liquid mutual funds and loans. The Company has set counter-parties
limits based on multiple factors including financial position, credit rating, etc. Loans are assessed on lifetime expected
credit loss model and no impairment loss is anticipated. The Company's maximum exposure to credit risk as at 31
March 2025 and 31 March 2024 is the carrying value of each class of financial assets.
The security deposit pertains to rent deposit given to lessors. The Company does not expect any losses from
non-performance by these counter-parties.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due.
The Company manages its liquidity risk by ensuring, that it will always have sufficient liquidity to meet its liabilities when
due. The Company's Management is responsible for liquidity, funding as well as settlement management.
The Company aims to maintain the level of its cash and cash equivalents and other highly marketable investments at an
amount in excess of expected cash outflows on financial liabilities (other than trade payables) over the next six months.
The Company also monitors the level of expected cash inflows on trade receivables and loans together with expected
cash outflows on trade payables and other financial liabilities.
Interest risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interests rate. Interest rate risk primarily arises from the Company's borrowings, investments in bank
deposits and loans given.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rate. The majority of the Company's assets are located in India and Indian rupee being
the functional currency for the Company. The Company's exposure to the risk of changes in foreign exchange rates
relates primarily to operating activities.
The Company has import of assets from United States of America (USD) and hence is exposed to foreign exchange risk
for making payment for operations. The Company's foreign currency payables and receivables are unhedged.
The Company's policy is to maintain a stable capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Management monitors the return on capital, as well as the
level of dividends to equity shareholders. The Company aims to manage its capital efficiently so as to safeguard its
ability to continue as a going concern and to optimise returns to all its shareholders. For the purpose of the Company's
capital management, capital includes issued capital and all other equity reserves. Total debt includes borrowings, lease
liabilities and bank overdraft.
Performance Obligation
The revenue from rendering medical & healthcare services and pharmaceutical products satisfies ‘at a point in time'
recognition criteria as prescribed by Ind AS 115.
2.43The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment
benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India certian
sections of the code came into effect on 03 May 2024. However, the date on which the Code will come into effect
has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact
of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
Based on a preliminary assessment, the Company believes the impact of the change will not be significant.
2.45 SHARE BASED PAYMENT ARRANGEMENT
Pursuant to the resolutions passed by the Board of Directors on 18 March 2023 and by the Shareholders on 06
May 2023, the Company approved ‘The Rainbow Children's Medicare Limited - Employee Stock Unit Plan 2023
(“Stock Unit Plan 2023”) in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations,
2021 ("SEBI SBEB SE Regulations"). The Stock Unit Plan 2023 is for issue of employee stock units to eligible employees,
which may result in an issuance of a maximum number of 400,000 Equity Shares. Upon exercise and payment of the
exercise price, an unit holder will be entitled to be allotted one Equity Share per employee stock unit.
Upon recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in
their meeting held on 14 May 2023 and 07 August 2023, granted 275,000 and 37,414 Stock Units respectively
under the Stock Unit Plan 2023 to its eligible employees which shall be exercisable into 312,414 equity shares having
face value of '10 each fully paid-up. The exercise price per stock unit shall be the face value of equity shares of the
Company i.e., '10 each. The vested Stock Units shall be exercisable within a period of three months from the date of
each vesting. The Stock Units shall vest after the minimum vesting period of one year and not later than the maximum
period of five years from the date of grant. The plan is in terms of SEBI SBEB SE Regulations.
*Upon recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting
held on 19 May 2024, vested 44,000 stock units under Stock Unit Plan 2023 at an exercise price of ' 10 per share to the Chief
Operating Officer of the Company. Each stock unit represents one equity share of ' 10 each, fully paid-up. On 17 July 2024, the
Nomination and Remuneration Committee through circular resolution allotted 44,000 equity shares of ' 10 each to the Chief
Operating Officer of the Company.
During the year, upon recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in
their meeting held on 13 August 2024, vested 5,986 stock units under Stock Unit Plan 2023 at an exercise price of ' 10 per share
to the Chief Financial Officer of the Company. Each stock unit represents one equity share of ' 10 each, fully paid-up. On 22 August
2024, the Nomination and Remuneration Committee through circular resolution allotted 5,986 equity shares of ' 10 each to the
Chief Financial Officer of the Company.
# On 27 October 2024, the Company has accepted the resignation of an eligible employee. Accordingly, the Company has
cancelled 220,000 stock units.
Fair value measurement
The fair value at grant date is determined using the Black Scholes valuation option-pricing model which takes into
account the exercise price, the term of the option, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The ESOP 2025 scheme :
Pursuant to the resolutions passed by the Board of Directors on 09 February 2025 and by the Shareholders on 02
April 2025, the Company approved ‘The Rainbow Children's Medicare Limited - Employee Stock Option Scheme
2025 (“ESOP 2025”) in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations,
2021 ("SEBI SBEB SE Regulations"). The ESOP 2025 scheme is for issue of employee stock options to eligible
employees, which may result in an issuance of a maximum number of 1,015,000 Equity Shares. Upon exercise and
payment of the exercise price, an option holder will be entitled to be allotted one Equity Share per employee stock
option. The exercise price per option shall be determined by the Nomination and Remuneration Committee subject to
a maximum discount of up to 20% from the market price of shares as on the date of Grant.
2.46 SUBSEQUENT EVENTS
There are no significant adjusting events that occurred subsequent to the balance sheet date.
2.47 OTHER STATUTORY INFORMATION
i. The Company do not have any Benami property and neither any proceedings have been initiated or is pending
against the Company for holding any Benami property.
ii. The Company do not have any transactions with companies struck off.
iii. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory year.
iv. The Company has not been declared a wilful defaulter by any bank or financial institution or any other lender
during the current year.
v. The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
a. 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
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
vi. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:
a. 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
b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
vii. The loan has been utilised for the purpose for which it was obtained and no short term funds have been used for
long term purpose.
viii. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
ix. The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961.)
x. The Company has complied with the number of layers prescribed under the Companies Act, 2013.
xi. The Company has not revalued its Property, plant and equipment (including right of use of assets) or intangible
assets or both during the current or previous year.
xii. The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses.
xiii. There were no amounts which were required to be transferred to Investor Education Protection Fund
by the Company.
2.48 During the financial year 2022-23, the Company has completed Initial Public Offering of 29,168,579 Equity Shares
of face value of ' 10 each of the Company for at an issue price of ' 542 per equity share (including a share premium
of ' 532 per equity share, eligible employees bidding in the employee's reservation portion were offered a discount
of ' 20 per equity share) aggregating to ' 15,808.49 million comprising a fresh issue of 5,167,679 Equity Shares
aggregating to ' 2,800.00 million and an offer for sale of 24,000,900 Equity shares aggregating to ' 13,008.49
million. The equity shares of the Company were listed on National Stock Exchange of India Limited (NSE) and BSE
Limited (BSE) w.e.f. 10 May 2022.
* During the financial year 2023-24, the Company has received an amount of ' 14.70 million towards the Company's
share of unspent IPO expenses. The same has been adjusted with securities premium as per the Companies Act,
2013. The Board of Directors of the Company in their meeting held on 30 October 2023 had approved to spend
the amount of ' 14.70 million towards the General corporate purposes, refer column (B) in the table above. After this
change, amount to be utilised for General corporate purposes is ' 576.10 million.
2.49 The Company has used accounting software for maintaining its books of account (SAP) and software for maintenance
of hospital related revenue and consumption records (Arcus Air) which has a feature of recording audit trail (edit log)
facility and the same has operated throughout the year for all relevant transactions recorded in the softwares, except
that audit trail feature is not enabled at the database level. Further no instance of audit trail feature being tampered
with was noted in respect of the softwares where the audit trail has been enabled. Additionally, the audit trail in respect
of Arcus Air has been preserved for a period of 3 months by the Company which is integrated to SAP on daily basis
for all financial data and for SAP the audit trail of prior year has been preserved as per the statutory requirements for
record retention to the extent it was enabled and recorded in the respective year.
As per our report of even date attached.
for S.R. Batliboi & Associates LLP for and on behalf of the Board of Directors of
Chartered Accountants Rainbow Children’s Medicare Limited
ICAI Firm Registration Number: 101049W/E300004 CIN: L85110TG1998PLC029914
per Atin Bhargava Dr. Ramesh Kancharla Dr. Dinesh Kumar Chirla
Partner Chairman and Managing Director Director
Membership Number.: 504777 DIN: 00212270 DIN: 01395841
Vikas Maheshwari Shreya Mitra
Chief Financial Officer Company Secretary
Membership Number: A54901
Place: Hyderabad Place: Hyderabad Place: Hyderabad
Date: 24 May 2025 Date: 24 May 2025 Date: 24 May 2025
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