K. Provision, contingent liabilities and
contingent assets
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to
settle the obligation and a reliable estimate can be
made of the amount of the obligation. Expected future
operating losses are not provided for.
Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and
the risks specific to the liability. The unwinding of the
discount is recognised as finance costs.
The Company records a provision for decommissioning
costs. Decommissioning costs are provided at the
present value of expected costs to settle the obligation
using estimated cash flows and are recognized as part
of the cost of the particular asset. The cash flows are
discounted at a current pre-tax rate that reflects the
risks specific to the decommissioning liability. The
unwinding of the discount is expensed as incurred
and recognized in the statement of profit and loss
as a finance cost. The estimated future costs of
decommissioning are reviewed annually and adjusted
as appropriate.
Contingencies:
Provision in respect of loss/contingencies relating to
claims, litigations, assessments, fines and penalties are
recognised when it is probable that a liability has been
incurred and the amount can be estimated reliably.
Contingent liabilities and contingent assets:
Contingent liability is a possible obligation arising from
past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of
the entity or a present obligation that arises from past
events but is not recognized because it is not probable
that an outflow of resources embodying economic
benefits will be required to settle the obligation or the
amount of the obligation cannot be measured with
sufficient reliability. The Company does not recognize
a contingent liability but discloses its existence in the
standalone financial statements.
Contingent asset is not recognised in standalone
financial statements since this may result in the
recognition of income that may never be realised.
However, when the realisation of income is virtually
certain, then the related asset is not a contingent asset
and is recognized.
Provisions, contingent liabilities and contingent assets
are reviewed at each Balance Sheet date.
L. Earnings per share
Basic Earnings per share
Basic Earnings Per Share (‘EPS’) is calculated by dividing
the profit attributable to the equity shareholders of the
Company by the weighted average number of equity
shares outstanding during the year.
Diluted Earnings per share
Diluted earnings per share is computed by dividing the
profit (considered in determination of basic earnings
per share) after considering the effect associated with
dilutive potential equity shares by the weighted average
number of equity shares considered for deriving basic
earnings per share adjusted for the weighted average
number of equity shares that would have been issued
upon conversion of all dilutive potential equity shares.
M. Exceptional items
The Company discloses certiain financial information
both including and excluding exceptional items. The
presentation of information excluding exceptional
items allows a better understanding of the underlying
operating performance of the Company and provides
consistency with the Company internal management
reporting. Exceptional items are identified by virtue of
either their size or nature so as to facilitate comparision
with prior periods and to assess underlying trends in
the financial performance of the Company.
N. Cash flow statement
Cash flows are reported using the indirect method,
whereby profit for the year is adjusted for the effects
of transactions of a non-cash nature, 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 are segregated
into operating, investing and financing activites. The
Company considers all highly liquid investments that
are readily convertible to known amounts of cash to be
cash equivalents.
O. Cash and cash equivalents
Cash and cash equivalents in the balance sheet and
cash flow statement consists of cash on hand, deposits
held at call with financial institutions, other short¬
term, highly liquid investments with original maturities
less than three months which are readily convertible
to known amounts of cash and which are subject to
insignificant risk of changes in value.
P. Investments in subsidiaries
Investments in subsidiaries carried at cost less any
provision for impairment. Investments are reviewed
for impairment if events or changes in circumstances
indicate that the carrying amount may not be
recoverable.
Q. Dividend
The Company recognises a liability for any dividend
declared but not distributed at the end of the reporting
period, when the distribution is authorised and the
distribution is no longer at the discretion of the
Company on or before the end of the reporting period.
R. 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.
S. Material accounting policy information
The Company adopted Disclosure of Accounting
Policies (Amendments to Ind AS 1) from April 01,
2023. Although the amendments did not result in any
changes in the accounting policies themselves, they
impacted the accounting policy information disclosed
in the financial statements.
The amendments require the disclosure of 'material'
rather than 'significant' accounting policies. The
amendments also provide guidance on the application
of materiality to disclosure of accounting policies,
assisting entities to provide useful, entity-specific
accounting policy information that users need
to understand other information in the financial
statements.
T. Recent pronouncements
Ministry of Corporate Affairs ("MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. For the year ended March
31, 2025, MCA has notified Ind AS - 117 Insurance
Contracts and amendments to Ind AS 116 - Leases,
relating to sale and leaseback transactions, applicable
to the Company w.e.f. April 1, 2024. The Company has
reviewed the new pronouncements and based on its
evaluation has determined that it does not have any
significant impact in its financial statements.
(iii) The Company does not have any capital work-in-progress which is overdue or has exceeded its cost compared
to its original plan and hence capital work-in-progress completion schedule is not applicable.
(iv) There are no CWIP which is temporarily suspended as at March 31, 2025 and March 31, 2024.
4(C) RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
The Company has elected not to apply the requirements of Ind AS 116 "Leases" to short-term leases of all assets
that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease
payments associated with these leases are recognized as an expense on a straight-line basis over the lease term
except inflation adjustment.
The Company uses the incremental borrowing rate to discount its lease payments. The rate applied is 8.50% p.a.
II. Other information
(i) The fair value of the investment property is '1,920.00 (March 31, 2024 '1,736.00), based on market
observable data. The Comapany has not engaged any registered valuer for determaining the above fair
value for the current year.
(ii) The Company has given the Investment property on operating lease. The Company has no restrictions on the
realisability of its investment property.
(iii) The Company's investment property consist of land and building in Kolakta, West Bengal.
Provision for impairment
Investments are tested for impairment annually and when circumstances indicate that the carrying value may
be impaired. Impairment is determined by assessing the recoverable amount of each investment. When the
recoverable amount of the investment is less than its carrying amount, an impairment loss is recognised.
The recoverable amounts of the above investments have been assessed using a value-in-use model. Value in use
is generally calculated as the net present value of the projected post-tax cash flows plus a terminal value of the
business. Initially, a post-tax discount rate is applied to calculate the net present value of the post-tax cash flows.
Key assumptions upon which the Company has based its determinations of value-in-use include:
a) Estimated cash flows based on internal budgets and industry outlook for a period of five years and a terminal
growth rate thereafter.
b) The terminal value is arrived at by extrapolating the last forecasted year cash flows to perpetuity, using a
constant long-term growth rate. This long term growth rate takes into consideration external macroeconomic
sources of data.
c) The after tax discount rates used reflect the current market assessment of the risks specific to a CGU, the
discount rate is estimated based on the weighted average cost of capital ('WACC') for respective CGU.
The Company believes that any reasonably possible change in the key assumptions on which a recoverable
amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount
of the investment.
24. DISCLOSURE REQUIRED UNDER CLAUSE 22 OF MICRO, SMALL AND MEDIUM
ENTERPRISE DEVELOPMENT ('MSMED') ACT, 2006
The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008
which recommends that the Micro and Small Enterprises should mention in their correspondence with its
customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly,
the disclosure in respect of the amounts payable to such enterprises as at 31 March 2025 has been made in
the financial statements based on information received and available with the Company. Further in view of the
management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not
expected to be material. The Company has not received any claim for interest from any supplier under the said Act.
25. DISCLOSURE AS PER SECTION 186 OF
THE COMPANIES ACT, 2013
The details of loans, guarantees and investments under
Section 186 of the Companies Act, 2013 read with the
Companies (Meetings of Board and its Powers) Rules,
2014 are as follows:
(i) Details of investments made are given in Note 6(a)
(ii) Details of the loans given by the Company is given
in Note 6(c)
26. OPERATING SEGMENTS
A. Basis for segmentation
An operating segment is a component of the Company
that engages in business activities from which it
may earn revenues and incur expenses, including
revenues and expenses that relate to transactions
with any of the Company’s other components, and
for which discrete financial information is available. All
operating segment's results are reviewed regularly by
the Company’s Chairman and Managing Director to
make decisions about resources to be allocated to the
segments and assess their performance.
The Chief Operating Decision Maker ("CODM") who are
the Company's Chairman and Managing Director who
evaluate the Company’s performance and allocates
resources based on an analysis of various performance
indicators at operational unit level and since there is
single operating segment, no segment disclosures of
the Company is presented. The Company’s operations
fall within a single business segment "Diagnostic
services”.
B. Geographical information
The Company operates within India and therefore there
are no assets or liabilities outside India.
C. Major customers
No single customer contributed more than 10% of the
Company's revenues during the year ended March 31,
2025 and March 31, 2024.
27. PURCHASE COMMITMENTS TOWARDS
REAGENT KITS
The Company has entered into agreements with
certain suppliers for purchase of reagents which
include the right to use equipment during the life of
the agreement in addition to purchase of minimum
committed quantities of reagents every year. These
agreements are in substance, cost of reagents and
services arrangements provided by the supplier on an
annual basis andthe minimum purchase commitments
therein do not result in more than insignificant penalty
on termination of the agreement. The cost of reagents
which includes the cost of rental of the equipment is
recorded as cost of material consumed.
28. EMPLOYEE BENEFIT PLANS
The Company has following post employment benefit
plans:
(a) Defined contribution plans
Contributions were made to provident fund
and Employees' State Insurance in India for the
employees of the Company as per the regulations.
These contributions are made to registered funds
administered by the Government of India. The
obligation of the Company is limited to the respective
amount contributed and it has no further contractual
nor any other constructive obligation. The expense
recognised during the period in the standalone
statement of profit and loss towards defined
contribution plans is '472.36 (March 31, 2024:
'421.24).
(b) Defined benefit plan
The Company provides for Gratuity for employees
in India as per the Payment of Gratuity Act, 1972.
Employees who are in continuous service for a period of
5 years are eligible for Gratuity. The amount of Gratuity
payable on retirement/termination is the employee's
last drawn basic salary per month computed
proportionately for 15 days salary multiplied for the
number of years of service or part thereof in excess of
six months, restricted to a sum of '20.
The Gratuity plan is administered through a Gratuity
Scheme with Life Insurance Corporation of India ('LIC').
The Company does not fully fund the liability and
maintains a target level of funding to be maintained
over a period of time based on estimations of expected
gratuity payments.
This defined benefit plans expose the Company to
actuarial risks, such as longevity risk, interest rate risk
and market (investment) risk.
Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the
balance sheet date for the estimated term of the obligations.
Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority,
promotion and other relevant factors.
Attrition rate: Represents the Company's best estimate of employee turnover in future (other than on account of
retirement, death or disablement) determined considering various factors such as nature of business, retention
policy, industry factors, past experience, etc.
29. SHARE BASED PAYMENTS
VDCL Employee Stock Option Plan 2018
“The Plan" or "ESOP 2018”
The shareholders of the Company approved "VDCPL
Employee Stock Option Plan 2018 (ESOP 2018)" at the
Extraordinary General Meeting held on May 03, 2018
and subsecquently it was amended at the extraordinary
genaral meeting held on March 25, 2021 and August
26, 2021 to grant a maximum of 1,625,000 options
to specified categories of employees of the Company.
Each option granted and vested under ESOP 2018
shall entitle the holder to acquire one equity share of
face value of '1 each of the Company.
The Plan consists of six schemes with various
vesting periods from the grant date subject to
satisfaction of vesting conditions. The method of
settlement under the Plan is by issue of equity
shares of the Company and there are no cash
settlement alternatives for the employees.
Vested options can be exercised over a period of ten
years from the grant date. The Exercise Price is the fair
value of the equity share as on the date of the grant
or as decided by the Nomination and remuneration
committee. The time and performance based
options under Scheme 1, 2, 3, 4, 5 and 6 become
vested as below:
The time and performance based options under
Scheme 1 become eligible on an annual basis at
30%, 30%, 20% and 20% over a period of four years
and vesting starts from second year. The time and
performance based options under Scheme 2 become
eligible on an annual bais at 25%, 25%, 25% and 25%
over a period of four years and vesting starts from third
year. The time based options under Scheme 3 become
eligible on an annual basis at 25%, 25%, 25% and 25%
over a period of four years and vesting starts from third
year. The time based options under Scheme 4 become
eligible on annual basis at 100% and vest on second
year from the grant date. The time based options under
Scheme 5 become eligible and vest on an annual basis
at 25%, 25%, and 50% over a period of three years. The
time based options under Scheme 6 become eligible
on an annual basis at 0%, 25%, 50% and 25% over a
period of four years and the performace based options
under Scheme 6 become eligible on an annual basis
at 25%, 25%, 25% and 25% over a period of four years.
The fair value of equity share options is estimated at
the date of grant using Black- Scholes model, taking
into account the terms and conditions upon which the
share options were granted. Based on the historical
trends, 50% of stock options are expected to be vested
and exercised, accordingly the total compensation
cost recognised in the statement of profit and loss is
'159.20 (March 31, 2024: 93.17).
Note:
(i) All transactions with these related parties are at arm's length basis and resulting outstanding receivables and
payables including financial assets and financial liabilities balances are settled in cash. None of the balances
are secured. (All the amounts of transactions and balances disclosed in this note are gross and undiscounted).
(ii) # Amounts paid as dividends to promoters and their relatives in the capacity of shareholders are not considered
as related party transactions.
(iii) 1 2The remuneration to key Managerial personnel does not include provision for gratuity and leave encashment,
as they are determined for the Company as a whole.
Reasons for variance of more than 25%
(i) There is a decrease in the current ratio primarily due to increase in capital creditors.
Definitions:
(a) Earnings available for debt service = Profit for the year Non-cash operating expenses such as depreciation
and amortisation Interest other adjustments like loss on sale of fixed assets etc.
(b) Debt service = Interest Lease Payments Principal Repayments
(c) Average inventory = (Opening inventory balance Closing inventory balance)/2
(d) Average trade receivables = (Opening trade receivables balance Closing trade receivables balance)/2
(e) Average trade payables = (Opening trade payables balance Closing trade payables balance)/2
(f) Working Capital = Current assets - Current liabilities
(g) Earnings before interest and taxes = Profit before tax Finance costs - Other income
(h) Capital Employed = Total assets- Total liabilities - Intangible assets Deferred tax liabilities
32. CAPITAL MANAGEMENT
The Company’s policy is to maintain a stable and strong capital structure with a focus on equity so as to provide
returns to shareholders, benefits to other stakeholders, creditors and to sustain future development and growth
of the business. In order to maintain the capital structure, the Company monitors the return on capital as well
as debt to total equity ratio. 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 debt to total equity,
debt includes its long-term and short-term borrowings. Total equity comprises of issued share capital and all other
equity reserves.
The Company's risk management is carried out by the Senior Management under policies approved by the Board
of Directors. The Board of Directors provides guiding principles for overall risk management, as well as policies
covering specific areas such as credit risk and liquidity risk.
i. 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.
The Company has no significant concentration of credit risk with any counterparty.
Trade receivables and loans:
Customer credit risk is managed by the respective department subject to Company's established policy, procedures
and control relating to customer credit risk management. Credit quality of a customer is assessed based on
individual credit limits as defined by the Company. Outstanding customer receivables are regularly monitored. All
the trade receivables are non interest bearing.
The Company has an exposure of '2,126.00 as at March 31, 2025 (March 31, 2024: '1,286.00) for loans given to
subsidiaries. Such loans are classified as financial asset measured at amortised cost. The Company did not have
any amounts that were past due but not impaired at March 31, 2025 or March 31, 2024. The Company has no
collateral in respect of these loans.
Credit risk on cash and cash equivalents, deposits with banks is generally low as the said deposits have been made
with the banks who have been assigned high credit rating by credit rating agencies. Investments of surplus funds
are made only with approved financial institutions. Investments primarily include investments in subsidiaries and
mutual funds.
ii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they
are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to
the Company’s reputation.
The finance team monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on
the basis of expected cash outflows on trade payables and other financial liabilities and any excess/short liquidity is
managed in the form of bank deposits and investment in mutual funds as per the approved frame work.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are
gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
Except for these financial liabilities, it is not expected that cash flows included in the maturity analysis could occur
significantly.
iii. Market risk
Market risk is the risk that results from changes in market prices - such as foreign exchange rates, interest rates
and others - will affect the Company's income. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimizing the return.
34. ADDITIONAL REGULATORY
INFORMATION PURSUANT TO THE
REQUIREMENT IN DIVISION II OF
SCHEDULE III TO THE COMPANIES ACT
2013
i. The Company does not have any Benami property,
where any proceeding has been initiated or
pending against the Company for holding any
Benami property.
ii. The Company does not have any transactions
with companies struck off under Section 248
of the Companies Act, 2013 or Section 560 of
Companies Act, 1956 during the financial year.
iii. The Company has not traded or invested in
Crypto Currency or Virtual Currency during the
financial year.
iv. The Company does not have any charges or
satisfaction which is yet to be registered with
Registrar of Companies (ROC) beyond the
statutory period.
v. The Company has 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 Company has not entered into any
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
Inon rvo m "T~ \/ A 1 G C 1 \
viii. The Company has not been declared as wilful
defaulter by any bank or financial institution or
government or any government authority.
ix. The Company has not revalued its property, plant
and equipment (including right-of-use assets) or
intangible assets or both during the current or
previous year.
35. The Company received a letter dated July 5, 2021,
March 14, 2022 and September 16, 2022 under
Section 37 of the Foreign Exchange Management
Act, 1999 read with Section 133(6) of the Income
Tax Act, 1961 from the Directorate of Enforcement,
Government of India ("ED”) requesting certain
information for the purpose of their investigation. The
Company responded to the ED letter by letter dated
August 5, 2021, March 31, 2022 and September 29,
2022 by providing the information requested for. The
letter only sought certain information, which has been
complied with, and it is not a show cause notice or
demand letter at this stage, and there is no impact to
the financial statements.
36. SOCIAL SECURITY CODE
The Indian Parliament has approved the Code on Social
Security, 2020 which would impact the contributions
by the company towards Provident Fund and Gratuity.
The Ministry of Labour and Employment had released
draft rules for the Code on Social Security, 2020 on
November 13, 2020. The Company will assess the
impact and its evaluation once the subject rules are
notified. The Company will give appropriate impact in
its financial statements in the period in which, the Code
becomes effective and the related rules to determine
the financial impact are published.
37. SCHEME OF AMALGAMATION
The Board of Directors of the Company at their
meeting held on 26 June 2024, have considered and
approved the proposed Scheme of Amalgamation
('Scheme") wherein Medinova Diagnostic Services
Limited (Subsidiary Company) would merge into
the Company with effect from 01 April 2024 (‘the
Appointed Date”) under Sections 230 to 232 and
other applicable provisions of the Companies Act,
2013, and other rules and regulations framed
thereunder ("Scheme"). The Company has received
letter with "no adverse observations” from the BSE
Limited, National Stock Exchange of India Limited
and SEBI on December 05, 2024, and further vide
National Company Law Tribunal (“NCLT’j, Hyderabad,
order dated March 5, 2025 (“Order”), the company
has obtained the approval of the shareholders and the
Unsecured Creditors vide resolutions passed at the
their meetings held on April 25, 2025, respectively.
The scheme is subject to the approval of the NCLT, and such other approvals, permissions, and sanctions of
regulatory and other authorities as may be necessary.
38. SUBSEQUENT EVENTS
Subsequent to March 31, 2025, the Board of Directors of the Company at its meeting held on May 12, 2025 has
recommended a final dividend of '2/- per equity share (amounting to '2,052.74) which is subject to approval at
the ensuing Annual General Meeting of the Company and hence was not recognised as a liability.
For B S R and Co For and on behalf of the Board of Directors of
Chartered Accountants Vijaya Diagnostic Centre Limited
ICAI Firm registration number: 128510W CIN: L85195TG2002PLC039075
Balkishan Kabra Dr. S. Surendranath Reddy S. Suprita Reddy
Partner Executive Chairman Managing Director
Membership Number: 221202 DIN: 00108599 DIN: 00263618
Hansraj Singh Rajput K. Sunil Chandra Ramachandra Reddy S
Company Secretary Executive Director Chief Financial Officer
Membership No: F11438 DIN: 01409332
Place: Hyderabad Place: Hyderabad
Date: May 12, 2025 Date: May 12, 2025
1
In addition to the remuneration, certain employee stock options were exercised, whose perquisite value is '346.46
2
(previous year: '114.05).
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