Mar 31, 2022
1. Reporting entity
Thyrocare Technologies Limited (the "Companyâ) is a company domiciled in India, with its registered office situated at D/37-1, TTC Industrial Area, MIDC Turbhe, Navi Mumbai - 400703, Maharashtra, India. The Company has been incorporated under the provisions of the Companies Act in India and its equity shares are listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India. The Company operates in the healthcare industry and is involved in providing quality diagnostic services at affordable costs to patients, laboratories and hospitals in India.
A. Statement of compliance
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (âthe Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 (hereinafter referred to as the âInd ASâ) and other relevant provisions of the Act.
The standalone financial statements were authorized for issue by the Companyâs Board of Directors on 29 April 2022. The details of the accounting policies are included in Note 3.
These standalone financial statements are prepared in India Rupees (INR), which is also the Companyâs functional currency. All amounts have been rounded-off to the nearest crore, unless otherwise indicated.
The standalone financial statements are prepared on the historical cost basis except for the following items :
Items |
Measurement basis |
Investments |
Fair value |
Employee shared-based payments at grant date |
Fair value |
Net defined benefit (asset) / liability |
Fair Value of plan assets less present value of defined benefit obligations |
In preparing these standalone financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.
Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the standalone financial statements is included in the following notes :
Note 3 K - Revenue recognition at a point in time
Note 3 L - Leases: whether an arrangement contains a lease and lease classification Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment is included in the following notes :
Note 3 D, 3 E, 4 and 5 - determining an assetâs expected useful life and the expected residual value at the end of its life;
Note 6, 7A - Impairment of Investments - recoverable amount requires estimates of operating margin, discount rate, future growth rate, terminal values, etc.
Note 30 - determining the provision for income taxes;
Note 32 - measurement of defined benefit obligations: key actuarial assumptions;
Note 34 - Fair value measurement of financial instruments; and
Note 35 - recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources.
Some of the Companyâs accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
The Company, in case of assets held for sale, makes use of valuation certificates obtained from third party professionals for determining significant fair value measurement for cases covered under Level 3.
The Company regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as statements of asset management companies managing the mutual fund schemes, is used to measure fair values, then the Company assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.
Significant valuation issues, if any, are reported to the companyâs audit committee.
Fair value is categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities (includes mutual funds that have quoted price/ declared NAV).
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in the following notes:
- Note 4C - investment property;
- Note 33 - share-based payment arrangements; and
- Note 34 - financial instruments.
3. Significant accounting policies
The Schedule III to the Act requires assets and liabilities to be classified as either current or non-current.
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is classified as current when it satisfies any of the following criteria:
(i) it is expected to be realised in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
(ii) it is expected to be realised within twelve months from the reporting date;
(iii) it is held primarily for the purposes of being traded; or
(iv) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.
All other assets are classified as non-current.
A liability is classified as current when it satisfies any of the following criteria :
(i) it is expected to be realised in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
(ii) it is due to be settled within twelve months from the reporting date;
(iii) it is held primarily for the purposes of being traded;
(iv) the Company does not have an unconditional right to defer settlement of liability for atleast twelve months from the reporting date.
All other liabilities are classified as non-current.
Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents.
Based on the nature of operations and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current - non-current classifications of assets and liabilities.
Foreign currency transactions
Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities are translated at the rate at the date of the transaction. Exchange differences are recognised in statement of profit or loss.
(i) Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus except for receivables / contract assets under Ind AS 115 which are measured at transaction price, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
(ii) Classification and subsequent measurement Financial assets
On initial recognition, a financial asset is classified as measured at
- amortised cost;
- Fair value through other comprehensive income (FVTOCI); or
- Fair value through profit and loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investmentâs fair value in OCI (designated as FVOCI â equity investment). This election is made on an investment- by- investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed, and information is provided to management. The information considered includes:
- the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether managementâs strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
- how the performance of the portfolio is evaluated and reported to the management;
- the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
- how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
- the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Companyâs continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.
For the purposes of this assessment, âprincipalâ is defined as the fair value of the financial asset on initial recognition. âInterestâ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:
- contingent events that would change the amount or timing of cash flows;
- terms that may adjust the contractual coupon rate, including variable interest rate features;
- prepayment and extension features; and
- terms that limit the Companyâs claim to cash flows from specified assets (e.g. non- recourse features).
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a significant discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.
Financial assets: Subsequent measurement and gains and losses |
|
Financial assets at FVTPL |
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. |
Financial assets at amortised cost |
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest cost / income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. |
Equity investments at FVOCI |
These assets are subsequently measured at fair value, Dividends are recognised as income in profit of loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss. |
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held - for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
(iii) Derecognition Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
(iv) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
(iii) Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such property, plant and equipment.
(iv) Depreciation
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the written down value method, and is generally recognised in the statement of profit and loss. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated.
The estimated useful lives of items of property, plant and equipment prescribed as per Schedule II are as follows:
Assets |
Useful life |
Buildings |
60 Years |
Plant and equipment (diagnostic equipment) |
13 Years |
Plant and equipment (others) |
15 Years |
Office equipment |
5 Years |
Furniture and fittings |
10 years |
Computers |
3-6 years |
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Based on technical evaluation and consequent advice, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets.
Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use (disposed of).
(v) Reclassification to investment property
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying amount on the date of reclassification.
Before transition to Ind AS, other intangible assets including those acquired by the Company are initially measured at cost. Such intangible assets are subsequently measured at cost less accumulated amortisation and any accumulated impairment losses. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. The intangible assets acquired by the Company, after transition to Ind AS are measured at fair value.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible assets.
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over their estimated useful lives using the straight-line method, and is included in depreciation and amortisation in Statement of Profit and Loss.
The estimated useful lives are as follows:
- Trademark - 5 years
Amortisation method, useful lives and residual values are reviewed at the end of each financial year and adjusted if appropriate.
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its investment property recognised as at 1 April 2016, measured as per the previous GAAP and use that carrying value as the deemed cost of such investment property.
Since the Company has leased part of its building to related party to conduct the business operation, based on technical evaluation and consequent advice, the management believes the indicative useful life of relevant type of asset mentioned in Part C of Schedule II to the Act, as representing the best estimate of the period over which investment properties (which are quite similar) are expected to be used. Accordingly, the Company depreciates investment properties over a period of 60 years on a written-down value basis.
Any gain or loss on disposal of an investment property is recognised in profit or loss.
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Raw materials, components and other supplies held for use in processing are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.
The comparison of cost and net realisable value is made on an item-by-item basis.
(i) Impairment of financial assets
The Company recognises loss allowances for expected credit losses on:
- financial assets measured at amortised cost; and
At each reporting date, the Company assesses whether financial assets carried at amortised cost. A financial asset is âcredit- impairedâ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit- impaired includes the following observable data
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as a default being past due for 90 days or more;
- i t is probable that the borrower will enter bankruptcy, or other financial reorganisation; or the disappearance of an
active market for a security because of financial difficulties.
The Company measures loss allowances at an amount equal to lifetime expected credit losses.
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.
Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Companyâs historical experience and informed credit assessment and including forward- looking information.
Determining whether the investments in subsidiaries and associates are impaired requires an estimate in the value in use of investments. The Company reviews its carrying value of investments carried at cost (net of impairment, if any) annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in the statement of profit and loss. In considering the value in use, the Board of Directors have anticipated the future market conditions and other parameters that affect the operations of these entities.
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Companyâs procedures for recovery of amounts due.
(iii) Impairment of non-financial assets
The companyâs non-financial assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated. Goodwill is tested annually for impairment.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
The Companyâs corporate assets (e.g., central office building for providing support to various CGUs) do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Non-current assets are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Such assets are generally measured at the lower of their carrying amount and fair value less costs to sell. Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated.
Losses on initial classification as held for sale and subsequent gains and losses on re-measurement are recognised in profit or loss.
Non-current assets classified as held for sale are presented separately from the other assets in the Consolidated Balance Sheet. The liabilities classified as held for sale are presented separately from other liabilities in the Consolidated Balance Sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single coordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the Consolidated Statement of Profit and Loss.
The post-tax profit or loss of discontinued operations and the post-tax gain or loss recognised on the measurement to fair value less costs to sell or on the disposal of the assets constituting the discontinued operation shall be disclosed separately as a single amount in the Consolidated Statement of Profit and Loss.
An analysis of the single amount into the revenue, expenses and pre-tax profit or loss of discontinued operations, the related income tax expense as required by Ind AS 12 and the gain or loss recognised on the measurement to fair value less costs to sell or on the disposal of the assets constituting the discontinued operation along with the related income tax expense thereon as required by Ind AS 12 may be presented in the notes or in the Consolidated Statement of Profit and Loss.
(i) Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company
has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
(ii) Share-based payment transactions
The grant date fair value of equity settled share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as expense is based on the estimate of the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market vesting conditions at the vesting date.
(ii) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund scheme. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
(iii) Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Companyâs net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (âthe asset ceilingâ). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (âpast service costâ or âpast service gainâ) or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
(iv) Other long-term employee benefits
The Companyâs net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured
on the basis of an annual independent actuarial valuation using the projected unit credit method. Remeasurements gains or losses are recognised in profit or loss in the period in which they arise.
(v) Termination benefits
Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.
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. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) 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 cost.
Revenue includes only the gross inflows of economic benefits. It is measured based on the consideration specified in the contracts with customers. Amounts collected on behalf of third parties such as goods and services taxes are not economic benefits which flow to the entity and do not result in increases in equity. Therefore, they are excluded from revenue.
Ind AS 115 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. Under Ind AS 115, revenue is recognised when a customer obtains control of the goods or services. Determining the timing of the transfer of control - at a point in time or over time requires judgement.
Revenue stream |
Nature and timing of satisfying performance obligations, including significant payment terms |
Revenue recognition under Ind AS 115 |
Sale of services |
Customers obtain control of the service at the time of receipt of relevant test reports. Customers generally pay upfront before availing diagnostic services or before undergoing scans and in case of tie-up customers, the credit period offered generally ranged from 15 to 30 days . The Company generally does not have refund/warranty obligations. |
Revenue from sale of testing and imaging services is recognized at a point in time once the testing samples are processed for requisitioned diagnostic tests. |
Sale of goods and consumables |
Customer obtains control of goods and consumables when the goods are delivered to the customerâs premise or other agreed upon delivery point where the customer takes control of the goods. The credit period offered to customers generally ranged from 30 days to 90 days. The Company generally does not have refund/warranty obligations. |
Revenue is recognized at a point in time when the goods and consumables are delivered at the agreed point of delivery which generally is the premises of the customer. |
I ncome from technical assistance and trade mark assignment is recognised once the Companyâs right to receive the revenue is established by the reporting date. Income from technical assistance and trademark is recognised as an agreed percentage of the turnover of the respective entities, as per the terms of the respective agreements.
A contract liability is the obligation to transfer services to a customer for which the Company has received consideration from the customer. If a customer pays consideration before the Company transfers services to the customer, a contract liability is recognised when the payment is made. Contract liabilities are recognised as revenue when the Company performs under the contract.
The Company has applied Ind AS 116 Leases, using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under Ind AS 17. The details of accounting policies under Ind AS 17 are disclosed separately if they are different from those under Ind AS 116 and the impact of changes is disclosed separately in this note.
Policy applicable from 1 April 2019
At inception of a contract, the Company assesses whether a contract is, or contains, a lease, A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether :
- the contract involves the use of an identified asset - this may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;
- the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
- the Company has the right to direct the use of the asset. The Company has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the Company has the right to direct the use of the asset if either, throughout the period of use:
o the Company has the right to operate the asset; or
o the Company designed the asset in a way that predetermines how and for what purpose it will be used.
At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.
(i) As a lessee
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Companyâs incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following :
- fixed payments, including in-substance fixed payments;
- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
- amounts expected to be payable under a residual value guarantee;
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an
option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is change in future lease payments arising from a change in an index or rate, if there is a change in the Companyâs estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Company presents right-of-use assets that do not meet the definition of investment property, separately, in Note 5B âRight-of-use long term leases (net of net investment in sub-leases)â and lease liabilities in Note 20A and Note 21B, in the statement of financial position.
However, for the leases of land and buildings in which it is a lessee, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
Short-term leases and leases of low-value assets
The Company has elected not to recognize right-of-use assets and lease liabilities for short-term-leases of machinery that have a lease term of 12 months or less and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(ii) As a lessor
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As a part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use assets arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease otherwise it is classified as finance lease.
In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting a constant periodic rate of return on the lessorâs net investment in the lease.
The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of âother incomeâ.
The accounting policies applicable to the Company as a lessor in the comparative period were not different from Ind AS 116. However, when the Company was an intermediate lessor the sub-leases were classified with reference to the underlying asset.
The Company presents right-of-use assets those were sub-leased, as net-off, in Note 5B âRight to use long term leases (net of net investment in sub-leases)â and receivables against sub-leases in Note 9 âOther Non-current financial assetsâ and Note 16 âOther Current financial assetsâ, in the statement of financial position.
In case of sublease, finance lease receivable is netted off from the value of Right of Use asset.in Note 5B.
Particulars |
As at 31 March, 2022 in '' Crore |
As at 31 March, 2021 in '' crore |
Less than one year |
5.42 |
3.43 |
One to five years |
13.72 |
6.12 |
More than five years |
2.29 |
0.08 |
Total |
21.43 |
9.63 |
Lease liabilities recorded in the Balance sheet as at 31 March 2022 |
||
Particulars |
As at 31 March, 2022 in '' Crore |
As at 31 March, 2021 in '' crore |
Non-current portion |
16.01 |
6.20 |
Current portion |
5.42 |
3.43 |
Total |
21.43 |
9.63 |
Amounts recognized in the statement of profit and loss |
||
Particulars |
As at 31 March, 2022 in '' Crore |
As at 31 March, 2021 in '' crore |
Interest expense on leases (recorded under Finance Cost in the statement of profit and loss) |
2.38 |
0.66 |
Depreciation on right-of-use assets for the year (refer note 5B for further details) |
5.78 |
4.37 |
Expenses relating to short term leases recorded in note 29 under Rent |
2.16 |
0.65 |
Interest income on net investment in sub-leases recorded under other income |
- |
0.10 |
Amount recognized in the statement of cash flows: |
||
Particulars |
As at 31 March, 2022 in '' Crore |
As at 31 March, 2021 in '' crore |
Total cash outflow on account of leases |
763 |
4.95 |
Total cash inflow from subleases |
0.13 |
0.11 |
(iii) Others
The Company entered into lease with the landlord for land at central processing laboratory premises about 10 years ago. The lease premium paid on transfer of lease rights in favor of the Company, is capitalised in the books and amortised over the period of the lease.
The Company uses testing equipment (analysers) under a number of reagent rental arrangements. Some of these arrangements provide the Company with option to purchase the equipment at the end of lease term at mutually negotiated price as well as an obligation to purchase the equipment at stipulated price in the event of premature termination.
Some of these arrangements are not in the legal form of lease, but a portion of the cost paid to the vendors is considered to contain a lease element due to the nature of the contractual terms.
Except for the changes below, the Company has consistently applied the accounting policies to all periods presented in these standalone financial statements.
The Company applied Ind AS 116 with a date of initial application of 1 April 2019. As a result, the Company has changed its accounting policy
Mar 31, 2018
a. current/ non-current classification
The Schedule III to the Act requires assets and liabilities to be classified as either current or non-current. The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
Assets
An asset is classified as current when it satisfies any of the following creteria :
(i) it is expected to be realised in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
(ii) it is expected to be realised within twelve months from the reporting date;
(iii) it is held primarily for the purposes of being traded; or
(iv) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date. All other assets are classified as non current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria :
(i) it is expected to be realised in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
(ii) it is due to be settled within twelve months from the reporting date;
(iii) it is held primarily for the purposes of being traded; or
(iv) the Company does not have an unconditions right to defer settlement of liability for atlease twelve months from the reporting date. All other liabilities are classified as non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents.
Based on the nature of operations and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current - non-current classifications of assets and liabilities.
b. Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated into the functional currency of Company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities are translated at the rate at the date of the transaction. Exchange differences are recognised in profit or loss.
c. Financial instruments
i. Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
ii. Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at
- amortised cost;
- FVOCI - equity investment; or
- FVTPL
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets. A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investmentâs fair value in OCI (designated as FVOCI â equity investment). This election is made on an investment- by- investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets: Subsequent measurement and gains and losses
Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest cost / income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Equity investments at FVOCI These assets are subsequently measured at fair value, Dividends are recognised as income in profit of loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.
Financial liabilities: Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held - for - trading, or it is a derivative or it is designated as such on initial recognition
Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
iii. derecognition
Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.â
The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
iv. Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
d. Property, plant and equipment
i. Recognition and measurement
Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses, if any. Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
ii. Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such property, plant and equipment (see Note 39).
iii. Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
iv. depreciation
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the written down value method, and is generally recognised in the statement of profit and loss. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated. The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as follows:
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Based on technical evaluation and consequent advice, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets. Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use (disposed off).
v. Reclassification to investment property
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying amount on the date of reclassification.
e. Other intangible assets
i. Other intangible assets
Other intangible assets including those acquired by the Compay are initially measured at cost. Such intangible assets are subsequently measured at cost less accumulated amortisation and any accumulated impairment losses. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.
ii. Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible assets.
iii. Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over their estimated useful lives using the straight-line method, and is included in depreciation and amortisation in Statement of Profit and Loss.
The estimated useful lives are as follows:
- Softwares - 5 years
Amortisation method, useful lives and residual values are reviewed at the end of each financial year and adjusted if appropriate.
f. Investment property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any. On transition to Ind AS, the Company has elected to continue with the carrying value of all of its investment property recognised as at 1 April 2016, measured as per the previous GAAP and use that carrying value as the deemed cost of such investment property.
Since the Company has leased part of its leasehold land and building to related party to conduct the business operation, based on technical evaluation and consequent advice, the management believes the indicative useful life of relevant type of asset mentioned in Part C of Schedule II to the Act, as representing the best estimate of the period over which investment properties (which are quite similar) are expected to be used. Accordingly, the Company depreciates portion of the investment properties constituting building over a period of 60 years on a written-down value basis and amortises portion of the investment properties constituting land over the period of lease. Any gain or loss on disposal of an investment property is recognised in profit or loss.
g. Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Raw materials, components and other supplies held for use in the processing are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.
The comparison of cost and net realisable value is made on an item-by-item basis.
h. Impairment
i. Impairment of financial instruments
The Company recognises loss allowances for expected credit losses on:
- financial assets measured at amortised cost At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit- impaired. A financial asset is âcredit- impairedâ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit- impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as a default or being past due for 90 days or more;
- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or - the disappearance of an active market for a security because of financial difficulties. Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.
Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. 12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Companyâs historical experience and informed credit assessment and including forward- looking information.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write- off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Companyâs procedures for recovery of amounts due.â
ii. Impairment of non-financial assets
The Companyâs non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated. Goodwill is tested annually for impairment. For impairment testing, assets that do not generate independent cash inflows are combined together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset). An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or Company of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
i. Employee benefits
i. Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
ii. Share-based payment transactions
The grant date fair value of equity settled share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as expense is based on the estimate of the number of awards for which the related service and nonmarket vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market vesting conditions at the vesting date.
iii. defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund scheme. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
iv. defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Companyâs net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (âthe asset ceilingâ). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (âpast service costâ or âpast service gainâ) or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
v. Other long-term employee benefits
The Companyâs net obligation in respect of long-term employee benefits other than postemployment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method. Remeasurements gains or losses are recognised in profit or loss in the period in which they arise.
vi. Termination benefits
Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.
j. Provisions (other than for employee benefits)
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. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) 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 cost. Expected future operating losses are not provided for.
k. Revenue from operations
i. Sale of goods
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. This inter alia involves discounting of the consideration due to the present value if payment extends beyond normal credit terms. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing effective control over, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.
ii. Rendering of services
Revenue from testing services is recognised once the testing samples are processed for requisitioned diagnostic tests. Revenue from imaging services is recognised once the services are rendered. Revenue from technical assistance and trade mark assignment is recognised once the Companyâs right to receive the revenue is established by the reporting date. Revenue from technical assistance and trademark is recognised as per the agreed percentage of the turnover of the respective entities, as per the terms of the agreement.
iii. multiple deliverable arrangements
When two or more revenue generating activities or deliverables are provided under a single arrangement, each deliverable that is considered to be a separate unit of account is accounted for seperately. The allocation of consideration from a revenue arrangement to its seperate units of account is based on the relative fair value of each unit. If the fair value of the delivered item is not reliably measurable, then revenue is allocated based on the difference between the total arrangement consideration and the fair value of the undelivered item.
l. Leases i. determining whether an arrangement contains a lease
At inception of an arrangement, it is determined whether the arrangement is or contains a lease.
At inception or on reassessment of the arrangement that contains a lease, the payments and other consideration required by such an arrangement are separated into those for the lease and those for other elements on the basis of their relative fair values. If it is concluded for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. The liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the incremental borrowing rate.
ii. Assets held under leases
Leases of property, plant and equipment that transfer to the Company substantially all the risks and rewards of ownership are classified as finance leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to similar owned assets. Assets held under leases that do not transfer to the Company substantially all the risks and rewards of ownership (i.e. operating leases) are not recognised in the Companyâs Balance Sheet.
iii. Lease payments
Payments made under operating leases are generally recognised in profit or loss on a straight-line basis over the term of the lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases. Lease incentives received are recognised as an integral part of the total lease expense over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
m. Recognition of rental income, dividend income, interest income or expense
Rental income from investment property is recognised as part of other income in profit or loss on a straight-line basis over the term of the lease except where the rentals are structured to increase in line with expected general inflation. Rental income from sub-leasing is also recognised in a similar manner and included under other income.
Dividend income is recognised in profit or loss on the date on which the Companyâs right to receive payment is established.
Interest income or expense is recognised using the effective interest method.
The âeffective interest rateâ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to :
- the gross carrying amount of the financial asset; or
- the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
n. Income tax
Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
ii. Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for:
- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;
- temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
- taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets â unrecognised or recognised, are reviewed at each reporting date and are recognised / reduced to the extent that it is probable/ no longer probable, respectively, that the related tax benefit will be realised.
Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.
o. discontinued operations
A discontinued operation is a component of the Companyâs business, the operation and cash flows of which can be clearly distinguished from those of the rest of the Company and which represents a separate major line of business and is part of a single co-ordinated plant to dispose of a separate major line of business. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier.
When an operation is classified as a discontinued operation, the comparative statement of profit and loss is re-presented as if the operation had been discontinued from the start of the comparative period.
p. events after reporting date
Where events occuring 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.
q. operating segments
In accordance with Indian Accounting Standard 108 âOperating Segmentsâ, segment information has been given in the consolidated financial statements of the Company.
r. Recent accounting pronouncements
Standards issued but not yet effective
In March 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115 Revenue from Contract with Customers, Appendix B to Ind AS 21 Foreign currency transactions and advance consideration and amendments to certain other standards. These amendments are applicable to the company from 1 April 2018. The Company will be adopting the amendments from their effective date.
a) ind AS 115 Revenue from contract with customers
Ind AS 115 supersedes Ind AS 11 Construction Contracts and Ind AS 18 Revenue. Ind AS 115 requires an entity to report information regarding nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with customers. The principle of Ind AS 115 is that an entity should recognize revenue that demonstrates the transfer of promised goods and services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standards can be applied either retrospectively to each prior reporting period presented or can be applied retrospectively with recognition of cumulative effects of contracts that are not completed contracts at the date of initial application of the standard. Based on the preliminary assessment performed by the Company, the impact of application of the standard is not expected to be material.
b) Appendix B to Ind AS 21 Foreign currency transactions and advance consideration
The Appendix clarifies that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the asset, expense or income (or part of it) is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration towards such assets,expenses or income. If there are multiple payments or receipts in advance,then an entity must determine transaction date for each payment or receipts of advance consideration.
The impact of the Appendix on the financial statements,as assessed by the Company, is expected to be not material.
Mar 31, 2017
1 Corporate information
Thyrocare Technologies Limited (âthe Companyâ) is fully automated diagnostic laboratory with a focus on providing quality diagnostic services at affordable costs to laboratories and hospitals in India and other countries. The Company operates through various Thyrocare Service Providers (TSPs), Thyrocare Aggregators (TAGs), through online portals and other online media for catering to various diagnostics requirements of their customers.
2 Significant accounting policies
2.1 Basis of accounting and preparation of standalone financial statements
These financial statements have been prepared in accordance with the generally accepted accounting principles in India under historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with applicable accounting standards notified under Section 133 of the Companies Act, 2013 (âActâ) read with Rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules, 2016 and the provisions of the Act, to the extent notified and applicable. The financial statements are presented in Indian rupees rounded off to the nearest million.
2.2 Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles (âGAAPâ) in India requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon managementâs evaluation of the relevant facts and circumstances as of the date of financial statements which in managementâs opinion are prudent and reasonable. Actual results may differ from the estimates used in preparing the accompanying financial statements. Any revision to accounting estimates is recognized prospectively in current and future periods.
2.3 Current - non- current classification
All assets and liabilities are classified into current and noncurrent.
Assets
An asset is classified as current when it satisfies any of the following criteria :
(a) it is expected to be realized in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is expected to be realized within 12 months after the reporting date; or
(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.
Current assets include the current position of non-current financial assets.
All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria :
(a) it is expected to be settled in the Companyâs normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within 12 months after the reporting date; or
(d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in the settlement by the issue of equity investments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities.
All other liabilities are classified as non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. All assets and liabilities have been classified as current or non-current as per the criteria set out in Schedule III of the Companies Act, 2013. Normal operating cycle for the Company is 12 months.
2.4 Inventories
Inventories comprises of reagents, diagnostic material, consumables and stock in trade which are valued at lower of cost and net realizable value. Cost is determined under the first-in first-out method and includes all costs incurred in bringing the inventories to their present location and condition.
2.5 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
2.6 Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
2.7 Revenue recognition
Revenue from testing services is recognized once the testing samples are processed for requisitioned diagnostic tests. Revenue from imaging services is recognized once the services are rendered.
Revenue from sale of products is recognized when the property and all significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of products. Sales are accounted net of sales tax and trade discounts, if any.
Revenue is recognized when there is reasonable certainty of realization.
Revenue from technical assistance and trade mark assignment is recognized once the Companyâs right to receive the revenue is established by the reporting date. Revenue from technical assistance and trademark is recognized as per the agreed percentage of the turnover of the respective entities, as per the terms of the agreement. Interest income is recognized using the time proportion method, based on the underlying interest rates. Dividend income, if any is recognized when the right to receive dividend is established.
2.8 Tangible fixed assets
Tangible assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any. Cost includes inward freight, duties, taxes (to the extent not recoverable from tax authorities) and expenses incidental to acquisition and installation of the fixed assets up to the time the assets are ready for intended use. Capital work-in-progress comprises of the cost of fixed assets that are not yet ready for their intended use at the balance sheet date.
In respect of fixed assets purchased during the year, the depreciation is provided on a pro rata basis from the date on which such asset is ready to use. Depreciation on tangible fixed assets, except leasehold land, is provided under the written down value method at the rates prescribed in Schedule
II to the Act, which in the opinion of management reflects the economic useful lives of assets. Depreciation on sale of assets is provided up to the date of sale of the asset. If the management''s estimate of the useful life of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid Schedule, depreciation is provided at higher rate based on the managementâs estimate of the useful life/ remaining useful life.
Assets costing up to Rupees five thousand are fully depreciated in the year of purchase.
Leasehold land is amortized on a straight line basis over the primary period of lease.
Assets on leasehold land i.e. building premises are depreciated over the shorter of the lease term and their useful lives (not being greater than the useful life envisaged in Schedule II to the Act).
2.9 Intangible fixed assets
Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset. Intangible assets are amortized over the estimated useful life not exceeding 5 years.
Intangible assets under development
Development activities involve a plan or design for the production of new or substantially improved products or processes. Development expenditure is capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use the asset. The expenditure capitalized includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and directly attributable borrowing costs (in the same manner as in the case of tangible fixed assets). Other development expenditure is recognized in the Statement of Profit and Loss as incurred.
2.10 Investments
Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments. However, that part of long term investments which is expected to be realized within 12 months after the reporting date is also presented under âcurrent assetsâ as âcurrent portion of long term investmentsâ in consonance with the current-non-current classification scheme of Schedule III of the Act. Long-term investments are stated at cost. Provision for diminution in value is made only when in the opinion of the management there is a diminution other than temporary in the carrying value of such investments determined separately for each investment. Current investments are valued at lower of cost and market value.
2.11 Employee benefits Short-term employment benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. These benefits include salary, wages and bonus, compensated absences such as paid annual leave and sickness leave. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period of rendering of service by the employees.
Post employment benefits Defined contribution plans
The Company has defined contribution plans for post employment benefits namely Provident Fund. Under the
provident fund plan, the Company contributes to a Government administered provident fund on behalf of its employees and has no further obligation beyond making its contribution. The Company makes contributions to state plans namely Employeeâs State Insurance Fund and Employeeâs Pension Scheme 1995 and has no further obligation beyond making the payment to them. The Companyâs contributions to the above funds are charged to the Statement of profit and loss every year.
Defined benefit plans
The Company''s gratuity benefit scheme are defined benefit plans. The Company''s net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs and the fair value of any plan assets are deducted. The calculation of the Companyâs obligation is performed annually by a qualified actuary using the projected unit credit method. The Company recognizes all actuarial gains and losses arising from defined benefit plans immediately in the Statement of Profit and Loss. All expenses related to defined benefit plans are recognized in employee benefits expense in the Statement of Profit and Loss. When the benefits of a plan are improved, the portion of the increased benefit related to past service by employees is recognized in profit or loss on a straight-line basis over the average period until the benefits become vested. The Company recognizes gains and losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs.
Other long-term employment benefits
The employees can carry-forward a portion of the unutilized accrued compensated absences and utilize it in future service periods or receive cash compensation on termination of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilized wholly within twelve months after the end of such period, the benefit is classified as a long-term employee benefit. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method.
2.12 Earnings per share
Basic EPS is computed by dividing the net profit attributable to shareholders by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year-end, except where the results would be anti dilutive.
2.13 Taxes on income Income tax
Income tax expense comprises current tax and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). Current tax provision is made based on the tax liability computed after considering tax allowances and exemptions, in accordance with the Income tax Act, 1961.
Deferred tax
Deferred tax charge or credit and the corresponding deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income taxes and profits/ losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realized.
2.14 Employee stock options
The excess of the fair value of shares, at the date of grant of options under the Employees Stock Option Scheme of the Company, over the exercise price is regarded as employee compensation, and recognized on a straight-line basis over the period over which the employees would become unconditionally entitled to apply for the shares. The accounting treatment is as prescribed by Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, issued by Securities and Exchange Board of India and the Guidance Note on Employee Share-based Payments issued by the Institute of Chartered Accountants of India.
2.15 Impairment of assets
In accordance with AS 28 on âimpairment of assets'', other fixed assets (tangible and intangible) are reviewed at each reporting date to determine if there is any indication of impairment. For assets in respect of which any such indication exists and for intangible assets mandatorily tested annually for impairment, the assetâs recoverable amount is estimated. An impairment loss is recognized if the carrying amount of an asset exceeds its recoverable amount.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets (cash generating unit or CGU) that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. The recoverable amount of an asset or CGU is the greater of its value in use and its net selling price. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
Impairment losses are recognized in profit or loss. However, an impairment loss on a revalued asset is recognized directly against any revaluation surplus to the extent that the impairment loss does not exceed the amount held in the revaluation surplus for that same asset.
If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists or has decreased, the assets or CGUâs recoverable amount is estimated. The impairment loss is reversed to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Such a reversal is recognized in the profit or loss; however, in the case of revalued assets, the reversal is credited directly to revaluation surplus except to the extent that an impairment loss on the same revalued asset was previously recognized as an expense in the profit or loss.
2.16 Provisions and contingencies
Provision is recognized in the balance sheet when the Company has a present obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and reliable estimation can be made of the amount required to settle the obligation. Contingent liabilities arising from claims, litigation, assessment, fines, penalties etc. are disclosed when there is a possible obligation or a present obligation as a result of a past event where it is not probable that an outflow of economic benefits will be required to settle the obligation, and the amount can be reasonably estimated. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosures is made.
2.17 Foreign exchange transactions
âForeign exchange transactions are recorded into Indian rupees using the average of the opening and closing spot rates on the dates of the respective transaction. Exchange differences arising on foreign exchange transactions settled during the period are recognized in the Statement of profit and loss of the year.
Monetary items (including long-term monetary items) in foreign currency, which are outstanding as at the year-end are translated at the year-end at the closing exchange rate and the resultant exchange differences are recognized in the Statement of profit and loss. Non-monetary foreign currency items are carried at cost.
2.18 Lease
Operating lease payments are recognized as an expense on a straight-line basis over the non cancellable period of the lease term and charged to the Statement of profit and loss unless other systematic basis is more representative of the time pattern of the benefit. Any modifications in respect of lease terms or assumptions are recorded prospectively.
ii) Rights, preferences and restrictions attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Companyâs residual assets. Each shareholder is eligible for one vote per share. The equity shares are entitled to dividend as declared from time to time.
On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
iv) As at 31 March 2017 : 85,192 (31 March 2016 : 39,188) equity shares of '' 10 each were reserved for issuance as follows:
a) 46,719 (31 March 2016 : Nil) equity shares of '' 10 each reserved for issuance under Employee Stock Option Scheme 2016 (ESOS 2016) (Refer note 26c).
b) 38,473 (31 March 2016 : 39,188) equity shares of '' 10 each reserved for issuance under Employee Stock Option Scheme 2015 (ESOS 2015) (Refer note 26c).
v) Aggregate no. of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of 5 years immediately preceding the reporting date :
a) Employees stock options
During the year ended 31 March 2015, the Company has approved Employees Stock Options Scheme on 20 September 2014 pursuant to which certain employees are entitled to 33,650 equity shares of '' 10 each. These equity shares have been issued to the ESOP Trust pursuant to the approved terms of employees stock option scheme 2014, for which only the exercise price i.e. the face value of shares has been recovered in cash (Refer note 26(c)).
b) During the year ended 31 March 2015, the Company has allotted 37,383,507 equity shares of '' 10/- each fully paid up on 24 September 2014, as bonus shares in the ratio of 3 equity shares for every share held, by capitalization of securities premium account of '' 370.81 million and capital redemption reserve of '' 3.03 million.
c) During the years 31 March 2016 and 31 March 2015, the Company has allotted 3,187,562 and 691,295 equity shares of '' 10 each fully paid up respectively, to the equity shareholders of Nueclear Healthcare Limited (âNHLâ) in consideration for 4,611,000 and 1,000,000 equity shares of NHL respectively at a premium of ''295.95 per share.
(i) As per the terms of the investment agreements executed between the Company, the promoter controlled entity - Thyrocare International Holding Company (TIHC) and the investors, the Company is required to obtain prior written consent of the investors before transferring the above investments to any third party. The said investment is subject to lock in period of 3 years from the Closing Date i.e. up to 23.01.2016, as per the investment agreement.
* The title of the investment is held by related party as at 31 March 2017 and is subsequently transferred in the name of the Company.
26 Employee benefit plans
26.a Defined contribution plans
The Company makes Provident Fund, ESIC and Maharashtra Labour Welfare fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized '' 14.56 million (31 March 2016 : '' 11.64 million) for Provident Fund contributions, '' 3.65 million (31 March 2016 : '' 2.15 million) for ESIC contributions and '' 0.07 million (31 March 2016 : '' 0.03 million) for Maharashtra Labour Welfare fund contributions in the Statement of Profit and Loss during the year (Refer note 23). The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. The Company does not expect any further liability other than the specified contributions.
Mar 31, 2016
1.1 Basis of accounting and preparation of standalone financial
statements
These financials statements have been prepared in accordance with the
generally accepted accounting principles in India under historical cost
convention on accrual basis. These financials statements have been
prepared to comply in all material aspects with applicable accounting
standards notified under Section 133 of the Companies Act, 2013 ("Act")
read with Rule 7 of the Companies (Accounts) Rules, 2014 and the
provisions of the Act, to the extent notified and applicable. The
financial statements are presented in Indian rupees rounded off to the
nearest million.
1.2 Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (''GAAP'') in India requires management to
make estimates and assumptions that affect the reported amount of
assets, liabilities, revenues and expenses and disclosure of contingent
liabilities on the date of the financial statements. The estimates and
assumptions used in the accompanying financial statements are based
upon management''s evaluation of the relevant facts and circumstances as
of the date of financial statements which in management''s opinion are
prudent and reasonable. Actual results may differ from the estimates
used in preparing the accompanying financial statements. Any revision
to accounting estimates is recognised prospectively in current and
future periods.
1.3 Current - non- current classification
All assets and liabilities are classified into current and non-
current.
Assets
An asset is classified as current when it satisfies any of the
following criteria:
(a) it is expected to be realised in, or is intended for sale or
consumption in, the company''s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is expected to be realised within 12 months after the reporting
date; or
(d) it is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after
the reporting date.
Current assets include the current position of non-current financial
assets.
All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the
following criteria:
(a) it is expected to be settled in the company''s normal operating
cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within 12 months after the reporting date;
or
(d) the company does not have an unconditional right to defer
settlement of the liability for at least 12 months after the reporting
date.
Terms of a liability that could, at the option of the counterparty,
result in the settlement by the issue of equity investments do not
affect its classification.
Current liabilities include current portion of non-current financial
liabilities.
All other liabilities are classified as non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for
processing and their realisation in cash or cash equivalents.
All assets and liabilities have been classified as current or
non-current as per the criteria set out in Schedule III of the
Companies Act, 2013. Normal operating cycle for the Company is 12
months.
1.4 Inventories
Inventories comprises of reagents, diagnostic material, consumables and
stock in trade which are valued at lower of cost and net realisable
value. Cost is determined under the first in first out method and
includes all costs incurred in bringing the inventories to their
present location and condition.
1.5 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.6 Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.7 Revenue recognition
Revenue from testing services is recognised once the testing samples
are processed for requisitioned diagnostic tests.
Revenue from imaging services is recognised once the services are
rendered.
Revenue from sale of products is recognised when the property and all
significant risks and rewards of ownership are transferred to the buyer
and no significant uncertainty exists regarding the amount of
consideration that is derived from the sale of products. Sales are
accounted net of sales tax and trade discounts, if any.
Revenue from technical assistance and trade mark assignment is
recognised once the Company''s right to receive the revenue is
established by the reporting date. Revenue from technical assistance
and trademark is recognised as per the agreed percentage of the
turnover of the respective entities, as per the terms of the agreement.
Interest income is recognised using the time proportion method, based
on the underlying interest rates. Dividend income if any is recognized
when the right to receive dividend is established.''''
1.8 Tangible fixed assets
Tangible assets are carried at cost of acquisition or construction less
accumulated depreciation and impairment loss, if any. Cost includes
inward freight, duties, taxes (to the extent not recoverable from tax
authorities) and expenses incidental to acquisition and installation of
the fixed assets up to the time the assets are ready for intended use.
Capital work-in-progress comprises of the cost of fixed assets that are
not yet ready for their intended use at the balance sheet date.
Pursuant to the Companies Act, 2013 being effective from 01 April,
2014, the Company had in previous year revised the depreciation rates
on fixed assets as per the useful life specified in Part ''C'' of
Schedule II of the Act. Consequently, depreciation charge for the year
ended 31 March 2015 was higher by Rs.6.26 millions due to change in the
estimated useful life of certain assets. Further, an amount of Rs. 5.79
millions had been adjusted against the opening balance of reserves
under surplus in statement of profit and loss as on 1 April 2014, in
respect of the residual value of assets wherein the remaining useful
life has become ''Nil'' (Refer Note 4(f) and Note 10)
In respect of fixed assets purchased during the period, the
depreciation is provided on a pro rata basis from the date on which
such asset is ready to use. Depreciation on tangible fixed assets,
except leasehold land, is provided under the written down value method
at the rates prescribed in Schedule II to the Act, which in the opinion
of management reflects the economic useful lives of assets.
Depreciation on sale of assets is provided up to the date of sale of
the asset. If the management''s estimate of the useful life of a fixed
asset at the time of acquisition of the asset or of the remaining
useful life on a subsequent review is shorter than that envisaged in
the aforesaid schedule, depreciation is provided at higher rate based
on the management''s estimate of the useful life/ remaining useful life.
Assets costing up to Rupees five thousand are fully depreciated in the
year of purchase
Leasehold land is amortised on a straight line basis over the primary
period of lease.
Assets on leasehold land i.e. building premises are depreciated over
the shorter of the lease term and their useful lives (not being greater
than the useful life envisaged in Schedule II to the Act).
1.9 Intangible fixed assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates. Subsequent
expenditure on an intangible asset after its purchase / completion is
recognised as an expense when incurred unless it is probable that such
expenditure will enable the asset to generate future economic benefits
in excess of its originally assessed standards of performance and such
expenditure can be measured and attributed to the asset reliably, in
which case such expenditure is added to the cost of the asset.
Intangible assets are amortised over the estimated useful life not
exceeding 5 years.
Intangible assets under development
Development activities involve apian or design for the production of
new or substantially improved products or processes. Development
expenditure is capitalised only if development costs can be measured
reliably, the product or process is technically and commercially
feasible, future economic benefits are probable, and the Company
intends to and has sufficient resources to complete development and to
use the asset. The expenditure capitalised includes the cost of
materials, direct labour, overhead costs that are directly attributable
to preparing the asset for its intended use, and directly attributable
borrowing costs (in the same manner as in the case of tangible fixed
assets). Other development expenditure is recognised in the Statement
of Profit and Loss as incurred.
1.10 Investments
Investments that are readily realisable and intended to be held for not
more than a year from the date of acquisition are classified as current
investments. All other investments are classified as long-term
investments. However, that part of long term investments which is
expected to be realised within 12 months after the reporting date is
also presented under ''current assets'' as "current portion of long term
investments" in consonance with the current-non- current classification
scheme of Schedule III of the Act. Long-term investments are stated at
cost. Provision for diminution in value is made only when in the
opinion of the management there is a dimunution other than temporary in
the carrying value of such investments determined seperately for each
investment. Current investments are valued at lower of cost and market
value.
1.11 Employee benefits
Short-term employment benefits
All employee benefits payable wholly within twelve months of rendering
the service are classified as short-term employee benefits. These
benefits include salary, wages and bonus, compensated absences such as
paid annual leave and sickness leave. The undiscounted amount of
short-term employee benefits expected to be paid in exchange for the
services rendered by employees is recognised during the period of
rendering of service by the employees.
Post employment benefits
Defined contribution plans
The Company has defined contribution plans for post employment benefits
namely Provident Fund. Under the provident fund plan, the Company
contributes to a Government administered provident fund on behalf of
its employees and has no further obligation beyond making its
contribution. The Company makes contributions to state plans namely
Employee''s State Insurance Fund and Employee''s Pension Scheme 1995 and
has no further obligation beyond making the payment to them. The
Company''s contributions to the above funds are charged to the Statement
of profit and loss every year.
Defined benefit plans
The Company''s gratuity benefit scheme are defined benefit plans. The
Company''s net obligation in respect of a defined benefit plan is
calculated by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior
periods; that benefit is discounted to determine its present value. Any
unrecognised past service costs and the fair value of any plan assets
are deducted. The calculation of the Company''s obligation is performed
annually by a qualified actuary using the projected unit credit method.
The Company recognises all actuarial gains and losses arising from
defined benefit plans immediately in the Statement of Profit and Loss.
All expenses related to defined benefit plans are recognised in
employee benefits expense in the Statement of Profit and Loss. When the
benefits of a plan are improved, the portion of the increased benefit
related to past service by employees is recognised in profit or loss on
a straight-line basis over the average period until the benefits become
vested. The Company recognises gains and losses on the curtailment or
settlement of a defined benefit plan when the curtailment or settlement
occurs.
Other long-term employment benefits
The employees can carry-forward a portion of the unutilised accrued
compensated absences and utilise it in future service periods or
receive cash compensation on termination of employment. Since the
compensated absences do not fall due wholly within twelve months after
the end of the period in which the employees render the related service
and are also not expected to be utilized wholly within twelve months
after the end of such period, the benefit is classified as a long-term
employee benefit. The Company records an obligation for such
compensated absences in the period in which the employee renders the
services that increase this entitlement. The obligation is measured on
the basis of independent actuarial valuation using the projected unit
credit method.
1.12 Segment reporting
The Company is engaged only in diagnostic services business in India
and follows only one reportable segment and therefore segment wise
reporting as per Accounting Standard (AS) 17 issued by The Institute of
Chartered Accountants of India is not applicable.
1.13 Earnings pershare
Basic EPS is computed by dividing the net profit attributable to
shareholders by the weighted average number of equity shares
outstanding during the year.
Diluted EPS is computed using the weighted average number of equity and
dilutive equity equivalent shares outstanding during the year-end,
except where the results would be anti dilutive.
1.14 Taxes on income
Income tax
Income tax expense comprises current tax and deferred tax charge or
credit (reflecting the tax effects of timing differences between
accounting income and taxable income for the period). Current tax
provision is made based on the tax liability computed after considering
tax allowances and exemptions, in accordance with the Income tax Act,
1961.
Deferred tax
Deferred tax charge or credit and the corresponding deferred tax
liability or asset is recognized for timing differences between the
profits/losses offered for income taxes and profits/ losses as per the
financial statements. Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have been enacted or
substantively enacted at the balance sheet date. Deferred tax assets
are recognised only to the extent there is reasonable certainty that
the assets can be realised in future; however, where there is
unabsorbed depreciation or carry forward of losses, deferred tax assets
are recognised only if there is a virtual certainty of realisation of
such assets. Deferred tax assets are reviewed as at each balance sheet
date and written down or written-up to reflect the amount that is
reasonably/ virtually certain (as the case may be) to be realised.
1.15 Employee stock options
The excess of the fair value of shares, at the date of grant of options
under the Employees Stock Option Scheme of the Company, over the
exercise price is regarded as employee compensation, and recognised on
a straight-line basis over the period over which the employees would
become unconditionally entitled to apply for the shares. The accounting
treatment is as prescribed by Securities and Exchange Board of India
(Share Based Employee Benefits) Regulations, 2014, issued by Securities
and Exchange Board of India and the Guidance Note on Employee
Share-based Payments issued by the Institute of Chartered Accountants
of India.
1.16 Impairment of assets
In accordance with AS 28 on ''impairment of assets'', other fixed assets
(tangible and intangible) are reviewed at each reporting date to
determine if there is any indication of impairment. For assets in
respect of which any such indication exists and for intangible assets
mandatorily tested annually for impairment, the asset''s recoverable
amount is estimated. An impairment loss is recognised if the carrying
amount of an asset exceeds its recoverable amount.
For the purpose of impairment testing, assets are grouped together into
the smallest group of assets (cash generating unit or CGU) that
generates cash inflows from continuing use that are largely independent
of the cash inflows of other assets or CGUs. The recoverable amount of
an asset or CGU is the greater of its value in use and its net selling
price. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the
risks specific to the asset or CGU.
Impairment losses are recognised in profit or loss. However, an
impairment loss on a revalued asset is recognised directly against any
revaluation surplus to the extent that the impairment loss does not
exceed the amount held in the revaluation surplus for that same asset.
If at the balance sheet date there is an indication that a previously
assessed impairment loss no longer exists or has decreased, the assets
or CGU''s recoverable amount is estimated. The impairment loss is
reversed to the extent that the asset''s carrying amount does not exceed
the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised. Such a reversal is recognised in the profit or loss;
however, in the case of revalued assets, the reversal is credited
directly to revaluation surplus except to the extent that an impairment
loss on the same revalued asset was previously recognised as an expense
in the profit or loss.
1.17 Provisions and contingencies
Provision is recognised in the balance sheet when the Company has a
present obligation as a result of a past event, and it is probable that
an outflow of economic benefits will be required to settle the
obligation and reliable estimation can be made of the amount required
to settle the obligation. Contingent liabilities arising from claims,
litigation, assessment, fines, penalties etc. are disclosed when there
is a possible obligation ora present obligation as a result of a past
event where it is not probable that an outflow of economic benefits
will be required to settle the obligation, and the amount can be
reasonably estimated. When there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosures is made.
1.18 Foreign exchange transactions
Foreign exchange transactions are recorded into Indian rupees using the
average of the opening and closing spot rates on the dates of the
respective transaction. Exchange differences arising on foreign
exchange transactions settled during the period are recognized in the
Statement of profit and loss of the year.
Monetary items (including long-term monetary items) in foreign
currency, which are outstanding as at the year-end are translated at
the year-end at the closing exchange rate and the resultant exchange
differences are recognized in the Statement of profit and loss.
Non-monetary foreign currency items are carried at cost.
1.19 Lease
Operating lease payments are recognised as an expense on a
straight-line basis over the non cancellable period of the lease term
and charged to the Statement of profit and loss unless other systematic
basis is more representative of the time pattern of the benefit. Any
modifications in respect of lease terms or assumptions are recorded
prospectively.