Accounting Policies of Vijaya Diagnostic Centre Ltd. Company

Mar 31, 2025

3. MATERIAL ACCOUNTING POLICIES

A. Revenue from contracts with customers

Revenue is measured based on the consideration
specified in a contract with a customer. The Company
recognises revenue when it transfers control over a
good or service to a customer.

i) Diagnostic services

Revenue from diagnostics services is amount billed net
of indirect taxes, reversals and discounts/concessions
if any. No element of financing is deemed present as
the sales are made primarily on cash and carry basis,
however for institutional/organizational customers
billing is done fortnightly/monthly based on the
agreement, which is consistent with market practice.

Revenue is recognized at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for transferring the goods or
services to a customer i.e. on transfer of control of
the service to the customer i.e., when the underlying
tests are conducted, samples are processed for
requisitioned diagnostic tests. Each service is
generally a separate performance obligation and
therefore revenue is recognised at a point in time when
the tests are conducted, samples are processed. For
multiple tests, the Company measures the revenue in
respect of each performance obligation at its relative
stand alone selling price and the transaction price
is allocated accordingly. The price that is regularly
charged for a test separately registered is considered
to be the best evidence of its stand alone selling.
Revenue contracts are on principal to principal basis
and the Company is primarily responsible for fulfilling
the performance obligation.

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 transfer 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.

Revenues in excess of invoicing are classified as contract
assets (referred to as ''unbilled revenue'') while invoicing
in excess of revenues are classified as contract liabilities
(referred to as ''unearned revenue'').

ii) Sale of Privilege cards

The Company operates a discount scheme where
certain ''Privilege cards'' are sold to the customers
against which specified discounts are given on the
future diagnostic services availed by the customer for
a specified period. The Company recognises revenue
from the sale of such cards over the period for which
the card is valid. The difference in sale consideration
received and revenue recognised is recognised as
deferred revenue.

B. Recognition of dividend income, interest
income or expense and rental income

Dividend income

Dividend are recognised in statement of profit and loss
on the date on which the Company’s right to receive
payment is established.

Interest income or expense

Interest income or expense is recognized using the
effective interest method.

The effective interest rate'' is the rate that exactly
discounts estimated future cash payments are

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-impaied, then the calculation of interest income
reverts to the gross basis.

Rental income

Rental income from investment property is recognised
as part of Other income in statement profit and loss
on the date on which the Company''s right to receive
payment is established.

C. Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and financial liability or
equity instrument of another entity.

i) Initial recognition and measurement

Trade receivables issued are initially recognised when
they are originated. All other financial assets or financial
liabilities are initially recognised when the Company
becomes a party to the contractual provision of the
instrument.

A financial asset (unless it is a trade receivable without
a significant financing component) or financial liability
is initially measured at fair value plus or minus, for an
item not at fair value through profit and loss (FVTPL),
transaction costs that are directly attributable to its
acquisition or issue.

The average credit period from these services provided
to customers is 0 to 60 days. No interest is charged
on the trade receivables for the amount over due
above the credit period. A trade receivable without a
significant financing component is initially measured
at the transaction price.

ii) Classification and subsequent measurement
Financial assets

All financial assets are 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.

On initial recognition, a financial asset is classified as
measured at:

- Amortised cost;

- Fair Value through Other Comprehensive Income
(FVOCI) - equity investment; or

- Fair Value through Profit or 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, in which case all affected financial
assets are reclassified on the first day of the first
reporting period following the change in the business
model.

A financial asset is measured at amortised cost if it
meets both of the following conditions and is not
designated as at FVTPL:

- Its held within a business model whose objective is
to hold assets to collect contractual cash flows; and

- Its 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
investment’s fair value in OCI (designated as FVOCI

- 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. 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.

Subsequent measurement

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 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 or 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

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 statement of 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 statement of 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 either:

• substantially all of the risks and rewards
of ownership of the financial asset are
transferred; or

• the Company neither transfers nor retains
substantially all of the risks and rewards of
ownership and it 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 in these cases, the
transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when
its contractual obligations are discharged or cancelled,
or expired.

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. On derecognition of
a financial liability, the difference between the carrying
amount extinguished and the consideration paid

(including any non-cash assets transferred or liabilites
assumed) 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

The cost of an item of property, plant and equipment
shall be recognised as an asset if, and only if it is
probable that future economic benefit associated with
the item will flow to the Company and the cost of the
item can be measured reliably. Items of property, plant
and equipment (including capital-work-in-progress)
are measured at cost, which includes capitalised
borrowing costs, less accumulated depreciation and
any accumulated impairment losses. Freehold land
is carried at historical cost less any accumulated
impairment losses.

Cost of an item of property, plant and equipment
comprises its purchase price, including non-refundable
purchase taxes, after deducting trade discounts and
rebates, any directly attributable cost of bringing the
items to its working conditions for its intended use
and estimated costs of dismantaling and removing the
item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant
and equipment comprises the cost of materials and
direct labour, any other costs directly attributable to
bringing the item to working condition for its intended
use, and estimated costs of dismantling and removing
the item and restoring the site on which it is located.

Any gain or loss on disposal of an item of property, plant
and equipment is recognised in profit or loss.

An item of of property, plant and equipmnet is
derecognised upon disposal or when no future
economic benefits are expecteed to arise from the
continued use of asset.

The net written down value as at April 01, 2016
has been considered as the gross carrying amount
recognised as per the previous GAAP (Deemed cost) as
at the date of transision to Ind AS.

Subsequent expenditure is capitalized only if it is
probable that the future economic benefits associated
with the expenditure will flow to the Company and the
cost of the item can be measured reliably.

ii) Depreciation

Depreciation is recognised so as to write off the cost
of assets (other than freehold land) less their residual
values over their useful lives. The Company has charged
depreciation on property, plant and equipment (PPE)
based on Written Down Value ("WDV") method upto 31
December 2022. With effect from 01 January 2023,
the Company has changed its method of depreciation
from WDV to Straight Line Method ("SLM") based
upon the technical assessment of expected pattern
of consumption of the future economic benefits
embodied in the assets.

Depreciation is charged over the useful lives of the
assets as estimated by the management based on
technical evaluation, which coincide with the useful
live prescribed in Schedule II to the Act. Depreciation
on additions and deletions are restricted to the period
of use.

In case of Building on leasehold land, the depreciation
is charged based on useful life of the building or the
lease period whichever is lower. In the case of lease hold
building improvements, the depreciation is charged
based on useful life of the improvements which is 10
years or lease period including expected renewal period
which ever is lower.

Residual value is considered to be 5% on all the assets,
as technically estimated by the management.

Assets costing below ''5,000 are depreciated using
depreciation rate at 100%.

Depreciation methods, useful lives and residual values
are reviewed at each reporting date and adjusted if
appropriate.

iii) Investment property
Recognition and measurement

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, including
related transaction costs. Subsequent to initial
recognition, investment property is measured at cost
less accumulated depreciation and accumulated
impairment losses, if any.

Investment property is derecognised either when
it has been disposed of or when it is permanently
withdrawn from use and no future economic benefit
is expected from its disposal. Any gain or loss on
disposal of investment property (calculated as the
difference between the net proceeds from disposal
and the carrying amount of the item) is recognised of
profit or loss.

Subsequent expenditure

Subsequent expenditure is capitalized only if it is
probable that the future economic benefits associated
with the expenditure will flow to the Company and the
cost of the item can be measured reliable.

Depreciation

Depreciation on investment property, other than
perpetual leasehold land, is calculated on Straight Line
Method (SLM) method based on useful life estimated
by the Management, which is equal to life prescribed in
Schedule II of the Act.

Fair value disclosure

The fair values of investment property is disclosed in
the notes is based on market observable data. The

Comapany has not engaged any registered valuer for
determaining the above fair value for the current year.

E. Intangible assets

i) Recognition and measurement

Intangible assets that are acquired, are recognized
at cost initially and carried at cost less accumulated
amortization and accumulated impairment loss, if any.
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in
the specific asset to which it relates.

ii) 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 (SLM) and is included in depreciation and
amortisation expense in statement of profit and loss.

- Software - 5 years

Amortisation method, useful lives and residual values
are reviewed at each reporting date and adjusted if
appropriate.

F. Inventories

Inventories comprise of diagnostic kits, reagents,
laboratory chemicals, consumables etc., these are
measured at 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 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 estimated costs of
completion and the estimated costs necessary to make
the sale.

The comparison of cost and net realisable value is made
on an item-by-Item basis.

G. Impairment of assets

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 ‘credit-impaired’
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 debtor;

- a breach of contract such as a default or being
more than 90 days past due;

- it is probable that the debtor 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 months 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
Company’s historical experience and informed credit
assessment and including forward-looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted
estimate of credit losses. Credit losses are measured
as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the Company
in accordance with the contract and the cash flows that
the Company expects to receive).

Expected credit losses'' are discounted at the effective
interest rate of the financial statement.

Presentation of allowance for expected credit losses in
the balance sheet.

Loss allowances for financial assets measured at
amortised cost are deducted from the gross carrying
amount of the assets.

Write-off

The gross carrying amount of a financial asset is written
off when the Company has no reasonable expections of
recovering asset in its entirety or a portion thereof. 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
Company’s procedures for recovery of amounts due.

ii) Impairment of non-financial assets

At each reporting date, the Company reviews the
carrying amount of non-financial assets, other than
inventories and deferred tax assets, to determine
whether there is any indication of impairment. If any
such indication exists, then the asset''s recoverable
amount is estimated.

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.

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.

In respect of 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 asset''s carrying amount does not exceed the
carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment
loss has been recognised.

H. Employee benefits

(i) Short-term employee benefits

Short term employee benefits are measured on an
undiscounted basis and expensed as the related
service is provided. A liability is recognised for the
amount expected to be paid 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
obligation can be estimated reliably.

(ii) Defined contribution plans

A defined contribution plan is a post-employment
benefit plan where the Company''s legal or constructive
obligation is limited to the amount that it contributes
to a seperate legal entity.

The Company makes specified monthly contributions
towards Government administered provident fund
scheme and Employees'' State Insurance (''ESI'') scheme.

Obligations for contributions to defined contribution
plans are expensed as an employee benefits expense
in statement of profit and loss in the period in which
the related services are rendered by employees.

(iii) Defined benefit plans

A defined benefit plan is a post-employment benefit
plan other than a defined contribution plan. The
Company''s net obligation in respect of defined benefit
plans is calculated seperately for each plan by estimating
the amount of future benefits that employees have
earned in the current and prior periods, discounting
that amount and deducting the fair value of any plan
assets. The defined benefit obligation is calculated
annually by a qualified actuary using the projected unit
credit method.

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
immediately in OCI. They are included in retained
earnings in the statement of changes in equity and in
the balance sheet. The Company determines the net
interest expense (income) on the net defined benefit
liability (asset) for the period by applying the discount
rate determined by reference to market yields at the
end of the reporting period on government bonds.
This rate is applied on the net defined benefit liability
(asset), both as determined at the start of the annual
reporting period, 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.

Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit or
loss as past service cost. The Company recognises gain
and losses on settlement of a defined benefit plan
when the settlement occurs.

(iv) Other long-term employee benefits -
compensated absences

Accumulated absences expected to be carried
forward beyond twelve months is treated as long¬
term employee benefit for measurement purposes.
The Company’s net obligation in respect of other
long-term employee benefit of accumulating
compensated absences is the amount of future
benefit that employees have accumulated at the end
of the year. That benefit is discounted to determine
its present value The obligation is measured annually
by a qualified actuary using the projected unit credit
method. Remeasurements are recognised in profit or
loss in the period in which they arise.

The obligations are presented as current liabilities in
the balance sheet if the Company does not have an
unconditional right to defer the settlement for at least
twelve months after the reporting date.

(v) Share based payments

The grant date fair value of equity-settled share-
based payment arrangements granted to employees
is generally recognised as an employee benefits
expense, with a corresponding increase in equity,
over the vesting period of the options. The amount
recognised as an expense is adjusted to reflect the
number of options for which the related service and
non-market performance conditions are expected to
be met, such that the amount ultimately recognised is
based on the number of options that meet the related
service and non-market performance conditions at
the vesting date. For share-based payment options
with non-vesting conditions, the grant date fair value
of the share-based payment is measured to reflect
such conditions and there is no true-up for differences
between expected and actual outcomes.

I. Leases

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. Lease contracts entered
by the Company majorly pertains for buildings taken
on lease to conduct its business in the ordinary course.

As a Lessor:

Leases for which the Company is a lessor are classified
as a finance or operating lease. Whenever the terms of
a lease transfer substantially all the risks and rewards

of ownership to the lessee, the contract is classified
as a finance lease. All other leases are classified as
operating leases. Rental income from operating leases
are recognised on straight line basis over the term of
relevant lease as part of other income.

As a Lessee:

At commencement or on modification of a contract
that contains a lease component, the Company
allocates the consideration in the contract to each
lease component on the basis of its relative stand¬
alone prices. The Company recognises 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, less
any lease incentives received.

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 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. 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 Company''s incremental borrowing
rate. Generally, the Company uses its incremental
borrowing rate as the discount rate.

The Company determines its incremental
borrowing rate by obtaining interest rates from
various external financing sources and makes
certain adjustments to reflect the terms of the
lease and type of the asset leased.

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 exercise price under a purchase option that
the Company is reasonably certain to exercise,
lease payments in an optional renewal period if
the Company is reasonably certain to exercise
an extension option, and penalties for early
termination of a lease unless the Company is
reasonably certain not to terminate early.

The lease liability is measured at amortised cost using
the effective interest method. It is remeasured when
there is a change in future lease payments arising
from a change in an index or rate, if there is a change
in the Company’s estimate of the amount expected
to be payable under a residual value guarantee, if the
Company changes its assessment of whether it will
exercise a purchase, extension or termination option or
if there is a revised in-substance fixed lease payment.

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.

Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use
assets and lease liabilities for leases of low-value assets
and short-term leases, including IT equipment. The
Company recognises the lease payments associated
with these leases as an expense in profit or loss on a
straight-line basis over the lease term.

J. Income-tax

Income-tax expenses comprises current and deferred
tax. It is recognised in profit or loss except to the extent
that it relates 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 at
the reporting date.

Tax assets and 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 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; and

- temporary differences in relation to a right-of-
use asset and a lease liability for a specific lease
are regarded as a net package (the lease) for the
purpose of recognising deferred tax.

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 - 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.

The measurement of deferred tax reflects the tax
consequences that would follow from the manner in
which the Company expects, at the reporting date,
to recover or settle the carrying amount of its assets
and liabilities.

Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by
the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current

tax liabilities and assets on a net basis or their tax assets
and liabilities will be realised simultaneously.

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Mar 31, 2024

3. MATERIAL ACCOUNTING POLICIES

A. Revenue from contracts with customers

Revenue is measured based on the consideration specified in a contract with a customer. The Company recognises revenue when it transfers control over a good or service to a customer.

i) Diagnostic services

Revenue from diagnostic services is recognized on amount billed net of discounts/concessions if any. No element of financing is deemed present as the sales are made primarily on cash and carry basis, however for institutional/organizational customers

billing is done fortnightly/monthly based on the agreement, which is consistent with market practice.

The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when the underlying tests are conducted, samples are processed for requisitioned diagnostic tests. Each service is generally a separate performance obligation and therefore revenue is recognised at a point in time when the tests are conducted, samples are processed. For multiple tests, the Company measures the revenue in respect of each performance obligation at its relative stand alone selling price and the transaction price is allocated accordingly. The price that is regularly charged for a test separately registered is considered to be the best evidence of its stand alone selling. Revenue contracts are on principal to principal basis and the Company is primarily responsible for fulfilling the performance obligation.

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 transfer 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.

Revenues in excess of invoicing are classified as contract assets (referred to as ''unbilled revenue'') while invoicing in excess of revenues are classified as contract liabilities (referred to as ''unearned revenue'').

ii) Sale of privilege cards

The Company operates a discount scheme where certain ''Privilege cards'' are sold to the customers against which specified discounts are given on the future diagnostic services availed by the customer for a specified period. The Company recognises revenue from the sale of such cards over the period for which the card is valid. The difference in sale consideration received and revenue recognised is recognised as deferred revenue.

B. Recognition of dividend income, interest income or expense and rental income Dividend income

Dividend are recognised in statement of profit and loss on the date on which the Company''s right to receive payment is established.

Interest income or expense

Interest income or expense is recognized using the effective interest method.

The effective interest rate'' is the rate that exactly discounts estimated future cash payments are 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-impaied, then the calculation of interest income reverts to the gross basis.

Rental income

Rental income from investment property is recognised as part of Other income in statement profit and loss on the date on which the Company''s right to receive payment is established.

C. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and financial liability or equity instrument of another entity.

i) Initial recognition and measurement

Trade receivables issued are initially recognised when they are originated. All other financial assets or financial liabilities are initially recognised when the Company becomes a party to the contractual provision of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

The average credit period from these services provided to customers is 0 to 60 days. No interest is charged on the trade receivables for the amount over due above the credit period. A trade receivable without a significant financing component is initially measured at the transaction price.

ii) Classification and subsequent measurement

Financial assets

All financial assets are 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.

On initial recognition, a financial asset is classified as measured at:

- Amortised cost;

- Fair Value through Other Comprehensive Income (FVOCI) - equity investment; or

- Fair Value through Profit or 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, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

- Its held within a business model whose objective is to hold assets to collect contractual cash flows; and

- Its 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 investment''s fair value in OCI (designated as FVOCI - 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. 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.

Subsequent measurement

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 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 or 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

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 statement of 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 statement of 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 either:

• substantially all of the risks and rewards of ownership of the financial asset are transferred;or

• the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it 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 in these cases, the transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired.

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. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilites assumed) 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

The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if it is probable that future economic benefit associated with the item will flow to the Company and the cost of the item can be measured reliably. Items of property, plant and equipment (including capital-work-in progress) are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and any accumulated impairment losses. Freehold land is carried at historical cost less any accumulated impairment losses.

Cost of an item of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the items to its working conditions for its intended use and estimated costs of dismantaling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

An item of of property, plant and equipmnet is derecognised upon disposal or when no future economic benefits are expecteed to arise from the continued use of asset

The net written down value as at April 01, 2016 has been considered as the gross carrying amount recognised as per the previous GAAP (Deemed cost) as at the date of transision to Ind AS.

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably.

ii) Depreciation

Depreciation is recognised so as to write off the cost of assets (other than freehold land) less their residual values over their useful lives. The Company has charged depreciation on property, plant and equipment (PPE) based on Written Down Value (”WDV”) method upto 31 December 2022. With effect from 01 January 2023, the Company has changed its method of depreciation from WDV to Straight Line Method (”SLM”) based upon the technical assessment of expected pattern of consumption of the future economic benefits embodied in the assets.

Depreciation is charged over the useful lives of the assets as estimated by the management based on technical evaluation, which coincide with the useful live prescribed in Schedule II to the Act. Depreciation on additions and deletions are restricted to the period of use.

The estimated useful lives of items of property, plant and equipment are as follows:

is lower. In the case of lease hold building improvements, the depreciation is charged based on useful life of the improvements which is 10 years or lease period including expected renewal period which ever is lower.

Residual value is considered to be 5% on all the assets, as technically estimated by the management.

Assets costing below Rs. 5,000 are depreciated using depreciation rate at 100%.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

iii) Investment property

Recognition and measurement

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, including related transaction costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.

Investment property is derecognised either when it has been disposed of or when it is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised of profit or loss.

Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliable.

Depreciation

Depreciation on investment property, other than perpetual leasehold land, is calculated on Straight Line Method (SLM) method based on useful life estimated by the Management, which is equal to life prescribed in Schedule II of the Act.

Fair value disclosure

The fair values of investment property is disclosed in the notes. Fair values is determined by an independent valuer who holds a recognised and relevant professional qualification and has recent experience in the location and category of the investment property being valued.

E. Intangible assets i) Recognition and measurement

Intangible assets that are acquired, are recognized at cost initially and carried at cost less accumulated amortization and accumulated impairment loss, if any. Subsequent expenditure is

capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.

ii) 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 (SLM) and is included in depreciation and amortisation expense in statement of profit and loss.

The estimated useful lives are as follows:

- Software - 5 years

Amortisation method, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

F. Inventories

Inventories comprise of diagnostic kits, reagents, laboratory chemicals, consumables etc., these are measured at 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 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 estimated costs of completion and the estimated costs necessary to make the sale.

The comparison of cost and net realisable value is made on an item-by-Item basis.

G. Impairment of assets

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 ''credit-impaired'' 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 debtor;

- a breach of contract such as a default or being more than 90 days past due;

- it is probable that the debtor 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 months 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 Company''s historical experience and informed credit assessment and including forward-looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

''Expected credit losses'' are discounted at the effective interest rate of the financial statement.

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expections of recovering asset in its entirety or a portion thereof. 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 Company''s procedures for recovery of amounts due.

ii) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amount of non-financial assets, other than inventories and deferred tax assets, to determine whether there is any indication

of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.

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.

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.

In respect of 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 asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss has been recognised.

H. Employee benefits

i) Short-term employee benefits

Short term employee benefits are measured on an undiscounted basis and expensed as the related service is provided. A liability is recognised for the amount expected to be paid 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 obligation can be estimated reliably.

ii) Defined contribution plans

A defined contribution plan is a post-employment benefit plan where the Company''s legal or constructive obligation is limited to the amount that it contributes to a seperate legal entity.

The Company makes specified monthly contributions towards Government administered provident fund scheme and Employees'' State Insurance (''ESI'') scheme.

Obligations for contributions to defined contribution plans are expensed as an employee benefits expense in statement of profit and loss in the period in which the related services are rendered by employees.

iii) Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company''s net obligation

in respect of defined benefit plans is calculated seperately for each plan by estimating the amount of future benefits that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The defined benefit obligation is calculated annually by a qualified actuary using the projected unit credit method.

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 immediately in OCI. They are included in retained earnings in the statement of changes in equity and in the balance sheet. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate determined by reference to market yields at the end of the reporting period on government bonds. This rate is applied on the net defined benefit liability (asset), both as determined at the start of the annual reporting period, 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.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost. The Company recognises gain and losses on settlement of a defined benefit plan when the settlement occurs.

iv) Other long-term employee benefits -compensated absences

Accumulated absences expected to be carried forward beyond twelve months is treated as long-term employee benefit for measurement purposes. The Company''s net obligation in respect of other long-term employee benefit of accumulating compensated absences is the amount of future benefit that employees have accumulated at the end of the year. That benefit is discounted to determine its present value The obligation is measured annually by a qualified actuary using the projected unit credit method. Remeasurements are recognised in profit or loss in the period in which they arise.

The obligations are presented as current liabilities in the balance sheet if the Company does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

v) Share based payments

The grant date fair value of equity-settled share-based payment arrangements granted to employees is generally recognised as an employee benefits expense, with a corresponding increase in equity, over the vesting period of the options. The amount recognised as an expense is adjusted to reflect the number of options for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of options that meet the related service and non-market performance

conditions at the vesting date. For share-based payment options with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

I. Leases

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. Lease contracts entered by the Company majorly pertains for buildings taken on lease to conduct its business in the ordinary course.

As a Lessor:

Leases for which the Company is a lessor are classified as a finance or operating lease. Whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. Rental income from operating leases are recognised on straight line basis over the term of relevant lease as part of other income.

As a Lessee:

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. The Company recognises 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, less any lease incentives received.

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 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. 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 Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

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 exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

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.

Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Company recognises the lease payments associated with these leases as an expense in profit or loss on a straight-line basis over the lease term.

J. Income-tax

Income-tax expenses comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates 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 at the reporting date.

Tax assets and 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 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; and

- temporary differences in relation to a right-of-use asset and a lease liability for a specific lease are regarded as a net package (the lease) for the purpose of recognising deferred tax.

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 - 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.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

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Mar 31, 2023

1. Corporate information

Vijaya Diagnostic Centre Limited (''the Company'') is engaged in the business of providing comprehensive range of diagnostic services, spanning pathological investigations, basic and high end radiology, nuclear medicine and related healthcare services.

The Company is domiciled and incorporated in India on June 05, 2002 and has its registered and corporate office at #6-3-883/F, Ground Floor, Family Planning Association

of India, Panjagutta, Hyderabad - 500 082, India.

The Company got listed on Bombay Stock Exchange (BSE)

and National Stock Exchange (NSE) on september 14, 2021 through Offer for sale of the Equity shares by certain

shareholders of the Comapany.

2. Basis of preparation and measurement

(i) Statement of compliance

The standalone financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as ''Ind AS'') as per Companies (Indian Accounting Standards) Rules, 2015 notified

under section 133 of the Companies Act, 2013.

The standalone financial statements were approved by the Board of Directors and authorised for issue on

May 29, 2023.

(ii) Change in accounting estimates

The Company has charged depreciation on Property, Plant and Equipment based on Written Down Value ("WDV”) method from 01 April 2022 to 31 December 2022.With effect from 01 January 2023, the Company has changed its method of depreciation from WDV to Straight Line Method ("SLM”) based on the technical assessment of the expected pattern of consumption of future economic benefits embodied in the assets as per Ind AS 16.

As per Ind AS 8, the effect of change in accounting estimate has to be given prospectively in the financial statements, accordingly, the Company has changed the method of depreciation w.e.f 01 January 2023. Due to this change in accounting estimate, the depreciation expense is lower and the profit before tax is higher by Rs.899.08 lakhs for the year ended 31 March 2023. Refer note 4(a)(i) for change in accounting estimate.

(iii) Functional and presentation currency

These standalone financial statements are presented in Indian Rupees (Rs.), which is also the Company''s

functional currency. All amounts have been rounded to the nearest lakhs, unless otherwise indicated.

(iv) Basis of measurement

These standalone financial statements have been prepared under the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.

Item Basis	Measurement
Certain financial assets and liabilities	Fair Value or Amortised Cost
Equity securities at FVOCI	Fair Value
Net defined benefit	Fair value of plan assets
(asset)/ liability	less present value of defined benefit obligations (refer note 28)
Equity settled share based payments	Fair Value

(v) Use of estimates and judgements

In preparing these standalone financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts 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 estimates are recognised prospectively.

Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements is included in the following notes:

- Note 3(I), 20 - lease term; whether the Company is reasonably certain to exercise extended options

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilites within the next financial year are included in the following notes:

- Note 28 - measurement of defined benefit obligations: key actuarial assumptions;

- Notes 12 - recognition and measurement of provisions and contingencies: key assumptions

about the Likelihood and magnitude of an outflow of resources;

- Note 6 (b) - impairment of financial assets;

- Note 4 and Note 5 - determining an asset''s expected useful life and the expected residual value at the end of its life

- Note 29 - Employee share based payments, equity settled

(vi) Measurement of fair values

A number of the accounting polices and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilites.

The Company has an established control framework with respect to the measurement of fair values.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability or

- In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Significant valuation issues are reported to the Company''s audit committee.

Fair values are categorised 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.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset 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 categorised 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 recognises 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 the measuring fair values is included in the following notes:

• Note 4: Investment Property.

• Note 29: Share based payments.

• Note 33: Financial Instruments.

(vii) Current and non-current classification:

The Company classifies an asset as current when:

- it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;

- it expects to realise the asset within twelve months after the reporting period;

- it holds the asset primarily for the purpose of traiding; or

- the asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non current.

A liability is classified as a current when- it is expected to be settled in the Company''s normal operating cycle;

- the liability is due to be settled within twelve months from the reporting period;

- it is held primarily for the purposes of being

trading;

- it does not hold an unconditiont right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counter party, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and realisation in cash or cash equivalents. The Company''s normal operating cycle is twelve months.

3. Significant accounting policies

A. Revenue from contracts with customers

Revenue is measured based on the consideration specified in a contract with a customer. The Company recognises revenue when it transfers control over a good or service to a customer.

i) Diagnostic services

Revenue from diagnostic services is recognized on amount billed net of discounts / concessions if any. No element of financing is deemed present as the sales are made primarily on cash and carry basis, however for institutional / organizational customers billing is done fortnightly / monthly based on the agreement, which is consistent with market practice.

The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when the underlying tests are conducted, samples are processed for requisitioned diagnostic tests. Each service is generally a separate performance obligation and therefore revenue is recognised at a point in time when the tests are conducted, samples are processed. For multiple tests, the Company measures the revenue in respect of each performance obligation at its relative stand alone selling price and the transaction price is allocated accordingly. The price that is regularly charged for a test separately registered is considered to be the best evidence of its stand alone selling. Revenue contracts are on principal to principal basis and the Company is primarily responsible for fulfilling the performance obligation.

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 transfer 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.

ii) Sale of Privilege cards

The Company operates a discount scheme where certain ''Privilege cards'' are sold to the customers against which specified discounts are given on the future diagnostic services availed by the customer for a specified period. The Company recognises revenue from the sale of such cards over the period for which the card is valid. The difference in sale consideration received and revenue recognised is recognised as deferred revenue.

B. Recognition of dividend income, interest income or expense and rental income

Dividend income

Dividend are recognised in statement of profit and loss on the date on which the Company''s right to receive payment is established.

Interest income or expense

Interest income or expense is recognized using the effective interest method.

The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments are 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.

Rental income:

Rental income from investment properly is recognised as part of Other income in statement profit and loss on the date on which the Company''s right to receive payment is esiablished.

C. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and financial liability or equity instrument of another entity.

i) Initial recognition and measurement

Trade receivables issued are initially recognised when they are originated. All other financial assets or financial liabilities are initially recognised when the Company becomes a party to the contractual provision of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

A trade receivable without a significant financing component is initially measured at the transaction price

ii) Classification and subsequent measurement

Financial assets

All financial assets are 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.

On initial recognition, a financial asset is classified as measured at:

- Amortised cost;

- Fair Value through Other Comprehensive Income (FVOCI) - equity investment; or

- Fair Value through Profit or 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, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

- It is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- Its 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 investment''s fair value in OCI (designated as FVOCI - 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. 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.

Subsequent measurement

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 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 or 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:

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 statement of 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 statement of 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 either:

• substantially all of the risks and rewards of ownership of the financial asset are transferred;or

• the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it 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 expired.

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. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilites assumed) 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

The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if it is probable that future economic benefit associated with the item will flow to the Company and the cost of the item can be measured reliably. Items of property, plant and equipment (including capital-work-in progress) are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and any accumulated impairment losses. Freehold land is carried at historical cost less any accumulated impairment losses.

Cost of an item of property, plant and equipment comprises its purchase price, including nonrefundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the items to its working conditions for its intended use and estimated costs of dismantaling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.

Any gain or loss on disposal of an item of property,

plant and equipment is recognised in profit or loss.

An item of property, plant and equipmnet is derecognised upon disposal or when no future economic benefits are expecteed to arise from the continued use of asset

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably.

ii) Depreciation

Depreciation is recognised so as to write off the cost of assets (other than freehold land) less their residual values over their useful lives. The Company has charged depreciation on property, plant & equipment (PPE) based on Written Down

Value ("WDV”) method upto 31 December 2022. With effect from 01 January 2023, the Company has changed its method of depreciation from WDV to Straight Line Method ("SLM”) based upon the technical assessment of expected pattern of consumption of the future economic benefits embodied in the assets.

Depreciation is charged over the useful lives of the assets as estimated by the management based on technical evaluation, which coincide with the useful live prescribed in Schedule II to the Act. Depreciation on additions and deletions are restricted to the period of use.

The estimated useful lives of items of property, plant and equipment are as follows:

Asset category	Management estimate of useful life	Useful life as per Schedule II
Buildings	60 years	60 years
Plant and equipment: - Medical and diagnostic equipments	13 years	13 years
- Other equipments	15 years	15 years
Electrical equipments	10 years	10 years
Furniture and fixtures	10 years	10 years
Office equipments	5 years	5 years
Computers - Servers and networks	6 years	6 years
- End user devices such as laptops, etc.	3 years	3 years
Vehicles	8 years	8 years

In case of Building on leasehold land, the depreciation is charged based on useful life of the building or the lease period whichever is lower. In the case of lease hold building improvements, the depreciation is charged based on useful life of the improvements which is 10 years or lease period including expected renewal period which ever is lower.

Residual value is considered to be 5% on all the assets, as technically estimated by the management.

Assets costing below Rs. 5,000 are depreciated using depreciation rate at 100%.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

iii) Investment property

Recognition and measurement

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, including related transaction costs. Subsequent to initial recognition, investment property is measured at cost

less accumulated depreciation and accumulated impairment losses, if any.

Investment property is derecognised either when it has been disposed of or when it is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised of profit or loss.

Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliable.

Depreciation

Depreciation on investment property, other than perpetual leasehold land, is calculated on Straight Line Method (SLM) method based on useful life estimated by the Management, which is equal to life prescribed in Schedule II of the Act.

Fair value disclosure

The fair values of investment property is disclosed in the notes. Fair values is determined by an

independent valuer who holds a recognised and relevant professional qualification and has recent experience in the location and category of the investment property being valued.

E. Intangible assets

i) Recognition and measurement

Intangible assets that are acquired, are recognized at cost initially and carried at cost less accumulated amortization and accumulated impairment loss, if any. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.

ii) 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 (SLM) and is included in depreciation and amortisation expense in statement of profit and loss.

The estimated useful lives are as follows:

- Software - 5 years

Amortisation method, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

F. Inventories

Inventories comprise of diagnostic kits, reagents, laboratory chemicals and consumables, these are measured at 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 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 estimated costs of completion and the estimated costs necessary to make the sale.

The comparison of cost and net realisable value is made on an item-by-Item basis.

G. Impairment of assets

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 ''credit-impaired'' 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 debtor;

- a breach of contract such as a default or being more than 90 days past due;

- it is probable that the debtor 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 months 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 Company''s historical experience and informed credit assessment and including forward-looking information.

Measurement of expected credit Losses

Expected credit Losses are a probabiLity-weighted estimate of credit Losses. Credit Losses are measured as the present value of all cash shortfaLLs (i.e. the difference between the cash fLows due to the Company in accordance with the contract and the cash fLows that the Company expects to receive).

Expected credit losses'' are discounted at the effective interest rate of the financial statement.

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expections of recovering asset in its entirety or a portion thereof. 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 Company''s procedures for recovery of amounts due.

ii) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amount of non-financiaL assets, other than inventories and deferred tax assets, to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverabLe amount is estimated.

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.

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.

In respect of 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 asset''s carrying amount does not exceed the carrying amount that wouLd have been determined, net of depreciation or amortisation, if no impairment Loss has been recognised.

H. Employee benefits

(i) Short-term employee benefits

Short term employee benefits are measured on an undiscounted basis and expensed as the reLated service is provided. A LiabiLity is recognised for the amount expected to be paid 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 obLigation can be estimated reLiabLy.

(ii) Defined contribution plans

A defined contribution plan is a post-employment benefit pLan where the Company''s LegaL or constructive obLigation is Limited to the amount that it contributes to a seperate LegaL entity.

The Company makes specified monthly contributions towards Government administered provident fund scheme and EmpLoyees'' State Insurance (''ESI'') scheme.

Obligations for contributions to defined contribution pLans are expensed as an empLoyee benefits expense in statement of profit and Loss in the period in which the reLated services are rendered by empLoyees.

(iii) Defined benefit plans

A defined benefit pLan is a post-empLoyment benefit pLan other than a defined contribution plan. The Company''s net obligation in respect of defined benefit plans is calculated seperateLy

for each plan by estimating the amount of future benefits that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The defined benefit obligation is calculated annually by a qualified actuary using the projected unit credit method.

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 immediately in OCI. They are included in retained earnings in the statement of changes in equity and in the balance sheet. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate determined by reference to market yields at the end of the reporting period on government bonds. This rate is applied on the net defined benefit liability (asset), both as determined at the start of the annual reporting period, 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.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost. The Company recognises gain and losses on settlement of a defined benefit plan when the settlement occurs.

(iv) Other long-term employee benefits -compensated absences

Accumulated absences expected to be carried forward beyond twelve months is treated as long-term employee benefit for measurement purposes. The Company''s net obligation in respect of other long-term employee benefit of accumulating compensated absences is the amount of future benefit that employees have accumulated at the end of the year. That benefit is discounted to determine its present value The obligation is measured annually by a qualified actuary using the projected unit credit method. Remeasurements are recognised in profit or loss in the period in which they arise.

The obligations are presented as current liabilities in the balance sheet if the Company does not have

an unconditional right to defer the settlement for at least twelve months after the reporting date.

(v) Share based payments

The grant date fair value of equity-settled share-based payment arrangements granted to employees is generally recognised as an employee benefits expense, with a corresponding increase in equity, over the vesting period of the options. The amount recognised as an expense is adjusted to reflect the number of options for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of options that meet the related service and nonmarket performance conditions at the vesting date. For share-based payment options with nonvesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

I. Leases

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. Lease contracts entered by the Company majorly pertains for buildings taken on lease to conduct its business in the ordinary course.

As a Lessor:

Leases for which the Company is a lessor are classified as a finance or operating lease. Whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. Rental income from operating leases are recognised on straight line basis over the term of relevant lease as part of other income.

As a Lessee:

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative standalone prices. The Company recognises 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, less any lease incentives received.

The Company determines the lease term as the non-cancettabte 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 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. 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 Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

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 exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if

the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. 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.

Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Company recognises the lease payments associated with these leases as an expense in profit or loss on a straight-line basis over the lease term.

J. Income-tax

Income-tax expenses comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates 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 at the reporting date.

Tax assets and 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 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; and

- temporary differences in relation to a right-of-use asset and a lease liability for a specific lease are regarded as a net package (the lease) for the purpose of recognising deferred tax

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 - 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.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

K. Provision, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of

a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be

made of the amount of the obligation. Expected future operating losses are not provided for.

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

The Company records a provision for decommissioning costs. Decommissioning costs are provided at the present value of expected costs to settle the obligation

using estimated cash flows and are recognized as part of the cost of the particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognized in the statement of profit and loss as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate.

Contingencies:

Provision in respect of loss / contingencies relating to claims, litigations, assessments, fines and penalties are recognised when it is probable that a liability has been incurred and the amount can be estimated reliably.

Contingent liabilities and contingent assets:

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the

control of the entity or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the standalone financial statements.

Contingent asset is not recognised in standalone financial statements since this may result in the recognition of income that may never be realised.

However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognized.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date

L. Earnings per share Basic Earnings per share

Basic Earnings Per Share (''EPS'') is calculated by dividing the profit attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted Earnings per share

Diluted earnings per share is computed by dividing the profit (considered in determination of basic earnings per share) after considering the effect associated with dilutive potential equity shares by the weighted average number of equity shares considered for deriving basic earnings per share adjusted for the weighted average number of equity shares that would have been issued upon conversion of all dilutive potential equity shares.

M. Cash flow statement

Cash flows are reported using the indirect method, whereby profit for the year is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing and financing activites. The Company considers all highly liquid investments that are readily convertible to known amounts of cash to be cash equivalents.

N. Cash and cash equivalents

Cash and cash equivalents in the balance sheet and cash flow statement consists of cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities less than three months which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

O. Investments in subsidiaries

Investments in subsidiaries carried at cost less any provision for impairment. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.

P. Dividend

The Company recognises a liability for any dividend declared but not distributed at the end of the reporting period, when the distribution is authorised and the distribution is no longer at the discretion of the Company on or before the end of the reporting period.

Q. Events after reporting date

Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the balance sheet date of material size or nature are only disclosed.

R. Recent pronouncements

Ministry of Corporate Affairs ("MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards)

Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 01, 2023, as below:

Ind AS 1 - Presentation of Financial Statements

The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements.

Ind AS 12 - Income Taxes

The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company does not expect this amendment to have any significant impact in its financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty”. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements.