2.12 Provisions, contingent liability and contingent
asset
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result
of a past event, it is probable that the Company will be
required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation at the end of the reporting period, taking
into account the risks and uncertainties surrounding
the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, it
carrying amount is the present value of those cash flows
(when the effect of the time value of money is material).
Contingent assets are disclosed in the standalone
financial statements by way of notes to standalone
financial statements when an inflow of economic
benefits is probable.
Contingent liabilities are disclosed in the standalone
financial statements by way of notes to standalone
financial statements, unless possibility of an outflow of
resources embodying economic benefit is remote.
2.13 Financial instruments
Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instruments.
Financial assets and financial liabilities are initially
measured at fair value, except for trade receivables that
do not have a significant financing component which
are measured at transaction price. Transaction costs
that are directly attributable to the acquisition or issue
of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from
the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets
or financial liabilities at fair value through profit or loss
are recognised immediately in the Statement of Profit
and Loss.
Trade receivables are initially measured (initial recognition
amount) at their transaction price (in accordance with
Ind AS 115) unless those contain a significant financing
component determined in accordance with Ind AS 115
or when the entity applies the practical expedient in
accordance with para 63 of Ind AS 115 and subsequently
measured at amortised cost using the effective interest
method, less provision for impairment.
2.14Financial assets
All recognised financial assets are subsequently
measured in their entirety at either amortised cost
or fair value, depending on the classification of the
financial assets.
Classification of financial assets
Financial instruments that meet the following conditions
are subsequently measured at amortised cost (except
for financial assets that are designated as at fair value
through profit or loss on initial recognition):
• the asset is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows; and
• the contractual terms of the instrument give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial instruments that meet the following conditions
are subsequently measured at fair value through other
comprehensive income (except for financial assets that
are designated as at fair value through profit or loss on
initial recognition):
• the asset is held within a business model whose
objective is achieved both by collecting contractual
cash flows and selling financial assets; and
• the contractual terms of the instrument give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
All other financial assets are subsequently measured at
fair value through profit or loss (FVTPL).
Effective interest method
The effective interest method is a method of calculating
the amortised cost of a financial instrument and of
allocating interest income over the relevant period. The
effective interest rate is the rate that exactly discounts
estimated future cash receipts (including all fees,
transaction costs and other premiums or discounts
that form an integral part of the effective interest rate)
through the expected life of the debt instrument, or,
where appropriate, a shorter period, to the net carrying
amount on initial recognition.
Income is recognised on an effective interest basis for
financial instruments other than those financial assets
classified as at Fair Value Through Profit and Loss.
Interest income is recognised in profit or loss and is
included in the "Other income" line item.
Financial instruments that do not meet the amortised
cost criteria or fair value through other comprehensive
income (FVTOCI) are measured at fair value through
profit or loss (FVTPL).
2.14.1 Cash and cash equivalents
The Company considers all highly liquid financial
instruments, which are readily convertible into
known amounts of cash that are subject to an
insignificant risk of change in value and having
original maturities of three months or less from the
date of purchase, to be cash equivalents. Cash and
cash equivalents consist of balances with banks
which are unrestricted for withdrawal and usage.
2.14.2 Financial assets at amortised cost
Financial assets are subsequently measured
at amortised cost using the effective interest
method if these financial assets are held within a
business whose objective is to hold these assets
in order to collect contractual cash flows and the
contractual terms of the financial asset give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
2.14.3 Financial assets at fair value through other
comprehensive income
Financial assets are measured at fair value
through other comprehensive income if these
financial assets are held within a business whose
objective is achieved by both selling financial
assets and collecting contractual cash flows, the
contractual terms of the financial asset give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
2.14.4 Financial assets at fair value through profit or loss
('FVTPL')
Financial assets are measured at fair value through
profit or loss unless it is measured at amortised
cost or at fair value through other comprehensive
income on initial recognition.
2.14.5 Investments in subsidiaries
Investments representing equity interest 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.
2.14.6 Foreign exchange gain and losses
The fair value of financial assets and liabilities
denominated in a foreign currency is determined in
that foreign currency and translated at the spot rate
at the end of each reporting period.
For foreign currency denominated financial assets
measured at amortised cost and FVTPL, the
exchange differences are recognised in Statement
of Profit and Loss except for those which are
designated as hedging instruments in a hedging
relationship. Further change in the carrying amount
of investments in equity instruments at fair value
through other comprehensive income relating to
changes in foreign currency rates are recognised
in other comprehensive income
Effective 1 April, 2018, the Company has adopted
Appendix B to Ind AS 21- Foreign Currency
Transactions and Advance Consideration which
clarifies the date of transaction for the purpose
of determining the exchange rate to use on
initial recognition of the related asset, expense
or income when an entity has received or paid
advance consideration in a foreign currency. The
effect on account of adoption of this amendment
was insignificant.
2.14.7 Impairment of financial assets
The Company assesses at each Balance Sheet
date whether a financial asset or a group of
financial assets is impaired. Ind AS 109 requires
expected credit losses to be measured through a
loss allowance. The Company recognises lifetime
expected losses for trade receivables that do
not constitute a financing transaction. For all
other financial assets, expected credit losses
are measured at an amount equal to 12 month
expected credit losses or at an amount equal to
lifetime expected losses, if the credit risk on the
financial asset has increased significantly since
initial recognition.
2.14.8 Derecognition of financial assets
The Company derecognises a financial asset when
the contractual rights to the cash flows from the
asset expire, or when it transfers the financial
asset and substantially all the risks and rewards of
ownership of the asset to another party.
On derecognition of a financial asset in its entirety,
the difference between the asset's carrying amount
and the sum of the consideration received and
receivable is recognised in the Statement of Profit
and Loss.
2.14.9 Income recognition
Interest Income: Interest income from a financial
asset is recognised using the effective interest
rate method. Interest income is accrued on a time
basis, by reference to the principal outstanding
and at the effective interest rate applicable, which
is the rate that exactly discounts estimated future
cash receipts through the expected life of the
financial asset to that asset's net carrying amount
on initial recognition.
Income from units in Mutual Funds/ Dividend from
subsidiary: Dividend from units in mutual funds/
dividend from subsidiary companies is recognised
when the Company's right to receive payment
is established by the reporting date. Income on
investment made in the units of fixed maturity plans
of mutual funds is recognised based on the yield
earned and to the extent of reasonable certainty.
2.15 Financial liabilities and equity instruments
2.15.1 Classification of debt or equity
Debt and equity instruments issued by a Company
are classified as either financial liabilities or as
equity in accordance with the substance of the
contractual arrangements and the definitions of a
financial liability and an equity instrument.
2.15.2 Equity instruments
An equity instrument is any contract that evidences
a residual interest in the assets of the entity after
deducting all of its liabilities. Equity instruments
issued by the Company are recognised at the
proceeds received, net of direct issue costs.
2.15.3 Financial liabilities
Borrowings, trade payables and other financial
liabilities are initially recognised at the value of
the respective contractual obligations. They are
subsequently measured at amortised cost. Any
discount or premium on redemption / settlement
is recognised in the Statement of Profit and Loss
as finance cost over the life of the liability using
the effective interest method and adjusted to the
liability figure disclosed in the Balance Sheet.
Financial liabilities are derecognised when the
liability is extinguished, that is, when the contractual
obligation is discharged, cancelled and on expiry.
All financial liabilities are subsequently measured
at amortised cost using the effective interest rate
method or at fair value through profit or loss.
2.15.4 Derecognition of financial liabilities
The Company derecognises financial liabilities
when, and only when, the Company's obligations
are discharged, cancelled or have expired. The
difference between the carrying amount of the
financial liability derecognised and the consideration
paid and payable is recognised in the Statement of
Profit and Loss.
2.16 Finance costs
Finance costs comprise interest cost on borrowings,
lease liabilities and net defined benefit liability,gains or
losses arising on re-measurement of financial assets
measured at FVTPL, gains/ (losses), net, on translation or
settlement of foreign currency borrowings and changes
in fair value and gains/ (losses) on settlement of related
derivative instruments. Borrowing costs that are not
directly attributable to a qualifying asset are recognised
in the statement of profit and loss using the effective
interest method.
2.17 Goodwill
Goodwill arising on an acquisition of a business is carried
at cost as established at the date of acquisition of the
business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is
allocated to each of the Company's cash-generating units
(or groups of cash-generating units) that is expected to
benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been
allocated is tested for impairment annually, or more
frequently when there is an indication that the unit may
be impaired. If the recoverable amount of the cash¬
generating unit is less than it's carrying amount, the
impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to
the other assets of the unit pro rata based on the carrying
amount of each asset in the unit. Any impairment loss
for goodwill is recognised directly in profit or loss. An
impairment loss recognised for goodwill is not reversed
in subsequent periods.
On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
2.18 Share-based payment arrangements
Equity-settled share-based payments to employees and
others providing similar services are measured at the fair
value of the equity instruments at the grant date. Details
regarding the determination of the fair value of equity-
settled share-based transactions are set out in note 45.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on
a straight-line basis over the vesting period, based on
the Company's estimate of equity instruments that will
eventually vest, with a corresponding increase in equity.
At the end of each reporting period, the Company
revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the
original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to the equity-
settled employee benefits reserve.
2.19 Earnings per share
Basic earnings per share is computed by dividing the
profit after tax by the weighted average number of equity
shares outstanding during the year. Diluted earnings
per share is computed by dividing the profit after tax
as adjusted for dividend, interest and other charges to
expense or income (net of any attributable taxes) relating
to the dilutive potential equity shares by the weighted
average number of equity shares considered for deriving
basic earnings per share and also the weighted average
number of equity shares that could have been issued
upon conversion of all dilutive potential equity shares.
2.20 Operating cycle
The Company has determined its operating cycle as 12
months for the purpose of classification of its assets and
liabilities as current and non-current.
2.21 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 operating 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 activities.
2.22 Dividends
Final dividends on shares are recorded on the date of
approval by the shareholders of the Company.
2.23 Use of estimates and judgements
The preparation of standalone financial statements in
conformity with Ind AS requires management to make
judgements, estimates and assumptions that affect
the application of accounting policies and the reported
amount of assets, liabilities, income, expenses and
disclosures of contingent assets and liabilities at the
date of these standalone financial statements and the
reported amount of revenues and expenses for the years
presented. Actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed
at each balance sheet date. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised and future periods affected.
In particular, information about significant areas of
estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect
on the amounts recognised in the standalone financial
statements are included in the following notes:
Accounting of reagent rental equipments
The Company has entered into agreements with certain
suppliers for purchase of reagent. As part of the
agreement, the Company has the right to use equipment
supplied by the suppliers free of charge subject to
purchase of minimum committed quantities of reagents.
The cost of reagents which includes the cost of rental of
the equipment is recorded as cost of material consumed.
Carrying amount of investments in subsidiaries
Determining whether the carrying amount of investments
in subsidiaries is recoverable involves significant
estimates as these investments are in unlisted
companies with fair values not readily available. The
Company reviews the investments for impairment to
assess whether the carrying amount is recoverable
based on a number of factors including profitability,
net asset value, liquidity and working capital (Refer to
note 6).
Useful lives of property, plant and equipment
The Company reviews the estimated useful lives of
property, plant and equipment at the end of each
reporting period. There is no such change in the useful
life of the assets (Refer to note 3).
Impairment of goodwill
Determining impairment of goodwill requires an
estimation to assess the recoverable value of cash
generating unit to its carrying value in accordance with
Ind AS 36, Impairment of Assets. The recoverable amount
is determined based on the value in use model which
includes use of discounted cash flow model to estimate
recoverable value which requires management and Board
of Directors to make estimates and assumptions related
to future cash flow forecasts (including forecast of future
revenue and operating margins), discount rates and the
long-term growth rates applied to these future cash flow
forecasts. Changes in these estimates and assumptions
could have a significant impact on the assessment of
the recoverable value and the consequential impact on
carrying value of Goodwill.
Impairment of intangible assets
Determining whether intangible assets are impaired
requires an estimation of the value in use of the cash¬
generating units to which intangible assets has been
allocated. The value in use calculation requires the
directors to estimate the future cash flows expected
to arise from the cash-generating unit and a suitable
discount rate in order to calculate present value. Where
the actual future cash flows are less than expected, an
impairment loss may arise (Refer to note 5).
Defined benefit obligations
Key assumptions related to life expectancies, salary
increases and withdrawal rates (Refer to note 42)
2A Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new
standard or amendments to the existing standards.
There is no such notification which would have been
applicable from April 1, 2026.
Notes:
1. All of the investment properties are held under leasehold interests.
2. There is no impairment in respect of investment property.
Disclosure of information on fair value of the Company's investment properties
i) During the year ended 31 March 2024, the Company had classified Right-of-use of buildings relating to 7th and 8th Foor of
SAS Tower, Gurugram into Investment property as per Ind AS 40. The fair value of the same as at 31 March, 2026 has been
arrived at ' 444.12 million ( 31 March 2025: 434.30 million) on the basis of valuation carried by A2Z Valuers, independent
valuer not connected with the Company, using the market value by income approach. Independent valuer is a registered
valuer as defined under Rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017. In estimating the fair
value of the properties, the highest and best use of the properties is their current use.
The Company has no restrictions on the realisation and remittance of income from investment properties and no contractual
obligation to purchase, construct or develop investment properties.
ii) The property rental income earned by the Company from its investment properties, all of which is leased out under operating
leases, amounted to ' 34.21 million (31 March 2025: ' 34.72 million). Direct operating expenses arising on the investment
properties, all of which generated rental income in the year, amounted to ' Nil (31 March 2025:Nil)
Impairment of goodwill
For the purpose of impairment testing, goodwill has been allocated to the cash generating unit - 'Labs CGU'. The recoverable
amount of cash-generating units is determined based on a value in use calculation which uses cash flow projections based
on financial forecasts covering a 5 years period, and a discount rate of 13.40 % per annum (as at 31 March, 2025: 12.50% per
annum).
Cash flow projections during the forecast period are based on the same expected gross margins and inflation throughout the
forecast period. The cash flows beyond that 5 year period have been extrapolated using a steady growth rate of 5 % per annum
(as at March 31, 2025: 5% per annum;), which is the projected long-term average growth rate for Labs CGU. The directors
believe that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause
the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit. Based on impairment
testing as above, the management believes that the recoverable amounts of goodwill are higher than their respective carrying
amounts and hence no amounts are required to be recorded for impairment in the carrying amounts of goodwill.
(vi) No shares have been issued for consideration other than cash and no shares have been bought back during the period of
five years immediately preceeding the reporting date including the current year.
(vii) The shareholders of the Company on December 07, 2025 had approved, through postal ballot, the issuance of bonus shares
in the proportion of 1:1, i.e., 1 (One) bonus equity share of ' 10 each for every 1 (One) fully paid-up equity share held as on
the record date. The Board of Directors had fixed December 19, 2025 as the record date. Accordingly, the Company has
allotted 8,37,75,510 bonus equity shares on December 22, 2025 by capitalizing share premium Account. The said bonus
equity shares rank pari passu in all respects with the existing equity shares of the Company. As a result of the bonus issue,
the paid-up capital of the Company increased to ' 1673.68 millions from ' 835.92 millions.
(viii) Share options granted under the Company's employee share options plans
(a) The shareholders of the Company approved 'Dr. Lal PathLabs Private Limited Employee Stock Option Plan 2010'
("ESOP 2010") at the Annual General Meeting held on 20 August, 2010 to grant a maximum of 3,808,960 options
(after considering bonus shares issued during the earlier year and subdivision of shares of ' 100 each into 10 shares
of ' 10 each) to specified categories of employees of the Company. Each option granted and vested under the ESOP
2010 shall entitle the holder to acquire 1 equity share of ' 10 each. As per resolution passed on 21 August, 2015, the
Company approved to cease further grants under the ESOP 2010. (Refer to note 44 for details of options granted,
vested and issued under the ESOP 2010).
(b) The shareholders of the Company approved 'Dr. Lal PathLabs Employees Restricted Stock Unit Plan 2016' ('RSU 2016')
at the Annual General Meeting held on 28 July, 2016 to grant a maximum of 1,244,155 Restricted Stock Units ("RSUs")
to key employees and directors of the Company and it's subsidiaries. Each RSU granted and vested shall entitle the
holder to acquire 1 equity share of ' 10 each. (Refer to note 44 for details of RSUs granted, vested and issued under
RSU 2016).
(c) The shareholders of the Company approved 'Dr Lal PathLabs Employee Stock Option Plan 2022' ('ESOP 2022') at the
Annual General Meeting held on 30 June, 2022 to grant a maximum of 1,250,278 options to employees of the Company
and it's subsidiaries. Each option granted and vested under the ESOP 2022 shall entitle the holder to acquire 1 equity
share of ' 10 each. (Refer to note 44 for details of options granted, vested and issued under ESOP 2022).
(d) The shareholders of the Company approved 'Dr. Lal PathLabs Employees Restricted Stock Unit Plan 2025' ('ESOP
2025') through postal ballot held on 7 December, 2025 to grant a maximum of 527,403 options to employees of the
Company and it's subsidiaries. Each option granted and vested under the ESOP 2025 shall entitle the holder to acquire
1 equity share of ' 10 each. (Refer to note 44 for details of options granted, vested and issued under ESOP 2025).
The final dividend of ' 6 per equity share proposed in the previous year ended 31 March, 2025 which was approved by the
members at the Annual General Meeting held on 30 June, 2025 and paid by the Company during the year in accordance
with section 123 of the Act, as applicable.
The interim dividend of ' 16.50 per equity share declared and paid by the Company during the year and until the date of
approval of the Standalone Financial Statements is in compliance with section 123 of the Act.
The Board of Directors of the Company has proposed final dividend of ' 4 per equity share (previous year ended 31 March,
2025'6.00 per equity share) for the year ended 31 March, 2026 which is subject to the approval of the members at the
ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.
During the year ended 31 March, 2012, the Company had constituted Dr. Lal PathLabs Employee Welfare Trust ("EWT
Trust") to acquire, hold and allocate/transfer equity shares of the Company to eligible employees from time to time on the
terms and conditions specified under respective plans. The financial statements of the EWT Trust have been included in
the financial statements of the Company, in accordance with the requirements of Ind AS.
Equity shares of the Company purchased from employees and primary market from time to time in the earlier years and
issued by the company during the year which are held by EWT as at 31 March, 2026 aggregated to 5,77,246 equity shares
(31 March, 2025: 2,24,462 equity shares) of face value ' 10 each.
(a) On approval of the Scheme of Amalgamation between the Company (Transferee Company) and its erstwhile wholly
owned subsidiary, namely Delta Ria and Pathology Private Limited (Transferor Company) by the Hon'ble New Delhi
Bench and Hon'ble Ahmedabad Bench of the National Company Law Tribunal on 23 October 2018 and 11 December
2018 respectively, the difference between the carrying value of investments in the books of account of the Transferee
Company and the amount of the net assets of the Transferor Company had been adjusted in Capital reserve amounting
to ' 33.00 million as stipulated in the scheme.
(b) On approval of the Scheme of Amalgamation between the Company (Transferee Company) and its erstwhile wholly
owned subsidiary, namely APL Institute of Clinical Laboratory & Research Private Limited (Transferor Company) by
the Hon'ble New Delhi Bench and Hon'ble Ahmedabad Bench of the National Company Law Tribunal on 13 May 2022
and 17 March 2023 respectively, the difference between the carrying value of investments in the books of account
of the Transferee Company and the share capital of the Transferor Company had been adjusted in Capital reserve
amounting to ' 72.25 million as stipulated in the scheme.
(c) The Board of Directors of the Company, at their meeting held on January 30, 2025, accorded in-principle approval for
the voluntary liquidation of Suburban Diagnostics (India) Private Limited "SDIPL1 , to be carried out under the provisions
of Insolvency and Bankruptcy Code, 2016. The Board of Directors of SDIPL in their meeting dated February 6, 2025 and
the members of SDIPL in their Extra Ordinary General meeting held on February 6, 2025 have accorded their approval
for consolidation of the business of SDIPL through voluntary liquidation process. Pursuant to the ongoing liquidation
process, the liquidator of SDIPL has transferred the entire business undertaking to the Company on a going concern
basis on and with effect from March 18, 2025 which resulted in capital reserve amounting to ' 681.22 million. (Refer
note 41)"
Revenue disaggregation as per geography has been included in segment information (Refer to note 36).
(i) The Company generates its entire revenue from contracts with customers for the services at a point in time. The Company
is engaged mainly in the business of running laboratories for carrying out pathological investigations of various branches
of bio-chemistry, hematology, histopathology, microbiology, electrophoresis, immuno-chemistry, immunology, virology,
cytology, other pathological and radiological investigations.
(ii) Transaction price allocated to the remaining performance obligations
The Company has applied practical expedient in Ind AS 115 "Revenue from contracts with customers" and and has
accordingly not disclosed information about remaining performance obligations which are part of the contracts that have
original expected duration of one year or less and where the Company has a right to consideration from a customer in an
amount that corresponds directly with the value to the customer of the entity's performance completed to date.
The Company is subject to Income Tax Act, 1961. The Company is assessed for tax on taxable profits determined for each fiscal
year beginning on 1 April and ending on 31 March.
Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India (Ind
AS) adjusted in accordance with the provisions of the Income tax Act, 1961. Such adjustments generally relate to depreciation
of property, plant and equipment, disallowances of certain provisions and accruals, similar exemptions, and retirement benefit
accurals. Statutory income tax is charged at 22% (2024-25: 22%) plus a surcharge and education cess. The combined Indian
statutory tax rate for the fiscal year 2024-25 and for the fiscal year 2025-26 was 25.168%.
b. Other commitment
1. The Company has no other commitments other than those in the nature of its routine business operation for purchase/
sales as per the normal operating cycle of Company.
2. The Company does not have any long term commitments or material non-cancellable contractual commitments/
contracts, including derivative contracts for which there were any material foreseeable losses other than the ones
recognised or disclosed elsewhere.
The Company is engaged solely in the business of running laboratories for carrying out pathological investigations of various
branches of bio-chemistry, hematology, histopathology, microbiology, electrophoresis, immuno-chemistry, immunology, virology,
cytology, other pathological and radiological investigations.
The Board of Directors of the Company, which has been identified as being the chief operating decision maker (CODM), evaluates
the Company's performance, allocates resources based on the analysis of the various performance indicators of the Company
as a single unit. Therefore there is no reportable segment for the Company, in accordance with the requirements of Indian
Accounting Standard 108- 'Operating Segments', notified under the Companies (Indian Accounting Standard) Rules, 2015.
The Company has spent an excess amount of Nil (31 March, 2025 : ' 0.05 million) with respect to other than ongoing projects
as approved by the Board of Directors in excess of the minimum requirement as per section 135 (5) of the Companies Act,
2013. The Company does not intends to carry forward the excess amount spent during the year of Nil(does not intend to carry
forward the excess amount of ' 0.05 million spent during the year ended 31 March 2025).
Note 38:
The Board of Directors of the subsidiaries, Paliwal Medicare Private Limited (PMPL) and Paliwal Diagnostics Private
Limited (PDPL) in their meetings held on 25 October, 2021 and 25 October, 2021 respectively have approved the ""Scheme of
Amalgamation"" of PMPL with PDPL w.e.f. 1 April, 2021, the appointed date. As per the said scheme, the undertaking of PMPL
shall stand transferred to and vested in PDPL on a going concern basis without any further act, deed of matter. The Hon'ble
Allahabad Bench of the National Company Law Tribunal ('Hon'ble Tribunal' or 'NCLT') sanctioned the Scheme of Amalgamation
('Scheme') between the subsidiaries Paliwal Medicare Private Limited (PMPL) (Transferor Company) and Paliwal Diagnostics
Private Limited (PDPL) (Transferee Company) on 3 September, 2024 respectively.
Note 39:
During the previous year, Dr. Lal PathLabs Kenya Private Limited (Wholly Owned Subsidiary), a Company incorporated
in the Republic of Kenya, has been dissolved and its name has been struck off, with effect from the date of publication of
gazettenotification dated 13 September, 2024. The Company had made a total investment of ' 48.31 million which has been
provided for. Therefore, the amount received during the year of ' 5.30 million has been treated as income.
Note 40: Research and Development
Details of expenditure incurred on approved in-house Research and Development facilities:(As certified by the managment)
Note 41: Business combination (Liquidation of Suburban Diagnostics (India) Private Limited)
The Company owned 100% shares in Suburban Diagnostics India Private Limited ("SDIPL') , at a cost of ' 9,604.52 million. The
investment in SDIPL was fair valued under IND AS 103 in the books of the Company upon a business combination transaction
on November 12, 2021 at ' 9,667.10 million.
The Board of Directors of the Company, at their meeting held on January 30, 2025, accorded in-principle approval for the voluntary
liquidation of SDIPL , to be carried out under the provisions of Insolvency and Bankruptcy Code, 2016. The Board of Directors
of SDIPL in their meeting dated February 6, 2025 and the members of SDIPL in their Extra Ordinary General meeting held on
February 6, 2025 accorded their approval for consolidation of the business of SDIPL through voluntary liquidation process.
The said distribution of business undertaking has been accounted for using the pooling of interests method in accordance
with Appendix C of Ind AS 103 'Business combinations of entities under common control'.
Note 42: Employee benefit plans42.1 Defined contribution plans
The Company operates defined contribution retirement benefit plans for all its qualifying employees. Where employees leave
the plans prior to full vesting of the contributions, the contributions payable by the Company are reduced by the amount of
forfeited contributions.
Employee benefit under defined contribution plan comprising of provident fund is recognised based on the amount of obligation
of the Company to contribute to the plan. The contribution is paid to Provident Fund authorities which is expensed during the year.
The total expense recognised in profit or loss of ' 127.43 million (for the year ended 31 March, 2025: ' 120.34 million) represents
contributions payable to provident fund by the Company at rates specified in the rules of the plans. As at 31 March, 2026,
contributions of ' 21.69 million (as at 31 March, 2025: ' 15.19 million) due in respect of the reporting period had not been paid
over to the plans. The amounts were paid subsequent to the end of the respective reporting periods.
42.2 Defined benefit plans
Gratuity: The Company operates a funded gratuity benefit plan. Gratuity liability arises on retirement, withdrawal, resignation,
and death of an employee. The aforesaid liability is calculated on the basis of 15 days salary for each completed year of service
with no limit. Vesting occurs upon completion of 4.5 years of service.
The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit
Credit method with actuarial valuations being carried out at each balance sheet date.
Notes:
1. The discount rate is based on the prevailing market yield of India Government securities as at the balance sheet date for
the estimated term of obligations.
2. The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion
and other relevant factors such as supply and demand in the employment market.
3. The expected return is based on the expectation of the average long term rate of return expected on investments of the
fund during the estimated term of the obligations.
On November 21, 2025, the Government of India notified provisions of the Code on Wages, 2019, the Industrial Relations Code,
2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020, ('Labour Codes')
which consolidate twenty-nine existing labour laws into a unified framework governing employee benefit during employment
and post-employment. The Labour Codes, amongst other things, introduces changes, including a uniform definition of wages
and enhanced benefits relating to leave. The Company has assessed and estimated the financial implications of these changes
which has resulted in increase in gratuity liability arising out of past service cost and increase in leave liability by ' 258.13 million
& ' 42.81 Million respectively. Considering the impact arising out of an enactment of the new legislation is an event of non¬
recurring nature, the Company has presented this incremental amount as "Impact of Labour Codes" under "Exceptional Item" in
the Standalone Statement of Profit and Loss. The Company continues to monitor the developments pertaining to Labour Codes
and will evaluate impact if any on the measurement of liability pertaining to employee benefits.
Note 43:
Effective 1 April, 2019, the Company adopted Ind AS 116 "Leases" to its leases using the modified retrospective approach
with the option to measure the right-of-use asset at an amount equal to the lease liability (i.e. as per para C8(c) (ii) of Ind AS
116), adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet
immediately before the date of initial application.
The Company has applied this standard to land leases and building leases etc. to evaluate whether these contracts contain lease
or not. Based on evaluation of the terms and conditions of the arrangements, the Company has evaluated such arrangements
to be leases. Under this standard, all lease contracts, with limited exceptions, are recognised in the financial statements by way
of right-of-use assets and corresponding lease liabilities.
When measuring lease liabilities, the weighted average discount rate used to calculate the lease liability in the opening balance
under Ind AS 116 is 9.5%-11.25%.
The Company recognises a lease liability measured at the present value of the remaining lease payments. The right-of-use assets
are recognised at cost, which comprises the amount of the measurement of the lease liability adjusted for any lease payments
made at or before the inception date of the lease
The Company has cash outflows for lease of underlying assets amounting to ' 864.33 (31 March, 2025: ' 778.77 million) out
of which rent charges is amounting to ' 289.62 million (31 March, 2025: 266.9 million) which includes rentals for short term
lease and low value lease.
Note 43A The Company has used accounting softwares for maintaining its books of account for the period 01 April, 2025 to 31
March, 2026 which have a feature of recording audit trail (edit log) facility and the same operated for all relevant transactions
recorded in the software and audit trail has been preserved by the Company as per the statutory requirements for record retention.
Note 43B During the year, the Company has reclassified employee-related payables, of INR 303.51 million which were previously
presented under "Trade Payables" to "Other Financial Liabilities" in the Balance Sheet. These reclassifications are in line with
the recent opinion of Expert Advisory Committee of ICAI.
Note 43C During the year, the company has regrouped manpower cost aggregating to ' 263.86 million for the year ended 31
March, 2025, representing collection and transportation charges carried out through third party from employee benefit expenses
to other expenses in line with the nature of contract.
Note 44 Share based payments plans
Note 44.1 Employee Share Option Plan-2010
44.1.1 Details of employee share based plan of the Company
The shareholders of the Company approved 'Dr. Lal PathLabs Private Limited Employee Stock Option Plan 2010' ("ESOP
2010") at the Annual General Meeting held on 20 August, 2010 to grant a maximum of 3,808,960 options to specified
categories of employees of the Company. Each option granted and vested under the ESOP 2010 shall entitle the holder to
acquire 1 equity share of ' 10 each. The Company had granted 3,730,340 options till the year ended 31 March, 2015, all of
which have all been vested as at 31 March 2019. As per resolution passed on 21 August, 2015, the Company approved to
cease any further grants under the ESOP 2010.
The shareholders of the Company on December 07, 2025 had approved, through postal ballot, the issuance of bonus shares
in the proportion of 1:1, i.e., 1 (One) bonus equity share of ' 10 each for every 1 (One) fully paid-up equity share held as on
the record date. The Board of Directors had fixed December 19, 2025 as the record date. Accordingly, ESOP 2010 scheme
shares has been adjusted. The said bonus equity shares rank pari passu in all respects with the existing equity shares of
the Company.
Note 1: All options vest after 48-60 months from date of grant subject to satisfaction of vesting conditions. The exercise
period is five years from the date on which the Company's shares were listed on a recognised stock exchange in India or
a period of 10 years from date of respective vesting, whichever period ends later. Options not exercised within exercise
period lapses.
44.1.2 Fair value of share options granted in the year
There were no options granted during the years ended 31 March, 2026 and 31 March, 2025.
44.1.4 Share options exercised during the year
4,000 shares were exercised during the year
44.1.5 Share options outstanding at the end of the year
The share options outstanding at the end of the year has a weighted average exercise price of ' 155.65 (as at 31 March,
2025: ' 155.65) and a weighted average remaining contractual life of years 1.13 years (as at 31 March, 2025: 2.13 years)
Note 44.2 Restricted Share Option Plan
44.2.1 Details of employee share based plan of the Company
The shareholders of the Company approved 'Dr. Lal PathLabs Employees Restricted Stock Unit Plan 2016' ('RSU 2016') at
the Annual General Meeting held on 28 July, 2016 to grant a maximum of 12,44,155 (Pre Bonus issue) Restricted Stock Units
(""RSUs"") to key employees and directors of the Company and it's subsidiaries. Each RSU granted and vested shall entitle
the holder to acquire 1 equity share of ' 10 each. Under RSU 2016, for the performance year 2016-17, options of ' 10 each
granted to eligible employees is 225,000 out of which 6,225 options were forfeited on non satisfaction of vesting conditions.
For the performance year 2017-18, options of ' 10 each granted to eligible employees is 225,716 and 9,602 options were
forfeited on non satisfaction of vesting conditions. Further, for the performance year 2018-19, options of ' 10 each granted
to eligible employees is 219,132 and 28,498 options were forfeited on non satisfaction of vesting conditions. Further, for
the performance year 2019-20, options of ' 10 each granted to eligible employees is 213,841 and 27,631 options were
forfeited on non satisfaction of vesting conditions.Further, for the performance year 2020-21, options of ' 10 each granted
to eligible employees is 1,12,200 and 12,468 options were forfeited on non satisfaction of vesting conditions. Further, for
the performance year 2021-22, options of ' 10 each granted to eligible employees is 131,594 and 11,793 options were
forfeited on non satisfaction of vesting conditions. Further, for the performance year 2022-23, options of ' 10 each granted
to eligible employees is 21,200 and 27,533 options were forfeited on non satisfaction of vesting conditions. Further, for the
performance year 2023-24, options of ' 10 each granted to eligible employees is 20,200 and 10,962 options were forfeited
on non satisfaction of vesting conditions.Further, for the performance year 2024-25, options of ' 10 each granted to eligible
employees is 18,000 and 3422 options were forfeited on non satisfaction of vesting conditions.
Further, for the performance year 2025-26, options of ' 10 each granted to eligible employees is Nil and 2036 options were
forfeited on non satisfaction of vesting conditions. The Company has accounted for the expense of options proportionately
for the period under employee cost on the basis of weighted average fair value.
The shareholders of the Company on December 07, 2025 had approved, through postal ballot, the issuance of bonus shares
in the proportion of 1:1, i.e., 1 (One) bonus equity share of ' 10 each for every 1 (One) fully paid-up equity share held as on
the record date. The Board of Directors had fixed December 19, 2025 as the record date. Accordingly, RSU 2016 scheme
shares has been adjusted. The said bonus equity shares rank pari passu in all respects with the existing equity shares of
the Company.
Note 44.3 'Dr Lal PathLabs Employee Stock Option Plan 2022
44.3.1 Details of employee share based plan of the Company
The shareholders of the Company approved 'Dr. Lal PathLabs Private Limited Employee Stock Option Plan 2022' ("ESOP
2022") at the Annual General Meeting held on 30 June, 2022 to grant a maximum of 1,250,278 (pre bonus issue) options
to specified categories of employees of the Company. Each option granted and vested under the ESOP 2022 shall entitle
the holder to acquire 1 equity share of ' 10 each. The Company had granted 211,400 options till the year ended 31 March,
2023.The Company had granted 237,500 options till the year ended 31 March, 2024. The Company had granted 189,500
options till the year ended 31 March, 2025.
The Company had granted 168,500 options till the year ended 31 March, 2026.
Further during the current year, the shareholders of the Company vide their special resolution dated December 07, 2025 by
partial modification of the original special resolution dated June 30, 2022 have authorized to grant not exceeding 7,22,875
(pre issue of bonus) Options to the Employees under the Plan.
Note 1: All options vest before one year and not later than four years from date of grant of such options subject to
satisfaction of vesting conditions. The exercise period is five years from the date of respective vesting or such other shorter
period as may be decided by the Nomination and Remuneration Committee from time to time. Options not exercised within
the exercise period lapse.
44.3.2 Fair value of share options granted in the year
The fair value of the options, calculated by an external valuer, was estimated on the date of grant using the Black-Scholes model
with the following significant assumptions:
44.3.5 Share options outstanding at the end of the year
The share options outstanding at the end of the year has a weighted average exercise price of of ' 1232.60(as at 31 March,
2025: 1232.60) and a weighted average remaining contractual life of years 5.97 years (as at 31 March, 2025: 6.12 years)
Note:
During the previous year, the Company has modified the terms of certain ESOPs by modifying vesting conditions (accelerated
vesting) under Employee Stock option plan, 2022. Accordingly, the Company has computed the incremental fair value of
options as the difference between the fair value of the modified ESOP and that of the original ESOP, using Black-Scholes
method as at the date of the modification which has been amortised in the Statement of Profit and Loss over the revised
vesting period and accordingly an additional charge of ' 6.54 Million has been recorded during the previous year.
Note 44.4 'Dr Lal PathLabs Employee Stock Option Plan 2025
The shareholders of the Company approved 'Dr. Lal PathLabs Employees Restricted Stock Unit Plan 2025' ('ESOP 2025')
through postal ballot held on 7 December, 2025 to grant a maximum of 527,403 options to employees of the Company and it's
subsidiaries. Each option granted and vested under the ESOP 2025 shall entitle the holder to acquire 1 equity share of ' 10 each.
No options under the said scheme has been granted during the year
Note 45 Financial instruments(a) Capital management
The Company's objectives when managing capital is to safeguard the ability to continue as a going concern, so that it can
continue to provide returns for shareholders and benefits for other stakeholders.
In order to maintain or adjust the capital structure, the Company adjusts the amount of dividends paid to shareholders,
return capital to shareholders or issue new shares.
The Company has investments in fixed deposits with banks and in mutual fund schemes wherein underlying portfolio is
spread across securities issued by different issuers having different credit ratings. The credit risk of investments in debt
mutual fund schemes is managed through investment policies and guidelines requiring adherence to stringent credit control
norms based on external credit ratings.
(b) Financial risk management objective and policies
This section gives an overview of the significance of financial instruments for the Company and provides additional
information on the balance sheet. Details of significant accounting policies, including the criteria for recognition, the basis
of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in Note 2.
Financial assets and liabilities:
The accounting classification of each category of financial instruments, and their carrying amounts, are set out below:
(c) Fair value measurement
The fair value hierarchy is based on inputs used in valuation techniques that are either observable or unobservable
and consists of three levels. The Company uses the following hierarchy for determining and disclosing the fair value of
financial instruments:
Level 1: Inputs are quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in
part using a valuation model based on assumptions that are neither supported by prices from observable current market
transactions in the same instrument nor are they based on available market data.
(d) Risk management framework
The Company's business is subject to several risks and uncertainties including financial risks. The Company's documented
risk management polices act as an effective tool in mitigating the various financial risks to which the business is exposed
to in the course of their daily operations. The risk management policies cover areas such as liquidity risk, interest rate
risk, counterparty and concentration of credit risk and capital management. Risks are identified through a formal risk
management programme with active involvement of senior management personnel and business managers. The
Company's risk management process is in line with the corporate policy. Each significant risk has a designated 'owner'
within the Company at an appropriate senior level. The potential financial impact of the risk and its likelihood of a negative
outcome are regularly updated.
The overall internal control environment and risk management programme including financial risk management is reviewed
by the Audit Committee on behalf of the board.
The risk management framework aims to:
- improve financial risk awareness and risk transparency
- identify, control and monitor key risks
- identify risk accumulations
- provide management with reliable information on the Company's risk situation
- improve financial returns
Treasury management
The Company's treasury function provides services to the business, co-ordinates access to domestic and international
financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk
reports which analyses exposures by degree and magnitude of risks. These risks include market risk (including currency
risk and interest rate risk), credit risk and liquidity risk.
Treasury management focuses on capital protection, liquidity maintenance and yield maximisation.
Financial risk
The Company's Board of Directors approves financial risk policies comprising liquidity, foreign currency, interest rate and
counterparty credit risk. The Company does not engage in the speculative treasury activity but seeks to manage risk and
optimise interest through proven financial instruments.
(i) Liquidity risk
The Company requires funds for short-term operational needs and has been rated by Care Ratings Limited (CARE)
for its banking facilities.
The Company remains committed to maintaining a healthy liquidity, gearing ratio and strengthening the balance sheet.
The maturity profile of the Company's financial liabilities and realisability of financial assets based on the remaining
period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect
the contractual cash obligation of the Company.
(ii) Interest rate risk
Fixed rate financial assets are largely interest bearing fixed deposits held by the Company. The returns from these
financial assets are linked to bank rate notified by Reserve Bank of India as adjusted on periodic basis. The Company
does not charge interest on overdue trade receivables. Trade payables are non interest bearing and are normally
settled up to 30-45 days terms. Mutual fund investments have debt securities as underlying assets and are exposed
to floating interest rates. The exposure of the Company's borrowing to interest rate changes at the end of the reporting
period depends on the expected movement of market interest rate.
(iii) Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss
to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and after
obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Company is exposed to credit risk for receivables, cash and cash equivalents, bank balances other than cash and
cash equivalents, investments and loans.
Credit risk management considers available reasonable and supportable forward-looking information including
indicators like external credit rating (as far as available), macro-economic information (such as regulatory changes,
government directives, market interest rate).
Only high rated banks are considered for placement of deposits. Bank balances are held with reputed and creditworthy
banking institutions."
For short-term investments, counterparty limits are in place to limit the amount of credit exposure to any one
counterparty. Defined limits are in place for exposure to individual counterparties in case of mutual funds schemes.
None of the Company's cash equivalents are past due or impaired. Regarding trade and other receivables, the Company
has accounted for impairment based on expected credit losses method as at 31 March, 2026 and 31 March, 2025
based on expected probability of default.
(iv) Details of Derivative Instruments and unhedged foreign currency exposures:
A. Details of Derivative Instruments
The Company has not entered into foreign exchange forward contracts where the counter parties is Bank.
(v) Price risks
The sensitivity of profit or loss in respect of investments in mutual funds at the end of the reporting period for /-5%
change in net asset value is presented below:
Profit before tax for the year ended 31 March, 2026 would increase/decrease by ' 199.65 million (for the year ended
31 March, 2025 would increase/ decrease by ' 150.85) as a result of the changes in net asset value of investment in
mutual funds.
Note 50
The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses.
Note 51
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by
the Company
Note 52
The Standalone Financial Statements were approved by the Board of Directors and authorised for issue on 30 April 2026.
Note 53
The figures have been rounded off to the nearest million of rupees up to two decimal places. The figure 0.00 wherever stated
represents value less than ' 10,000/-.
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