OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion is intended to convey managements perspective on our financial condition and results of operations for the Fiscals 2022, 2023 and 2024. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our Restated Financial Information as of and for Fiscals 2022, 2023 and 2024, including the related annexures.
Unless otherwise indicated or context otherwise requires, the financial information for Fiscals 2022, 2023 and 2024, included herein is derived from the Restated Financial Information, included in this Draft Red Herring Prospectus. For further information, see "Restated Financial Information " and "Summary of Financial Information " on pages 217 and 68.
Our Fiscal year ends on March 31 of each year. Accordingly, all references to a particular Fiscal are to the 12-month period ended March 31 of that year. Financial information for the eight months ended November 30, 2023 andfour months ended March 31, 2024 is indicative of the financial results for the full year as the Erstwhile LLP was converted to our company under the provisions of the Companies Act, 2013 on December 01, 2023 and are comparable with financial information for the years ended March 31, 2023, and March 31, 2022. Further, financial information for the eight months ended November 30, 2023 andfour months ended March 31, 2024, has been annualised unless otherwise specified.
This discussion contains forward-looking statements that involve risks and uncertainties and reflects our current view with respect to future events and financial performance. Actual results may differ from those anticipated in these forward- looking statements as a result offactors such as those set forth under "Forward Looking Statements" and "Risk Factors" on pages 26 and 39, respectively.
Business Overview
We are an innovative diagnostic chain in Mumbai Metropolitan Region ("MMR") offering comprehensive radiology and pathology solutions. We offer a one-stop solution for pathology and radiology testing services such as imaging (including radiology), pathology/clinical laboratory and tele-radiology to customers under the brand name "PC Diagnostics" through our extensive operational network, which consists of 8 diagnostic centres and 1 centralised laboratory across Mumbai Metropolitan Region in the state of Maharashtra.
Our history can be traced back to 2021, when our Promoters established the first "PC Diagnostics" Centre in Thane, Maharashtra with a vision of providing comprehensive, innovative and high-quality diagnostic services under one roof, in a reliable, affordable and customer-centric manner. The business was carried out under limited liability partnership firm, which was later converted into our company in 2023. The diagnostic sector in India has experienced significant growth, with market revenue increasing from Rs. 710 billion in 2020 to Rs. 1,055 billion in 2024 at a CaGR of 10.4%. This growth is expected to continue, reaching Rs. 2,204 billion by 2030 at a CAGR of 13.1% between 2024 and 2030. In Maharashtra, the diagnostic sector grew from Rs. 24.7 billion in 2020 to Rs. 35.45 billion in 2024 at a 9.5% CAGR and is projected to reach Rs. 72.7 billion by 2030 at a 12.1% CAGR from 2024 to 2030. The Radiology industry in India grew from Rs. 263.2 billion in 2020 to Rs. 407 billion in 2024 at 11.5% CAGR and is projected to grow to Rs. 868 billion by 2030 at a CAGR of 13.5% from 2024 to 2030. In Maharashtra, Radiology grew at a CAGR of 10.7% from 2020-2024 and is expected to grow from Rs. 15.04 billion in 2024 to Rs. 31.4 billion by 2030 at a CAGR of 13.1%. Radiology accounted for 38% of Indias and 42% of Maharashtras Diagnostics Lab Market in 2023. Several factors drive this growth, including Indias population, which is expected to increase from 1.21 billion to 1.52 billion from March 1, 2011-2036, with the urban population increasing from ~470 million in 2021 to 625 million by 2030. The population aged 65 and above rose from 89.5 million in 2019 to 101 million in 2023 and the population aged 60 and above is projected to grow over 347 million by 2050. Non-communicable diseases contribute to 60% of total mortality in India, with estimated incidences of cancer cases increasing from 13.92 lakhs in 2020 to 14.61 lakhs in 2022. Furthermore, medical tourism has surged, with visitors rising from 3.22 lakhs in 2021 to 6.34 lakhs in 2023. These factors collectively contribute to the growth of the diagnostic industry in India. (Source: D&B report). We believe that the combination of our brand position driven by our operating history in our core geographies, extensive network and reputation for providing quality diagnostic services positions us well to continue to grow our business in MMR and Maharashtra markets and take advantage of the growth of the Indian diagnostic industry specifically in radiology.
We offer a comprehensive range of approximately 60 routine and 487 specialized pathology tests and approximately 96 basic and 130 advanced radiology tests that cover a range of specialties and disciplines, as of June 30, 2024. Our test menu includes pathology tests ranging from basic biochemistry and clinical pathology which are performed at our own centres to cytogenetics and high-end molecular diagnostic tests which are outsourced to larger reference laboratories, and radiology tests ranging from basic echocardiograms, X-rays and ultrasounds to advanced radiology tests including computerised tomography ("CT") scans, magnetic resonance imaging ("MRI") scans and advanced positron emission tomography CT ("PET CT"). We focus on a customer centric approach to enhance the overall quality of our services for optimal customer satisfaction. For convenience of our customers, we provide value-added services such as home collection of specimens and house calls and various delivery or access modes for tests reports. Several factors, including the strength of our brand, integrated services model, quality of our diagnostic services, centre infrastructure and customer experience, convenience of our operational network and home collection in our core geographies are important differentiating factors in customers choosing us as their preferred diagnostic service provider, which helps us in retaining our customers, and sets us apart from our competitors.
We have implemented a ‘hub and spoke model across MMR which are either directly or through strategic joint ventures with our subsidiaries, whereby specimens are collected across multiple locations within a catchment area or region for delivery to our reference centres for diagnostic testing. This model provides greater economies of scale and enhances consistency in our testing procedures and results. All of our centres offer integrated diagnostics services (pathology and radiology tests under one roof) with smaller spokes offering pathology tests and basic radiology tests and hub centres offering pathology tests, basic radiology tests and advanced radiology tests such as MRI, CT and PET CT. As of June 30, 2024, our operational network consists of diagnostic centre network of (i) a flagship centre located in Thane, which is our ‘main hub and equipped to conduct all of pathology specimens collection, basic and advanced radiology tests; (ii) 3 other hub centres through our subsidiaries, which are equipped to conduct all of pathology specimens collection, basic radiology tests and advanced radiology tests; and (iii) 4 spoke centres including 1 spoke centre through our subsidiary, which are equipped to conduct a majority of basic radiology tests and certain pathology specimen collection; and 1 centralised laboratory co-located with one of the spoke centre. Our diagnostic services are provided by a medical professional team consisting of 5 laboratory doctors, 19 radiologists and 128 well-trained technical staff in our operational network, as of June 30, 2024.
Our individual consumer business contributed to 90.66% of our revenue from operations for the fiscal year 2024 (combined as per the restated standalone financial information for eight months ended November 30, 2023 and four months ended on March 31, 2024), and 92.67% of our revenue from operations for the fiscal year 2024 (combined as per the restated consolidatedfinancial information for eight months ended November 30, 2023 andfour months ended on March 31, 2024), owing to the trust built while rendering quality diagnostic services and experience gained.
Our business and brand "PC Diagnostics" were conceptualised and founded by Dr. Ketan Jayantilal Jain and Dr. Sanket Vinod Jain, our Promoters and Non-Executive directors, who are a first-generation entrepreneur in healthcare and have more than ten years and seven years of experience, respectively, in integrated diagnostics business and both are a radiologist. Our Promoter and Chief Financial Officer, Rohit Prakash Srivastava, have been involved in our business and operations since 2021 as management advisor. Our shareholders include Dr. Ketan Jayantilal Jain, Dr. Sanket Vinod Jain, Rohit Prakash Srivastava and Investor Promoters, Badal Kailash Naredi and Jayesh Prakash Jain; and we believe we have benefited significantly from their vision and leadership, and they along with our senior management, have been instrumental in formulating and executing the core strategy of our Company.
During the year ended March 31, 2024, we conducted approximately 17,062 pathology tests and 26,084 radiology tests for approximately 24,408 patients. Our tests per patient visit was 1.77, our average revenue per patient was Rs3,967.37/- and our average revenue per test was Rs2,244.37/- (combined as per the restated standalone financial information for eight months ended November 30, 2023 and four months ended on March 31, 2024).
During the year ended March 31, 2024, we conducted approximately 24,060 pathology tests and 49,312 radiology tests for approximately 42,129 patients. Our tests per patient visit was 1.74, our average revenue per patient was Rs3,757.63/- and our average revenue per test was Rs2,157.57/- (combined as per the restated consolidated financial information for eight months ended November 30, 2023 and four months ended on March 31, 2024).
The following table sets forth certain key financial and operational indicators for our Company as at/for the periods indicated:
Based on Restated Consolidated Financial Information:
a) Key financial indicators
| Indicator | December 01, 2023 to March 31, 2024 | April 01, 2023 to November 30, 2023 |
| Revenue from Operations (Rs in Lakhs) (1) | 836.68 | 746.37 |
| EBITDA (Rs in Lakhs) (2) | 387.12 | 324.29 |
| EBITDA Margin (%) (3) | 46.27% | 43.45% |
| PAT (Rs in Lakhs) (4) | 204.45 | 175.90 |
| PAT Margin (%) (5) | 24.44% | 23.57% |
| Return on equity (%) (6) | 19.43% | 21.52% |
| Return on capital employed (%) (7) | 21.98% | 27.80% |
| Investment in Property, Plant and Equipment (Rs in Lakhs) (8) | 45.37 | - |
| Cash Conversion Ratio (times) (9) | 1.44 | 0.25 |
Notes:
(1) Revenue from operations is calculated as revenue from sale of services.
(2) EBITDA is calculated as restated profit before tax, extraordinary and exceptional items plus finance costs, depreciation and amortisation expense minus other income.
(3) EBITDA margin is calculated as a percentage of EBITDA divided by revenue from operations.
(4) PAT represents total profit after tax for the year/period.
(5) PAT margin is calculated as a percentage of PAT divided by revenue from operations.
(6) Return on Equity (ROE%) is calculated as a percentage of PAT divided by Average Total Equity at the end of the year /period, whereas Average total equity is calculated as average of opening equity share capital and reserves and surplus and closing equity share capital and reserves and surplus.
(7) Return on Capital Employed (ROCE%) is calculated as a percentage of EBIT is divided by Average Capital Employed at the end of the year /period, whereas Average capital employed is calculated as average of opening capital employed and closing capital employed. EBIT is calculated as restated profit before tax plus finance costs minus other income. Capital Employed is calculated as Total Equity plus DTA minus DTL, Long Term Borrowings and Short-Term Borrowings.
(8) Investment in Property, Plant and Equipment is calculated as investment in Computers & Printers, Furniture and Fixtures, Medical Equipment, Office Equipment and Vehicles in a particular period/ year.
(9) Cash conversion ratio is calculated as cash flow from operations divided by EBITDA.
b) Key operational indicators
| Indicator | December 01, 2023 to March 31, 2024 | April 01, 2023 to November 30, 2023 |
| Number of diagnostic centres | 8 | 3 |
| Number of patients served | 25,436 | 16,693 |
| Number of tests performed | 48,774 | 24,598 |
| Number of tests per patient visit (1) | 1.92 | 1.47 |
| Individual Consumer Business Revenue (Rs in Lakhs) | 783.72 | 683.30 |
| Individual Consumer Business as a % of total revenue | 93.67% | 91.55% |
| Institutional Business Revenue (Rs in Lakhs) | 52.97 | 63.07 |
| Institutional Business Revenue as a % of total revenue | 6.33% | 8.45% |
| Average revenue per test (ARPT) (Rs) (2) | 1,715.44 | 3,034.26 |
| Revenue generated from pathology routine and specialized tests (Rs in Lakhs) (3) | 74.59 | 20.75 |
| Revenue generated from basic radiology tests (Rs in Lakhs) (4) | 164.73 | 112.74 |
| Revenue generated from advanced radiology tests (Rs in Lakhs) (5) | 597.36 | 612.88 |
Notes:
(1) Number of tests per patient visit is derived by dividing the number of tests performed by the number ofpatients served.
(2) Average revenue per test is calculated as revenue from operations divided by the number of tests performed.
(3) Routine tests include: basic biochemistry, basic haematology, clinical pathology and Specialized tests are advanced biochemisfry, chemiluminescence immunoassay (CLIA) that combine chemiluminescence technique with immunochemical reactions.
(4) Basic Radiology tests include ECG, X-rays, and ultrasounds.
(5) Advance Radiology tests include CT scans andMRI scans and highly specialized nuclear medicine tests such as PET-CT scans, which require advanced machinery to conduct such tests.
Based on Restated Standalone Financial Information:
c) Key financial indicators
| Indicator | December 01, 2023 to March 31, 2024 | April 01, 2023 to November 30,2023 | March 31, 2023 | March 31, 2022 |
| Revenue from Operations (Rs in Lakhs) (1) | 381.85 | 586.51 | 684.29 | 290.27 |
| EBITDA (Rs in Lakhs) (2) | 186.47 | 210.29 | 170.01 | 26.99 |
| EBITDA Margin (%) (3) | 48.83% | 35.85% | 24.84% | 9.30% |
| PAT (Rs in Lakhs) (4) | 220.49 | 180.06 | 23.66 | (75.02) |
| PAT Margin (%) (5) | 57.74% | 30.70% | 3.46% | (25.84) % |
| Return on equity (%) (6) | 24.23% | 22.96% | 4.17% | (32.58) % |
| Return on capital employed (%) (7) | 14.21% | 17.60% | 5.75% | (34.58) % |
| Investment in Property, Plant and Equipment (Rs in Lakhs) (8) | 45.37 | - | 8.74 | 796.97 |
| Cash Conversion Ratio (times) (9) | 1.97 | (0.17) | 1.00 | 4.69 |
Notes:
(1) Revenue from operations is calculated as revenue from sale of services.
(2) EBITDA is calculated as restated profit before tax, extraordinary and exceptional items plus finance costs, depreciation and amortisation expense minus other income.
(3) EBITDA margin is calculated as a percentage of EBITDA divided by revenue from operations.
(4) PAT represents total profit after tax for the year/period.
(5) PAT margin is calculated as a percentage of PAT divided by revenue from operations.
(6) Return on Equity (ROE%) is calculated as a percentage of PAT divided by Average Total Equity at the end of the year /period, whereas Average total equity is calculated as average of opening equity share capital and reserves and surplus and closing equity share capital and reserves and surplus.
(7) Return on Capital Employed (ROCE%) is calculated as a percentage of EBIT is divided by Average Capital Employed at the end of the year /period, whereas Average capital employed is calculated as average of opening capital employed and closing capital employed. EBIT is calculated as restated profit before tax plus finance costs minus other income. Capital Employed is calculated as Total Equity plus DTA minus DTL, Long Term Borrowings and Short-Term Borrowings.
(8) Investment in Property, Plant and Equipment is calculated as investment in Computers & Printers, Furniture and Fixtures, Medical Equipment, Office Equipment and Vehicles in a particular period/ year.
(9) Cash conversion ratio is calculated as cash flow from operations divided by EBITDA.
d) Key operational indicators
| Indicator | December 01, 2023 to March 31, 2024 | April 01, 2023 to November 30,2023 | March 31, 2023 | March 31, 2022 |
| Number of diagnostic centres | 4 | 2 | 1 | 1 |
| Number of patients served | 12,477 | 11,931 | 14,498 | 6,768 |
| Number of tests performed | 24,643 | 18,503 | 20,863 | 10,031 |
| Number of tests per patient visit (1) | 1.98 | 1.55 | 1.44 | 1.48 |
| Individual Consumer Business Revenue (Rs in Lakhs) | 344.73 | 533.17 | 658.59 | 286.28 |
| Individual Consumer Business Revenue as a % of total revenue | 90.28% | 90.91% | 96.24% | 98.62% |
| Institutional Business Revenue (Rs in Lakhs) | 37.12 | 53.33 | 25.71 | 4.00 |
| Institutional Business Revenue as a % of total revenue | 9.72% | 9.09% | 3.76% | 1.38% |
| Average revenue per test (ARPT) (Rs) (2) | 1,550/- | 3,170/- | 3,280/- | 2,894/- |
| Revenue generated from pathology routine and specialized tests (Rs in Lakhs) (3) | 48.22 | 15.08 | 11.11 | 6.96 |
| Revenue generated from basic radiology tests (Rs in Lakhs) (4) | 71.64 | 95.23 | 112.02 | 50.27 |
| Revenue generated from advanced radiology tests (Rs in Lakhs) (5) | 261.99 | 476.20 | 561.16 | 233.04 |
Notes:
(1) Number of tests per patient visit is derived by dividing the number of tests performed by the number of patients served.
(2) Average revenue per test is calculated as revenue from operations divided by the number of tests performed.
(3) Routine tests include: basic biochemistry, basic haematology, clinical pathology and Specialized tests are advanced biochemistry, chemiluminescence immunoassay (CLIA) that combine chemiluminescence technique with immunochemical reactions.
(4) Basic Radiology tests include ECG, X-rays, and ultrasounds.
(5) Advance Radiology tests include CT scans and MRI scans and highly specialized nuclear medicine tests such as PET-CT scans, which require advanced machinery to conduct such tests.
Significant factors affecting our Financial Condition and Results of Operations
Our business and results of operations have been affected by a number of important factors that we believe will continue to affect our business and results of operations in the future. These factors include the following:
Number of Customers Served and Tests Conducted
The key drivers affecting the growth of our revenue from operations are the number of pathology and radiology tests that we conduct as well as the number of customers served by us. During the year ended March 31, 2024, we conducted approximately 17,062 pathology tests and 26,084 radiology tests for approximately 24,408 patients. Our tests per patient visit was 1.77, our average revenue per patient was Rs3,967.37/- and our average revenue per test was Rs2,244.37/- (combined as per the restated standalone financial information for eight months ended November 30, 2023 and four months ended on March 31, 2024) and during the year ended March 31, 2024, we conducted approximately 24,060 pathology tests and 49,312 radiology tests for approximately 42,129 patients. Our tests per patient visit was 1.74, our average revenue per patient was Rs3,757.63/- and our average revenue per test was Rs2,157.57/- (combined as per the restated consolidated financial information for eight months ended November 30, 2023 and four months ended on March 31, 2024). We offer a comprehensive range of approximately 60 routine and 487 specialized pathology tests and approximately 96 basic and 130 advanced radiology tests that cover a range of specialties and disciplines, as of June 30, 2024. Our operations are supported by a centralised laboratory collocated with one of our spoke centres in Parel, and a service network consisting of one flagship diagnostic centre, 3 hub centres and 4 spoke centres, as of June 30, 2024.
The number of customer visit is also dependent on our ability to maintain and improve our brand image, which in turn depends on several factors such as the quality and efficiency of our pathology tests, radiology tests, turnaround time and customer satisfaction, the performance of our service network, the introduction of new tests and services and our ability to maintain strong relationships with customers and vendors. While we expect to continue to serve a higher number of customer visit in the future, the diagnostics industry in India is highly competitive, and it is challenging to improve market share and profitability.
Consequently, our ability to grow our revenues depends on our ability to compete successfully and attract new customers.
Expansion of our network of diagnostic centres
Our financial performance and results of operations depend on the effectiveness of the geographic reach of our network. We operate an extensive network of integrated diagnostic centres across MMR and as of June 30, 2024, operated 8 diagnostic centres offering both radiology and pathology services across MMR in Maharashtra, India. We intend to expand our presence to additional regions in Maharashtra and also consolidate our presence in regions where we currently operate, while maintaining the quality of the services we offer. We also intend to explore opportunities for expansion of our operations in other states of India. New diagnostic centres we establish increases the number of patients served and contributes to our revenue growth. The new diagnostic centres we set up undergoes an initial ramp-up period between two and six months, during which period operating expenses for a new centre exceeds revenues generated by it resulting in an operating loss. In addition, while we maintain equipment and staff at our diagnostic centres, our tele-radiology services allow us operating leverage and scalability with additional radiologists and doctors operating from the hub. Our ability to maintain and expand our network of diagnostic centres, collection centres and processing centres in a cost effective and efficient manner has had, and we expect will continue to have, an impact on our financial performance and results of operation.
Revenue Mix between Individual Customers and Institutional Customers
Our results of operations are affected by the customer mix serviced by us. In general, a higher percentage of individual customers will have a positive impact on our revenues as services rendered to such customers tend to have higher profit margins than services rendered to institutional customers. A substantial majority of our customers are individual customers, with over 90.66% of our revenues from operations for the financial year 2024 (combined as per the restated consolidated financial information for eight months ended November 30, 2023 and four months ended on March 31, 2024), and over 92.67% of our revenues from operations for the financial year 2024 (combined as per the restated standalone financial information for eight months ended November 30, 2023 and four months ended on March 31, 2024), being directly attributed to our individual consumer business, as a result of the strength of our brand, our integrated services model, quality of our diagnostics, our centre infrastructure and customer experience, the convenience of our centre network and home collection in our core geographies.
We intend to continue to focus on increasing the number of our individual customers through various initiatives such as expanding our service network to create visibility, increase our presence in the market, boost our home collection services and preventive and wellness services. In addition, we have employed focused sales and support team for our institutional customer and aim to strive for growth in volume and revenue generated from institutional customers concurrently.
Purchases of Consumables
During our course of business, we regularly consume reagents, chemicals, radiology supplies and other related consumables. For the financial years 2024 (combined as per the restated standalone financial information for eight months ended November 30, 2023 and four months ended on March 31, 2024), 2023 and 2022, our purchases of consumables were Rs118.17 lakhs, Rs94.41 lakhs and Rs41.94 lakhs, or 17.25%, 14.44% and 10.17%, respectively of our total expenses. Our purchases of consumables as percentage of total revenue from operations is affected by various factors including repricing of vendor contracts for reagents, initiatives for improving operational efficiencies and increased economies of scale of our operations.
As we continue to expand our operations and test portfolio, we would need to procure additional volumes of raw materials. We depend on third-party vendors and suppliers to procure our testing reagents, chemicals, radiology supplies. The procurement cost of foreign produced reagents and other materials may change due to several factors including depreciation of Indian Rupee, and our suppliers may therefore demand to re-negotiate the supply contracts with us. In the event of an increase in the price of such items, we may not be able to correspondingly increase the price of our services.
Depreciation, repairs and maintenance of our equipment
The nature of the diagnostic imaging services and clinical laboratory tests we provide, requires us to invest in technologically sophisticated equipment. Such equipment is generally expensive and purchases of and upgrades to such equipment form a major component of our annual capital expenditure. Medical equipment also forms a substantial part of our fixed assets, which results in significant associated depreciation cost. In Fiscals 2024 (combined as per the restated standalone financial information for eight months ended November 30, 2023 and four months ended on March 31, 2024), 2023 and 2022, the depreciation and amortisation expenses represented 16.44%, 21.02%, and 35.93%, respectively, of our total expenses.
The timely and effective maintenance of our equipment and instruments is essential for the efficient operation of our diagnostic equipment. Purchased equipment typically has a 12 month - 36-month supplier warranty for any defects, malfunctions and any required repairs required. However, upon the expiry of the warranty period, repairs and maintenance are in most cases carried out pursuant to annual maintenance contracts with equipment vendors, and as a result, our repairs and maintenance expenses may increase significantly at the end of such warranty period. Further, as we expand our network and purchase additional equipment, we expect our repairs and maintenance expenses to increase significantly in the future upon such equipment coming out of the warranty period.
Periods of Disease Outbreaks
Our revenues and results of operations have fluctuated in the past and may continue to fluctuate significantly due to periods of disease outbreaks, such as malaria and dengue. Diagnostic healthcare testing volumes typically increase during the monsoon season, when there is a greater prevalence of malaria and dengue, as well as gastrointestinal and respiratory diseases. The increased prevalence of a particular virus or other pathogen in the general population often causes an increased demand for specific diagnostic healthcare testing for that virus. However, certain of our expenses are less impacted by fluctuations in demand, as a significant portion of our costs and expenses such as employee benefits expense, annual maintenance contracts for radiology equipment, housekeeping, security expenses are fixed, unlike the costs of medical consumables. As a result of such seasonal and other factors, we experience year-on-year fluctuations and we expect such seasonal patterns in our results of operations to continue in the foreseeable future.
Changes in Government Regulations and Policies
We are subject to government regulations, which can affect our results of operations. These regulations could change at any time, with little or no warning or time for us to prepare. For example, the prices that we charge for our services could become subject to recommended or maximum fees set by the Government or other authorities. In addition, we are required to obtain and maintain a number of statutory and regulatory registrations, permits and approvals under central, state and local government rules in India, generally for carrying out our business and for each of our facilities. The implementation and/or changes in Government regulations and policies affecting the prices we charge and licensing requirements may, in effect, limit our ability to charge customers higher prices for our services and affect our operation capability. For further details, see "Risk Factors - Legal and Regulatory Risks - Non-compliance with and changes in any of the applicable laws, rules or regulations, including pricing, safety, health and environmental laws, may adversely affect our business, results of operations and financial condition and cash flows. " and "Risk Factors - Legal and Regulatory Risks - We require certain approvals, licenses, registrations and permits for conducting our business and our inability to obtain, retain or renew them in a timely manner, or at all, may adversely affect our business, results of operations and financial condition." on pages 47 and 48, respectively.
Currently, the provision of diagnostic services in India is exempt from GST. Any change in Government regulation in this regard may significantly affect our operations due to an increase in operating costs.
Critical Accounting Policies and Significant Judgments and Estimates
The methods, assumptions, and estimates that we use in applying our accounting policies may require us to apply judgments regarding matters that are inherently uncertain. We consider an accounting policy to be a critical estimate if: (1) we must make assumptions that were uncertain when the judgment was made, and (2) changes in the estimate assumptions, or selection of a different estimate methodology, could have a significant impact on our financial position and the results that we report in our Restated Consolidated Financial Information. While we believe that our estimates, assumptions, and judgments are reasonable, they are based on information available when the estimate was made.
Further, our material accounting policies as per Restated Financial Information, are as follows:
1. Basis of Accounting
These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) including the Accounting Standards notified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared under the historical cost convention on an accrual basis.
2. Use of Estimates
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the managements best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
3. Property, Plant and Equipment and Depreciation
Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises of all expenses incurred to bring the assets to its present location and condition. Borrowing cost directly attributable to the acquisition /construction are included in the cost of fixed assets. Adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.
The company has adopted cost model for all class of items of Property, Plant and Equipment. In case of new projects / expansion of existing projects, expenditure incurred during construction / preoperative period including interest and finance charge on specific / general purpose loans, prior to commencement of commercial production are capitalized. The same are allocated to the respective on completion of construction / erection of the capital project / fixed assets. Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future economic benefits from the existing asset beyond its previously assessed standard of performance.
Capital assets (including expenditure incurred during the construction period) under erection / installation are stated in the Balance Sheet as "Capital Work in Progress."
Depreciation on Fixed Assets is provided to the extent of depreciable amount on the Written down Value (WDV) Method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. The carrying amount of assets is reviewed at each balance sheet date if there is any indication of impairment based on internal or external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets, net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
4. Foreign currency Transactions Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
Exchange Differences
Exchangedifferencesarisingonthesettlementorreportingofmonetaryitemsatratesdifferentfromthoseatwhichtheywereinitially recordedduring the year, or reported in previous Standalone financial statement, are recognized as income or expense in the Statement of Profit and Loss.
5. Investments
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments. On disposal of an investment, the difference between it carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
6. Inventories
As per (AS) 2, The inventories are physically verified at regular intervals by the management. Raw Material Inventories are valued at the lower of cost and net realizable value.
Finished goods, Stock-in-Trade and Work-in-Progress are valued at lower of cost and net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads net of recoverable taxes incurred in bringing them to their respective present location and condition.
Consumable stores and spares are valued at the lower of cost and net realizable value, as estimated by the management. Obsolete, defective, unserviceable and slow/non-moving stocks are duly provided for.
7. Revenue Recognition
Revenue from the operations is recognized on generally accepted accounting principal and when it is earned and no significant uncertainty exists as to its ultimate collection and includes taxes, wherever applicable.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The capital gain on sale of investments if any are recognized on completion of transaction. No notional profit/loss are recognized on such investments. Interest income is recognized on time proportion basis, when it is accrued and due for payment.
8. Borrowing Cost
Borrowing cost that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.
9. Employee Benefits
Short - term employee benefits are recognized as an expense at the undiscounted amount in the profit & loss account of the year in which the related service is rendered.
Long Term Employee benefit (gratuity) are recognized are accounted in the books of account based on Valuation report of Actuarial.
10. Taxes on Income
Income tax expenses for the year comprises of current tax and deferred tax. Current tax provision is determined on the basis of taxable income computed as per the provisions of the Income Tax Act. Deferred tax is recognized for all timing differences that are capable of reversal in one or more subsequent periods subject to conditions of prudence and by applying tax rates that have been substantively enacted by the balance sheet date.
11. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.
Segment Information
There is no reportable segment identified on the basis of which segment information is required to be disclosed.
Information about Revenue Split by Geographical Area
Based on Restated Consolidated Financial Information:
(Rs in Lakhs)
| Centre Name | Through self / subsidiary | For the period | |
| December 01, 2023 to March 31, 2024 | April 01, 2023 to November 30, 2023 | ||
| Thane, Mazgaon, Sewri, Parel | Self | 376.16 | 586.51 |
| Marol (Andheri East) |
Subsidiary - PCD Diagnostics LLP | 95.02 | 159.86 |
| Byculla | Subsidiary - Primacare Healthcare LLP | 222.50 | - |
| Bhayander East |
Subsidiary - Pratham MRI and CT Scan Centre | 143.00 | - |
| Kalwa | Subsidiary - Invicta Medical LLP | - | - |
| Total | 836.68 | 746.37 | |
Notes:
(1) Sewri and Parel Centres were acquired by our company on January 01, 2024.
(2) P CD Diagnostics LLP became subsidiary on August 21, 2023.
(3) Primacare Healthcare LLP became subsidiary on December 01, 2023.
(4) Pratham MRI and CT Scan Centre became subsidiary on December 01, 2023.
(5) Invicta Medical LLP became subsidiary on January 18, 2024.
(6) As certified by M/s. Piyush Kothari & Associates, Chartered Accountants, by way of their certificate dated August 02, 2024.
Based on Restated Standalone Financial Information:
(Z in Lakhs)
| Centre | Through | As of | |||
| December 01, 2023 to March 31, 2024 | April 01, 2023 to November 30, 2023 | March 31, 2023 | March 31, 2022 | ||
| Thane, Mazgaon, Sewri, Parel | Self | 381.85 | 586.51 | 684.29 | 290.27 |
| Total | 381.85 | 586.51 | 684.29 | 290.27 | |
Notes:
1. Sewri and Parel Centres were acquired by our company on January 01, 2024.
2. As certified by M/s. Piyush Kothari & Associates, Chartered Accountants, by way of their certificate dated August 02, 2024.
Key Components of Income and Expenses
We report our income and expenditure in the following manner:
Total Income
Our total income comprises of revenue from operations and other income.
Revenue from operations: consists revenue from providing diagnostic services such as health check-up and laboratory services to individual and institutional customers and radiology testing income.
Other income: consists of share of profit from LLPs and miscellaneous income.
Total Expenses
Our total expenses comprise of purchases of consumables, changes in inventories of consumables, employee benefits expenses, finance costs, depreciation and amortization expenses, and other expenses.
Purchases of Consumables: consists of costs incurred towards the purchase of all the raw materials that we require for conducting clinical laboratory tests and profiles.
Employee benefits expenses: consists of salaries and wages, directors remuneration, gratuity, contributions to provident and ESIC, other allowances and staff & labour welfare expenses.
Finance costs: consists of interest expenses and bank charges.
Depreciation and Amortization Expenses: consists of depreciation expenses on property plant and equipment, and amortization of intangible assets.
Other Expenses: consists of electricity expenses, general expenses, legal & professional & consultancy charges, rent, repair & maintenance, provision for expenses, testing expenses, etc.
Our Results of Operations (Consolidated)
The following table sets forth select financial data derived from our restated consolidated statement of profit and loss for Fiscal 2024 and we have expressed the components of select financial data as a percentage of total income for such year:
| Particulars | 2024 (combined for eight months ended November 30, 2023 and four months ended on March 31, 2024) | |
| (Rs in Lakhs) | (% of total income) | |
| Income | ||
| Revenue from Operations | 1,583.05 | 99.76% |
| Other income | 3.85 | 0.24% |
| Total Income | 1,586.90 | 100.00% |
| Particulars | 2024 (combined for eight months ended November 30, 2023 and four months ended on March 31, 2024) | |
| (Rs in Lakhs) | (% of total income) | |
| Expenses | ||
| Purchases of Consumables | 151.19 | 9.53% |
| Changes in Inventories of Consumables | (39.23) | (2.47) % |
| Employees Benefit Expenses | 210.89 | 13.29% |
| Finance Costs | 10.08 | 0.64% |
| Depreciation and Amortization | 193.28 | 12.18% |
| Other expenses | 548.79 | 34.58% |
| Total Expenses | 1,075.00 | 67.74% |
| Restated profit / (loss) before tax | 511.90 | 32.26% |
| Tax Expenses | 131.55 | 8.29% |
| Restated profit / (loss) for the year | 380.35 | 23.97% |
Fiscal 2024 Total Income
Our total income was Rs1,586.90 lakhs for Fiscal 2024 based on Restated Consolidated Information. This was primarily attributable to our revenue from operations which was primarily driven by revenue from providing diagnostic services such as health check-up and laboratory services to individual and institutional customers and radiology testting income from all our centres and miscellaneous income.
Revenue from operations: Our revenue from operations was Rs1,583.05 lakhs for Fiscal 2024 based on Restated Consolidated Information primarily due to our diagnostic services such as health check-up and laboratory services to individual and institutional customers and radiology testing income from our centres; Additionally, our revenue growth is significantly supported by the acquisition of various centres and the integration of our subsidiaries during the last quarter of Fiscal 2024. During the Fiscal 2024, we conducted approximately 24,060 pathology tests and 49,312 radiology tests for approximately 42,129 patients on consolidated basis.
Other income: Other income was Rs3.85 lakhs consisting of miscellaneous income.
Total Expenses
Purchases of Consumables: The purchase of consumables were Rs151.19 lakhs for Fiscal 2024 based on Restated Consolidated Information, primarily due to purchase of all the raw materials that we require for conducting clinical laboratory tests and profiles such as reagent kits, chemicals, films and other materials required for performing the diagnostic tests.
Changes in changes in inventories of consumables: The changes in inventories of consumables were Rs39.23 lakhs for Fiscal 2024 based on Restated Consolidated Information, primarily attributable to a higher closing inventory of consumables. Our opening inventories of consumables aggregated to NIL and our closing inventories of consumables aggregated to Rs39.23 lakhs.
Employee benefits expenses: The Employee benefits expenses were Rs210.89 lakhs for Fiscal 2024 based on Restated Consolidated Information, primarily due to salaries and wages of Rs197.34 lakhs, offset of gratuity provision of Rs2.92 lakhs and staff & labour welfare expenses of Rs16.47 lakhs, payable to our employees including our subsidiaries. Our total employee count for the Fiscal 2024 including that of our subsidiaries were 97 employees.
Finance costs: The finance costs were Rs10.08 lakhs for Fiscal 2024 based on Restated Consolidated Information, primarily due to the interest expenses of Rs5.93 lakhs on loan taken from bank in one of our subsidiaries, Pratham MRI and CT Scan Centre and bank charges of Rs4.15 lakhs.
Depreciation and Amortization Expenses: The Depreciation and Amortization Expenses were Rs193.28 lakhs for Fiscal 2024 based on Restated Consolidated Information, primarily due depreciation on property plant and equipment for Rs 192.15 lakhs, and amortization of intangible assets for Rs1.16 lakhs. This was primarily attributable to the total number of operational diagnostic centres that we had as on March 31, 2024.
Other Expenses: The other expenses were Rs548.79 lakhs for Fiscal 2024 based on Restated Consolidated Information primarily due to:
• Professional fees and legal fees were Rs214.33 lakhs for Fiscal 2024, primarily attributable to the fees payable to our consultant radiologists and consultant doctors and other professionals;
• rent was Rs87.19 lakhs for Fiscal 2024, primarily attributable to the rent payable towards our diagnostic centres;
• electricity expenses were Rs87.16 lakhs for Fiscal 2024, primarily attributable to the utilization of electricity at our diagnostic centers;
• business promotion expenses were Rs49.13 lakhs for Fiscal 2024, primarily attributable to brand visibility expenses and expansion of our customer base through various marketing channels;
• repairs and maintenance were Rs34.87 lakhs for Fiscal 2024, primarily attributable to our operational diagnostic centers;
• provision for expenses for Rs16.95 lakhs were made for Fiscal 2024 towards our diagnostic centres;
• printing and stationary expenses were Rs16.28 lakhs for Fiscal 2024, primarily attributable to our operational diagnostic centers;
• miscellaneous expenses for Rs14.03 lakhs were made for Fiscal 2024 towards our diagnostic centres;
• testing expenses for Rs9.25 lakhs, for Fiscal 2024, primarily attributable to expenses in relation to cytogenetics and high-end molecular diagnostic tests which are outsourced to larger reference laboratories.
Tax Expenses
The tax expenses were Rs131.55 lakhs for Fiscal 2024 based on Restated Consolidated Information primarily due to During the Fiscal 2024, we incurred a current tax liability of Rs10.21 lakhs and deferred tax charge of Rs121.34 lakhs.
Restated profit after tax for the year
For the reasons discussed above, the restated profit after tax for the Fiscal 2024 based on Restated Consolidated Information was Rs380.35 lakhs for Fiscal 2024.
Our Results of Operations (Standalone)
The following table sets forth select financial data derived from our restated standalone statement of profit and loss for Fiscals 2024, 2023 and 2022 and we have expressed the components of select financial data as a percentage of total income for such years:
| Fiscals | ||||||
| Particulars | 2024 (combined for eight months ended November 30, 2023 andfour months ended on March 31, 2024) | 2023 | 2022 | |||
| (Rs in Lakhs) | (% of total income) | (Rs in Lakhs) | (% of total income) | (Rs in Lakhs) | (% of total income) | |
| Income | ||||||
| Revenue from Operations | 968.36 | 83.68% | 684.29 | 99.84% | 290.27 | 93.04% |
| Other income | 188.89 | 16.32% | 1.08 | 0.16% | 21.71 | 6.96% |
| Total Income | 1,157.24 | 100.00% | 685.37 | 100.00% | 311.98 | 100.00% |
| Expenses | ||||||
| Purchases of Consumables | 118.17 | 10.21% | 94.41 | 13.78% | 41.94 | 13.44% |
| Changes in Inventories of Consumables | (29.27) | (2.53) % | - |
- |
- |
- |
| Employees Benefit Expenses | 158.56 | 13.70% | 98.55 | 14.38% | 38.23 | 12.26% |
| Finance Costs | 3.01 | 0.26% | 2.02 | 0.30% | 0.88 | 0.28% |
| Depreciation and Amortization | 110.57 | 9.55% | 137.44 | 20.05% | 148.17 | 47.49% |
| Other expenses | 324.13 | 28.01% | 321.33 | 46.88% | 183.11 | 58.69% |
| Total Expenses | 685.17 | 59.21% | 653.75 | 95.39% | 412.34 | 132.17% |
| Restated profit / (loss) before tax | 472.08 | 40.79% | 31.62 | 4.61% | (100.36) | (32.17) % |
| Tax Expenses | 71.52 | 6.18% | 7.96 | 1.16% | (25.34) | (8.12) % |
| Restated (loss) for the year | 400.55 | 34.61% | 23.66 | 3.45% | (75.02) | (24.05) % |
Fiscal 2024 compared to Fiscal 2023
Total Income
Our total income increased by 68.85% to Rs1,157.24 lakhs for Fiscal 2024 from Rs685.37 lakhs for Fiscal 2023 based on Restated Standalone Information. This increase was primarily due to an increase in our revenue from operations which was primarily driven by revenue from providing diagnostic services such as health check-up and laboratory services to individual and institutional customers and radiology testing income from our centres and significant increase in our other income primarily due to share of profit from the LLPs pursuant to acquisition of our Subsidiaries LLPs on December 01, 2023. For further details, please see, Fiscal 2024 compared to Fiscal 2023 - Total Income - Other income" below.
Revenue from operations: Our revenue from operations increased by 41.51% to Rs968.36 lakhs for Fiscal 2024 from Rs684.29 lakhs for Fiscal 2023 based on Restated Standalone Information, primarily due to increase in revenue from pathology and radiology tests to individual and institutional customers and income from radiology testing. During the Fiscal 2024, we conducted approximately 17,062 pathology tests and 26,084 radiology tests for approximately 24,408 patients as compared to 3,965 pathology tests and 16,898 radiology tests for approximately 14,498 patients in Fiscal 2023.
Other income: Our other income was increased by 17,549.68% to Rs188.89 lakhs for Fiscal 2024 from Rs1.08 lakhs for Fiscal 2023 based on Restated Standalone Information, primarily due to:
• increase in share of profit from the LLPs for Rs187.91 lakhs pursuant to acquisition of our Subsidiaries LLPs on August 21, 2023 and December 01, 2023 in Fiscal 2024 as compare to NIL in Fiscal 2023; and
• increase in miscellaneous income for Rs0.98 lakhs in Fiscal 2024 as compare to NIL in Fiscal 2023.
Total Expenses
Purchases of Consumables: The purchase of consumables increased by 25.16% to Rs118.17 lakhs for Fiscal 2024 from Rs94.41 lakhs for Fiscal 2023 based on Restated Standalone Information, primarily due to purchase of higher volumes of reagent kits, chemicals, films and other materials required for performing the diagnostic tests. The difference in percentage increase in purchases of consumables and the revenue from operations was brought by the change in mix of tests conducted. As a percentage of revenue from operations, our purchases of consumables were 12.20% and 13.80% for the Fiscals 2024 and 2023, respectively.
Changes in changes in inventories of consumables: The changes in inventories of consumables increased by 100.00% aggregating to Rs29.27 lakhs for the Fiscal 2024 as compared to NIL for the Fiscal 2023 based on Restated Standalone Information. During the Fiscal 2024 and 2023, our opening stock aggregated to NIL. Similarly, during the Fiscal 2024, our closing stock aggregated to Rs29.27 lakhs as compared to NIL during the Fiscal 2023. This was primarily on account of increased consumption of reagent kits, chemicals, films and other materials required for performing the diagnostic tests due to an increase in our operating activities, which led to higher closing stock at the end of the Fiscal 2024.
Employee benefits expenses: The employee benefits expense increased by 60.90% to Rs158.56 lakhs for the Fiscal 2024 from Rs98.55 lakhs for the Fiscal 2023 based on Restated Standalone Information, primarily due to:
• increase in salaries, wages and bonus to Rs152.61 lakhs for the Fiscal 2024 from Rs88.64 lakhs for the Fiscal 2023. This was on account of (i) an increase in the number of our employees to 66 as of Fiscal 2024 from 9 as of Fiscal 2023, and (ii) annual increments in salaries;
• decrease in gratuity provision to Rs2.92 lakhs for the Fiscal 2024 from Rs4.06 lakhs for the Fiscal 2023; and
• increase in staff & labour welfare expenses to Rs8.87 lakhs for the Fiscal 2024 from Rs5.85 lakhs for the Fiscal 2023;
Finance costs: The finance costs increased by 48.76% to Rs3.01 lakhs for the Fiscal 2024 from Rs2.02 lakhs for the Fiscal 2023 based on Restated Standalone Information, primarily due to increase in bank charges by Rs0.99 lakhs.
Depreciation and Amortization Expenses: The depreciation and amortization expenses decreased by 19.55% to Rs110.57 lakhs for the Fiscal 2024 from Rs137.44 lakhs for the Fiscal 2023 based on Restated Standalone Information, primarily due to:
• decrease in depreciation on property plant and equipment to Rs109.57 lakhs for the Fiscal 2024 from Rs135.62 lakhs for the Fiscal 2023 due to depreciation provided to the extent of depreciable amount on the Written down Value (WDV) Method; and
• decrease in amortization of intangible assets to Rs1.00 lakhs for the Fiscal 2024 from Rs1.81 lakhs for the Fiscal 2023 due to amortization provided to the extent of depreciable amount on the Written down Value (WDV) Method.
Other Expenses: The other expenses increased by 0.87% to Rs324.13 lakhs for the Fiscal 2024 from Rs321.33 lakhs for the
Fiscal 2023 based on Restated Standalone Information, primarily due to:
• decrease in professional fees and legal fees to Rs114.47 lakhs for the Fiscal 2024 from Rs166.33 lakhs for the Fiscal 2023, primarily attributable to the fees payable to our consultant radiologists and consultant doctors and other professionals;
• increase in rent to Rs55.47 lakhs for the Fiscal 2024 from Rs47.99 lakhs for the Fiscal 2023, primarily attributable to the rent payable towards our diagnostic centres;
• increase in electricity expenses to Rs49.89 lakhs for the Fiscal 2024 from Rs43.62 lakhs for the Fiscal 2023, primarily attributable to the utilization of electricity at our diagnostic centers;
• decrease in business promotion expenses to Rs31.03 lakhs for the Fiscal 2024 from Rs44.19 lakhs for the Fiscal 2023, primarily due to reduction in brand visibility expenses and expansion of our customer base through various marketing channels;
• increase in repairs and maintenance to Rs27.66 lakhs for the Fiscal 2024 from Rs1.17 lakhs for the Fiscal 2023, primarily due to increase in our operations at our diagnostic centers;
• increase in provision for expenses to Rs16.95 lakhs for the Fiscal 2024 from NIL for the Fiscal 2023 towards our diagnostic centres;
• increase in printing and stationary expenses to Rs10.29 lakhs for the Fiscal 2024 from Rs7.89 lakhs for the Fiscal 2023, primarily attributable to our operational diagnostic centers; and
• increase in general expenses to Rs5.62 lakhs for the Fiscal 2024 from NIL for the Fiscal 2023 towards our diagnostic centres;
Tax Expenses
Our total tax expense was increased by 798.61% to Rs71.52 lakhs for the Fiscal 2024 from Rs7.96 lakhs for the Fiscal 2023 comprising of deferred tax charge. During the Fiscal 2024, we incurred deferred tax charge of Rs71.52 lakhs and during Fiscal 2023, we incurred deferred tax charge of Rs7.96 lakhs. The increase in our deferred tax expense was primarily due to creation of deferred tax liabilities on account of timing difference in Net block as per books & as per Income Tax.
Restated profit after tax for the year
Due to the foregoing, we incurred a profit of Rs400.55 lakhs during the Fiscal 2024, as compared to a profit of Rs23.66 lakhs during the Fiscal 2023. Our profit has significantly increased primarily due to increase in revenue from pathology and radiology tests to individual and institutional customers and income from radiology testing by Rs284.06 lakhs, share of profit from the LLPs for Rs187.91 lakhs pursuant to acquisition of our Subsidiaries LLPs on August 21, 2023 and December 01, 2023 with no significant increase in total expenses. During the Fiscal 2024, we conducted approximately 17,062 pathology tests and 26,084 radiology tests for approximately 24,408 patients as compared to 3,965 pathology tests and 16,898 radiology tests for approximately 14,498 patients in Fiscal 2023.
Fiscal 2023 compared to Fiscal 2022
Total Income
Our total income increased by 119.68% to Rs685.37 lakhs for Fiscal 2023 from Rs311.98 lakhs for Fiscal 2022 based on Restated Standalone Information. This increase was primarily due to an increase in our revenue from operations which was primarily driven by revenue from providing diagnostic services such as health check-up and laboratory services to individual and institutional customers and radiology testing income from our centres with offset in our other income primarily due to decrease in interest income in Fiscal 2023 as compared to Fiscal 2022. For further details, please see, " - Fiscal 2023 compared to Fiscal 2022 - Total Income - Other income" below.
Revenue from operations: Our revenue from operations increased by 135.74% to Rs684.29 lakhs for Fiscal 2023 from Rs290.27 lakhs for Fiscal 2022 based on Restated Standalone Information, primarily due to increase in revenue from pathology and radiology tests to individual and institutional customers and income from radiology testing. During the Fiscal 2023, we conducted approximately 3,965 pathology tests and 16,898 radiology tests for approximately 14,498 patients in Fiscal 2023 as compared to 2,333 pathology tests and 7,698 radiology tests for approximately 6,768 patients in Fiscal 2022.
Other income: Our other income was decreased by 95.04% to Rs1.08 lakhs for Fiscal 2023 from Rs21.71 lakhs for Fiscal 2022 based on Restated Standalone Information, primarily due to:
• decrease in interest income to NIL in Fiscal 2023 as compared to Rs21.36 lakhs in Fiscal 2022; and
• increase in miscellaneous income to Rs1.08 lakhs in Fiscal 2023 as compared to Rs0.35 lakhs in Fiscal 2022.
Total Expenses
Purchases of Consumables: The purchase of consumables increased by 125.11% to Rs94.41 lakhs for Fiscal 2023 from Rs41.94 lakhs for Fiscal 2022 based on Restated Standalone Information, primarily due to purchase of higher volumes of reagent kits, chemicals, films and other materials required for performing the diagnostic tests. The difference in percentage increase in purchases of consumables and the revenue from operations was brought by the change in mix of tests conducted. As a percentage of revenue from operations, our purchases of consumables were 13.80% and 14.45% for the Fiscals 2023 and 2022, respectively.
Changes in changes in inventories of consumables: The changes in inventories of consumables were NIL for the Fiscal 2023 and for Fiscal 2022 based on Restated Standalone Information.
Employee benefits expenses: The employee benefits expense increased by 157.76% to Rs98.55 lakhs for the Fiscal 2023 from Rs38.23 lakhs for the Fiscal 2022 based on Restated Standalone Information, primarily due to:
• increase in salaries, wages and bonus to Rs88.64 lakhs for the Fiscal 2023 from Rs32.60 lakhs for the Fiscal 2022. This was on account of (i) an increase in the number of our employees to 9 as of Fiscal 2023 from 7 as of Fiscal 2022, and (ii) annual increments in salaries;
• increase in gratuity provision to Rs4.06 lakhs for the Fiscal 2023 from Rs1.38 lakhs for the Fiscal 2022; and
• increase in staff & labour welfare expenses to Rs5.85 lakhs for the Fiscal 2023 from Rs4.26 lakhs for the Fiscal 2022;
Finance costs: The finance costs increased by 129.91% to Rs2.02 lakhs for the Fiscal 2023 from Rs0.88 lakhs for the Fiscal 2022 based on Restated Standalone Information, primarily due to increase in bank charges by Rs1.14 lakhs.
Depreciation and Amortization Expenses: The depreciation and amortization expenses decreased by 7.25% to Rs137.44 lakhs for the Fiscal 2023 from Rs148.17 lakhs for the Fiscal 2022 based on Restated Standalone Information, primarily due to:
• decrease in depreciation on property plant and equipment to Rs135.62 lakhs for the Fiscal 2023 from Rs147.21 lakhs for the Fiscal 2022 due to depreciation provided to the extent of depreciable amount on the Written down Value (WDV) Method; and
• increase in amortization of intangible assets to Rs1.81 lakhs for the Fiscal 2023 from Rs0.97 lakhs for the Fiscal 2022 primarily due to purchase of intangible assets in November 2021 which accounted amortisation for five months in Fiscal 2022.
Other Expenses: The other expenses increased by 75.48% to Rs321.33 lakhs for the Fiscal 2023 from Rs183.11 lakhs for the Fiscal 2022 based on Restated Standalone Information, primarily due to:
• increase in professional fees and legal fees to Rs166.33 lakhs for the Fiscal 2023 from Rs92.89 lakhs for the Fiscal 2022, primarily attributable to the fees payable to our consultant radiologists and consultant doctors and other professionals;
• increase in rent to Rs47.99 lakhs for the Fiscal 2023 from Rs27.99 lakhs for the Fiscal 2022, primarily attributable to the increase in our rent payable towards our diagnostic centres;
• increase in electricity expenses to Rs43.62 lakhs for the Fiscal 2023 from Rs37.12 lakhs for the Fiscal 2022, primarily attributable to increase in the utilization of electricity at our diagnostic centers;
• increase in business promotion expenses to Rs44.19 lakhs for the Fiscal 2023 from Rs12.71 lakhs for the Fiscal 2022, primarily due to increase in brand visibility expenses and expansion of our customer base through various marketing channels;
Tax Expenses
Our total tax expense was increased by 131.41% to Rs7.96 lakhs for the Fiscal 2023 comprising of deferred tax charge from Rs25.34 lakhs for the Fiscal 2022 comprising of deferred tax credit. During the Fiscal 2023, we incurred deferred tax charge of Rs7.96 lakhs and during Fiscal 2022, we created deferred tax credit of Rs 25.34 lakhs. The increase in our deferred tax expense was primarily due to creation of deferred tax liabilities on account of timing difference in Net block as per books & as per Income Tax with an offset of creation of deferred tax assets on brought forward losses of our Erstwhile LLP.
Restated profit after tax for the year
Due to the foregoing, we incurred a profit of Rs23.66 lakhs during the Fiscal 2023, as compared to a loss of Rs75.02 lakhs during the Fiscal 2022. Our profit has significantly increased primarily due to significant increase in revenue from pathology and radiology tests to individual and institutional customers and income from radiology testing by Rs394.02 lakhs with no significant increase in total expenses. During the Fiscal 2023, we conducted approximately 3,965 pathology tests and 16,898 radiology tests for approximately 14,498 patients as compared to 2,333 pathology tests and 7,698 radiology tests for approximately 6,768 patients in Fiscal 2022. Further, the loss incurred in the Fiscal 2022 is merely because of the depreciation charged on our assets as per the Schedule II of the Companies Act, 2013. The nature of the diagnostic imaging services and clinical laboratory tests we provide, requires us to invest in technologically sophisticated equipment. Such equipment is generally expensive and purchases of and upgrades to such equipment form a major component of our annual capital expenditure. Medical equipment also forms a substantial part of our fixed assets, which results in significant associated depreciation cost.
Cash Flows and Cash and Cash Equivalents
Based on Restated Consolidated Financial Information
The following table sets forth our cash flows and cash and cash equivalents for the period / years indicated:
| Particulars | December 01, 2023 to March 31, 2024 | April 01, 2023 to November 30, 2023 |
| Net cash (used)/from operating activities | 556.26 | 79.72 |
| Net cash (used)/from investing activities | (517.14) | (342.61) |
| Net cash (used)/from financing activities | (97.27) | 450.22 |
| Net increase / (decrease) in cash and cash equivalents at the end of the period | (58.16) | 187.33 |
| Cash and Cash equivalents at the beginning of the period | 191.75 | 4.42 |
| Cash and Cash equivalents at the end of the period | 133.59 | 191.75 |
Operating Activities
Net cash generated from operating activities was Rs556.26 lakhs for the period December 01, 2023 to March 31, 2024. While our net profit before tax was Rs284.23 lakhs, we had an operating profit before working capital changes of Rs383.88 lakhs for the period December 01, 2023 to March 31, 2024 which was primarily due to depreciation and amortisation of Rs98.74 lakhs and interest expense and bank charges of Rs7.96 lakhs, partially offset by gratuity of Rs7.05 lakhs. Our changes in working capital for the period December 01, 2023 to March 31, 2024 primarily consisted of an increase in inventories by Rs27.36 lakhs, increase in trade receivables by Rs37.38 lakhs, decrease in loans and advances by Rs66.70 lakhs, increase in other current assets by Rs3.74 lakhs, increase in trade payables by Rs122.65 lakhs, increase in other current liabilities by Rs74.44 lakhs and decrease in short term provisions by Rs22.93 lakhs. There were no income taxes paid during the period.
Net cash generated from operating activities was Rs79.72 lakhs for the period April 01, 2023 to November 30, 2023. While our net profit before tax was Rs227.68 lakhs, we had an operating profit before working capital changes of Rs328.46 lakhs for the period April 01, 2023 to November 30, 2023 which was primarily due to depreciation and amortisation of Rs94.53 lakhs and interest expense and bank charges of Rs2.12 lakhs, gratuity of Rs4.13 lakhs. Our changes in working capital for the period April 01, 2023 to November 30, 2023 primarily consisted of an increase in inventories by Rs12.03 lakhs, increase in trade receivables by Rs47.58 lakhs, increase in loans and advances by Rs183.03 lakhs, increase in other current assets by Rs0.06 lakhs, decrease in trade payables by Rs7.79 lakhs, decrease in other current liabilities by Rs1.63 lakhs and increase in short term provisions by Rs3.38 lakhs. There were no income taxes paid during the period.
Investing Activities
Net cash used in investing activities was Rs517.14 lakhs for the period December 01, 2023 to March 31, 2024, primarily comprising payment for purchase of property, plant and equipment for existing diagnostic centres and laboratory of Rs45.37 lakhs, payment for acquisition of our subsidiaries of Rs460.57 lakhs and increase in security deposits for our diagnostic centres by Rs11.20 lakhs.
Net cash used in investing activities was Rs342.61 lakhs for the period April 01, 2023 to November 30, 2023, primarily comprising payment for acquisition of our subsidiaries of Rs341.83 lakhs and increase in security deposits for our diagnostic centres by Rs0.78 lakhs.
Financing Activities
Net cash flow used in financing activities was Rs97.27 lakhs for the period December 01, 2023 to March 31, 2024, primarily comprising of proceeds of long-term borrowings of Rs381.13 lakhs, capital withdrawal of Rs359.10 lakhs, interest and bank charges paid of Rs7.96 lakhs and partially offset on consolidation reflecting adjustments related impact on minority interest for change in depreciation, deferred tax and other changes in minority interest on account of restatement of Rs111.34 lakhs.
Net cash flow generated from financing activities was Rs450.22 lakhs for the period April 01, 2023 to November 30, 2023, primarily comprising of repayment of long-term borrowings of Rs1.00 lakh, fresh capital infusion of Rs452.61 lakhs by the Partners of the Erstwhile LLP, interest and bank charges paid of Rs2.12 lakhs and partially offset on consolidation reflecting adjustments related impact on minority interest for change in depreciation, deferred tax and other changes in minority interest on account of restatement of Rs0.74 lakhs.
Based on Restated Standalone Financial Information
The following table sets forth our cash flows and cash and cash equivalents for the period / years indicated:
(Rs in Lakhs)
| For the period | Fiscal | |||
| Particulars | December 01, 2023 to March 31, 2024 | April 01, 2023 to November 30, 2023 | 2023 | 2022 |
| Net cash (used)/from operating activities | 367.04 | (35.94) | 169.73 | 126.68 |
| Net cash (used)/from investing activities | (7.19) | (281.51) | (8.66) | (786.73) |
| Net cash (used)/from financing activities | (336.05) | 377.81 | (192.02) | 689.90 |
| Net increase / (decrease) in cash and cash equivalents at the end of the period / year | 23.81 | 60.37 | (30.95) | 29.85 |
| Cash and Cash equivalents at the beginning of the year / period | 23.81 | 60.37 | (30.95) | 29.85 |
| Cash and Cash equivalents at the end of the year / period | 88.60 | 64.78 | 4.42 | 35.36 |
Operating Activities
Net cash generated from operating activities was Rs367.04 lakhs for the period December 01, 2023 to March 31, 2024. While our net profit before tax was Rs257.77 lakhs, we had an operating profit before working capital changes of Rs179.42 lakhs for the period December 01, 2023 to March 31, 2024 which was primarily due to depreciation and amortisation of Rs38.31 lakhs, bank charges of Rs1.01 lakhs, partially offset by gratuity provision of Rs7.05 lakhs and offset by income from share of profit from LLPs and miscellaneous income for Rs110.62 lakhs. Our changes in working capital for the period December 01, 2023 to March 31, 2024 primarily consisted of an increase in inventories by Rs17.24 lakhs, increase in trade receivables by Rs30.06 lakhs, decrease in loans and advances by Rs175.82 lakhs, increase in other current assets by Rs1.63 lakhs, increase in trade payables by Rs54.86 lakhs, increase in other current liabilities by Rs28.81 lakhs and decrease in short term provisions by Rs22.93 lakhs. There were no income taxes paid during the period.
Net cash used in operating activities was Rs35.94 lakhs for the period April 01, 2023 to November 30, 2023. While our net profit before tax was Rs214.30 lakhs, we had an operating profit before working capital changes of Rs214.43 lakhs for the period April 01, 2023 to November 30, 2023 which was primarily due to depreciation and amortisation of Rs72.25 lakhs, bank charges of Rs2.00 lakhs, gratuity of Rs4.13 lakhs and offset by income from share of profit from LLPs and miscellaneous income for Rs78.26 lakhs. Our changes in working capital for the period April 01, 2023 to November 30, 2023 primarily consisted of an increase in inventories by Rs12.03 lakhs, increase in trade receivables by Rs43.58 lakhs, increase in loans and advances by Rs181.71 lakhs, increase in other current assets by Rs0.06 lakhs, decrease in trade payables by Rs10.26 lakhs, decrease in other current liabilities by Rs6.10 lakhs and increase in short term provisions by Rs3.38 lakhs. There were no income taxes paid during the period.
Net cash generated from operating activities was Rs169.73 lakhs for the Fiscal 2023. While our net profit before tax was Rs31.62 lakhs, we had an operating profit before working capital changes of Rs174.07 lakhs for the Fiscal 2023 which was primarily due to depreciation and amortisation of Rs137.44 lakhs, bank charges of Rs2.02 lakhs, gratuity provision of Rs4.06 lakhs and offset by miscellaneous income for Rs1.08 lakhs. Our changes in working capital for the Fiscal 2023 primarily consisted of an increase in trade receivables by Rs0.47 lakhs, decrease in loans and advances by Rs0.11 lakhs, decrease in other current assets by Rs2.21 lakhs, decrease in trade payables by Rs9.05 lakhs, decrease in other current liabilities by Rs2.3 6 lakhs and increase in short term provisions by Rs5.21 lakhs. There were no income taxes paid during the year.
Net cash generated from operating activities was Rs126.68 lakhs for the Fiscal 2022. While our net loss before tax was Rs100.36 lakhs, we had an operating profit before working capital changes of Rs28.36 lakhs for the Fiscal 2022 which was primarily due to depreciation and amortisation of Rs148.17 lakhs, bank charges of Rs0.88 lakhs, gratuity provision of Rs1.38 lakhs and offset by interest income and miscellaneous income for Rs21.71 lakhs. Our changes in working capital for the Fiscal 2022 primarily consisted of an increase in trade receivables by Rs0.05 lakhs, decrease in loans and advances by Rs39.89 lakhs, increase in other current assets by Rs3.31 lakhs, increase in trade payables by Rs39.27 lakhs, increase in other current liabilities by Rs8.45 lakhs and increase in short term provisions by Rs14.07 lakhs. There were no income taxes paid during the year.
Investing Activities
Net cash used in investing activities was Rs7.19 lakhs for the period December 01, 2023 to March 31, 2024, primarily comprising payment for purchase of property, plant and equipment for existing diagnostic centres and laboratory of Rs45.37 lakhs, increase in non-current investments for the acquisition of subsidiaries by Rs61.24 lakhs and increase in security deposits for our diagnostic centres by Rs11.20 lakhs and income from share of profit from LLPs and miscellaneous income for Rs110.62 lakhs.
Net cash used in investing activities was Rs281.51 lakhs for the period April 01, 2023 to November 30, 2023, primarily comprising increase in non-current investments for the acquisition of subsidiaries of Rs358.99 lakhs and increase in security deposits for our diagnostic centres by Rs0.78 lakhs and income from share of profit from LLPs and miscellaneous income for Rs78.26 lakhs.
Net cash used in investing activities was Rs8.66 lakhs for the Fiscal 2023, primarily comprising payment for purchase of property, plant and equipment for existing diagnostic centre of Rs8.74 lakhs, increase in security deposits for our diagnostic centre by Rs1.00 lakh and miscellaneous income for Rs1.08 lakhs.
Net cash used in investing activities was Rs786.73 lakhs for the Fiscal 2022, primarily comprising payment for purchase of property, plant and equipment for setting up new diagnostic centre of Rs796.97 lakhs, increase in security deposits for our diagnostic centre by Rs11.47 lakhs and interest income and miscellaneous income for Rs21.71 lakhs.
Financing Activities
Net cash flow used in financing activities was Rs336.05 lakhs for the period December 01, 2023 to March 31, 2024, primarily comprising of proceeds from long-term borrowings of Rs194.55 lakhs, capital withdrawal of Rs529.58 lakhs and bank charges paid of Rs1.01 lakhs.
Net cash flow generated from financing activities was Rs377.81 lakhs for the period April 01, 2023 to November 30, 2023, primarily comprising of repayment of long-term borrowings of Rs1.00 lakh, fresh capital infusion of Rs380.81 lakhs by the Partners of the Erstwhile LLP and bank charges paid of Rs2.00 lakhs.
Net cash flow used in financing activities was Rs192.02 lakhs for the Fiscal 2023, primarily comprising of proceeds of long - term borrowings of Rs39.00 lakhs, capital withdrawal of Rs151.00 lakhs by the Partners of the Erstwhile LLP and bank charges paid of Rs2.02 lakhs.
Net cash flow generated from financing activities was Rs689.90 lakhs for the Fiscal 2022, primarily comprising of proceeds from long-term borrowings of Rs14.50 lakhs, fresh capital infusion of Rs676.28 lakhs by the Partners of the Erstwhile LLP and bank charges paid of Rs0.88 lakhs.
Indebtedness
The following table sets forth our financial indebtedness as of March 31, 2024:
Based on Restated Consolidated Financial Information
| Particulars | Amount |
| Long Term Borrowings | 381.13 |
| Short Term Borrowings | - |
| Total | 381.13 |
Based on Restated Standalone Financial Information
Rs in lakhs
| Particulars | Amount |
| Long Term Borrowings | 194.55 |
| Short Term Borrowings | - |
| Particulars | Amount |
| Total | 194.55 |
Notes: The Long-Term Borrowing as disclosed in the Restated Financial Information are only due to Restated Adjustment impact arising in the restated profit & loss account which eventually transferred to partners capital account in previous financial years. Whatever the adjustment happened in the previous year profit & loss account as disclosed in the reconciliation statement between audited profit & restated profit, were directly transferred to partners capital account & due to this the closing restated b alance of partners capital were varied from Audited closing balance of partners capital account as on the date of conversion of the firm into company. The difference between both i.e. audited capital & restated capital has been considered as long-term borrowing related to partners capital account. Although for more clarification, we hereby clarify that this borrowing was arise in the restated financials just due to Restated Adjustment & the same are not actually payable in the audited financials.
Liquidity and Capital Resources
Our company has historically financed its operations through a combination of cash flow from operating activities, equity injections, finance arrangements and investments. Historically, the capital contributions were used primarily to support the growth of our company. Our company receives payments directly from the patients, which impacts the amount of cash available to us at a given date. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under "Risk Factors" on page 39. As of March 31, 2024, our cash and cash equivalents (including fixed deposits) were Rs88.60 lakhs based on the restated standalone financial information. Our short-term requirements include our working capital requirements and our long-term requirements include our capital expenditure requirements such as investments in property, plant and equipment.
We monitor rolling forecasts of our liquidity position comprising cash and cash equivalents on the basis of expected cash flows. Our liquidity management involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external requirements and maintaining debt financing plans. We have cash and cash equivalents and bank balances (including fixed deposits) of Rs88.60 lakhs, Rs64.78 lakhs, Rs4.42 lakhs and Rs35.36 lakhs as of March 31, 2024, November 30, 2023, March 31, 2023, and March 31, 2022, respectively based on the restated standalone financial information.
Capital Expenditure
For the period December 01, 2023 to March 31, 2024, we added fixed assets of property, plant and equipment of Rs45.37 lakhs, primarily for medical plant and equipment. For the financial year 2023, we added fixed assets of property, plant and equipment of Rs8.74 lakhs, primarily for medical plant and equipment and vehicles. For the financial year 2022, we added fixed assets of property, plant and equipment of Rs796.97 lakhs, primarily for medical plant and equipment, and furniture and fixtures.
We plan to continue to expand in our key geographical areas by opening new diagnostic centres in the next 12 months, which will in turn incur further capital expenditure.
Contingent Liabilities
As of March 31, 2024, we did not have any contingent liabilities as per AS 29.
Off-Balance Sheet Commitments and Arrangements
We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.
Quantitative and Qualitative Analysis of Market Risks
We are exposed to various types of market risks during the normal course of business. For further details, see "Risk Factors" on page 39.
Credit risk
Credit risk is the risk of financial loss to us if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from our receivables from customers and loans. The maximum exposure to credit risk in case of all the financial instruments is restricted to their respective carrying amount. Further, our exposure to credit risk is influenced mainly by the individual characteristics of each customer. Customer credit risk is managed by designated department subject to our established policy, procedures and control relating to customer credit risk management. Credit quality of individual customer is assessed based on individual credit limits as defined by us, we also monitor outstanding customer receivables regularly. We have no significant concentration of credit risk.
Liquidity risk
Liquidity risk refers to the risk that we will encounter difficulty in meeting the obligations associated with our financial liabilities that are settled by delivering cash or other financial asset. Our approach to managing liquidity is to ensure, as far as possible, that we will have sufficient liquidity to meet our liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.
Market Risks
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments. We have negligible exposure to foreign currency risk. We do not have interest rate risks as we do not have debt obligations with floating interest rates. Further, we are not exposed to currency risk, as we do not have any significant foreign currency outstanding /receivables neither are we exposed to price or commodity risk.
Inflation
In recent years, India has experienced relatively high rates of inflation. Inflation generally impacts the overall economy and business environment and hence could affect us.
Auditor Qualifications and Emphasis of Matter
There are no auditor qualifications which have not been given effect to in the Restated Financial Information.
Unusual or Infrequent Events or Transactions
There have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
Known Trends or Uncertainties
Our business has been subject to significant economic changes arising from the trends identified above in Significant Factors Affecting our Financial Conditions and Results of Operations"" above and the uncertainties described in "Risk Factors" on page 39.
Future Relationship between Cost and Revenue
Other than as described in "Risk Factors"" and this section, there are no known factors that might affect the future relationship between cost and revenue.
Related Party Transactions
We have engaged in the past, and may engage in the future, in transactions with related parties. For details of our related party transactions, see "Other Financial Information - Related Party Transactions" on page 222.
Competitive Conditions
We operate in a competitive environment. Please refer to "Risk Factors", "Industry Overview" and "Our Business" on pages 39, 117 and 159, respectively, for further information on our industry and competition.
Seasonality and Cyclicality of Business
Our business experiences marginal seasonality during the monsoon season, as a result of the onslaught of dengue and malaria.
Extent to which material increases in Net Sales or Revenue are due to increased Sales Volume, introduction of new products or services or increased Sales Prices
Changes in revenue in the last three Fiscals, are as described in "- Fiscal 2024 compared to Fiscal 2023" and "- Fiscal 2023 compared to Fiscal 2022" above.
Significant Dependence on Single or Few Customers
Given the nature of our business operations, we do not believe our business is dependent on any single or a few customers or suppliers.
New Products or Business Segments
Except as disclosed in "Our Business" on page 159, there are no new products or business segments that have or are expected to have a material impact on our business prospects, results of operations or financial condition.
Significant developments occurring after March 31, 2024
Except as set out below, to our knowledge, no circumstances have arisen since the date of the last financial statements as disclosed in this Draft Red Herring Prospectus which materially or adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months:
1. The Board of the Company has approved bonus issue of equity shares in the ratio 63:1 in the board meeting held on April 11, 2024. The members of the Company approved proposal of Board of Directors for bonus issue of equity shares in the ratio 63:1 in the EGM held on April 13, 2024.
2. The bonus issue of equity shares in the ratio 63:1 was allotted in the board meeting held on April 15, 2024.
3. The status of the Company changed to Public Limited and the name of the Company was changed to "Invicta Diagnostic Limited vide Special Resolution passed by the Shareholders at the Extra-Ordinary General Meeting of the Company held on April 20, 2024. The fresh Certificate of Incorporation consequent to conversion was issued on July 02, 2024 by the Assistant Registrar of Companies/ Deputy Registrar of Companies/ Registrar of Companies, Central Processing Centre.
4. The Board of the Company has approved to raise funds through Initial Public Offering in the board meeting held on July 08, 2024.
5. The members of the Company approved proposal of Board of Directors to raise funds through initial public offering in the AGM held on July 12, 2024.
Recent Accounting Pronouncements
As on the date of this Draft Red Herring Prospectus, there are no recent accounting pronouncements, which, we believe, would have a material effect on our financial condition or results of operations.
CAPITALISATION STATEMENT
The following table sets forth our capitalisation as of March 31, 2024, derived from our Restated Financial Information:
Based on Restated Consolidated Financial Information
(Rs in Lakhs)
| Particulars# | Pre-Issue as at March 31, 2024 | As adjusted for the Issue* |
| Borrowings** | ||
| Long term borrowings (I) | 381.13 | [•] |
| Short term borrowings (II) | - |
|
| Total borrowings (III = I + II) | 381.13 | [•] |
| Equity | ||
| Equity Share capital (IV) | 13.15 | [•] |
| Reserves and Surplus (V) | 960.17 | [•] |
| Total Equity (VI = IV + V) | 973.32 | [•] |
| Long Term borrowings / Total Equity (VII = I / VI) (times) | 0.39 | [•] |
| Total borrowings / total equity (VIII = III / VI) (times) | 0.39 | [•] |
# All terms shall carry the meaning as per Schedule III of the Companies Act, 2013.
* The corresponding post Issue capitalization data is not determinable at this stage pending the determination of the Issue Price and hence has not been furnished.
** Total borrowings are the sum of long-term borrowings and short-term borrowings.
Based on Restated Standalone Financial Information
(Rs in Lakhs)
| Particulars# | Pre-Issue as at March 31, 2024 | As adjusted for the Issue* |
| Borrowings** | ||
| Long term borrowings (I) | 194.55 | [•0 |
| Short term borrowings (II) | - |
|
| Total borrowings (III = I + II) | 194.55 | [•0 |
| Equity | ||
| Equity Share capital (IV) | 13.15 | [•1 |
| Reserves and Surplus (V) | 742.31 | [•1 |
| Total Equity (VI = IV + V) | 755.46 | [•1 |
| Long Term borrowings / Total Equity (VII = I / VI) (times) | 0.26 | [•1 |
| Total borrowings / total equity (VIII = III / VI) (times) | 0.26 | [•1 |
# All terms shall carry the meaning as per Schedule III of the Companies Act, 2013.
* The corresponding post Issue capitalization data is not determinable at this stage pending the determination of the Issue Price and hence has not been furnished. ** Total borrowings are the sum of long-term borrowings and short-term borrowings.
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