Accounting Policies of Broach Lifecare Hospital Ltd. Company

Mar 31, 2024

NOTE - 19

Notes to the Standalone Financial Statements for the year ended 31st March, 2024 Company Overview:

These financial statements comprise financial statements of Broach Lifecare Hospital Limited ("the Company”) for the year ended on 31st March, 2024. Company was originally incorporated on 25^th April 2023 as BROACH LIFECARE HOSPITAL PRIVATE LIMITED, then after name of the company was changed to BROACH LIFECARE HOSPITAL LIMITED under the provisions of the Companies Act, 2013 with the Registrar of Companies, Ahmedabad, Gujarat. Registration certificate pursuant to name change has been issued on 7th November, 2023.

The Company is primarily engaged in business of healthcare services.

(A) SIGNIFICANT ACCOUNTING POLICIES:

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013 ("the 2013 Act”) and the relevant provisions of the 1956 Act / 2013 Act, as applicable. The financial statements of the Company are prepared under the historical cost convention using the accrual method of accounting. The accounting policies adopted in the preparation of financial statements are consistent with those of the previous year. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in Schedule III to the 2013 Act.The significant accounting policies adopted in the presentation of the financial statements are as under.

(a) Property, Plant and Equipment and Depreciation:

Property, plant and equipment ("PPE¹) are carried at cost less accumulated depreciation and impairment loss, if any. Cost comprises of purchase price and any attributable cost such as duties, freight, borrowing cost, erection and commissioning expenses incurred in bringing the assets to its working conditions for its intended use.

Depreciation is provided on Straight - Line Method based on the useful lives as prescribed under Schedule II of the Act.

Depreciation on deletions during the year is provided up to the date on which the asset is sold/discarded. Depreciation on additions is provided on a pro-rata basis from the date of capitalization. Depreciation on deletions during the year is provided up to the date on which the asset is sold/discarded.

Advance paid/expenditure incurred on acquisition /construction of fixed assets which are not ready for their intended use at each balance sheet date are disclosed under loans and advances as advances on capital account and capital work-in-progr^sijespectively.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for a separate items (major components) of property, plant and equipment.

The residual value, useful life and method of depreciation of an asset is reviewed at each financial year end and adjusted prospectively.

- Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any.

There is no such Intangible Asset during the year.

(b) Use Of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialized.

(c) Revenue Recognition:

Revenue is recognised only when risks and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operation includes sale of drugs and Pharmaceuticals and other chemicals and other income includes interest income, discount income and others.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Insurance claims are recognized as and when they are settled / admitted.

Income stated above is exclusive of taxes collected. Rebates and discounts granted to customers are reduced from revenue.

(d) Salaries, Wages etc.:

Short-term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. These benefits include compensated absences such as paid privilege leave. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the year.

Towards contributions to defined contribution plans are recognised as expense when employees have rendered services entitling them to such benefits.

The company accounts for salaries are on accrual basis.

(e) Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as expense in the period in which they are incurred.

(f) Taxes on Income:

i. Tax Expenses are accounted in the same period to which the revenue and expenses relate. Provision for current income tax is made for the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between the taxable income and the net profit or loss before tax for the year as per the financial statements are indentified and the tax effect of timing differences at the end of the accounting year, based on effective tax rates substantively enacted by the Balance Sheet date.

ii. Current tax assets and Current Tax Liabilities are offset when there is a legally enforceable right to set off the recognized amount and there is an intention to settle the asset and the liability on a net basis.

iii. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities related to taxes on income levied by the same governing taxation laws

iv. Deferred tax assets, other than an unabsorbed depreciation and carried forward losses, are recognized only if there is reasonable certainty that they will be realized in the future and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date. In situations where the company has unabsorbed depreciation and carried forward losses, deferred tax assets are recognized only if there is virtually certainty supported by convincing evidence that the same can be realized against future taxable profits. Deferred Tax assets are reviewed at each Balance Sheet date for their reliability.

(g) Investments:

Long term investments are carried individually at cost. Provision for diminution is made to recognise a decline, other than temporary, in the value of such investments. Current investments are carried individually, at lower of cost and fair value if any. Cost of investments includes acquisition charges such as brokerage, fees and duties.

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments if any. All other investments are classified as long term investments if any.

On disposal of investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss if any

(h) Inventories:

Inventories consisting of stock-in-trade are valued at the lower of cost and not realisable value Cost comprises all cost of purchases and other cost incurred in bringing the inventories to their present location and condition. Cost is determined on the specific identification basis"

The comparison of cost and net realisable values made on an item-by-item basis.

(i) Earnings per share (EPS):

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders for the period by the weighted average number of equity shares outstanding during the period. Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent diluted equity shares outstanding during the year, except where the results would be anti-dilutive.

(j) Cash and Cash Equivalent:

Cash and cash Equivalent consist of cash on hand and bank and short -term investment with original maturities/ holding period of three months or less from the date of investments.

(k) Foreign currency transactions:

Foreign currency transactions if any are recorded at the rates of exchange prevailing on the date of transaction. Exchange differences arising out of transactions settled during the period are recognised in the Statement of Profit and Loss.

Foreign currency monetary assets and liabilities outstanding at the balance sheet date are translated at the year-end exchange rate and differences arising out of such transactions are recognised in the Statement of Profit and Loss.non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

(I) Provisions and Contingencies:

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract.

A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources or an obligation for which the future outcome cannot be ascertained with reasonable certainty. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.

(m) Loans and Advances:

No funds have been advanced/loaned/invested from borrowed funds or (from share premium or from any other sources/ kind of funds) by the Company to any other person (s) or entity(ies-), including foreign entities (intermediaries), with the understanding (whether recorded in writing or otherwise) that the intermediary shall (i) directly or indirectly lend or invest in other persons or entities identified in any other manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

No funds have been received by the Company from any person(s) or entity(ies.), including foreign entities (Funding Parties), with the understanding (whether recorded in writing or otherwise) that the Company (Ultimate Beneficiaries) shall (i) directly or indirectly lend or invest in other persons or entities identified in any other manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(n) Other Accounting Policies:

- These are consistent with generally accepted accounting policies.