Accounting Policies of Yatharth Hospital & Trauma Care Services Ltd. Company

Mar 31, 2025

1.3 Basis of preparation & Material
Accounting Policies

a) Basis of preparation of financial statements:

The Company has adopted accounting policies
that comply with Indian Accounting standards
(Ind AS) notified by Ministry of Corporate Affairs
vide notification dated 16 February 2015 under
section 133 of the Companies Act 2013, as required
by the relevant applicability provisions prescribed
in the same notification. Accounting policies have
been applied consistently to all periods presented
in these financial statements. The financial
statements referred hereinafter have been
prepared in accordance with the requirements
and instructions of Schedule III to the Companies
Act 2013, amended from time to time applicable to
companies to whom Ind AS applies.

The Company''s financial statements have
been prepared in accordance with the Ind AS
prescribed. The preparation of the Company''s
financial statements in conformity with Indian
Accounting Standard requires the Company to
exercise its judgment in the process of applying
the accounting policies. It also requires the use of
accounting estimates and assumptions that effect
the reported amounts of assets and liabilities at the
date of the financial statements. These estimates
and assumptions are assessed on an ongoing basis
and are based on experience and relevant factors,
including expectations of future events that are
believed to be reasonable under the circumstances
and presented under the historical cost convention
on accrual basis of accounting.

b) Revenue Recognition

The Company''s revenue from medical and
healthcare services comprises of income from
hospital services and sale of pharmacy items.

Revenue from contracts with customers is
recognised when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the company
expects to be entitled in exchange for those
goods or services.

Income from hospital services comprises of fees
charged for inpatient and outpatient hospital
services. The performance obligations for this
stream of revenue include accommodation,
surgery, medical/clinical professional services,
food and beverages, investigations and supply of
pharmaceutical and related products.

Revenue is measured based on the transaction
price, which is the fixed consideration adjusted
for components of variable consideration which
constitutes discounts, and any other rights and
obligations as specified in the contract with the
customer. Revenue also excludes taxes collected
(if any) from customers and deposited back to the
respective statutory authorities.

Revenue is recognised at the point in time for the
outpatient hospital services when the related
services are rendered at the transaction price.
With respect to the inpatients hospital services
the revenue is recognized at the transaction price
on such patients when the hospital services are
rendered completely.

Revenue from sale of pharmacy and food and
beverages (including cafe and hospital services),
where the performance obligation is satisfied at
a point in time, is recognised when the control of
goods is transferred to the customer.

The company applies the most likely amount
method or the expected value method to estimate
the variable consideration in the contract. The
selected method that best predicts the amount
of variable consideration is primarily driven by the
number of volume thresholds contained in the
contract. The most likely amount is used for those
contracts with a single volume threshold, while
the expected value method is used for those with
more than one volume threshold. The company
then applies the requirements on constraining
estimates in order to determine the amount of
variable consideration that can be included in the
transaction price and recognised as revenue.

Contract assets represents value to the extent
of medical and healthcare services rendered to
the patients who are undergoing treatment/
observation on the balance sheet date and is not
billed as at the balance sheet date.

Other Income

Interest on deposits, loans and debt instruments
are measured at amortized cost. Interest income
is recorded using the Effective Interest Rate
(EIR). EIR is the rate that exactly discounts the
estimated future cash payments or receipts over
the expected life of the financial instrument or a
shorter period, where appropriate, to the gross
carrying amount of the financial asset or to the
amortized cost of a financial liability. Other Income
includes rental income and ambulance services
being recognized on due basis.

c) Property, Plant and Equipment

Property, Plant and Equipment (PPE) are stated
at original cost of acquisition including incidental
expenses and all the borrowing costs, which are
directly attributable to the acquisition of assets and
installation of the concerned assets. PPE are shown
net of accumulated depreciation.

Capital work in progress is stated at cost, net of
accumulated impairment loss, if any.

Depreciation has been charged as per rules
provided by The Companies Act, 2013. For PPE
acquired during the year, depreciation is provided
on pro rata basis from the date the assets were put
to use. The carrying amount of a property, plant
and equipment is de-recognised when no future
economic benefits are expected from its use or
on disposal. Assets taken on long term lease are
amortized over the balance period of lease.

Depreciation on property, plant and equipment is
provided on written down value method based on
estimated useful life of assets as prescribed in part
C of schedule II to the Companies Act, 2013

The property, plant and equipment acquired under
finance leases, if any, is depreciated over the asset''s
useful life or over the shorter of the asset''s useful
life and the lease term, if there is no reasonable
certainty that the Company will obtain ownership
at the end of the lease term.

Freehold land is not depreciated. Lease hold land is
depreciated over the balance period of lease, once
the building or any other asset erected over such
period of land is put to use.

Based on the planned usage of certain specific
assets and technical assessment, the management
has estimated the useful lives of Property, plant
and equipment as below:

- Individual asset not exceeding H 5,000 have
been fully depreciated in the year of purchase.

- Leasehold improvements are amortised over
the period of the lease or estimated useful life,
whichever is shorter.

The residual values, useful lives, and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.

d) Taxes on Income

Tax Expenses:

Income Tax expense comprises of current tax and
deferred tax charge or credit. Provision for current
tax is made with reference to taxable income
computed for the financial year for which the
financial statements are prepared by applying the
tax rates as applicable.

Current Tax-Current Income tax relating to
items recognized outside the profit and loss is
recognized outside the profit and loss (either
in other comprehensive income or in other
component of equity)

MAT- Minimum Alternate Tax (MAT) paid in a year
is charged to the Statement of Profit and Loss as
current tax. The company recognizes MAT credit
available as an asset only to the extent there is
convincing evidence that the company will pay
normal income tax during the specified period, i.e.,
the period for which MAT Credit is allowed to be
carried forward. In the year in which the Company
recognizes MAT Credit as an asset in accordance
with the Guidance Note on Accounting for Credit
Available in respect of Minimum Alternate Tax
under the Income Tax Act, 1961, the said asset is

created by way of credit to the statement of Profit
and Loss and shown as “MAT Credit Entitlement."
The Company reviews the “MAT Credit Entitlement"
asset at each reporting date and writes down the
asset to the extent the company does not have
convincing evidence that it will pay normal tax
during the sufficient period.

Deferred Tax:-Deferred tax is provided using the
liability method on temporary differences at the
reporting date between the tax bases of assets
and liabilities and their carrying amounts for
financial reporting purpose at reporting date i.e.
timing difference between taxable income and
accounting income. Deferred income tax assets
and liabilities are measured using tax rates and
tax laws that have been enacted or substantively
enacted by the balance sheet date and are
expected to apply to taxable income in the years in
which those temporary differences are expected to
be recovered or settled. The effect of changes in tax
rates on deferred income tax assets and liabilities
is recognized as income or expense in the period
that includes the enactment or the substantive
enactment date. A deferred income tax asset is
recognized to the extent that it is probable that
future taxable profit will be available against which
the deductible temporary differences and tax
losses can be utilized.

The carrying amount of deferred tax assets is
reviewed as at each balance sheet date and
reduced to the extent that it is no longer probable
that sufficient taxable profit will not be available
against which deferred tax asset to be utilized.
Unrecognized deferred tax assets are re-assessed
at each reporting date and are recognized to the
extent that it has become probable that future
taxable profits will allow the deferred tax asset
to be recovered.

Deferred tax assets are recognized for the unused
tax credit to the extent that it is probable that
taxable profits will be available against which the
losses will be utilized. Significant management
judgement is required to determine the amount
of deferred tax assets that can be recognized,
based upon the likely timing and the level of future
taxable profits.

Deferred tax relating to items recognised outside
profit or loss is recognised outside profit or loss
(either in other comprehensive income or in
equity). Deferred tax items are recognised in
correlation to the underlying transaction either in
OCI or directly in equity.

e) Borrowing Costs

Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised
as part of the cost of the asset. All other borrowing
costs are expensed in the period in which they
occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the
borrowing of funds.

f) Leases

Right of Use Assets

The Company recognizes a right-of-use asset, on
a lease by-lease basis, to measure that right-of-
use asset an amount equal to the lease liability,
adjusted by the amount of any prepaid or accrued
lease payments relating to that lease recognised in
the balance sheet immediately before the date of
initial application.

The cost of right-of-use assets includes the amount
of lease liabilities recognised. Initial direct costs
incurred and lease payments made at or before
the commencement date less any lease incentives
received, the recognized right-of-use assets are
depreciated on a straight-line basis over the shorter
of its estimated useful life and the lease term.
Right-of-use assets are subject to impairment test.

Lease Liabilities

The Company recognise a lease liability at the
present value of the remaining lease payments,
discounted using the lessee''s incremental
borrowing rate. The lease payments include fixed
payments (including in-substance fixed payments)
less any lease incentives receivable, variable lease
payments that depend on a lease by lease basis. In
calculating the present value of lease payments,
the Company uses the incremental borrowing rate
at the lease commencement date if the interest
rate implicit in the lease is not readily determinable.

Short-term Leases and leases of low-value assets

The company applies the short-term lease
recognition exemption to its short-term leases (i.e.,
those leases that have a lease term of 12 months
or less from the commencement date and do not
contain a purchase option). It also applies the lease
of low-value assets recognition exemption to leases
that are considered of low value. Lease payments
on short-term leases and leases of low-value assets
are recognised as expense on a straight-line basis
over the lease term.

g) Inventory

Inventories are stated at lower of cost or net
realisable value. Cost of Inventories comprises
of cost of purchase, cost of conversion and other
costs incurred in bringing the inventories to their
present location and condition. Closing stock cost
is determined on FIFO basis.

h) Employee Benefits

The undiscounted amount of short-term employee
benefits i.e. wages and salaries, bonus, incentive
and annual leave etc. expected to be paid in
exchange for the service rendered by employees
are recognized as an expense except in so far as
employment costs may be included within the cost
of an asset during the period when the employee
renders the services.

Retirement benefit in the form of provident fund
and pension contribution is a defined contribution
scheme and is recognized as an expense except in
so far as employment costs may be included within
the cost of an asset.

Gratuity is a defined benefit obligation. The
liability is provided for on the basis of actuarial
valuation made at the end of each financial year.
The actuarial valuation is done as per Projected
Unit Credit method.

Re-measurements, comprising of actuarial
gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on
the net defined benefit liability and the return
on plan assets (excluding amounts included in
net interest on the net defined benefit liability),
are recognised immediately in the balance sheet
with a corresponding debit or credit to profit or
loss through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or
loss in subsequent periods.

i) Foreign Exchange Transactions

These financial statements are presented in
Indian Rupees (H), which is the Company''s
functional currency.

Transactions in foreign currency are recorded on
initial recognition at the spot rate prevailing at the
time of the transaction.

At the end of each reporting period

• Monetary items (Assets and Liabilities)
denominated in foreign currencies are
retranslated at the rates prevailing at that date.

• Non-monetary items carried at fair value that
are denominated in foreign currencies
are retranslated at the rates prevailing at the
date when the fair value was determined.

• Non-monetary items that are measured in
terms of historical cost in a foreign currency
are not retranslated Exchange differences on
monetary items are recognized in profit o r
loss in the period in which they arise.

j) Fair Value Measurement:

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

• In the principal market for the asset
or liability, or

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

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

A fair value measurement of a non-financial asset
takes into account a market participant''s ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.

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

All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorized within the fair value hierarchy,
described as follows, based on the lowest
level input that is significant to the fair value
measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable.

• Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable.

For assets and liabilities that are recognised in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.

For the purpose of fair value disclosures, the
Company has determined classes of assets &
liabilities on the basis of the nature, characteristics
and the risks of the asset or liability and the level of
the fair value hierarchy as explained above.

k) Financial Instrument

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

a) Recognition

The company recognizes financial assets and
financial liabilities when it becomes a party to
the contractual provisions of the instrument

b) Measurement

i) Financial assets

A financial asset is measured at

- amortised cost or

- fair value either through
other compressive income or
through profit or loss

ii) Financial liability

A financial liability is measured at

- amortised cost using the effective
interest method or

- fair value through profit or loss.

iii) Initial recognition and measurement:-

All financial assets and liabilities
are recognized at fair value at initial
recognition, plus or minus, any transaction

cost that are directly attributable to the
acquisition or issue of financial assets
and financial liabilities that are not at fair
value through profit or loss.

iv) Subsequent measurement

Financial assets as subsequent measured
at amortised cost or fair value through
other comprehensive income (FVOCI) or
fair value through profit or loss (FVTPL) as
the case may be.

Financial liabilities as subsequent
measured at amortised cost or fair value
through profit or loss.

c) Financial assets

i) Trade Receivables:

Trade receivables are the contractual right
to receive cash or other financial assets
and recognized initially at transaction
value. Subsequently measured at
amortised cost (Initial fair value less
expected credit loss). Expected credit loss
is the difference between all contractual
cash flows that are due to the company
and all that the company expects to
receive (i.e. all cash shortfall), discounted
at the effective interest rate.

ii) Equity investments -Investment in
Subsidiary, associates & Joint venture

Investment in Subsidiary, associates
& Joint venture is carried at cost
as per Ind AS27

All other equity investments in scope of
Ind AS 109 are measured at fair value.
Equity instruments which are held for
trading and contingent consideration
recognised by an acquirer in a business
combination to which Ind AS103 applies
are classified as at FVTPL. For all other
equity instruments, the company
may make an irrevocable election to
present in other comprehensive income
subsequent changes in the fair value.
The Company makes such election on
an instrument by- instrument basis.
The classification is made on initial
recognition and is irrevocable.

If the Company decides to classify an
equity instrument as at Fair value to other
comprehensive income (FVTOCI), then

all fair value changes on the instrument,
excluding dividends, are recognized
in the OCI. There is no recycling of the
amounts from OCI to P&L, even on sale
of investment. However, the company
may transfer the cumulative gain or
loss within equity.

Equity instruments included within
the FVTPL category are measured at
fair value with all changes
recognized in the P&L.

iii) Cash and cash Equivalents:

Cash and cash equivalent in the balance
sheet comprise cash at banks and on
hand and short-term deposits with an
original maturity of three months or less,
highly liquid investments that are readily
convertible into known amounts of cash
and which are subject to insignificant risk
of changes in value.

iv) Impairment of Financial Assets:

The Company recognizes loss allowances
using the expected credit loss (ECL)
model for the financial assets which are
not fair valued through profit or loss.
Loss allowance for trade receivables with
no significant financing component is
measured at an amount equal to lifetime
ECL. For all other financial assets, expected
credit losses are measured at an amount
equal to the 12-month ECL, unless there
has been a significant increase incredit risk
from initial recognition in which case those
are measured at lifetime ECL. The amount
of expected credit losses (or reversal) that
is required to adjust the loss allowance at
the reporting date to the amount that is
required to be recognised is recognized as
an impairment gain or loss in profit or loss.

d) Financial liabilities

i) Trade payables:

Trade payables represent liabilities for
goods and services provided to the
Company prior to the end of financial year
and which are unpaid. Trade payables
are presented as current liabilities unless
payment is not due within 12 months
after the reporting period or not paid/

payable within operating cycle. They are
recognised initially at their fair value and
subsequently measured at amortised
cost using the effective interest method.

ii) Borrowings:

Borrowings are initially recognised at fair
value, net of transaction costs incurred.
Borrowings are subsequently measured
at amortised cost. Any difference between
the proceeds (net of transaction costs) and
the redemption amount is recognised
in profit or loss over the period of the
borrowings using the effective interest
method. Fees paid on the establishment
of loan facilities are recognised as
transaction costs of the loan.

Borrowings are classified as current
liabilities unless the Company has an
unconditional right to defer settlement of
the liability for at least 12 months after the
reporting period. Where there is a breach
of a material provision of a long-term loan
arrangement on or before the end of the
reporting period with the effect that the
liability becomes payable on demand on
the reporting date, the company does
not classify the liability as current, if the
lender agreed, after the reporting period
and before the approval of the financial
statements for issue, not to demand
payment as a consequence of the breach.

iii) Equity Instruments:

An equity instrument is any contract
that evidences a residual interest in the
assets of company after deducting all
of its liabilities. Equity instruments are
recognised at the proceeds received, net
of direct issue costs.

e) Derecognition of financial instrument:

The company derecognizes a financial asset
when the contractual rights to the cash flows
from the financial asset expire or it transfers
the financial asset and the transfer qualifies
for derecognition under Ind AS 109. A financial
liability (or a part of a financial liability) is
derecognized from the company''s balance
sheet when the obligation specified in the
contract is discharged or cancelled or expires.

f) Offsetting of financial instruments:

Financial assets and financial liabilities
are offset and the net amount is reported
in the balance sheet if there is a currently
enforceable legal right to offset the recognised
amounts and there is an intention to settle on
a net basis, to realise the assets and settle the
liabilities simultaneously

g) Financial guarantee

Financial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder
for a loss it incurs because the specified
debtor fails to make a payment when due
in accordance with the terms of a debt
instrument. Financial guarantee contracts are
recognised initially as a liability at fair value,
adjusted for transaction costs that are directly
attributable to the issuance of the guarantee.
Subsequently, the liability is measured at
the higher of the amount of loss allowance
determined asper impairment requirements
of IND AS 109 and the amount recognised less
cumulative amortization.

l) Operating cycle:

Based on the nature of products / activities of
the Company and the normal time between
acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined
its operating cycle as 12 months for the purpose of
classification of its assets and liabilities as current
and non-current.

m) Earnings Per Share

The Earning per share is computed in accordance
with the IND AS 33. Basic earnings per share are
calculated by dividing the net profit or loss for
the year attributable to equity shareholders by
the weighted average number of equity shares
outstanding during the year. For the purpose of
calculating diluted earnings per share, the net
profit or loss for the year attributable to equity
shareholders and the weighted average number
of shares outstanding during the year are adjusted
for the effects of all dilutive potential equity shares.

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Mar 31, 2024

1.3 Basis of preparation & Significant Accounting Policies

a) Basis of preparation of financial statements:

The Company has adopted accounting policies that comply with Indian Accounting standards (Ind AS) notified by Ministry of Corporate Affairs vide notification dated 16 February 2015 under section 133 of the Companies Act 2013, as required by the relevant applicability provisions prescribed in the same notification. Accounting policies have been applied consistently to all periods presented in these financial statements. The financial statements referred hereinafter have been prepared in accordance with the requirements and instructions of Schedule III to the Companies Act 2013, amended from time to time applicable to companies to whom Ind AS applies.

The Company’s financial statements have been prepared in accordance with the Ind AS prescribed. The preparation of the Company’s financial statements in conformity with Indian Accounting Standard requires the Company to exercise its judgment in the process of applying the accounting policies. It also requires the use of accounting estimates and assumptions that effect the reported amounts of assets and liabilities at the date of the financial statements. These estimates

and assumptions are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances and presented under the historical cost convention on accrual basis of accounting.

>) Revenue Recognition

The Company’s revenue from medical and healthcare services comprises of income from hospital services and sale of pharmacy items.

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

Income from hospital services comprises of fees charged for inpatient and outpatient hospital services. The performance obligations for this stream of revenue include accommodation, surgery, medical/clinical professional services, food and beverages, investigations and supply of pharmaceutical and related products.

Revenue is measured based on the transaction price, which is the fixed consideration adjusted for components of variable consideration which constitutes discounts, and any other rights and obligations as specified in the contract with the customer. Revenue also excludes taxes collected (if any) from customers and deposited back to the respective statutory authorities.

Revenue is recognised at the point in time for the outpatient hospital services when the related services are rendered at the transaction price. With respect to the inpatients hospital services the revenue is recognized at the transaction price on such patients when the hospital services are rendered completely.

Revenue from sale of pharmacy and food and beverages (including cafe and hospital services), where the performance obligation is satisfied at a point in time, is recognised when the control of goods is transferred to the customer.

The company applies the most likely amount method or the expected value method to estimate the variable consideration in the contract. The selected method that best predicts the amount

of variable consideration is primarily driven by the number of volume thresholds contained in the contract. The most likely amount is used for those contracts with a single volume threshold, while the expected value method is used for those with more than one volume threshold. The company then applies the requirements on constraining estimates in order to determine the amount of variable consideration that can be included in the transaction price and recognised as revenue.

Contract assets represents value to the extent of medical and healthcare services rendered to the patients who are undergoing treatment/ observation on the balance sheet date and is not billed as at the balance sheet date.

Other Income

Interest on deposits, loans and debt instruments are measured at amortized cost. Interest income is recorded using the Effective Interest Rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. Other Income includes rental income and ambulance services being recognized on due basis.

c) Property, Plant and Equipment

Property, Plant and Equipment (PPE) are stated at original cost of acquisition including incidental expenses and all the borrowing costs, which are directly attributable to the acquisition of assets and installation of the concerned assets. PPE are shown net of accumulated depreciation.

Capital work in progress is stated at cost, net of accumulated impairment loss, if any.

xDepreciation has been charged as per rules provided by The Companies Act, 2013. For PPE acquired during the year, depreciation is provided on pro rata basis from the date the assets were put to use. The carrying amount of a property, plant and equipment is de-recognised when no future economic benefits are expected from its use or on disposal. Assets taken on long term lease are amortized over the balance period of lease.

Depreciation on property, plant and equipment is provided on written down value method based on

The property, plant and equipment acquired under finance leases, if any, is depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term, if there is no reasonable certainty that the Company will obtain ownership at the end of the lease term.

Freehold land is not depreciated. Lease hold land is depreciated over the balance period of lease, once the building or any other asset erected over such period of land is put to use.

Based on the planned usage of certain specific assets and technical assessment, the management has estimated the useful lives of Property, plant and equipment as below:

- Individual asset not exceeding H 5,000 have been fully depreciated in the year of purchase.

- Leasehold improvements are amortised over the period of the lease or estimated useful life, whichever is shorter.

The residual values, useful lives, and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

) Taxes on Income

Tax Expenses:

Income Tax expense comprises of current tax and deferred tax charge or credit. Provision for current tax is made with reference to taxable income computed for the financial year for which the financial statements are prepared by applying the tax rates as applicable.

Current Tax-Current Income tax relating to items recognized outside the profit and loss is

recognized outside the profit and loss (either in other comprehensive income or in other component of equity)

MAT- Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The company recognizes MAT credit available as an asset only to the extent there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT Credit is allowed to be carried forward. In the year in which the Company recognizes MAT Credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961, the said asset is created by way of credit to the statement of Profit and Loss and shown as “MAT Credit Entitlement.” The Company reviews the “MAT Credit Entitlement” asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the sufficient period.

Deferred Tax:-Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date i.e. timing difference between taxable income and accounting income. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed as at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will not be available against which deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets are recognized for the unused tax credit to the extent that it is probable that taxable profits will be available against which the losses will be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

e) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

f) Leases

Right of Use Assets

The Company recognizes a right-of-use asset, on a lease by-lease basis, to measure that right-of-use asset an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet immediately before the date of initial application.

The cost of right-of-use assets includes the amount of lease liabilities recognised. Initial direct costs incurred and lease payments made at or before the commencement date less any lease incentives received, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment test.

Lease Liabilities

The Company recognise a lease liability at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on a lease by lease basis. In

calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable.

Short-term Leases and leases of low-value assets

The company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

g) Inventory

Inventories are stated at lower of cost or net realisable value. Cost of Inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Closing stock cost is determined on FIFO basis.

h) Employee Benefits

The undiscounted amount of short-term employee benefits i.e. wages and salaries, bonus, incentive and annual leave etc. expected to be paid in exchange for the service rendered by employees are recognized as an expense except in so far as employment costs may be included within the cost of an asset during the period when the employee renders the services.

Retirement benefit in the form of provident fund and pension contribution is a defined contribution scheme and is recognized as an expense except in so far as employment costs may be included within the cost of an asset.

Gratuity is a defined benefit obligation. The liability is provided for on the basis of actuarial valuation made at the end of each financial year. The actuarial valuation is done as per Projected Unit Credit method.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to profit or

loss through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

i) Foreign Exchange Transactions

These financial statements are presented in Indian Rupees (INR), which is the Company’s functional currency.

Transactions in foreign currency are recorded on initial recognition at the spot rate prevailing at the time of the transaction.

At the end of each reporting period

• Monetary items (Assets and Liabilities) denominated in foreign currencies are retranslated at the rates prevailing at that date.

• Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined.

• Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated Exchange differences on monetary items are recognized in profit or loss in the period in which they arise.

j) Fair Value Measurement:

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

• In the principal market for the asset or liability, or

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

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

A fair value measurement of a non-financial asset takes into account a market participant’s ability to

generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

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

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the basis of the nature, characteristics and the risks of the asset or liability and the level of the fair value hierarchy as explained above.

k) Financial Instrument

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

a) Recognition

The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument

b) Measurement

i) Financial assets

A financial asset is measured at

- amortised cost or

- fair value either through other compressive income or through profit or loss

ii) Financial liability

A financial liability is measured at

- amortised cost using the effective interest method or

- fair value through profit or loss.

iii) Initial recognition and measurement:-

All financial assets and liabilities are recognized at fair value at initial recognition, plus or minus, any transaction cost that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss.

iv) Subsequent measurement

Financial assets as subsequent measured at amortised cost or fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL) as the case may be.

Financial liabilities as subsequent measured at amortised cost or fair value through profit or loss.

c) Financial assets

i) Trade Receivables:

Trade receivables are the contractual right to receive cash or other financial assets and recognized initially at transaction value. Subsequently measured at amortised cost (Initial fair value less expected credit loss). Expected credit loss is the difference between all contractual cash flows that are due to the company and all that the company expects to receive (i.e. all cash shortfall), discounted at the effective interest rate.

ii) Equity investments -Investment in Subsidiary, associates & Joint venture

Investment in Subsidiary, associates & Joint venture is carried at cost as per Ind AS27

All other equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by- instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at Fair value to other comprehensive income (FVTOCI), then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

iii) Cash and cash Equivalents:-

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

iv) Impairment of Financial Assets:-

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime

ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase incredit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in profit or loss.

d) Financial liabilities

i) Trade payables:

Trade payables represent liabilities for goods and services provided to the Company prior to the end of financial year and which are unpaid. Trade payables are presented as current liabilities unless payment is not due within 12 months after the reporting period or not paid/ payable within operating cycle. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

ii) Borrowings:

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the company does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

iii) Equity Instruments:

An equity instrument is any contract that evidences a residual interest in the assets of company after deducting all of its liabilities. Equity instruments are recognised at the proceeds received, net of direct issue costs.

e) Derecognition of financial instrument:

The company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the company’s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

f) Offsetting of financial instruments:

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously

g) Financial guarantee

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined asper impairment requirements of IND AS 109 and the amount recognised less cumulative amortization.

l) Operating cycle:-

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

m) Earnings Per Share

The Earning per share is computed in accordance with the IND AS 33. Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

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Mar 31, 2023

Significant Accounting Policies

a) Basis of preparation of financial statements:

The Company has adopted accounting policies that comply with Indian Accounting standards (Ind AS)
notified by Ministry of Corporate Affairs vide notification dated 16 February 2015 under section 133 of the
Companies Act 2013, as required by the relevant applicability provisions prescribed in the same
notification. Accounting policies have been applied consistently to all periods presented in these
financial statements. The financial statements referred hereinafter have been prepared in accordance
with the requirements and instructions of Schedule III to the Companies Act 2013, amended from time
to time applicable to companies to whom Ind AS applies.

The Company''s financial statements have been prepared in accordance with the Ind AS prescribed. The
preparation of the Company''s financial statements in conformity with Indian Accounting Standard
requires the Company to exercise its judgment in the process of applying the accounting policies. It
also requires the use of accounting estimates and assumptions that effect the reported amounts of
assets and liabilities at the date of the financial statements. These estimates and assumptions are
assessed on an ongoing basis and are based on experience and relevant factors, including expectations
of future events that are believed to be reasonable under the circumstances and presented under the
historical cost convention on accrual basis of accounting.

b) Revenue Recognition

The Company''s revenue from medical and healthcare services comprises of income from hospital
services and sale of pharmacy items.

Revenue from contracts with customers is recognised when control of the goods or services are
transferred to the customer at an amount that reflects the consideration to which the company expects
to be entitled in exchange for those goods or services.

Income from hospital services comprises of fees charged for inpatient and outpatient hospital services.
The performance obligations for this stream of revenue include accommodation, surgery,
medical/clinical professional services, food and beverages, investigations, and supply of pharmaceutical
and related products.

Revenue is measured based on the transaction price, which is the fixed consideration adjusted for
components of variable consideration which constitutes discounts, estimated disallowances and any
other rights and obligations as specified in the contract with the customer. Revenue also excludes taxes
collected (if any) from customers and deposited back to the respective statutory authorities.

Revenue is recognised at the point in time for the outpatient hospital services when the related services
are rendered at the transaction price. With respect to the inpatients hospital services the revenue is
recognized at the transaction price on such patients when the hospital services are rendered
completely.

Revenue from sale of pharmacy and food and beverages (including cafe and hospital services), where
the performance obligation is satisfied at a point in time, is recognised when the control of goods is
transferred to the customer.

The company applies the most likely amount method or the expected value method to estimate the
variable consideration in the contract. The selected method that best predicts the amount of variable
consideration is primarily driven by the number of volume thresholds contained in the contract. The
most likely amount is used for those contracts with a single volume threshold, while the expected value
method is used for those with more than one volume threshold. The company then applies the
requirements on constraining estimates in order to determine the amount of variable consideration
that can be included in the transaction price and recognised as revenue.

Contract assets represents value to the extent of medical and healthcare services rendered to the
patients who are undergoing treatment/ observation on the balance sheet date and is not billed as at
the balance sheet date.

Other Income

Interest on deposits, loans and debt instruments are measured at amortized cost. Interest income is
recorded using the Effective Interest Rate (EIR). EIR is the rate that exactly discounts the estimated
future cash payments or receipts over the expected life of the financial instrument or a shorter period,
where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a
financial liability. Other Income includes rental income and ambulance services being recognized on
due basis.

c) Property, Plant and Equipment

Property, Plant and Equipment (PPE) are stated at original cost of acquisition including incidental
expenses and all the borrowing costs, which are directly attributable to the acquisition of assets and
installation of the concerned assets. PPE are shown net of accumulated depreciation.

Capital work in progress is stated at cost, net of accumulated impairment loss, if any.

Depreciation has been charged as per rules provided by The Companies Act, 2013. For PPE acquired
during the year, depreciation is provided on pro rata basis from the date the assets were put to use. The
carrying amount of a property, plant and equipment is de-recognised when no future economic
benefits are expected from its use or on disposal. Assets taken on long term lease are amortized over
the balance period of lease.

Depreciation on property, plant and equipment is provided on written down value method based on
estimated useful life of assets as prescribed in part C of schedule II to the Companies Act, 2013

The property, plant and equipment acquired under finance leases, if any, is depreciated over the asset''s
useful life or over the shorter of the asset''s useful life and the lease term, if there is no reasonable
certainty that the Company will obtain ownership at the end of the lease term.

Freehold land is not depreciated. Lease hold land is depreciated over the balance period of lease, once
the building or any other asset erected over such period of land is put to use.

Based on the planned usage of certain specific assets and technical assessment, the management has
estimated the useful lives of Property, plant and equipment as below:

- Individual asset not exceeding Rs. 5,000 have been fully depreciated in the year of purchase.

- Leasehold improvements are amortised over the period of the lease or estimated useful life,
whichever is shorter.

The residual values, useful lives, and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.

d) Taxes on Income
Tax Expenses:

Income Tax expense comprises of current tax and deferred tax charge or credit. Provision for current
tax is made with reference to taxable income computed for the financial year for which the financial
statements are prepared by applying the tax rates as applicable.

Current Tax-Current Income tax relating to items recognized outside the profit and loss is recognized
outside the profit and loss (either in other comprehensive income or in other component of equity)

MAT- Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as
current tax. The company recognizes MAT credit available as an asset only to the extent there is
convincing evidence that the company will pay normal income tax during the specified period, i.e.,
the period for which MAT Credit is allowed to be carried forward. In the year in which the Company
recognizes MAT Credit as an asset in accordance with the Guidance Note on Accounting for Credit
Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961, the said asset is created
by way of credit to the statement of Profit and Loss and shown as “MAT Credit Entitlement.” The
Company reviews the “MAT Credit Entitlement” asset at each reporting date and writes down the
asset to the extent the company does not have convincing evidence that it will pay normal tax during
the sufficient period.

Deferred Tax: -Deferred tax is provided using the liability method on temporary differences at the
reporting date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purpose at reporting date i.e. timing difference between taxable income and accounting
income. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have
been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. The
effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or
expense in the period that includes the enactment or the substantive enactment date. A deferred
income tax asset is recognized to the extent that it is probable that future taxable profit will be
available against which the deductible temporary differences and tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed as at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profit will not be available against which
deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting
date and are recognized to the extent that it has become probable that future taxable profits will allow
the deferred tax asset to be recovered.

Deferred tax assets are recognized for the unused tax credit to the extent that it is probable that
taxable profits will be available against which the losses will be utilized. Significant management
judgement is required to determine the amount of deferred tax assets that can be recognized, based
upon the likely timing and the level of future taxable profits.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either
in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the
underlying transaction either in OCI or directly in equity.

e) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as
part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the
borrowing of funds.

f) Leases

Right of Use Assets

The Company recognizes a right-of-use asset, on a lease by-lease basis, to measure that right-of-use
asset an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease

payments relating to that lease recognised in the balance sheet immediately before the date of initial
application.

The cost of right-of-use assets includes the amount of lease liabilities recognised. Initial direct costs
incurred and lease payments made at or before the commencement date less any lease incentives
received, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of
its estimated useful life and the lease term. Right-of-use assets are subject to impairment test.

Lease Liabilities

The Company recognise a lease liability at the present value of the remaining lease payments,
discounted using the lessee''s incremental borrowing rate. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments
that depend on a lease by lease basis. In calculating the present value of lease payments, the Company
uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the
lease is not readily determinable.

Short-term Leases and leases of low-value assets

The company applies the short-term lease recognition exemption to its short-term leases (i.e., those
leases that have a lease term of 12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition exemption to leases that are
considered of low value. Lease payments on short-term leases and leases of low-value assets are
recognised as expense on a straight-line basis over the lease term.

g) Inventory

Inventories are stated at lower of cost or net realisable value. Cost of Inventories comprises of cost of
purchase, cost of conversion and other costs incurred in bringing the inventories to their present
location and condition. Closing stock cost is determined on FIFO basis.

h) Employee Benefits

The undiscounted amount of short-term employee benefits i.e. wages and salaries, bonus, incentive
and annual leave etc. expected to be paid in exchange for the service rendered by employees are
recognized as an expense except in so far as employment costs may be included within the cost of an
asset during the period when the employee renders the services.

Retirement benefit in the form of provident fund and pension contribution is a defined contribution
scheme and is recognized as an expense except in so far as employment costs may be included within
the cost of an asset.

Gratuity is a defined benefit obligation. The liability is provided for on the basis of actuarial valuation
made at the end of each financial year. The actuarial valuation is done as per Projected Unit Credit
method.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets
(excluding amounts included in net interest on the net defined benefit liability), are recognised
immediately in the balance sheet with a corresponding debit or credit to profit or loss through OCI in
the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent
periods.

i) Foreign Exchange Transactions

These financial statements are presented in Indian Rupees (INR), which is the Company''s functional
currency.

Transactions in foreign currency are recorded on initial recognition at the spot rate prevailing at the
time of the transaction.

At the end of each reporting period

• Monetary items (Assets and Liabilities) denominated in foreign currencies are retranslated
at the rates prevailing at that date.

• Non-monetary items carried at fair value that are denominated in foreign currencies
are retranslated at the rates prevailing at the date when the fair value was determined.

• Non-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated Exchange differences on monetary items are recognized in profit or loss in the
period in which they arise.

j) Fair Value Measurement:

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

• In the principal market for the asset or liability, or

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

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

A fair value measurement of a non-financial asset takes into account a market participant''s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.

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

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair

value measurement is directly or indirectly observable.

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorization (based on the lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on
the basis of the nature, characteristics and the risks of the asset or liability and the level of the fair value
hierarchy as explained above.

k) Financial Instrument

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

a) Recognition

The company recognizes financial assets and financial liabilities when it becomes a party to
the contractual provisions of the instrument

b) Measurement

i) Financial assets

A financial asset is measured at

- amortised cost or

- fair value either through other compressive income or through profit or loss

ii) Financial liability

A financial liability is measured at

- amortised cost using the effective interest method or

- fair value through profit or loss.

iii) Initial recognition and measurement:-

All financial assets and liabilities are recognized at fair value at initial recognition, plus or
minus, any transaction cost that are directly attributable to the acquisition or issue of financial
assets and financial liabilities that are not at fair value through profit or loss.

iv) Subsequent measurement

Financial assets as subsequent measured at amortised cost or fair value through other
comprehensive income (FVOCI) or fair value through profit or loss (FVTPL) as the case may
be.

Financial liabilities as subsequent measured at amortised cost or fair value through profit or
loss.

c) Financial assets

i) Trade Receivables:

Trade receivables are the contractual right to receive cash or other financial assets and

recognized initially at transaction value. Subsequently measured at amortised cost (Initial fair
value less expected credit loss). Expected credit loss is the difference between all contractual
cash flows that are due to the company and all that the company expects to receive (i.e. all
cash shortfall), discounted at the effective interest rate.

ii) Equity investments -Investment in Subsidiary, associates & Joint venture

Investment in Subsidiary, associates & Joint venture is carried at cost as per Ind AS27

All other equity investments in scope of Ind AS 109 are measured at fair value. Equity
instruments which are held for trading and contingent consideration recognised by an
acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For
all other equity instruments, the company may make an irrevocable election to present in
other comprehensive income subsequent changes in the fair value. The Company makes such
election on an instrument by- instrument basis. The classification is made on initial recognition
and is irrevocable.

If the Company decides to classify an equity instrument as at Fair value to other
comprehensive income (FVTOCI), then all fair value changes on the instrument, excluding
dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L,
even on sale of investment. However, the company may transfer the cumulative gain or loss
within equity.

Equity instruments included within the FVTPL category are measured at fair value with
all changes recognized in the P&L.

iii) Cash and cash Equivalents:-

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short¬
term deposits with an original maturity of three months or less, highly liquid investments that
are readily convertible into known amounts of cash and which are subject to insignificant risk
of changes in value.

iv) Impairment of Financial Assets:-

The Company recognizes loss allowances using the expected credit loss (ECL) model for the
financial assets which are not fair valued through profit or loss. Loss allowance for trade
receivables with no significant financing component is measured at an amount equal to
lifetime ECL. For all other financial assets, expected credit losses are measured at an amount
equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial
recognition in which case those are measured at lifetime ECL. The amount of expected credit
losses (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognised is recognized as an impairment gain or loss in profit
or loss.

d) Financial liabilities

i) Trade payables:

Trade payables represent liabilities for goods and services provided to the Company prior to
the end of financial year and which are unpaid. Trade payables are presented as current
liabilities unless payment is not due within 12 months after the reporting period or not
paid/payable within operating cycle. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective interest method.

ii) Borrowings:

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings
are subsequently measured at amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in profit or loss over the period of
the borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan.

Borrowings are classified as current liabilities unless the Company has an unconditional right
to defer settlement of the liability for at least 12 months after the reporting period. Where there
is a breach of a material provision of a long-term loan arrangement on or before the end of the

reporting period with the effect that the liability becomes payable on demand on the reporting
date, the company does not classify the liability as current, if the lender agreed, after the
reporting period and before the approval of the financial statements for issue, not to demand
payment as a consequence of the breach.

iii) Equity Instruments:

An equity instrument is any contract that evidences a residual interest in the assets of
company after deducting all of its liabilities. Equity instruments are recognised at the proceeds
received, net of direct issue costs.

e) Derecognition of financial instrument:

The company derecognizes a financial asset when the contractual rights to the cash flows from
the financial asset expire or it transfers the financial asset and the transfer qualifies for
derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is
derecognized from the company''s balance sheet when the obligation specified in the contract
is discharged or cancelled or expires.

f) Offsetting of financial instruments:

Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is a currently enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis, to realise the assets and settle the liabilities
simultaneously

g) Financial guarantee

Financial guarantee contracts issued by the Company are those contracts that require a
payment to be made to reimburse the holder for a loss it incurs because the specified debtor
fails to make a payment when due in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for
transaction costs that are directly attributable to the issuance of the guarantee. Subsequently,
the liability is measured at the higher of the amount of loss allowance determined asper
impairment requirements of IND AS 109 and the amount recognised less cumulative
amortization.

l) Operating cycle:-

Based on the nature of products / activities of the Company and the normal time between acquisition
of assets and their realisation in cash or cash equivalents, the Company has determined its operating
cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

m) Earnings Per Share

The Earning per share is computed in accordance with the IND AS 33. Basic earnings per share are
calculated by dividing the net profit or loss for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year. For the purpose of calculating
diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are adjusted for the effects of all
dilutive potential equity shares.