Accounting Policies of Chandan Healthcare Ltd. Company

Mar 31, 2025

e) Significant accounting policies

i. ) Revenue recognition

Revenue from the sale of goods is recognized
when ownership, along with all significant risks
and rewards, has been transferred to the buyer,
and when there is no significant uncertainty
regarding the amount of consideration to be
received from the sale.

Revenue from the sale of services is recognized
using the completed service contract method,
provided there is no significant uncertainty
regarding the amount of consideration to be
received for rendering the service.

Sales are accounted for net of amounts
recovered towards gst and sales returns.

Sales returns are recorded upon the actual
receipt of returned goods or the settlement of
claims.

Revenue arising from the use by others of
enterprise resources yielding interest and
dividends should only be recognised when
no significant uncertainty as to measurability
or collectability exists. These revenues are
recognised on the following bases:

Interest: On a time proportion basis taking into
account the amount outstanding and the rate
applicable.

Dividends: When the owner''s right to receive
payment is established.

ii. ) Inventories

Inventories comprise of diagnostic kits ,reagents,
laboratory chemicals and consumables,
these are measured at lower of cost and net

realisable value.The cost of inventories is based
on the weighted average cost formula and
includes expenditure incurred in acquiring the
inventories and other costs incurred in bringing
them to their present location and condition.
Net realisable value is the estimated selling
price in the ordinary course of business, less
estimated costs necessary to make the sale.The
comparison of cost and net realisable value is
made on an item-by-Item basis.

iii.) Property, plant & equipments

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

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

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

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

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

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

iv. ) Intangible assets

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

v. ) Depreciation & Amortisation

Depreciation is recognised so as to write off the
cost of assets (other than freehold land) less
their residual values over their useful lives.

The Company has charged depreciation on
property, plant & equipment (PPE) based on
the Straight line Method(SLM) as per useful life
specified in schedule II of the Companies Act,
2013.

Amortisation is calculated to write off the cost
of intangible assets less their estimated residual
values over their estimated useful lives using
the straight line method (SLM) and is included
in depreciation and amortisation expense in
statement of profit and loss.

Depreciation and amortisation on additions and
deletions are restricted to the period of use.

Residual value is considered to be 5% on all the
assets.

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

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

vi. ) Employee benefits

Short-term employee benefits

Short term employee benefits are measured
on an undiscounted basis and expensed as the
related service is provided.A short term liability is

recognised if the Company has a present legal
or constructive obligation to pay the amount as
a result of past service provided by the employee
and the obligation can be estimated reliably.

Defined contribution plans

A defined contribution plan is a post¬
employment benefit plan where the company''s
legal or constructive obligation is limited to the
amount that it contributes to a seperate legal
entity. The company makes specified monthly
contributions towards government administered
provident fund scheme and employees'' state
insurance (''ESI'') scheme.The company makes
specified monthly contributions towards
government administered provident fund
scheme and employees'' state insurance (''ESI'')
scheme. Obligations for contributions to defined
contribution plans are expensed as an employee
benefits expense in statement of profit and loss
in the period in which the related services are
rendered by employees.

Defined benefit plans

A defined benefit plan is a post-employment
benefit plan other than a defined contribution
plan.The company has a defined benefit plan
namely gratuity for all its employees.Liability for
defined benefit plan is provided on the basis of
valuations, as at the balance sheet date, carried
out by an independent actuary.The actuarial
valuation method used by independent actuary
for measuring the liability is the Projected Unit
Credit Method. Actuarial gains and losses due
to changes in actuarial assumptions and are
recognised immediately in the profit and loss
account as income or expense.Current and non
current liabilities are recognised on the basis of
actuarial report.

Termination benefits

Termination benefits are recognised as an
expense as and when incurred.

vii.) Lease

Lease contracts entered by the company majorly
pertains for buildings taken on operationg lease
to conduct its business in the ordinary course.
Leases where the lessor effectively retains
substantially all the risks and benefits of the

leased assets are classified as operating leases.
Operating lease payments are recognized in the
statement of profit and loss on a straight line
basis over the lease term.Lease agreements are
renewable for further period or periods on terms
and condition as mutually agreed with the
lessor.Variation or escalations clauses in lease
rentals are made as per mutually agreed terms
and conditions with the lessor.

viii. ) Impairment of assets

An asset is treated as impaired when the
carrying cost of assets exceeds its recoverable
value. An impairment loss is charged to the
statement of profit and loss in the year in
which an asset is identified as impaired. The
impairment loss recognised in prior accounting
period is increased/ reversed where there has
been change in the estimate of recoverable
value. The recoverable value is the higher of
the assets'' net selling price and value in use. At
each reporting date, the Company reviews the
carrying amount of assets, to determine whether
there is any indication of impairment. If any such
indication exists, then the asset''s recoverable
amount is estimated.

ix. ) Investments

Current Investments are carried at lower of cost
and market value computed Investment wise.
Long Term Investments are stated at cost or
fair value . Provision for diminution in the value
of long term investments is made only if such a
decline is other than temporary in the opinion of
the management.

x. ) Income-tax

Provision for income tax is made on the basis of
taxable income for the year at current rates. Tax
expense comprises of current tax and deferred
tax at the applicable enacted or substantively
enacted rates. Current tax represents the amount
of income tax payable/ recoverable in respect
of the taxable income/ loss for the reporting
period. Deferred tax represents the effect of
timing difference between taxable income and
accounting income for the reporting period
that originate in one period and are capable
of reversal in one or more subsequent periods.

The deferred tax asset is recognised and

carried forward only to the extent that there
is a reasonable certainty that the assets will
be realised in future. However, where there is
unabsorbed depreciation or carried forward
loss under taxation laws, deferred tax assets
are recognised only if there is virtual certainty of
realisation of assets.

Minimum Alternate Tax (MAT) paid in a year is
charged to the statement of profit and Loss as
current tax. The company recognizes the MAT
credit available as an asset only to the extent
that there is convincing evidence that the
company will pay the normal income tax during
the specified period i.e., period for which MAT
credit is allowed to be carried forward.