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Accounting Policies of Jeena Sikho Lifecare Ltd. Company
This note provides a list of the material accounting policies
adopted in the preparation of these standalone financial
statements. These policies have been consistently applied to
all the years presented, unless otherwise stated.
These standalone financial statements have been prepared
in accordance with the Indian Accounting Standards
(hereinafter referred to as the ''Ind AS'') as notified by
Ministry of Corporate Affairs pursuant to section 133 of the
Companies Act, 2013 read with Rule 3 of the Companies
(Indian Accounting Standards) Rules, 2015 and Companies
(Indian Accounting Standards) Amendment Rules, 2016. The
standalone financial statements are prepared in INR, which
is the functional currency and all values are rounded off to
nearest lakhs (INR 100000), except otherwise indicated.
These Ind AS standalone financial statements for the year
ended 31 March 2026 were approved for issue by the Board
of Directors on 30 May 2026.
These financial statements for the year ended 31 March 2026
are the first financial statements prepared by the Company as
per Ind AS. For all periods upto and including the year ended 31
March 2025, the Company prepared its financial statements
in accordance with the accounting standards notified under
the section 133 of the Companies Act 2013, read together
with paragraph 7 of the Companies (Accounts) Rules, 2014
(hereinafter referred to as ''Previous GAAP'') used for its
statutory reporting requirement in India immediately before
adopting Ind AS. The opening balance sheet at the beginning
of the comparative year have been restated in accordance
with Ind AS for comparative information. Reconciliations and
explanations of the effect of the transition from Previous
GAAP to Ind AS on the Company''s Balance Sheet, Statement
of Profit and Loss and Statement of Cash Flows are provided
in note 46.
The standalone financial statements have been prepared
on accrual and going concern basis under historical cost
convention except for certain financial assets and financial
liabilities that are measured at fair value or amortized cost,
defined benefit obligations and share based payments.
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 to/by the Company.
All assets and liabilities for which fair value is measured
or disclosed in the standalone financial statements are
categorized within fair value hierarchy, described as follows,
based on the lowest level of 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 standalone
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 and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and
the level of the fair value hierarchy as explained above.
(d) Critical accounting estimates and
judgements
The preparation of standalone financial statements in
conformity with Ind AS requires management to make
judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and
liabilities and disclosure of contingent liabilities at the end
of the reporting period. Although these estimates are based
upon management''s best knowledge of current events and
actions, uncertainty about these assumptions and estimates
could result in the outcomes requiring a material adjustment
to the carrying amounts of assets or liabilities in future
periods. Changes in estimates are reflected in the standalone
financial statements in the period in which changes are made
and if material, their effects are disclosed in the notes to the
standalone financial statements.
Significant management judgements
Recognition of deferred tax assets - The extent to
which deferred tax assets can be recognized is based on
an assessment of the probability of the Company''s future
taxable income against which the deferred tax assets can be
utilized.
Evaluation of indicators for impairment of assets - The
evaluation of applicability of indicators of impairment of
assets requires assessment of several external and internal
factors which could result in deterioration of recoverable
amount of the assets.
Contingent liabilities - At each balance sheet date basis the
management judgment, changes in facts and legal aspects,
the Company assesses the requirement of provisions against
the outstanding contingent liabilities. However, the actual
future outcome may be different from this judgement.
Leases - Judgment required to ascertain lease classification,
lease term, incremental borrowing rate, lease and non-lease
component, and impairment of ROU.
Significant estimates
Defined benefit obligation (DBO) - Management''s estimate
of the DBO is based on a number of underlying assumptions
such as standard rates of inflation, mortality, discount rate
and anticipation of future salary increases. Variation in these
assumptions may significantly impact the DBO amount and
the annual defined benefit expenses.
Allowance for expected credit losses - The allowance for
doubtful debts reflects management''s estimate of losses
inherent in its credit portfolio. This allowance is based on
Company''s estimate of the losses to be incurred, which
derives from past experience with similar receivables, current
and historical past due amounts, write-offs and collections,
the careful monitoring of portfolio credit quality and current
and projected economic and market conditions. Should the
present economic and financial situation persist or even
worsen, there could be a further deterioration in the financial
situation of the Company''s debtors compared to that
already taken into consideration in calculating the allowances
recognised in the financial statements.
Share based payments - Measurement of share-based
payments; measurement of financial guarantee contracts,
provisions and contingent liabilities.
Inventory obsolescence & Valuation - Inventories are carried
at the lower of cost and net realisable value. The estimation of
net realisable value and provision for obsolescence involves
significant judgment, including assessment of demand, market
conditions, and inventory ageing. Appropriate provisions are
made for slow-moving and obsolete inventories based on
management''s estimates.
Useful life of Fixed assets - Useful lives of property, plant
and equipment are determined based on management''s
estimate of expected usage, wear and tear, and technological
obsolescence, in line with Schedule II. These estimates
are reviewed annually and revised prospectively, where
necessary.
Fair valuation of investments - Investments measured
at fair value involve the use of valuation techniques and
significant estimates, particularly where market quotes are
not available. Key assumptions include cash flow projections,
discount rates, and market comparables. Changes in these
assumptions may materially impact the fair value of such
investments.
Recoverability of goodwill - Goodwill is tested annually
for impairment based on the recoverable amount of the
underlying CGU. The assessment involves significant
estimates, including projected cash flows, growth rates, and
discount rates. Changes in these assumptions may materially
impact the carrying value of goodwill.
Probability of exercise of ESOP - The estimation of ESOP
expense involves judgment in assessing the probability
of vesting and exercise, based on assumptions such as
employee attrition and historical trends. These estimates are
reviewed periodically and revised prospectively.
There are no assumptions and estimation uncertainties that
have a significant risk of resulting in a material adjustment
within the next financial year except for as disclosed in these
standalone financial statements.
(e) Current versus non-current classification
The Company presents assets and liabilities in the Balance
Sheet based on current/non-current classification.
An asset is treated as current when it is:
> Expected to be realized or intended to be sold or
consumed in normal operating cycle;
> Held primarily for the purpose of trading;
> Expected to be realized within twelve months after the
reporting period; or
> Cash or cash equivalents unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when it is:
> Expected to be settled in normal operating cycle;
> Held primarily for the purpose of trading;
> Due to be settled within twelve months after the
reporting period; or
> There is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period.
Current liabilities include the current portion of non-current
financial liabilities. All other liabilities are classified as non¬
current.
Deferred tax assets/liabilities are classified as non-current
assets/liabilities.
Operating cycle
The operating cycle is the time between the acquisition of
assets for processing and their realization/settlement in cash
and cash equivalents. The companies have identified twelve
months as their operating cycle for classification of their
current assets and liabilities.
Recognition and measurement
Items of property, plant and equipment are measured at cost,
less accumulated depreciation and accumulated impairment
losses, if any.
The cost of an item of property, plant and equipment
comprises its purchase price and non-refundable purchase
taxes, after deducting trade discounts and rebates any costs
directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the
manner intended by management.
The cost of a self-constructed item of property, plant and
equipment comprises the cost of materials and direct labour,
any other cost directly attributable to bringing the item to
working condition for its intended use.
An item of property, plant and equipment and any significant
part initially recognised is derecognised upon disposal or
when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in
the standalone Statement of profit and loss when such asset
is derecognised.
Subsequent cost
Subsequent costs are included in the asset''s carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that the future economic benefits associated
with expenditure will flow to the Company and the cost of
the item can be measured reliably. All other subsequent costs
are charged to standalone Statement of profit and loss at the
time of incurrence.
Depreciation
Depreciation is calculated on cost of items of property,
plant and equipment less their estimated residual value over
the estimated useful lives using the straight-line method
and is generally recognised in the standalone statement of
profit and loss. Depreciation on items of property, plant and
equipment of Company is provided as per Schedule II of
the Companies Act, 2013 except in cases where expected
useful life of the assets are different from the corresponding
life prescribed as under and the Company based upon the
nature of asset, the operating condition of the asset, the
estimated usage of the asset, past history of replacement
and anticipated technological changes, believes that this is
the best estimate on the basis of actual realization.
Depreciation on other items of property, plant and equipment
of Company is provided as per Part C of Schedule II of the
Companies Act, 2013:
Depreciation method, useful lives and residual values are
reviewed by management at each reporting date and
adjusted prospectively, as appropriate.
Depreciation on additions/disposals is provided on pro¬
rata basis i.e. from (upto) the date on which asset is ready
to use/disposed of.
The residual values, useful lives and methods of
depreciation of property plant and equipment are reviewed
by management at each reporting date and adjusted
prospectively, as appropriate.
During disposal of property, plant and equipment, any profit
earned/loss sustained towards excess/shortfall of sale
value vis-a-vis carrying cost of assets is accounted for in
Standalone Statement of Profit and Loss.
(g) Capital work-in-progress and Intangible
Assets under development:
Capital work-in-progress and intangible assets under
development represent expenditure incurred in respect of
capital projects/intangible assets under development and
are carried at cost. Cost comprises purchase cost, related
acquisition expenses, development/construction costs,
borrowing costs and other direct expenditure.
Intangible assets acquired separately are measured on initial
recognition at cost and recognised only if it is probable that
the expected future economic benefits that are attributable
to the asset will flow to the Company and the cost of assets
can be measured reliably. The cost of intangible assets
acquired in a business combination is their fair value at the
date of acquisition. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation
and accumulated impairment losses. Internally generated
intangibles, excluding capitalised development costs, are not
capitalised and the related expenditure is reflected in profit
or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either
finite or indefinite.
Intangible assets with finite lives are amortised over the useful
economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least at
the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to
modify the amortisation period or method, as appropriate,
and are treated as changes in accounting estimates.
The amortisation expense on intangible assets with finite
lives is recognised in the standalone statement of profit and
loss unless such expenditure forms part of carrying value of
another asset.
Amortization of intangible assets such as software is
computed on a straight-line basis, at the rates representing
estimated useful life of up to 5 years:
Intangible assets with indefinite useful lives are not amortised,
but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite
life is reviewed annually to determine whether the indefinite
life continues to be supportable. If not, the change in useful
life from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible
asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and
are recognised in the standalone statement of profit or loss
when the asset is derecognised.
Goodwill
Goodwill arising on acquisition of a business represents the
excess of the consideration transferred over the Company''s
interest in the net fair value of identifiable assets acquired and
liabilities assumed at the date of acquisition, in accordance
with Ind AS 103 - Business Combinations.
Goodwill is recognised as an intangible asset and is
subsequently measured at cost less accumulated impairment
losses. In accordance with Ind AS 38 and Ind AS 36, goodwill
is not amortised but is tested for impairment at least annually,
or more frequently if events or changes in circumstances
indicate potential impairment.
For the purpose of impairment testing, goodwill is allocated to
the respective cash-generating units ("CGUs") or groups of
CGUs that are expected to benefit from the synergies of the
acquisition. Goodwill is allocated to the relevant CGUs within
the Company''s operating segments, representing the lowest
level at which goodwill is monitored for internal management
purposes.
The recoverable amount of each CGU to which goodwill is
allocated is determined as the higher of its value in use and
fair value less costs of disposal.
Value in use is based on discounted cash flow projections
derived from management-approved budgets and forecasts,
covering a defined projection period. These projections
involve significant estimates and assumptions, including
revenue growth rates, operating margins, patient footfall,
expected capacity utilisation, and discount rates reflecting
the time value of money and risks specific to the CGU.
Key assumptions are reviewed periodically and are based
on management''s best estimate of future economic and
operating conditions.
Any impairment loss, being the excess of the carrying amount
of the CGU over its recoverable amount, is first allocated to
reduce the carrying amount of goodwill. Such impairment
losses are recognised in the Statement of Profit and Loss.
The Company as lessee
The Company enters into an arrangement for lease of
buildings. Such arrangements are generally for a fixed period
but may have extension or termination options. In accordance
with Ind AS 116 - Leases, at inception of the contract, the
Company assesses whether a contract is, or contains a lease.
A lease is defined as ''a contract, or part of a contract, that
conveys the right to control the use an asset (the underlying
asset) for a period of time in exchange for consideration''.
To assess whether a contract conveys the right to control the
use of an identified asset, the Company assesses whether:
⢠The contract involves the use of an identified asset -
this may be specified explicitly or implicitly, and should
be physically distinct or represent substantially all of the
capacity of a physically distinct asset. If the supplier has
a substantive substitution right, then the asset is not
identified;
⢠The Company has the right to obtain substantially all of
the economic benefits from use of the asset throughout
the period of use; and
⢠The Company assesses whether it has the right to direct
''how and for what purpose'' the asset is used throughout
the period of use. At inception or on reassessment
of a contract that contains a lease component, the
Company allocates the consideration in the contract
to each lease component on the basis of their relative
stand-alone prices. However, for the leases of buildings
in which it is a lessee, the Company has elected not
to separate non-lease components and account for
the lease and non-lease components as a single lease
component.
The Company applies a single recognition and measurement
approach for all leases, except for short-term leases and
leases of low-value assets. The Company recognizes lease
liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
Measurement and recognition of leases as a lessee
The Company recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-
use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less any
lease incentives received.
The right-of-use assets is subsequently measured at cost
less any accumulated depreciation, accumulated impairment
losses.
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Company''s
incremental borrowing rate. Generally, the Company uses its
incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease
liability comprise the following:
⢠fixed payments, including in-substance fixed payments;
⢠variable lease payments that depend on an index or a
rate, initially measured using the index or rate as at the
commencement date;
⢠amounts expected to be payable under a residual value
guarantee; and
⢠the exercise price under a purchase option that the
Company is reasonably certain to exercise, lease
payments in an optional renewal period if the Company
is reasonably certain to exercise an extension option,
and penalties for early termination of a lease unless the
Company is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an
index or rate, if there is a change in the Company''s estimate
of the amount expected to be payable under a residual value
guarantee, or if the Company changes its assessment of
whether it will exercise a purchase, extension or termination
option. When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of
the right-of-use asset, or is recorded in Statement of profit
and loss if the carrying amount of the right-of-use asset has
been reduced to zero, as the case may be.
The Company presents right-of-use assets that do not meet
the definition of investment property on the face of balance
sheet below ''property, plant and equipment'' and lease
liabilities under ''financial liabilities'' in the balance sheet.
The Company has elected to account for short-term leases
and leases of low-value assets using the practical expedients.
Instead of recognizing a right-of-use asset and lease
liability, the payments in relation to these are recognized as
an expense in standalone statement of profit and loss on a
straight-line basis over the lease term.
Certain employees of the Company receive part of
their remuneration in the form of share-based payment
transactions, whereby employees render services in
exchange for shares or rights over shares (''equity-settled
transactions'').
The fair value on grant date of equity-settled share-based
payment arrangements granted to eligible employees of the
Company under the Employee Stock Option Plan (''ESOP'') is
recognised as employee stock option plan expenses in the
Statement of profit and loss, in relation to options granted to
employees of the Company (over the vesting period of the
awards), with a corresponding increase in other equity. The
total amount to be expensed is determined by reference to
the fair value of the options determined under Black-Scholes
model.
The amount recognised as an expense reflects the number
of awards for which the related service and non-market
performance conditions are expected to be met, such that
the amount ultimately recognised is based on the number
of awards that meet the related service and non-market
performance conditions at the vesting date.
The increase in equity recognised in connection with a
share-based payment transaction is presented in the
"Employee stock options outstanding accountâ, as separate
component in other equity. At the end of each period, the
Company revises its estimates of the number of options
that are expected to be vested based on the non-market
performance conditions at the vesting date.
If vesting periods or other vesting conditions apply, the
expense is allocated over the vesting period, based on the
best available estimate of the number of share options
expected to vest. Upon exercise of share options, the
proceeds received, net of any directly attributable transaction
costs, are allocated to share capital up to the nominal (or par)
value of the shares issued with any excess being recorded as
share premium.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted
earnings per share.
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.
Financial assets
Recognition and initial measurement
Trade receivables and debt instruments are initially
recognised when they are originated. All other financial assets
are initially recognised when the Company becomes a party
to the contractual provisions of the instrument.
Except for those trade receivables that do not contain a
significant financing component and are measured at the
transaction price in accordance with Ind AS 115, all financial
assets are initially measured at fair value plus, for an item not
at fair value through profit and loss (FVTPL), transaction costs
that are attributable to its acquisition or issue.
Classification
For the purpose of initial recognition, the Company classifies
its financial assets in following categories:
⢠Financial assets measured at amortised cost;
⢠Financial assets measured at fair value through other
comprehensive income (FVTOCI); and
⢠Financial assets measured at fair value through profit
and loss (FVTPL)
Financial assets are not reclassified subsequent to their
initial recognition, except if and in the period the Company
changes its business model for managing financial assets.
A financial asset is measured at the amortized cost if it meets
both of the following conditions and is not designated as at
FVTPL:
⢠The financial asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and
⢠The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments
of principal and interest (SPPI) on the principal amount
outstanding.
After initial measurement, such financial assets are
subsequently measured at amortized cost using the effective
interest rate (''EIR'') method.
A financial asset being ''debt instrument'' is measured at the
FVTOCI if both of the following criteria are met:
⢠The asset is held within the business model, whose
objective is achieved both by collecting contractual
cash flows and selling the financial assets, and
⢠The contractual terms of the financial asset give rise
on specified dates to cash flows that are SPPI on the
principal amount outstanding.
On initial recognition of an equity instrument that is not
held for trading, the Company may irrevocably elect to
present subsequent changes in the investment''s fair value
in OCI (designated as FVOCI). This election is made on an
investment-by-investment basis.
All financial assets not classified as measured at amortised
cost or FVOCI as described above are measured at FVTPL. This
includes all derivative financial assets. On initial recognition,
the Company may irrevocably designate a financial asset
that otherwise meets the requirement to be measured at
amortised cost or at FVOCI as at FVTPL if doing so eliminates
or significantly reduces as accounting mismatch that would
otherwise arise.
Investment in equity instruments of subsidiaries
Investments in equity instruments of subsidiaries are
accounted for at cost in accordance with Ind AS 27 ''Separate
Financial Statements''.
Investments in mutual funds
Investments in mutual funds are measured at FVTPL.
Measured at Amortized Cost
Financial assets that are held within a business model
whose objective is to hold financial assets in order to collect
contractual cash flows that are solely payments of principal
and interest, are subsequently measured at amortized cost
using the EIR method less impairment, if any. The amortization
of EIR and loss arising from impairment, if any, is recognized in
the Standalone Statement of Profit and Loss.
Measured at Fair Value through other Comprehensive
Income
Financial assets that are held within a business model whose
objective is achieved by both, selling financial assets and
collecting contractual cash flows that are solely payments
of principal and interest, are subsequently measured at
FVTOCI. Fair value movements are recognized in the other
comprehensive income (''OCI''). Interest income measured
using the EIR method and impairment losses, if any are
recognized in the Standalone Statement of Profit and Loss.
On de-recognition, cumulative gain or loss previously
recognized in OCI is reclassified from the equity to ''other
income'' in the Standalone Statement of Profit and Loss.
Measured at Fair Value through Profit or Loss
A financial asset not classified as either amortized cost or
FVTOCI, is classified as FVTPL. Such financial assets are
measured at fair value with all changes in fair value, including
interest income and dividend income, if any, recognized as
''other income'' in the Standalone Statement of Profit and Loss.
Subsequent measurement
Financial assets at amortised cost
These assets are subsequently measured at amortised cost
using the effective interest method. The amortised cost is
reduced by impairment losses, if any. Interest income and
impairment are recognised in the Statement of profit and
loss.
Financial assets at FVTPL
These assets are subsequently measured at fair value.
Net gains and losses, including any interest income, are
recognised in the Statement of profit and loss.
Derecognition
The Company derecognises a financial asset when the
contractual rights to the cash flows from the financial asset
expire, or it transfers the rights to receive the contractual
cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are
transferred or in which the Company neither transfers nor
retains substantially all of the risks and rewards of ownership
and it does not retain control of the financial asset. Any gain
or loss on derecognition is recognised in the standalone
Statement of profit and loss.
Impairment of financial assets (other than at fair value)
The Company recognises loss allowances using the
Expected Credit Loss (ECL) model for financial assets that
are not measured at fair value through profit or loss.
For trade receivables that do not contain a significant
financing component, the Company applies the simplified
approach prescribed under Ind AS 109 and recognises loss
allowances at an amount equal to lifetime ECL. Lifetime
ECL represents the expected credit losses resulting from all
possible default events over the expected life of the financial
asset.
The Company measures lifetime ECL for trade receivables
using a provision matrix, which is based on historical credit
loss experience, adjusted for current conditions and
forward looking information such as changes in economic
conditions, customer-specific factors, and industry trends.
The assessment considers factors including ageing of
receivables, past default patterns, credit risk characteristics
of customers, and reasonable and supportable forecasts of
future economic conditions.
For all other financial assets, expected credit losses are
measured at an amount equal to 12 month ECL, unless there
has been a significant increase in credit risk, since initial
recognition, in which case loss allowances are measured at
lifetime ECL. In assessing whether credit risk has increased
significantly, the Company considers quantitative and
qualitative factors, including changes in credit ratings,
adverse business or economic conditions, and past due
status.
The changes (incremental or reversal) in loss allowance
computed using the ECL model are recognised as an
impairment gain or loss in the standalone Statement of Profit
and Loss.
Write-off
The gross carrying amount of a financial asset is written off
(either partially or in full) to the extent that there is no realistic
prospect of recovery. This is generally the case when the
Company determines that the counterparty does not have
assets or sources of income that could generate sufficient
cash flows to repay the amounts subject to write-off.
However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the
Company''s procedures for recovery of amounts due.
Financial liabilities
Recognition and initial measurement
All financial liabilities are initially recognised when the
Company becomes a party to the contractual provisions of
the instrument. All financial liabilities are initially measured at
fair value minus, for an item not at fair value through profit and
loss, transaction costs that are attributable to the liability.
Classification and subsequent measurement
Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as FVTPL if it
is classified as held-for-trading, or it is a derivative or it is
designated as such on initial recognition. Financial liabilities
at FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in profit and
loss.
Financial liabilities other than classified as FVTPL, are
subsequently measured at amortised cost using the effective
interest method. Interest expenses are recognised in profit
and loss. Any gain or loss on derecognition is also recognised
in profit and loss.
Derecognition
The Company derecognises a financial liability when its
contractual obligations are discharged or cancelled or
expired. The Company also derecognises a financial liability
when its terms are modified and the cash flows under the
modified terms are substantially different. In this case, a
new financial liability based on modified terms is recognised
at fair value. The difference between the carrying amount
of the financial liability extinguished and the new financial
liability with modified terms is recognised in the standalone
Statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the
net amount presented in the Balance Sheet when, and only
when, the Company currently has a legally enforceable right
to set off the amounts and it intends either to settle them
on a net basis or to realise the assets and settle the liabilities
simultaneously.
Revenue from contracts with customers
Revenue from contracts with customers is recognised in
accordance with Ind AS 115, when control of the promised
goods or services is transferred to the customer, at an
amount that reflects the consideration to which the
Company expects to be entitled in exchange for such goods
or services.
The Company assesses its performance obligations in
each contract and recognises revenue when (or as) such
performance obligations are satisfied. Control is considered
to be transferred when the customer obtains the ability
to direct the use of and substantially all of the remaining
benefits from the goods or services.
Further, the Company evaluates whether it is acting as
a principal or an agent in its revenue arrangements. The
Company has generally concluded that it is acting as a
principal, as it typically controls the specified goods or
services prior to their transfer to the customer and is primarily
responsible for fulfilling the promise to provide such goods or
services.
Sale of products
In respect of sale of fast-growing Ayurvedic products
where the performance obligation is satisfied at a point in
time, revenue is recognised when the control of goods is
transferred to the customer as per the terms & conditions
of the contract. Revenue from the sale of goods is measured
at the transaction price received or receivable, net of returns
and allowances, trade discounts and volume rebates.
The Company considers whether there are other promises
in the contract that are separate performance obligations to
which a portion of the transaction price needs to be allocated.
For each performance obligation identified, the Company
recognizes revenue as and when it satisfies the performance
obligation at a point in time.
Sale of services
The healthcare services income includes revenue generated
from in-patient services, panchakarma therapies, 72-hour
health camps, home based health care services, out-patient
services and day care, dietary support and nutrition guidance
and comprehensive patient support anytime, anywhere.
Revenue is recognised when each performance obligation
is satisfied over a period of time when inpatient/outpatients
has received the service.
Other operating revenue
Revenue from testing services provided under the
agreement with Chandan Healthcare Limited is recognised in
accordance with Ind AS 115, when the performance obligation
is satisfied.
The Company provides diagnostic and testing services to
patients, and revenue is recognised at a point in time, i.e.,
upon completion of the testing services and issuance of
test results, when control of the service is transferred to the
customer.
Further, the Company has entered into an arrangement with
its related party, Shuddhi Lifecare Private Limited ("SLPL"),
whereby SLPL is permitted to use the Company''s branding
and marketing collateral, including promotional materials and
related intellectual property.
Revenue from such arrangements is royalty income and is
recognised in accordance with Ind AS 115 over the period to
which it relates, based on the underlying sales made by SLPL
as per the agreed terms. The consideration is determined as
a percentage of sales of goods and services undertaken by
SLPL.
Such income is considered ancillary to the main business
operations of the Company and is recognised on an
accrual basis in line with the substance of the contractual
arrangement.
Contract liability of loyalty points
Loyalty points granted to customers are treated as a separate
performance obligation under Ind AS 115, as they provide a
material right for future purchases. Accordingly, a portion
of the transaction price is allocated to such points based
on their relative standalone selling price and is deferred as
a contract liability until redemption or expiry. Revenue is
recognised net of such incentives, reflecting the effective
discount provided to customers.
Interest income
For all debt instruments measured either at amortized cost
or at fair value through other comprehensive income, 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 the financial liability. When calculating the
effective interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of the
financial instrument but does not consider the expected
credit losses. Interest income is included in other income in
the standalone statement of profit and loss.
Contract assets
A contract asset is the right to consideration in exchange
for goods or services transferred to the customer. If the
company perform by transferring goods or services to a
customer before the customer pays consideration or before
payment is due, a contract asset is recognised for the earned
consideration that is conditional.
Contract liabilities
A contract liability is the obligation to transfer goods or
services to a customer for which the company have received
consideration (or an amount of consideration is due) from
the customer. If a customer pays consideration before the
company transfer goods or services to the customer, a
contract liability is recognised when the payment is made, or
the payment is due (whichever is earlier). Contract liabilities
are recognised as revenue when the company perform under
the contract.
Trade receivables
A receivable represents the right of entities forming part of
company to an amount of consideration that is unconditional
(i.e., only the passage of time is required before payment
of the consideration is due). Refer to accounting policies of
financial assets in financial instruments - initial recognition
and subsequent measurement.
The Company''s standalone financial statement are presented
in Indian Rupees (INR), which is the company''s functional
currency. Functional currency is the currency of the primary
economic environment in which a Company operates and
is normally the currency in which the Company primarily
generates and expends cash.
Transactions in foreign currencies are initially recorded by
the Company at the functional currency spot rates at the
date the transaction first qualifies for recognition. Monetary
assets and liabilities denominated in foreign currencies are
translated at the functional currency spot rates of exchange
at the reporting date.
Exchange differences arising on settlement or translation of
monetary items are recognised in standalone statement of
profit and loss.
Non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions. Non-monetary
items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair
value is determined. The gain or loss arising on translation of
non-monetary items measured at fair value is treated in line
with the recognition of gain or loss on change in fair value of
the item (i.e., translation differences on items whose fair value
gain or loss is recognised in other comprehensive income or
standalone statement of profit and loss are also recognised
in other comprehensive income or standalone statement of
profit and loss, respectively).
Short-term employee benefits
Employee benefit liabilities such as salaries, wages and
bonus, etc. that are expected to be settled wholly within
twelve months after the end of the reporting period in which
the employees render the related service are recognised in
respect of employee''s services up to the end of the reporting
period and are measured at an undiscounted amount
expected to be paid when the liabilities are settled.
Post-employment benefit plans
Defined contribution plans
A defined contribution plan is a post-employment benefit
plan under which the Company pays fixed contributions
into a separate entity and will have no legal or constructive
obligation to pay further amounts. Payments to defined
contribution plans are recognised as an expense when
employees have rendered service entitling them to the
contributions.
Defined benefit plans
The Company has an obligation towards gratuity, a defined
benefit retirement plan covering eligible employees. The
plan provides for a lump sum payment to vested employees
at retirement, death while in employment or on termination
of employment, of an amount based on the respective
employee''s salary and the tenure of employment.
The liability recognised in the Balance Sheet in respect of
defined benefit gratuity plan is the present value of the
defined benefit obligation at the end of the reporting period.
The defined benefit obligation is calculated by actuary using
the projected unit credit method.
The present value of the defined benefit obligation is
determined by discounting the estimated future cash
outflows by reference to market yields at the end of the
reporting period on government bonds that have terms
approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation.
This cost and other costs are included in employee benefits
expense in the Statement of profit and loss.
Remeasurements of the net defined benefit liability, which
comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any,
excluding interest), are recognised in other comprehensive
income and transferred to retained earnings.
Changes in the present value of the defined benefit obligation
resulting from settlement or curtailments are recognised
immediately in Statement of profit and loss as past service
cost.
The Company''s net obligation in respect of defined benefit
plans is calculated by estimating the amount of future benefit
that employees have earned in the current and prior periods,
discounting that amount and deducting the fair value of any
plan assets.
The Company presents the leave as a current liability in the
balance sheet, to the extent it does not have an unconditional
right to defer its settlement for 12 months after the reporting
date. Where Company has the unconditional legal and
contractual right to defer the settlement for a period beyond
12 months, the same is presented as non-current liability.
The Company recognizes termination benefit as a liability
and an expense when the Company has a present obligation
as a result of past event, it is probable that an outflow of
resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of
the amount of the obligation.
If the termination benefits fall due more than 12 months after
the balance sheet date, they are measured at present value
of future cash flows using the discount rate determined by
reference to market yields at the balance sheet date on
government bonds.
The interest is calculated by applying the discount rate to
the net defined benefit liability. The Company recognizes the
following changes in the net defined benefit obligation as an
expense in the standalone Statement of Profit and Loss:
> Service costs comprising current service costs, past-
service costs, gains and losses on curtailments and
non-routine settlements; and
> Interest expense.
Other short-term employee benefits
Compensated absences
The Company''s net obligation in respect of compensated
absences is the amount of benefit to be settled in future,
that employees have earned in return for their service in
the current and previous years. The benefit is discounted to
determine its present value. The obligation is measured on the
basis of an actuarial valuation using the projected unit credit
method. Remeasurements are recognised in Statement of
profit and loss in the period in which they arise.
1. corporate information
Jeena Sikho Lifecare limited was incorporated in 2017. The
company deals in trading of Ayurvedic Medicines across the
PAN India basis and providing ayurvedic therapies through
its hospital network.
2. basis of preparation of financial
statements (significant accounting
policies & other explanatory notes)
2.1 basis of Preparation
The financial statements of the Company have been prepared
in accordance with the Generally Accepted Accounting
Principles in India (Indian GAAP), including the Accounting
Standards notified under section 133 of the Companies
Act, 2013. The financial statements have been prepared on
accrual basis under the historical cost convention.
2.2 Current versus non-current
classification
The Company presents assets and liabilities in the balance
sheet based on current/non- current classification. An asset
is treated as current when it is:
- Expected to be realized or intended to be sold or
consumed in normal operating cycle;
- Held primarily for purpose of trading;
- Expected to be realized within twelve months after the
reporting period; or
- Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle;
- It is held primarily for purpose of trading;
- It is due to be settled within twelve months after the
reporting period; or
- Thereisnounconditionalrighttodeferthesettlementofthe
liability for at least twelve monthsafter the reporting period
All other liabilities are classified as non current.
Deferred tax assets and deferred tax liabilities are classified
as non- current assets and liabilities.
The operating cycle is the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents. The Company has identified twelve months as
its operating cycle.
2.3 Use of estimates
The preparation of the financial statements requires
the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities
(including contingent liabilities) and the reported income and
expenses during the year. The Management believes that the
estimates used in preparation of the financial statements
are prudent and reasonable. Future results could differ due
to these estimates and the differences between the actual
results and the estimates are recognised in the periods in
which the results are known/materialise.
2.4 Inventories
The inventory are valued at lower of cost or net realizable
value. The inventory costs are based on first in first out
method. Cost includes all charges in bringing the goods to
the point of sale, including octroi and other levies, transit
insurance and receiving charges.
2.5 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise
of cash at bank and in hand and short term investments
with an original maturity of three months or less. Earmarked
balances with bank, margin money or security against
borrowings, guarantees and other commitments, if any shall
be treated separately from cash and cash equivalent.
2.6 Cash flow statement
Cash flows are reported using the indirect method, whereby
profit/(loss) before extraordinary items and tax is adjusted
for the effects of transactions of non-cash nature and any
deferrals or accruals of past or future cash receipts or
payments. The cash flows from operating, investing and
financing activities of the Company are segregated based
on the available information.
2.7 Property, plant and equipment
Property, Plant and equipment including capital work in
progress are stated at cost, less accumulated depreciation
and accumulated impairment losses, if any. The cost
comprises of purchase price, taxes, duties, freight and
other incidental expenses directly attributable and related
to acquisition and installation of the concerned assets
and are further adjusted by the amount of input tax credit
availed wherever applicable. Subsequent costs are included
in asset''s carrying amount or recognised as separate assets,
as appropriate, only when it is probable that future economic
benefit associated with the item will flow to the Company
and the cost of item can be measured reliably.
2.8 Depreciation and amortisation
Depreciation on property, plant and equipment is provided
on prorate basis on straight line method using the useful
lives of the assets estimated by the management and in
the manner prescribed in Schedule II of the Companies
Act 2013. The estimated life of various assets is as follows:
2.9 Intangible assets
Separately acqu ired intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible
assets are carried at cost less accumulated amortization and
accumulated impairment losses, if any. Internally generated
intangibles, excluding capitalized development cost, are
not capitalized and the related expenditure is reflected
in statement of Profit and Loss in the period in which the
expenditure is incurred. Cost comprises the purchase price
and any attributable cost of bringing the asset to its working
condition for its intended use.
Internally Generated intangible assets
The cost of an internally generated intangible asset
comprises all expenditure that can be directly attributed, or
allocated on a reasonable and consistent basis, to creating,
producing and making the asset ready for its intended
use. No cost incurred in the Research Phase of the asset
is recognized. The cost incurred in the development phase
is recognized only if the company can demonstrate the
following conditions:
(a) the technical feasibility of completing the intangible
asset so that it will be available for use;
(b) its intention to complete the intangible asset and use or
sell it;
(c) its ability to use or sell the intangible asset;
(d) how the intangible asset will generate probable future
economic benefits. Among other things, the company
should demonstrate the existence of a market for the
output of the intangible asset or the intangible asset
itself or, if it is to be used internally, the usefulness of
the intangible asset;
(e) the availability of adequate technical, financial and
other resources to complete the development and to
use or sell the intangible asset; and
(f) its ability to measure the expenditure attributable to the
intangible asset during its development reliably.
Goodwill
Goodwill acquired on the purchase of business is recognized
as a difference between the purchase consideration and the
value of the net assets acquired. Goodwill is amortized over
the period over which the economic benefits are expected to
accrue to the Company.
2.10 Revenue recognition
Sale of goods
Sales are recognised, net of returns and trade discounts, on
transfer of significant risks and rewards of ownership to the
buyer, which generally coincides with the delivery of goods
to customers. Sales exclude GST. The company follows
the mercantile system of accounting and recognizes the
income and expenditures on accrual basis except in case of
significant uncertainties.
Sale of service
Sales of services are recognized when the services are
rendered.
2.11 Other income
Interest income is recognised on time proportion basis.
Rental income is recognized on accrual basis.
2.12 Foreign currency TRANSACTIONS AND
translations
Initial recognition
Transactions in foreign currencies entered into by the
Company are accounted at the exchange rates prevailing
on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary
items at the Balance Sheet date
Foreign currency monetary items (other than derivative
contracts) of the Company outstanding at the Balance Sheet
date are restated at the year-end rates.
Exchange differences arising out of these translations are
charged to the Statement of Profit and Loss.
2.13 Investments
Long-term investments, are carried individually at cost
less provision for diminution, other than temporary, in the
value of such investments. Current investments are carried
individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage,
fees and duties.
2.14 Employee benefits
The Company has adopted the Accounting Standard
15- Employee Benefits prescribed under the Companies
(Accounting Standards) Rules, 2006. ''Employee benefits
include provident fund, bonus and gratuity benefits. The
Company''s obligation towards various employee benefits
has been recognized as follows:
Short Term Employee Benefits
All employee benefits payable wholly within twelve months
of rendering the service are short-term employee benefits.
Benefits such as salaries, wages and bonus wages, etc, are
recognized in the Profit and Loss statement in the period in
which the employee renders the related service.
Defined contribution plans
The Company''s contribution to provident fund are considered
as defined contribution plans and are charged as an expense
as they fall due based on the amount of contribution required
to be made.
Defined benefits plans
(i) For defined-benefit plans, the amount recognised in
the Balance Sheet is the present value of the defined-
benefit obligation less the fair value of any plan assets
and any past service costs not yet recognised. The
present value of the defined-benefit obligation is the
present value of expected future payments required to
settle the obligation resulting from employee service
in the current and prior periods. The discount rate
used is the market yields on government bonds at the
Balance Sheet date with remaining terms to maturity
approximating those of the Company''s obligations.
(ii) Actuarial gains and losses in respect of post
employment and other long-term benefits are charged
to the Statement of Profit and Loss.
Employee Stock Options
The Company measures compensation cost relating to
employee stock options using the Fair Value Method.
Compensation expense is amortised over the vesting period
of the option on a straight line basis.
2.15 Borrowing costs
Borrowing costs include interest, amortisation of ancillary
costs incurred and exchange differences arising from
foreign currency borrowings to the extent they are regarded
as an adjustment to the interest cost. Costs in connection
with the borrowing of funds to the extent not directly related
to the acquisition of qualifying assets are charged to the
Statement of Profit and Loss over the tenure of the loan.
Borrowing costs, allocated to and utilised for qualifying
assets, pertaining to the period from commencement
of activities relating to construction/development of the
qualifying asset up to the date of capitalisation of such
asset is added to the cost of the assets.
Borrowing cost attributable to the fixed assets during
construction/exploration, renovation and modernization are
capitalized. Such borrowing costs are apportioned on the
average balance of capital work in progress for the year.
Other borrowing costs are recognized as an expense in the
period in which they are incurred.
2.16 Segment reporting
The Company identifies primary segments based on the
dominant source, nature of risks and returns and the internal
organisation and management structure. The operating
segments are the segments for which separate financial
information is available and for which operating profit/loss
amounts are evaluated regularly by the executive.
2.17 Taxes on income
Tax expense comprises current and deferred tax. Current
income tax is measured at the amount expected to be paid
to the tax authorities in accordance with Income Tax Act,
1961. Deferred income tax reflects the impact of current year
timing differences between taxable income that originates
in one period and are capable of reversal in one or more
subsequent periods.
Deferred tax is recognised on timing differences, being the
differences between the taxable income and the accounting
income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax is
measured using the tax rates and the tax laws enacted or
substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred
tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised only if there is virtual
certainty that there will be sufficient future taxable income
available to realise such assets. Deferred tax assets are
recognised for timing differences of other items only to the
extent that reasonable certainty exists that sufficient future
taxable income will be available against which these can be
realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing
tax laws and the Company has a legally enforceable right
for such set off. Deferred tax assets are reviewed at each
Balance Sheet date for their realisability.
2.18 Impairment of assets
The carrying values of assets/cash generating units are
reviewed at each Balance Sheet date for impairment. If any
indication of impairment exists, the recoverable amount of
such assets is estimated and impairment is recognised if the
carrying amount of these assets exceeds their recoverable
amount. The recoverable amount is the greater of the net
selling price and their value in use. Value in use is arrived at
by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is
indication that an impairment loss recognised for an asset
in earlier accounting periods no longer exists or may have
decreased, such reversal of impairment loss is recognised
in the Statement of Profit and Loss.
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS (SIGNIFICANT ACCOUNTING POLICIES & OTHER EXPLANATORY NOTES)
2.1 Basis of preparation
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under Section 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention.
2.2 Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification. An asset is treated as current when it is:
- Expected to be realized or intended to be sold or consumed in normal operating cycle;
- Held primarily for purpose of trading;
- Expected to be realized within twelve months after the reporting period; or
- cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle;
- It is held primarily for purpose of trading;
- It is due to be settled within twelve months after the reporting period; or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and deferred tax liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
2.3 Use of estimates
The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known/materialise.
2.4 Inventories
The inventory are valued at lower of cost or net realizable value. The inventory costs are based on first in first out method.Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.
2.5 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise of cash at bank and in hand and short term investments with an original maturity of three months or less. Earmarked balances with bank, margin money or security against borrowings, guarantees and other commitments, if any shall be treated separately from cash and cash equivalent
2.6 Cash flow statement
Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
2.7 Property, plant and equipment
Property, Plant and equipment including capital work in progress are stated at cost, less accumulated depreciation and accumulated impairment losses, if any. The cost comprises of purchase price, taxes, duties, freight and other incidental expenses directly attributable and related to acquisition and installation of the concerned assets and are further adjusted by the amount of input tax credit availed wherever applicable. Subsequent costs are included in asset''s carrying amount or recognised as separate assets, as appropriate, only when it
is probable that future economic benefit associated with the item will flow to the Company and the cost of item can be measured reliably.
2.8 Depreciation and amortisation
Depreciation on property, plant and equipment is provided on prorate basis on straight line method using the useful lives of the assets estimated by the management and in the manner prescribed in Schedule II of the Companies Act 2013. The estimated life of various assets is as follows:
2.9 Intangible assets
Separately acquired intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangibles, excluding capitalized development cost, are not capitalized and the related expenditure is reflected in statement of Profit and Loss in the period in which the expenditure is incurred. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.
Internally Generated intangible assets
The cost of an internally generated intangible asset comprises all expenditure that can be directly attributed, or allocated on a reasonable and consistent basis, to creating, producing and making the asset ready for its intended use. No cost incurred in the Research Phase of the asset is recognized. The cost incurred in the development phase is recognized only if the Company can demonstrate the following conditions:
(a) the technical feasibility of completing the intangible asset so that it will be available for use;
(b) its intention to complete the intangible asset and use or sell it;
(c) its ability to use or sell the intangible asset;
(d) how the intangible asset will generate probable future economic benefits. Among other things, the Company should demonstrate the existence of a market for the output of the intangible asset or the intangible asset
itself or, if it is to be used internally, the usefulness of the intangible asset;
(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
(f) its ability to measure the expenditure attributable to the intangible asset during its development reliably.
2.10 Revenue recognition
Sale of goods
Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude GST. The Company follows the mercantile system of accounting and recognizes the income and expenditures on accrual basis except in case of significant uncertainties.
Sale of service
Sales of services are recognized when the services are rendered.
2.11 Other income
Interest income is recognised on time proportion basis. Rental income is recognized on accrual basis.
2.12 Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet date
Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at the year-end rates.
Exchange differences arising out of these translations are charged to the Statement of Profit and Loss.
2.13 Investments
Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.
2.14 Employee benefits
The Company has adopted the Accounting Standard 15 - Employee Benefits prescribed under the Companies (Accounting Standards) Rules, 2006. ''Employee benefits include provident fund, bonus and gratuity benefits. The Company''s obligation towards various employee benefits has been recognized as follows:
Short-term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are short-term employee benefits. Benefits such as salaries, wages and bonus wages, etc, are recognized in the Profit and Loss statement in the period in which the employee renders the related service.
Defined contribution plans
The Company''s contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.
Defined benefits plans
(i) For defined-benefit plans, the amount recognised in the Balance Sheet is the present value of the defined-benefit obligation less the fair value of any plan assets and any past service costs not yet recognised. The present value of the defined-benefit obligation is the present value of expected future payments required to settle the obligation resulting from employee service in the current and prior periods. The discount rate used is the market yields on government bonds at the Balance Sheet date with remaining terms to maturity approximating those of the Company''s obligations.
(ii) Actuarial gains and losses in respect of post employment and other long-term benefits are charged to the Statement of Profit and Loss.
Employee Stock Options
The Company measures compensation cost relating to employee stock options using the Fair Value Method. Compensation expense is amortised over the vesting period of the option on a straight line basis.
2.15 Borrowing costs
Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to
construction/development of the qualifying asset up to the date of capitalisation of such asset is added to the cost of the assets.
Borrowing cost attributable to the fixed assets during construction/exploration, renovation and modernization are capitalized. Such borrowing costs are apportioned on the average balance of capital work in progress for the year. Other borrowing costs are recognized as an expense in the period in which they are incurred.
2.16 Segment reporting
The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive.
2.17 Taxes on income
Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with Income Tax Act, 1961. Deferred income tax reflects the impact of current year timing differences between taxable income that originates in one period and are capable of reversal in one or more subsequent periods.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.
2.18 Impairment of assets
The carrying values of assets/cash generating units are reviewed at each Balance Sheet date for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss.
SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Preparation
The financial statements of the Company have been
prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP), including
the Accounting Standards notified under section 133
of the Companies Act, 2013. The financial statements
have been prepared on accrual basis under the historical
cost convention.
2.2 Current versus non-current classification
The Company presents assets and liabilities in the balance
sheet based on current/non- current classification. An
asset is treated as current when it is:
- Expected to be realized or intended to be sold or
consumed in normal operating cycle
- Held primarily for purpose of trading
- Expected to be realized within twelve months after
the reporting period, or
- cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least
twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for purpose of trading
- It is due to be settled within twelve months after the
reporting period, or
- There is no unconditional right to defer the settlement
of the liability for at least twelve months after the
reporting period
All other liabilities are classified as non current.
Deferred tax assets and deferred tax liabilities are
classified as non- current assets and liabilities.
The operating cycle is the time between the acquisition
of assets for processing and their realization in cash and
cash equivalents. The Company has identified twelve
months as its operating cycle."
2.3 Use of estimates
The preparation of the financial statements requires
the Management to make estimates and assumptions
considered in the reported amounts of assets and
liabilities (including contingent liabilities) and the reported
income and expenses during the year. The Management
believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Future
results could differ due to these estimates and the
differences between the actual results and the estimates
are recognised in the periods in which the results are
known / materialise.
2.4 Inventories
The inventory are valued at lower of cost or net realizable
value. The inventory costs are based on first in first out
method.Cost includes all charges in bringing the goods to
the point of sale, including octroi and other levies, transit
insurance and receiving charges. Finished goods include
appropriate proportion of overheads.
2.5 Cash and cash equivalents
Cash and cash equivalents in the balance sheet
comprise of cash at bank and in hand and short term
investments with an original maturity of three months
or less. Earmarked balances with bank, margin money
or security against borrowings, guarantees and other
commitments ,if any shall be treated separately from
cash and cash equivalent
2.6 Cash flow statement
Cash flows are reported using the indirect method,
whereby profit / (loss) before extraordinary items and tax
is adjusted for the effects of transactions of non-cash
nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flows from operating,
investing and financing activities of the Company are
segregated based on the available information.
2.7 Property, plant and equipment
Property, Plant and equipment including capital work in
progress are stated at cost, less accumulated depreciation
and accumulated impairment losses, if any. The cost
comprises of purchase price, taxes, duties, freight and
other incidental expenses directly attributable and related
to acquisition and installation of the concerned assets
and are further adjusted by the amount of input tax
credit availed wherever applicable. Subsequent costs
are included in asset''s carrying amount or recognised as
separate assets, as appropriate, only when it is probable
2.8 Depreciation and amortisation
Depreciation on property, plant and equipment is provided
on prorate basis on straight line method using the useful
lives of the assets estimated by the management and in
the manner prescribed in Schedule II of the Companies
Act 2013. The estimated life of various assets is
as follows:
2.9 Intangible assetsSeparately acquired intangible assets
Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses, if any.
Internally generated intangibles, excluding capitalized
development cost, are not capitalized and the related
expenditure is reflected in statement of Profit and Loss
in the period in which the expenditure is incurred. Cost
comprises the purchase price and any attributable cost
of bringing the asset to its working condition for its
intended use.
2.10 Revenue recognition
Sale of goods
Sales are recognised, net of returns and trade discounts,
on transfer of significant risks and rewards of ownership
to the buyer, which generally coincides with the delivery
of goods to customers. Sales exclude GST. The
company follows the mercantile system of accounting
and recognizes the income and expenditures on accrual
basis except in case of significant uncertainties.
Sales of services are recognized when the services
are rendered.
Interest income is recognised on time proportion basis.
Rental income is recognized on accrual basis
2.12 Foreign currency transactions and
translationsInitial recognition
Transactions in foreign currencies entered into by the
Company are accounted at the exchange rates prevailing
on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary
items at the Balance Sheet date
Foreign currency monetary items (other than derivative
contracts) of the Company outstanding at the Balance
Sheet date are restated at the year-end rates.
Exchange differences arising out of these translations are
charged to the Statement of Profit and Loss."
Long-term investments, are carried individually at cost
less provision for diminution, other than temporary, in
the value of such investments. Current investments are
carried individually, at the lower of cost and fair value.
Cost of investments include acquisition charges such as
brokerage, fees and duties.
The Company has adopted the Accounting Standard
15- Employee Benefits prescribed under the Companies
(Accounting Standards) Rules, 2006. ''Employee benefits
include provident fund, bonus and gratuity benefits. The
Companyâs obligation towards various employee benefits
has been recognized as follows:
All employee benefits payable wholly within twelve
months of rendering the service are short-term employee
benefits. Benefits such as salaries, wages and bonus
wages, etc, are recognized in the Profit and Loss
statement in the period in which the employee renders
the related service.
The Company''s contribution to provident fund are
considered as defined contribution plans and are charged
as an expense as they fall due based on the amount of
contribution required to be made.
(i) For defined-benefit plans, the amount recognised
in the Balance Sheet is the present value of the
defined-benefit obligation less the fair value of
any plan assets and any past service costs not
yet recognised. The present value of the defined-
benefit obligation is the present value of expected
future payments required to settle the obligation
resulting from employee service in the current and
prior periods. The discount rate used is the market
yields on government bonds at the Balance Sheet
date with remaining terms to maturity approximating
those of the Companyâs obligations.
(ii) Actuarial gains and losses in respect of post
employment and other long-term benefits are
charged to the Statement of Profit and Loss.
Borrowing costs include interest, amortisation of ancillary
costs incurred and exchange differences arising from
foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost. Costs
in connection with the borrowing of funds to the extent
not directly related to the acquisition of qualifying assets
are charged to the Statement of Profit and Loss over
the tenure of the loan. Borrowing costs, allocated to and
utilised for qualifying assets, pertaining to the period
from commencement of activities relating to construction
/ development of the qualifying asset up to the date
of capitalisation of such asset is added to the cost of
the assets.
Borrowing cost attributable to the fixed assets during
construction/ exploration, renovation and modernization
are capitalized. Such borrowing costs are apportioned
on the average balance of capital work in progress for
the year. Other borrowing costs are recognized as an
expense in the period in which they are incurred."
The Company identifies primary segments based on
the dominant source, nature of risks and returns and
the internal organisation and management structure.
The operating segments are the segments for which
separate financial information is available and for which
operating profit/loss amounts are evaluated regularly by
the executive.
Tax expense comprises current and deferred tax. Current
income tax is measured at the amount expected to be
paid to the tax authorities in accordance with Income
Tax Act, 1961. Deferred income tax reflects the impact of
current year timing differences between taxable income
that originates in one period and are capable of reversal
in one or more subsequent periods.
Minimum Alternate Tax (MAT) paid in accordance with the
tax laws, which gives future economic benefits in the form
of adjustment to future income tax liability, is considered
as an asset if there is convincing evidence that the
Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it
is probable that future economic benefit associated with
it will flow to the Company.
Deferred tax is recognised on timing differences, being
the differences between the taxable income and the
accounting income that originate in one period and are
capable of reversal in one or more subsequent periods.
Deferred tax is measured using the tax rates and the tax
laws enacted or substantially enacted as at the reporting
date. Deferred tax liabilities are recognised for all timing
differences. Deferred tax assets in respect of unabsorbed
depreciation and carry forward of losses are recognised
only if there is virtual certainty that there will be sufficient
future taxable income available to realise such assets.
Deferred tax assets are recognised for timing differences
of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be
available against which these can be realised. Deferred
tax assets and liabilities are offset if such items relate to
taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such
set off. Deferred tax assets are reviewed at each Balance
Sheet date for their realisability.
The carrying values of assets / cash generating units
are reviewed at each Balance Sheet date for impairment.
If any indication of impairment exists, the recoverable
amount of such assets is estimated and impairment is
recognised if the carrying amount of these assets exceeds
their recoverable amount. The recoverable amount is the
greater of the net selling price and their value in use. Value
in use is arrived at by discounting the future cash flows
to their present value based on an appropriate discount
factor. When there is indication that an impairment loss
recognised for an asset in earlier accounting periods no
longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit
and Loss.
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