Accounting Policies of Krsnaa Diagnostics Ltd. Company

Mar 31, 2025

2 Material accounting policies

Material accounting policies adopted by the company are as under:

2.1 Basis of Preparation of Ind AS financial statements

(a) Statement of compliance with Ind AS

The standalone financial statements (''financial
statements'') of the Company have been prepared in
accordance with Indian Accounting Standards (Ind
AS) notified under the Companies (Indian Accounting
Standards) Rules, 2015 (as amended from time to time)
and presentation requirements of Division II of Schedule
III to the Companies Act, 2013, (Ind AS compliant Schedule
III), as applicable to the standalone financial statements.

(b) Basis of measurement

The financial statements have been prepared on
a historical cost convention on accrual and going
concern basis, except for the following material items
that have been measured at fair value as required by
relevant Ind AS:-

i) Certain financial assets and liabilities measured
at fair value (refer accounting policy on
financial instruments)

ii) Share based payments - Equity settled options at
grant date fair value.

iii) Net defined benefit liability - Present value
of defined benefit obligation less fair value
of plan assets.

(c) Classification of current and non current

The Company segregates assets and liabilities into
current and non-current categories for presentation in
the balance sheet after considering its normal operating
cycle and other criteria set out in Ind AS 1 Presentation

of Financial Statements. For this purpose, current assets
and liabilities include the current portion of non-current
assets and liabilities respectively. Deferred tax assets
and liabilities are always classified as non-current.
The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash and
cash equivalents. The Company has identified period up
to twelve months as its operating cycle.

(d) Use of estimates

The preparation of financial statements are in conformity
of Ind AS which requires the Management to make
estimate and assumptions that affect the reported
amount of assets and liabilities as at the Balance Sheet
date, reported amount of revenue and expenses for the
year and disclosures of contingent liabilities as at the
Balance Sheet date. The estimates and assumptions used
in the accompanying financial statements are based upon
the Management''s evaluation of the relevant facts and
circumstances as at the date of the financial statements.
Actual results could differ from these estimates.
Estimates and underlying assumptions are reviewed on
a periodic basis. Revisions to accounting estimates, if any,
are recognized in the year in which the estimates are
revised and in any future years affected. Refer Note 3 for
detailed discussion on estimates and judgments.

During the previous financial year i.e. March 31, 2024,
company has reassessed the useful life and residual value
of certain assets. As per Ind AS 8, the effect of change in
accounting estimate has to be given prospectively in the
financial statements. Due to this change in accounting
estimate, depreciation expense is lower and profit
before taxes is higher by H. 39.67 million for the year
ended March 31, 2024. Refer note 5.1 for change in
accounting estimate.

(e) Going concern

The Company has prepared the financial statements
on the basis that it will continue to operate as
a going concern.

(f) All amounts have been rounded-off to the nearest
millions, unless otherwise indicated.

.2 Property, plant and equipment

Property, plant and equipment are stated at historical cost
less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items and cost of
employees incurred towards setting up new centers.

Subsequent costs are included in the asset''s carrying amount
or recognized as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the

item will flow to the Company and the cost of the item can
be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognized when
replaced. All other repairs and maintenance are charged
to Statement of Profit and Loss during the year in which
they are incurred.

Advances paid towards the acquisition of property, plant and
equipment outstanding at each balance sheet date is classified

as capital advances under other non-current assets and the
cost of assets not put to use before such date are disclosed
under ''Capital work-in-progress''.

Depreciation methods, estimated useful lives

The Company depreciates property, plant and equipment over
their estimated useful lives using the straight line method. The
estimated useful lives of assets are as follows:

Leasehold improvements are amortised over the estimated
useful economic life i.e. 12 years or lease period including
expected renewal period whichever is lower.

During the year ended March 31, 2024, Company has
reassessed the estimated economic useful life of certain assets
forming part of Plant & Machinery and leasehold improvement
based on technical evaluation carried out by the company. In
case of plant and machinery company has reassessed the useful
life from 13 year to 5/10 years and leasehold improvement
from 10 years to 12 years or lease period including expected
renewal period whichever is lower.

Company has also reassessed residual value for all the assets
from 0% to 5%/10%/20% as mentioned in table above except
intangibles. For impact of change in accounting estimate
refer note 5.1.

Based on the technical experts assessment of useful life, certain
items of property plant and equipment are being depreciated
over useful lives different from the prescribed useful lives
under Schedule II to the Companies Act, 2013. Management
believes that such estimated useful lives are realistic and
reflect fair approximation of the period over which the assets
are likely to be used.

Depreciation on addition to property plant and equipment
is provided on pro-rata basis from the date of acquisition.
Depreciation on sale/deduction from property plant and
equipment is provided up to the date preceding the date
of sale, deduction as the case may be. Gains and losses on
disposals are determined by comparing proceeds with carrying
amount. These are included in Statement of Profit and Loss
under ''Other Income''.

Depreciation methods, useful lives and residual values are
reviewed periodically at each financial year end and adjusted
prospectively, as appropriate.

1.3 Other intangible assets

Intangible assets are stated at acquisition cost, net of
accumulated amortization.

The Company amortized intangible assets over their estimated
useful lives using the straight line method. The estimated
useful lives of intangible assets are as follows:

Intangible assets with finite lives are assessed for impairment
whenever there is an indication that the intangible asset may
be impaired. The amortization period and the amortization
method for an intangible asset with a finite useful life are
reviewed at least at each financial year end.

2.4 Foreign currency transactions

(a) Functional and presentation currency

Items included in the financial statements are measured
using the currency of the primary economic environment
in which the entity operates (''the functional currency'').
The financial statements are presented in Indian
rupee (H), which is the Company''s functional and
presentation currency.

(b) Transactions and balances

On initial recognition, all foreign currency transactions
are recorded by applying to the foreign currency amount
the exchange rate between the functional currency and
the foreign currency at the date of the transaction. Gains/
Losses arising out of fluctuation in foreign exchange rate
between the transaction date and settlement date are
recognised in the Statement of Profit and Loss.

All monetary assets and liabilities in foreign currencies
are restated at the year end at the exchange rate
prevailing at the year end and the exchange differences
are recognised in the Statement of Profit and Loss.

Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions.

2.5 Fair value measurement

The Company measures financial instruments such as
investment in mutual fund at each balance sheet date.

The Company uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs. The
Company''s management determines the policies and procedures
for fair value measurement .

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

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

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

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

2.6 Revenue from contract with customers

Revenue is primarily generated from Radiology, Pathology
services and Tele- Reporting Services i.e. diagnostic services

Revenue from diagnostic services is recognised on amount
billed net of discounts/ rebates and taxes if any.

Revenue is recognised when the amount of revenue can be
reliably measured, it is probable that future economic benefits will

flow to the entity and when underlying tests are conducted and
reports are processed. The Company also enters into contract
with vendor''s for providing various services at its diagnostic
centre''s which helps to fulfil its performance obligation .

Company has assessed these contracts and has concluded that it
is primarily responsible for fulfilling the performance obligation
in the contract and Company has no agency relationships.
Accordingly the revenue has been recognised at the gross
amount as and when services are provided and performance
obligation is satisfied. Payment made to vendor''s for various
services provided at diagnostic centre''s is recognised as ''Fees
to hospitals and others'' as an expense as and when services are
received from vendor.

A contract liability is the obligation to transfer services to a
customer for which the Company has received consideration
from the customer. If a customer pays consideration before the
Company transfers services to the customer, a contract liability
is recognised when the payment is made. Contract liabilities
are recognised as revenue when the Company performs
under the contract.

Other income

Interest Income is recognised on a basis of effective interest
method as set out in Ind AS 109, Financial Instruments,
and where no significant uncertainty as to measurability or
collectability exists.

Expenses

Fees to Hospital & other pertains to expenses incurred for
availing various services at diagnostics centre.

Expenses is recognised as and when services are received from
vendors and is net of discounts.

2.7 Taxes

Tax expense for the year, comprising current tax and
deferred tax, are included in the determination of the net
profit for the year.

(a) Current income tax

Current tax assets and liabilities are measured at the
amount expected to be recovered or paid to the taxation
authorities. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively
enacted, at the year end date. Current tax assets and
tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on
a net basis, or to realize the asset and settle the liability
simultaneously.

(b) Deferred tax

Deferred income tax is provided on temporary differences
arising between the tax bases of assets and liabilities and
their carrying amounts in financial statements. Deferred
income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the end
of the year and are expected to apply when the related
deferred income tax asset is realised or the deferred
income tax liability is settled.

Deferred tax assets are recognised for all deductible
temporary differences only if it is probable that future
taxable amounts will be available to utilize those
temporary differences and losses.

Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities

Deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate
to the same taxation authority. Current tax asset and
current tax liabilities are offset when entity has legally
enforceable right to offset and intends either to settle on
a net basis, or to realise the asset and settle the liability
simultaneously.

Current and deferred tax is recognized in Statement of
Profit and Loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in
equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.

2.8 Leases

The Company as a lessee

The Company''s lease asset classes primarily consist of leases
for Machinery and Building. The Company assesses whether a
contract contains a lease, at inception of a contract. A contract
is, or contains, a lease if the contract conveys the right to
control the use of an identified 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: (i) the contract involves the use of
an identified asset (ii) the Company has substantially all of the
economic benefits from use of the asset through the period
of the lease and (iii) the Company has the right to direct the
use of the asset.

At the date of commencement of the lease, the Company
recognizes a right-of-use asset ("ROU”) and a corresponding
lease liability for all lease arrangements in which it is a lessee,
except for leases with a term of twelve months or less (short¬

term leases) and low value leases. For these short-term and
low value leases, the Company recognizes the lease payments
as an operating expense on a straight-line basis over the term
of the lease. The Company determines the lease term as the
noncancellable period of a lease, together with both periods
covered by an option to extend the lease if the Company is
reasonably certain to exercise that option; and periods covered
by an option to terminate the lease if the Company is reasonably
certain not to exercise that option. In assessing whether the
Company is reasonably certain to exercise an option to extend
a lease, or not to exercise an option to terminate a lease, it
considers all relevant facts and circumstances that create an
economic incentive for the Company to exercise the option to
extend the lease, or not to exercise the option to terminate
the lease. The Company revises the lease term if there is a
change in the non-cancellable period of a lease. The right-
of-use asset is subsequently depreciated using the straight¬
line method over the lease term. 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.

2.9 Inventories

Inventories are valued at the lower of cost and net
realisable value.

Costs incurred in bringing each product to its present location
and condition are accounted for as follows:

Cost includes purchase price, (excluding those subsequently
recoverable by the enterprise from the concerned revenue
authorities), freight inwards and other expenditure incurred
in bringing such inventories to their present location and
condition. In determining the cost, weighted average cost
method is used.

Provision of obsolescence on inventories is considered on the
basis of management''s estimate based on demand and market
of the inventories. Net realizable value is the estimated selling
price in the ordinary course of business, less the estimated
cost of completion and the estimated costs necessary
to make the sale.

The comparison of cost and net realizable value is made on
item by item basis.

2.10 Impairment of non-financial assets

The Company assesses at each year end whether there is any
objective evidence that a non financial asset or a group of non
financial assets is impaired. If any such indication exists, the
Company estimates the asset''s recoverable amount and the
amount of impairment loss.

An impairment loss is calculated as the difference between
an asset''s carrying amount and recoverable amount. Losses
are recognized in Statement of Profit and Loss and reflected
in an allowance account. When the Company considers that
there are no realistic prospects of recovery of the asset, the
relevant amounts are written off. If the amount of impairment
loss subsequently decreases and the decrease can be related
objectively to an event occurring after the impairment was
recognised, then the previously recognised impairment loss is
reversed through Statement of Profit and Loss.

The recoverable amount of an asset or cash-generating unit
(as defined below) is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset.
For the purpose of impairment testing, assets are grouped
together into the smallest group of assets that generates cash
in flows from continuing use that are largely independent of
the cash inflows of other assets or groups of assets (the "cash¬
generating unit”).

---

Mar 31, 2024

2 Material accounting policies

Material accounting policies adopted by the company are as under:

2.1 Basis of Preparation of Ind AS Financial Statements

(a) Statement of Compliance with Ind AS

The Standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the Standalone financial statements.

(b) Change in accounting estimate

During the year company has reassessed the useful life and residual value of certain assets. As per Ind AS 8, the effect of change in accounting estimate has to be given prospectively in the financial statements. Due to this change in accounting estimate, depreciation expense is lower and profit before taxes is higher by H39.67 million for the year ended March 31, 2024. Refer note 5.1 for change in accounting estimate.

(c) Basis of measurement

The financial statements have been prepared on a historical cost convention on accrual and going concern basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:-

i) Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments)

ii) Share based payments

(d) Classification of Current and Non Current

All assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of services and the time between the rendering of service and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current and noncurrent classification of assets and liabilities.

(e) Use of estimates

The preparation of financial statements are in conformity of Ind AS which requires the Management to make estimate and assumptions that affect the reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses for the year and disclosures of contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the accompanying financial statements are based upon the Management''s evaluation of the relevant facts and circumstances as at the date of the financial statements. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognized in the year in which the estimates are revised and in any future years affected. Refer Note 3 for detailed discussion on estimates and judgments.

(f) All amounts have been rounded-off to the nearest millions, unless otherwise indicated.

2.2 Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items and cost of employees incurred towards setting up new centers.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to Statement of Profit and Loss during the year in which they are incurred.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under ''Capital work-in-progress''.

During the year, Company has reassessed the estimated economic useful life of certain assets forming part of Plant & Machinery and leasehold improvement based on technical evaluation carried out by the company. In case of plant and machinery company has reassessed the useful life from 13 year to 5/10 years and leasehold improvement from 10 years to 12 years or lease period including expected renewal period whichever is lower.

Company has also reassessed residual value for all the assets from 0% to 5%/10%/20% as mentioned in table above except intangibles. For impact of change in accounting estimate refer note 5.1.

Based on the technical experts assessment of useful life, certain items of property plant and equipment are being depreciated over useful lives different from the prescribed useful lives under Schedule II to the Companies Act, 2013. Management believes that such estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Depreciation on addition to property plant and equipment is provided on pro-rata basis from the date of acquisition. Depreciation on sale/deduction from property plant and equipment is provided up to the date preceding the date of sale, deduction as the case may be. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in Statement of Profit and Loss under ''Other Income''.

Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and adjusted prospectively, as appropriate.

3 Other Intangible Assets

Intangible assets are stated at acquisition cost, net of accumulated amortization.

The Company amortized intangible assets over their estimated useful lives using the straight line method. The estimated useful lives of intangible assets are as follows:

Intangible assets with finite lives are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

2.4 Foreign Currency Transactions

(a) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in Indian rupee (H), which is the Company''s functional and presentation currency.

(b) Transactions and balances

On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction. Gains/Losses arising out of fluctuation in foreign exchange rate between the transaction date and settlement date are recognised in the Statement of Profit and Loss.

All monetary assets and liabilities in foreign currencies are restated at the year end at the exchange rate prevailing at the year end and the exchange differences are recognised in the Statement of Profit and Loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

2.5 Fair value measurement

The Company measures financial instruments such as investment in mutual fund at each balance sheet date.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. The Company''s management determines the policies and procedures for fair value measurement.

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

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

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

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

2.6 Revenue from Contract with Customers

Revenue is primarily generated from Radiology, Pathology services and Tele- Reporting Services i.e. diagnostic services

Revenue from diagnostic services is recognised on amount billed net of discounts/ rebates and taxes if any.

Revenue is recognised when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when underlying tests are conducted and reports are processed. The Company also enters into contract with vendor''s for providing various services at its diagnostic centre''s which helps to fulfil its performance obligation.

Company has assessed these contracts and has concluded that it is primarily responsible for fulfilling the performance obligation in the contract and company has no agency relationships. Accordingly the revenue has been recognised at the gross amount as and when services are provided and performance obligation is satisfied. Payment made to vendor''s for various services provided at diagnostic centre''s is recognised as ''Fees to hospitals and others'' as an expense as and when services are received from vendor.

A contract liability is the obligation to transfer services to a customer for which the Company has received consideration from the customer. If a customer pays consideration before the Company transfers services to the customer, a contract liability is recognised when the payment is made. Contract liabilities are recognised as revenue when the Company performs under the contract.

Other Income

Interest Income is recognised on a basis of effective interest method as set out in Ind AS 109, Financial Instruments, and where no significant uncertainty as to measurability or collectability exists.

Expenses

Fees to Hospital & other pertains to expenses incurred for availing various services at diagnostics centre.

Expenses is recognised as and when services are received from vendors and is net of discounts.

2.7 Taxes

Tax expense for the year, comprising current tax and deferred tax, are included in the determination of the net profit for the year.

(a) Current income tax

Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the year end date. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

(b) Deferred tax

"Deferred income tax is provided on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the year and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It

establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax asset and current tax liabilities are offset when entity has legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognized in Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

2.8 Leases

The Company as a lessee

The Company''s lease asset classes primarily consist of leases for Machinery and Building. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified 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: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

"At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The Company determines the lease term as the noncancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease. The right-of-use asset is subsequently depreciated using the straight-line method over the lease term. 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.

2.9 Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

Cost includes purchase price, (excluding those subsequently recoverable by the enterprise from the concerned revenue authorities), freight inwards and other expenditure incurred in bringing such inventories to their present location and condition. In determining the cost, weighted average cost method is used.

Provision of obsolescence on inventories is considered on the basis of management''s estimate based on demand and market of the inventories. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.

The comparison of cost and net realizable value is made on item by item basis.

2.10 Impairment of non-financial assets

"The Company assesses at each year end whether there is any objective evidence that a non financial asset or a group of non financial assets is impaired. If any such indication exists, the Company estimates the asset''s recoverable amount and the amount of impairment loss.

An impairment loss is calculated as the difference between an asset''s carrying amount and recoverable amount. Losses are recognized in Statement of Profit and Loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through Statement of Profit and Loss.

The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash in flows from continuing use

that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit").

---

Mar 31, 2023

Significant accounting policies

Significant accounting policies adopted by the
company are as under:

2.1 Basis of Preparation of Ind AS Financial
Statements

(a) Statement of Compliance with Ind AS"

These financial statements have been prepared
in accordance with Indian Accounting Standards
(Ind AS) notified under Section 133 of the
Companies Act, 2013 (the "Act") read with the
Companies (Indian Accounting Standards)
Rules, 2015 and Companies (Indian Accounting
Standards) Amendment Rules, 2016.

The financial statements were approved by the
Company''s Board of Directors and authorised for
issue on May 27, 2023.

(b) Basis of measurement

The financial statements have been prepared
on a historical cost convention on accrual basis,
except for the following material items that
have been measured at fair value as required by
relevant Ind AS:-

i) Certain financial assets and liabilities
measured at fair value (refer accounting
policy on financial instruments)

ii) Share based payments

All assets and liabilities have been classified as
current or non-current as per the Company''s
operating cycle and other criteria set out in the
Schedule III to the Companies Act, 2013. Based
on the nature of services and the time between
the rendering of service and their realization in
cash and cash equivalents, the Company has
ascertained its operating cycle as twelve months
for the purpose of current and noncurrent
classification of assets and liabilities.

(c) Use of estimates

The preparation of financial statements are
in conformity of Ind AS which requires the
Management to make estimate and assumptions
that affect the reported amount of assets and
liabilities as at the Balance Sheet date, reported
amount of revenue and expenses for the
year and disclosures of contingent liabilities
as at the Balance Sheet date. The estimates
and assumptions used in the accompanying
financial statements are based upon the
Management''s evaluation of the relevant facts
and circumstances as at the date of the financial
statements. Actual results could differ from
these estimates. Estimates and underlying
assumptions are reviewed on a periodic basis.
Revisions to accounting estimates, if any, are
recognized in the year in which the estimates
are revised and in any future years affected.
Refer Note 3 for detailed discussion on estimates
and judgments.

(d) All amounts have been rounded-off to the
nearest millions, unless otherwise indicated.

2.2 Property, plant and equipment

Property, plant and equipment are stated at historical
cost less depreciation. Historical cost includes
expenditure that is directly attributable to the
acquisition of the items.

Subsequent costs are included in the asset''s carrying
amount or recognized as a separate asset, as
appropriate, only when it is probable that future
economic benefits associated with the item will
flow to the Company and the cost of the item can
be measured reliably. The carrying amount of any
component accounted for as a separate asset is
derecognized when replaced. All other repairs and
maintenance are charged to Statement of Profit and
Loss during the year in which they are incurred.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance
sheet date is classified as capital advances under
other non-current assets and the cost of assets not
put to use before such date are disclosed under
''Capital work-in-progress''.

Depreciation methods, estimated useful lives

The Company depreciates property, plant and
equipment over their estimated useful lives using
the straight line method. The estimated useful lives
of assets are as follows:

Depreciation on addition to property plant and
equipment is provided on pro-rata basis from the
date of acquisition. Depreciation on sale/deduction
from property plant and equipment is provided up
to the date preceding the date of sale, deduction as
the case may be. Gains and losses on disposals are
determined by comparing proceeds with carrying
amount. These are included in Statement of Profit
and Loss under ''Other Income''.

Depreciation methods, useful lives and residual
values are reviewed periodically at each financial year
end and adjusted prospectively, as appropriate.

2.3 Other Intangible Assets

Intangible assets are stated at acquisition cost, net of
accumulated amortization.

The Company amortized intangible assets over their
estimated useful lives using the straight line method.
The estimated useful lives of intangible assets are
as follows:

Leasehold improvements are amortised over the
estimated useful economic life i.e. the duration of
lease (ranging from 5 to 10 years)

Based on the technical experts assessment of useful
life, certain items of property plant and equipment
are being depreciated over useful lives different from
the prescribed useful lives under Schedule II to the
Companies Act, 2013. Management believes that such
estimated useful lives are realistic and reflect fair
approximation of the period over which the assets
are likely to be used.

2.4 Foreign Currency Transactions

(a) Functional and presentation currency

Items included in the financial statements are
measured using the currency of the primary
economic environment in which the entity
operates (''the functional currency''). The
financial statements are presented in Indian
rupee (''), which is the Company''s functional and
presentation currency.

(b) Transactions and balances

On initial recognition, all foreign currency
transactions are recorded by applying to the

foreign currency amount the exchange rate
between the functional currency and the foreign
currency at the date of the transaction. Gains/
Losses arising out of fluctuation in foreign
exchange rate between the transaction date and
settlement date are recognised in the Statement
of Profit and Loss.

All monetary assets and liabilities in foreign
currencies are restated at the year end at the
exchange rate prevailing at the year end and
the exchange differences are recognised in the
Statement of Profit and Loss.

Non-monetary items that are measured in
terms of historical cost in a foreign currency are
translated using the exchange rates at the dates
of the initial transactions.

2.5 Fair value measurement

The Company measures financial instruments, such
as, derivatives at fair value at each balance sheet date.

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

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

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

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs. The
Company''s management determines the policies
and procedures for fair value measurement such as
derivative instrument.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described

as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

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

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

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

2.6 Revenue Recognition

Revenue is primarily generated from Radiology,
Pathology services and Tele- Reporting Services.

Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price (net of variable consideration) allocated to that
performance obligation. The transaction price of
goods sold and services rendered is net of variable
consideration on account of various discounts
and schemes offered by the company as part of
the contract.

The Company has assessed that it is primarily
responsible for fulfilling the performance obligation
and has no agency relationships. Accordingly the
revenue has been recognised at the gross amount
and fees to hospitals and others has been recognised
as an expense.

Revenue is recognised when the amount of revenue
can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific
criteria have been met as described below.

Amounts disclosed as revenue are net of indirect taxes,
trade allowances, rebates and amounts collected
on behalf of third parties and is not recognised in
instances where there is uncertainty with regard
to ultimate collection. In such cases revenue is
recognised on reasonable certainty of collection.

A contract liability is the obligation to transfer services
to a customer for which the Company has received
consideration from the customer. If a customer pays

consideration before the Company transfers services
to the customer, a contract liability is recognised
when the payment is made. Contract liabilities are
recognised as revenue when the Company performs
under the contract.

Other Income

Interest Income is recognised on a basis of effective
interest method as set out in Ind AS 109, Financial
Instruments, and where no significant uncertainty as
to measurability or collectability exists.

Dividends are recognized in statement of profit and
loss on the date on which the Company''s right to
receive payment is established.

2.7 Taxes

Tax expense for the year, comprising current tax and
deferred tax, are included in the determination of the
net profit for the year.

(a) Current income tax

Current tax assets and liabilities are measured
at the amount expected to be recovered or paid
to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that
are enacted or substantively enacted, at the year
end date. Current tax assets and tax liabilities are
offset where the entity has a legally enforceable
right to offset and intends either to settle on a
net basis, or to realize the asset and settle the
liability simultaneously.

(b) Deferred tax

Deferred income tax is provided in full, using
the balance sheet approach, on temporary
differences arising between the tax bases of
assets and liabilities and their carrying amounts
in financial statements. Deferred income tax is
also not accounted for if it arises from initial
recognition of an asset or liability in a transaction
other than a business combination that at the
time of the transaction affects neither accounting
profit nor taxable profit (tax loss). Deferred
income tax is determined using tax rates (and
laws) that have been enacted or substantially

enacted by the end of the year and are expected
to apply when the related deferred income tax
asset is realised or the deferred income tax
liability is settled.

Deferred tax assets are recognised for all
deductible temporary differences and unused
tax losses only if it is probable that future
taxable amounts will be available to utilize those
temporary differences and losses.

Management periodically evaluates positions
taken in tax returns with respect to situations
in which applicable tax regulation is subject to
interpretation. It establishes provisions where
appropriate on the basis of amounts expected
to be paid to the tax authorities

Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
offset current tax assets and liabilities and when
the deferred tax balances relate to the same
taxation authority. Current tax asset and current
tax liabilities are offset when entity has legally
enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and
settle the liability simultaneously.

Current and deferred tax is recognized in
Statement of Profit and Loss, except to the
extent that it relates to items recognised in
other comprehensive income or directly in
equity. In this case, the tax is also recognised
in other comprehensive income or directly in
equity, respectively.

2.8 Leases

The Company as a lessee

The Company''s lease asset classes primarily consist
of leases for Machinery. The Company assesses
whether a contract contains a lease, at inception of
a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an
identified 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: (i) the contract involves

the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of
the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU")
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases
with a term of twelve months or less (short-term
leases) and low value leases. For these short-term and
low value leases, the Company recognizes the lease
payments as an operating expense on a straight-line
basis over the term of the lease.

Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.

2.9 Inventories

Inventories are valued at the lower of cost and net
realisable value.

Costs incurred in bringing each product to its present
location and condition are accounted for as follows:

Cost includes purchase price, (excluding those
subsequently recoverable by the enterprise from
the concerned revenue authorities), freight inwards
and other expenditure incurred in bringing such
inventories to their present location and condition.
In determining the cost, weighted average cost
method is used.

Provision of obsolescence on inventories is
considered on the basis of management''s estimate
based on demand and market of the inventories. Net
realizable value is the estimated selling price in the
ordinary course of business, less the estimated cost
of completion and the estimated costs necessary to
make the sale.

The comparison of cost and net realizable value is
made on item by item basis.

2.10 Impairment of non-financial assets

The Company assesses at each year end whether
there is any objective evidence that a non financial

asset or a group of non financial assets is impaired.
If any such indication exists, the Company estimates
the asset''s recoverable amount and the amount of
impairment loss.

An impairment loss is calculated as the difference
between an asset''s carrying amount and recoverable
amount. Losses are recognized in Statement of Profit
and Loss and reflected in an allowance account. When
the Company considers that there are no realistic
prospects of recovery of the asset, the relevant
amounts are written off. If the amount of impairment
loss subsequently decreases and the decrease can
be related objectively to an event occurring after
the impairment was recognised, then the previously
recognised impairment loss is reversed through
Statement of Profit and Loss.

The recoverable amount of an asset or cash¬
generating unit (as defined below) is the greater of
its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest
group of assets that generates cash in flows from
continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the
"cash-generating unit").