SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. BASIS OF PREPARATION OF FINANCIAL SATEMENTS
The financial statements are prepared and presented under the historical cost convention and
evaluated on a going-concern basis using the accrual system of accounting in accordance with
the accounting principles generally accepted in India (Indian GAAP) and the requirements of
the Companies Act, including the Accounting Standards as prescribed by the Section 133 of
the Companies Act, 2013 (“the Act”) read with Rule 7 of Companies (Accounts) Rules, 2014).
2. USE OF ESTIMATES
The preparation of financial statements in conformity with Generally Accepted Accounting
Principles (GAAP) requires the management of the Company to make estimates and
assumptions that affect the reported balances of assets and liabilities and disclosures relating
to the contingent liabilities, if any, as at the date of the financial statements and reported
amounts of income and expenses during the year. Examples of such estimates include value
of value of WIP stock etc. The difference between the actual results and estimates are
recognized in the period in which results are known or materialized.
3. PROPERTY, PLANT AND EQUIPMENTS
Property, Plant & Equipment are stated at historical cost less accumulated depreciation and
impairment losses. Cost includes purchase price and all other attributable cost to bring the
assets to its working condition for the intended use. Property, Plant & Equipment have been
recorded in the books of the Company at WDV as per Companies Act, 2013.
Subsequent expenditures related to Property; Plant & Equipment are added to its book value
only if they increase the future benefits from the existing asset beyond its previously assessed
standard of performance.
Assets are capitalized as capital work-in-progress till it is not ready for the intended use. At
the point when an asset is operating at management's intended use, the cost of asset is
transferred to the appropriate category of property, plant and equipment and depreciation
commences.
4. INTANGIBLE ASSETS
Intangible assets that are acquired by the Company are measured initially at cost. After initial
recognition, an intangible asset is carried at its cost less accumulated amortization and any
accumulated impairment loss.
Subsequent expenditure, if any, is capitalized only when it increases the future economic
benefits embodied in the specific asset to which it relates.
5. DEPRECIATION
Depreciation on Fixed Assets has been provided on 'Written Down Value' based on the useful
life of the assets and in the manner prescribed in the Schedule II of the Companies Act, 2013.
In first year, company has identified assets whose life as been expired according to company
act, 2013, therefore the WDV of such assets has been written off upto salvage value i.e. 5% of
original cost of purchase.
6. BORROWING COSTS
Borrowing cost includes interest and amortization of ancillary costs incurred in connection
with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalized as part of the cost of the respective asset.
All other borrowing costs are expensed in the period they occur.
7. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value.
An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset
is identified as impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of amount.
8. INVESTMENTS
Investments, which are readily realizable and intended to be held for not more than one year
from the date on which such investments are made, are classified as current investments. All
other investments are classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost comprises purchase
price and directly attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of cost and fair value
determined on an individual investment basis. Long-term investments are carried at cost.
However, provision for diminution in value is made to recognize a decline other than
temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal
proceeds is charged or credited to the statement of profit and loss.
9. INVENTORIES
i) Raw Material, Packaging Material, Tools and Consumables, and Finished Goods are valued
at lower of Cost or net realizable value.
ii) Work in Progress at various level is valued at lower of cost or net realizable value. The
Management estimates the work in progress according to stage of completion. Cost of
inventories comprises of cost of purchase, cost of conversion and other costs including
manufacturing overheads incurred in bringing them to their respective present location and
condition.
10. REVENUE RECOGNITION
i) Revenue is recognized to the extent that is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured.
ii) Revenue from sale of goods is recognized when the significant risk and rewards are
transferred as per the terms of sale. Revenues are recorded at invoice value.
iii) Income in respect of interest, insurance claims, export benefits, subsidy etc. is recognized
to the extent the company is reasonably certain of its ultimate realization.
11. EMPLOYEE BENEFITS
Defined-contribution plans:
i) The company does not carry forward the balance of earned leave balance of employees,
balance earned leave is paid to the employees according to the policy of company.
ii) Company's contribution to Provident Fund and other Funds for the year is accounted on
accrual basis and charged to the Statement of Profit & Loss for the year.
iii) Retirement benefits in the form of Gratuity are considered as defined benefit obligations
and are provided on the basis of the actuarial valuation as at the date of the Balance Sheet.
12. SEGMENT ACCOUNTING
Business Segment
(a) The business segment has been considered as the primary segment.
(b) The Company's primary business segments are reflected based on principal business
activities, the nature of service, the differing risks and returns, the organization structure and
the internal financial reporting system.
(c) The Company's primary business includes manufacturing and trading of healthcare
devices and other healthcare consumables and accordingly Segment Disclosure has been
disclosed.
13. ACCOUNTING FOR TAXES ON INCOME
Tax expense comprises of current and deferred tax. Current income tax is measured at the
amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961
enacted in India. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting date.
(i) Deferred income taxes reflect the impact of timing differences between taxable income and
accounting income originating during the current year and reversal of timing differences for
the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date.
(ii) Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets
are recognized for deductible timing differences only to the extent that there is reasonable
certainty that sufficient future taxable income will be available against which such deferred
tax assets can be realized. In situations where the Company has unabsorbed depreciation or
carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty
supported by convincing evidence that they can be realized against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each reporting date. The company
writes-down the carrying amount of a deferred tax asset to the extent that it is no longer
reasonably certain or virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be realized. Any such write¬
down is reversed to the extent that it becomes reasonably certain or virtually certain, as the
case may be, that sufficient future taxable income will be available.
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