1. Corporate information
MAGENTA LIFECARE LIMITED ("the company") is a limited company domiciled in India and
incorporated under the provisions of the Companies Act, 2013. Corporate Identity Number:
L74120GJ2015PLC084050, the registered office of the company is located at N P Patel Estate, A & T
Padamla, Vadodara, Vadodara, Gujarat, India, 391350
2. Basis of preparation
The Financial Statements of the Company have been prepared in accordance with the Generally
Accepted Accounting Principles in India to comply with the Accounting Standards notified under
Section 133 of Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and
relevant provisions of the Companies Act, 2013 ("the 2013 Act").
The accounting policies adopted in the preparation of Financial Statements are consistent with
those of previous period.
3. Use of estimates
The preparation of Financial Statements requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income, expenses and disclosures of contingent liabilities at the date of these Financial
Statements. Although these estimates are based on the 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.
4. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured.
Interest
Interest income is recognized on the Accrual basis determined by the amount outstanding and the
rate applicable and where no significant uncertainty as to measurability or collectability exists.
5. Tangible fixed assets
Fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. The
cost comprises purchase price, borrowing costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for the intended use. Any trade
discounts and rebates are deducted in arriving at the purchase price.
6. Depreciation
Depreciation on fixed assets is provided on Straight Line Method basis in the manner and at the
rates prescribed in Schedule II to the Companies act 2013.
7. Impairment
The Company assesses at each reporting date whether there is an indication that an asset may be
impaired. If any indication exists or when annual impairment testing for an asset is required, the
Company estimates the asset's recoverable amount. An assets recoverable amount is higher of an
assets or Cash generating unit's (CGU) net selling price and its value in use. The recoverable amount
is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discontinued to their present value using a pre-tax discount rate
that reflects current market assessments of time value of money and the risks specific to the asset.
In determining net selling price, recent market transactions are taken into account, if available. If
no such transactions can be identified, an appropriate valuation model is adopted.
8. Employee benefit expenses
Short-term employee benefits are recognized as an expense at the undiscounted amount in the
profit and loss account of the year in which the related service is rendered.
Defined contribution plans
Retirement benefit in the form of provident fund is considered as defined contribution scheme and
the contributions are charged to the statement of profit and loss of the year when the contributions
to respective funds are due. There are no other obligations other than the contribution payable to
the respective fund.
9. Taxation:
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 the Income Tax Act, 1961 enacted in
India. The tax rates and tax Laws used to compute the amounts are those that are enacted, at the
reporting date.
Deferred 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 at the reporting date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets including
the unrecognized deferred tax assets, if any, at each reporting date, 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 deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each reporting date and are adjusted
for its appropriateness.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set
off current tax assets against current tax liabilities and deferred tax assets and deferred taxes relate
to the same taxable entity and the same taxation authority.
Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as
current tax. The company recognizes MAT credit available as an asset only to the extent there is
convincing evidence that the company will pay normal income tax during the specified period, i.e.,
the period for which MAT Credit is allowed to be carried forward. In the year in which the Company
recognizes MAT Credit as an asset in accordance with the Guidance Note on Accounting for Credit
Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961, the said asset is
created by way of credit to the statement of Profit and Loss and shown as "MAT Credit Entitlement."
The Company reviews the "MAT Credit Entitlement" asset at each reporting date and writes down
the asset to the extent the company does not have convincing evidence that it will pay normal tax
during the sufficient period.
10. Investment
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.
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.
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