Significant Accounting Policies
1. General Information:
Nephro Care India Limited (formerly called Nephro Care India Private Limited) (‘’ the Company”) is a private limited company domiciled in India and registered under the provisions of Companies Act, 1956 on dated 8th July, 2014. The registered office of the company is at Flat No 1-JC -18, 5th Floor Sec-III, Salt Lake Bidhan Nagar Sai Complex Kolkata-700098. The main business of the company is to provide comprehensive 360 Degree healthcare servicing to the patients with kidney related services, The company operate only in non-invasive service. The Company got converted into public limited company wef from 5th March, 2024
On 15th February, 2024, the company has commenced its commercial operations at Chandan Nagar, Kolkata, West Bengal
On 1st July, 2024, the company has inaugurated a state of the art rental care clinic in Alipurduar, West Bengal. This facility is a significant stride in addressing the growing demand for advanced diagnostic services and accessible pharmacy support for kidney patients in the region.
On 14th July, 2024, the company marked a significant milestone in its journey towards revolutionizing healthcare in India with the inauguration of the "Vivacity Multispecialty Hospital” in Mad hya gram , Kolkata , West Bengal. Vivacity Multispecialty Hospital stands out as the first of its kind in Eastern India, featuring AI- enabled smart Operation Theatres (OTs) and Intensive Care Units (ICUs).
The Company got listed in NSE Emerge under SME platform on 5th July 2024.
2. Basis of Preparation:
a) The financial statements are prepared and presented under the historical cost convention on accrual basis of accounting in accordance with generally accepted accounting principles in India ("Indian GAAP") and comply in all material respects with the mandatory Accounting Standards ("AS”) prescribed under Section 133 of the Companies Act, 2013 ("the Act”) read with (the Companies (Accounting Standards) Rules, 2021, and with the relevant provisions of the Act and pronouncements of the Institute of Chartered Accountants of India ("ICAI”). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.
All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule III to the Act. Based on the nature of the work, the Company has ascertained its operating cycle as up to twelve months for the purpose of current and non-current classification of assets and liabilities.
b) Functional and Presentation Currency
The Financial Statements have been prepared in Indian Rupees (INR), which is also the Company’s functional currency. The Financial Statements have been rounded off to nearest lacs up to two places of decimals, unless otherwise stated
3. Use of Estimates and Judgements:
The preparation of financial statements is in conformity with generally accepted accounting principles, which requires the management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of liabilities at the date of the financial statements and the results of operations during the reporting periods. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from those estimates. Estimate and assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which estimate is revised and future periods affected.
Critical accounting judgements and key sources of estimation uncertainty: Key assumptions:
a) Useful lives of depreciable and amortisable assets: -
The company reviews the estimated useful lives of depreciable or amortisable assets at each reporting period, based its expected utility of those assets. Uncertainties in these estimates relate to technical and economic obsolesce that may change the utility of certain items of property, plant and equipment.
b) Inventories: -
The company estimates the net realisable value (NRV) of its inventories by taking into account estimated selling price, estimated cost of completion, estimated costs necessary to make the sale, obsolescence considering past trend. Inventories are written done to NRV when such NRV is lower than their cost.
c) Recognition and measurement of provisions, liabilities and contingencies: -
Provision and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events that can be reasonably be estimated. The timing of recognition requires application of judgement to existing facts and circumstances which may be subject to change.
Contingencies in the normal course may be arise from litigation and other claims. Potential liabilities that are possible but not probable of crystalizing or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes to accounts but are not recognized.
d) Income Taxes: -
The Company’s tax jurisdiction is India. Significant judgements are involved in determining the provisions for income taxes including amount expected to be paid or recovered for uncertain tax positions.
e) Defined benefit obligations: -
The present value of defined benefit obligation which includes gratuity is determined using actuarial valuations using projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the
complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in assumptions. All assumptions are reviewed at each reporting date.
4. Significant Accounting Policies:
Overall Considerations: -
The financial information has been prepared using significant accounting policies and measurement basis as summarised below: -.
a) Cash Flow Statement: -
Cash Flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of the transactions of non-cash nature, any deferrals or accruals past or future operating cash receipts or payments and any items of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities
b) Property, Plant and Equipment and Intangible Assets: -
Property, plant and equipment (“PPE”) are stated at cost, net of depreciation. The cost of an asset comprises its purchase price and any cost directly attributable for bringing the asset to its working condition and location for its intended use. Subsequent expenditures, if any, related to an item of PPE are added to its book value only if they increase the future benefits from existing asset beyond its previously assessed standard of performance.
The cost of property, plant and equipment not ready for its intended use at each reporting date are disclosed as capital work in progress. At the point when asset is operating at management intended use, the cost of construction is transferred to appropriate category of property, plant and equipment and deprecation commences.
Property, Plant and Equipment is derecognised on disposal or when no future benefits are expected for its use. Any gain or loss arising on derecognition of assets (calculated as the difference between the net disposal proceeds and the carrying amount of the assets) is recognised in other income/expenses in the statement of profit and loss in the year the asset us derecognised.
Depreciation and amortisation
Depreciation on Property, Plant and Equipment is determined using the Written Down Value on prorata basis based on the useful life of the asset as prescribed under Schedule II of the Companies Act, 2013. Improvements on leasehold improvements are depreciated over the period of lease ie 9 years.
c) Taxation: -
Tax expense recognised in the Statement of Profit or Loss comprises the sum of the current tax and deferred tax.
i) Current Income Tax
Current tax is the amount of income tax determined to be payable in respect of taxable income for a period as per the provisions of the Income-tax Act, 1961 (“IT Act”). The Company account for tax credit in respect of Minimum Alternate Tax (“MAT”) in situations where the MAT payable is higher than tax payable under normal provisions of the IT Act and where there is a reasonable certainty of adjusting such credit in future years. The credit so availed is adjusted in future years when the tax under normal provisions is higher than MAT payable to the extent of the said difference.
ii) Deferred Tax
Deferred tax is the effect of timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are reviewed at each balance sheet date and recognised/derecognised only to the extent that there is reasonable/ virtual certainty, depending on the nature of the timing differences, that sufficient future taxable income will be available against which such deferred tax assets can be realised.
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