II Significant accounting policies
The principal accounting policies applied in the preparation of the financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise
stated.
A Property Plant & Equipment
A.1 Initial recognition and measurement
Items of Property, Plant and Equipment are measured at cost less accumulated
depreciation/amortization and accumulated impairment losses. Cost includes expenditure that is
directly attributable to bringing the asset, inclusive of non-refundable taxes & duties, to the location
and condition necessary for it to be capable of operating in the manner intended by management.
When parts of an item of property, plant and equipment have different useful lives, they are
recognized separately.
Items of spare parts, stand-by equipment and servicing equipment which meet the definition of
Property, Plant and Equipment are capitalized.
Property, Plant and Equipments which are not ready for intended use as on the date of Balance Sheet
are disclosed as 'Capital Work-In-Progress'.
Property, Plant and Equipments are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any.
A.2. Subsequent costs
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is
probable that future economic benefits deriving from the cost incurred will flow to the enterprise and
the cost of the item can be measured reliably.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will
flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is
derecognized. The costs of the day-to-day servicing of Property, Plant and Equipment are recognized
in profit or loss as incurred.
A.3. Derecognition
Property, Plant and Equipment are derecognized when no future economic benefits are expected from
their use or upon their disposal. Gains and losses on disposal of an item of property, plant and
equipment are determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment, and are recognized in the statement of profit and loss.
A.4. Depreciation/amortization
Depreciation is recognized in profit or loss on a written-down value basis over the estimated useful
lives of each part of an item of Property, Plant and Equipment.
Depreciation on additions to/deductions from property, plant and equipment during the year is
charged on pro-rata basis from/up to the date on which the asset is available for use/disposed.
Depreciation on property, plant and equipment is provided on their estimated useful lives as
prescribed by Schedule II of Companies Act, 2013 which is as under:
The useful lives of Property, Plant and Equipments are reviewed at the end of each reporting period if
the expected useful life of the asset changes significantly from previous estimates, the effect of such
change in estimates are accounted for prospectively.
B Leases
B.1 As Lessee
B.1.1 Leases where the Company, as lessee has substantially all risks and rewards of ownership are
classified as finance lease. On initial recognition, assets held under finance leases are recorded as
property, plant and equipment and the related liability is recognized as Financial Liability. At
inception of the lease, finance leases are recorded at amounts equal to the fair value of the leased asset
or, if lower, the present value of the minimum lease payments. Minimum lease payments made under
finance leases are apportioned between the finance expense and the reduction of the outstanding
B.1.2 An operating lease is a lease other than a finance lease. Lease payments under an operating lease shall
be recognised as an expense on a straight-line basis over the lease term unless another systematic
basis is more representative of the time pattern. Lease incentives received are recognized as an
integral part of the total lease expense, over the term of the lease.
C Borrowing costs
Borrowing costs are interest and other costs incurred in connection with the borrowing of funds.
Borrowing costs that are directly attributable to the acquisition, construction/exploration/
development or erection of qualifying assets are capitalized as part of cost of such asset until such time
the assets are substantially ready for their intended use. Qualifying assets are assets which take a
substantial period of time to get ready for their intended use or sale. Capitalization of the borrowing
costs in respect of General Borrowing used for the purpose of obtaining a qualifying asset is computed
based on the weighted average cost of such borrowing that are outstanding during the period and
used for the acquisition, construction/exploration or erection of the qualifying asset.
Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare the
qualifying assets for their intended uses are complete.
Borrowing Costs consists of (a)interest expense calculated using effective interest method as
described in Ind AS 109-'Financial Instruments'(b) finance charges in respect of finance lease
recognized in accordance with Ind AS 17 'Leases' (c) other cost that an entity incurs in connection
with the borrowing of funds.
Other borrowing costs are recognized as an expense in the year in which they are incurred.
D Inventories
Inventories of drugs and medical consumables are valued at lower of cost or net realizable value. Cost
includes the cost of purchase including expenditure directly attributable to the purchase. Cost is
determined using the first-in, first-out (FIFO) method. Net realizable value is the estimated selling
price in the ordinary course of business.
Inventory of land under development is also valued at lower of cost or net realizable value.
E Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise of cash at bank and cash on hand and short¬
term deposits with an original maturity of within a year, which are subject to insignificant risk of
change in value.
F Financial instruments
Financial assets and financial liabilities are recognised when a Company becomes a party to the
contractual provisions of the instruments.
F.1 Financial Assets
F.1.1 Initial recognition and measurement
All financial assets are recognized initially at fair value plus or minus, in the case offinancial assets not
recorded at fair value through profit or loss, transaction costs are attributable to the acquisition or
issue of the financial asset, otherwise charged to Statement of Profit & Loss.
F.1.2 Subsequent measurement
Financial assets are subsequently classified and measured at:
• Financial assets at amortised cost
• Financial assets at fair value through profit and loss (FVTPL)
• Financial assets at fair value through other comprehensive income (FVTOCI).
a) Trade Receivables
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at
amortised cost, using the effective interest rate (EIR) method net of any expected credit losses
wherever applicable. The EIR is the rate that discounts estimated future cash income through the
expected life of financial instrument.
b) Investment in Equity Instruments:
All investments in equity instruments in entities other than subsidiaries and joint ventures are
measured at fair value. Equity instruments if held for trading are classified as at FVTPL. For all other
equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. The
Company makes such election on an instrument by instrument basis. The classification is made on
initial recognition and is irrevocable.
If the company decides to classify an equity instrument at FVTOCI, then all fair value changes on the
instruments, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from
OCI to P&L, even on sale of investment as the company transfers cumulative gain or loss within the
equity.
Equity instruments if classified as FVTPL category are measured at fair value with all changes
recognized in the profit and loss.
F.1.3 Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of similar financial assets) is
primarily derecognized (i.e. removed from the Company's balance sheet) when:
• The contractual rights to receive cash flows from the asset have expired, or
• The Company has transferred its contratcual rights to receive cash flows from the asset.
F.2 Financial liabilities
F.2.1 Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost.
Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
F.2.2 Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. Amortized cost is
calculated by taking into account any discount or premium on acquisition and any material transaction
that are integral part of the EIR. For trade and other payables maturing within one year from the
balance sheet date, the carrying amounts shall be approximate fair value due to the short maturity of
these instruments.
Financial liabilities carried at fair value through profit or loss are measured at fair value with all
changes in fair value recognised in the Statement of Profit and Loss.
F.2.3 Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition of
a new liability. The difference in the respective carrying amounts is recognized in the statement of
G Impairment of Non-Financial Assets
The Company, in accordance with the Indian Accounting Standard (Ind AS) 36 "Impairment ofAssets"
, has adopted the practice of assessing at each Balance Sheet date whether there is any indication that
an asset may be impaired. If any such indication exists, then the company provides for the loss for
impairment of Assets after estimating the recoverable amount of the assets.
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