2 Significant Accounting Policies:
a. Basis of Preparation of Financial Statement
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 Companies (Accounts) Rules, 2021.
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 Ill to the Companies Act, 2013
b. Use of Estimates
The preparation of the financial statements in conformity with GAAP requires Management to
make estimates and judgments that affect the reported balances of assets and liabilities and
disclosure relating to contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period for the periods presented.
Management believes that the estimates used like Net realizable value of Inventories etc. in the
preparation of financial statements are prudent and reasonable. Future results could differ from
these estimates.
2.01 Revenue Recognition
Income from Services:
Revenues from contracts priced on a per activity basis are recognised on completion of the
activity and those based on time and material basis are recognised when services are rendered
and related costs are incurred.
2.02 Other Income
Interest income is recognised on a time proportion basis taking into account the amount
outstanding and the rate applicable.
2.03 Property, Plant And Equipment
Property, Plant and Equipment ("PPE") are stated at cost of acquisition inclusive of expenses
directly attributable/related to the acquisition/ construction/erection of such assets. GST and
other applicable taxes paid on acquisition of property, plant and equipment are capitalized to
the extent not available/ utilizable as input tax credit under GST or other relevant law in force.
Expenditure incurred on renovation and modernization of PPE on completion of the originally
estimated useful life resulting in increased life and/or efficiency of an existing asset, is added to
the cost of the related asset. In the carrying amount of an item of PPE, the cost of replacing the
part of such an item is recognized when that cost is incurred if the recognition criteria are met.
The carrying amount of those parts that are replaced is derecognized in accordance with the
derecognition principles.
After initial recognition, PPE is carried at cost less accumulated depreciation/amortization and
accumulated impairment losses, if any.
An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the Statement of Profit and Loss when the asset
is derecognized.
Intangible Assets
Intangible assets are recognised at acquisition cost when the asset is identifiable, non¬
monetary in nature, without physical substance and is probable that such expenditure is to
result in future economic benefits to the entity.
Any gain or loss arising on such Derecognition is measured as the difference between the net
disposal proceeds and the carrying amount of the asset, and is recognized in statement of
profit or loss. Other intangible assets relates to technical know-how and non-compete.
Capital Work In Progress
Capital work in progress is stated at cost, net of impairment losses, if any. Cost comprises of
the cost of items of PPE not yet commissioned, incidental pre-operative expenses and
borrowing costs.
Intangible Assets Under Developments
Intangible assets under development consist of costs capitalized since the development
costs are measurable reliably, the product or process is technically and commercially
feasible, future economic benefits are probable, and the Company intends to and has
sufficient resources to complete development and to use the asset. The expenditure
capitalized includes the cost of purchase of license, direct labour and overheads costs that
are directly attributable to preparing the asset to its intended use.
Depreciation and Amortization:
Property, Plant and Equipment and Intangible Assets
Depreciation on Property, Plant and Equipment and Intangible Assets is recognized in profit or
loss using 'Written Down Value Method'. Depreciation is provided based on useful life of the
assets as prescribed in schedule II of the Companies Act, 2013. Depreciation is charged
proportionately from/to the date of acquisition/disposal.
Office Equipment capitalised prior to financial year 2024-25 useful is taken as 15 years and from
financial year 2024-25 useful life is taken as 5 years
The depreciation methods, estimated useful lives, and residual values of the PPE are reviewed at
the end of each reporting period. The effect of changes in these estimates is accounted on a
prospective basis.
2.04 Impairments
"The Company assesses at each reporting date as to whether there is any indication that any
property, plant and equipment and intangible assets or group of assets, called cash generating
units (cgu) may be impaired. If any such indication exists the recoverable amount of an asset
or CGU is estimated to determine the extent of impairment, if any. When it is not possible to
estimate the recoverable amount of an individual asset, the Company estimates the
recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset's
carrying amount exceeds its recoverable amount. The recoverable amount is higher of an
asset's fair value less cost of disposal and value in use. Value in use is based on the estimated
future cash flows, discounted to their present value using pre-tax discount rate that reflects
current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognised in the prior accounting period is reversed if there has been a
change in the estimate of the recoverable amount."
2.05 Investments:
Long-term investments are stated at cost less the amount written off, where there is a
diminution in its value of a long-term nature. Current investments are stated at the lower of
cost and fair value. Gain or loss arising from the sale or disposal of such investment is
accounted at the time of actual sale or disposal.
2.06 Cash & Cash Equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks. The Company
considers all highly liquid investments with a remaining maturity at the date of purchase of
three months or less and that are readily convertible to known amounts of cash to be cash
equivalents.
2.07 Employee Benefit
Short-Term Employee Benefits
"The short-term employee benefits expected to be paid in exchange for the services rendered
by employees are recognised as an expense during the period when the employees render the
services."
Post-Employment Benefits
• Defined Contribution Plans
"The company has no policy of encashment and accumulation of leave. Therefore, no provision
of leave Encashment is made. Company's contribution to Provident Fund and other Funds for the
year is accounted on an accrual basis and charged to the Statement of Profit & Loss for the
year."
• Defined Benefits Plans
"The cost of the defined benefit plan and other post-employment benefits and the present value
of such obligation are determined using actuarial valuations. 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, mortality rates and future
pension increases. Due to the complexities involved in the valuation and its long-term nature, a
defined benefit obligation is highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date.
The company has recognized the gratuity payable to the employees as defined benefit plans.
The liability in respect of these benefits is calculated using the Projected Unit Credit Method and
spread over the period during which the benefit is expected to be derived from employees'
services."
2.08 Borrowing Cost
"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
capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period
in which they occur. Borrowing costs consist of interest and other costs that the company incurs
in connection with the borrowing of funds. Borrowing cost also includes exchange differences to
the extent regarded as an adjustment to the borrowing costs.
The Company has not acquired any eligible assets in pursuance of AS 16. Hence, no borrowing
cost is capitalised during the year."
2.09 Foreign Currency Transactions
Transactions in foreign currencies are recorded in Indian Rupees using the rates of exchange
prevailing on the dates of the transactions. At each balance sheet date, recorded monetary
balances are reported in Indian Rupees at the rates of exchange prevailing at the balance sheet
date. All realised and unrealised exchange adjustment gains and losses are dealt with in the
profit and loss account.
2.10 Accounting For Taxes On Income
(i) Current tax is determined as the amount of tax payable in respect of taxable income for the
year.
(ii) Deferred Tax is recognised, on timing difference, being the difference between taxable
incomes and accounting income that originate in one period and are capable of reversal in one
or more subsequent periods.
(iii) Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are
recognized if there is virtual certainty that sufficient future taxable income will be available
against which such assets can be realized. Other deferred tax assets are recognized only to the
extent there is reasonable certainty of realization in the future. Such assets are reviewed at each
Balance sheet date to reassess realization.
(iv) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have
been enacted or substantively enacted by the balance sheet date.
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