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Accounting Policies of Indraprastha Medical Corporation Ltd. Company
Mar 31, 2025
KM MATERIAL ACCOUNTING POLICIES
A. Basis of preparation of financial statements
These financial statements are prepared on the going concern basis and in accordance with Indian Accounting Standards
(Ind AS) under the historical cost convention on the accrual basis (except certain Financial Instruments which are measured
at fair value and Building, Plant & Medical Equipment, which are recognised at deemed cost on the basis of fair values), as
per the provisions of the Companies Act , 2013 ('' Act'') (to the extent notified) and guidelines issued by the Securities and
Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies
(Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2023.
B. Statement of compliance
The financial statements have been prepared in accordance with Ind ASs notified under the Companies (Indian Accounting
Standards) Rules, 201 5 as amended.
C. Capital management
The capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The
primary objective of the Company''s capital management is to maintain optimum capital structure to reduce cost of capital and
to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings.
In order to maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return
capital to shareholders or issue new shares.
D. Use of estimates and judgements
The preparation of the financial statements is in conformity with Ind AS requires management to make estimates, judgments
and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the
reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the period. Application of accounting policies that
require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these
financial statements have been disclosed. Accounting estimates could change from period to period. Actual results could
differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in
circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in
which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
E. Revenue recognition
Healthcare services
The Healthcare services income include revenue generated from outpatients, which mainly consist of activities for physical
examinations, treatments, surgeries and tests, as well as that generated from inpatients, which mainly consist of activities for
clinical examinations and treatments, surgeries, and other fees such as room charges, and nursing care. The performance
obligations for this stream of revenue include food & beverage, accommodation, surgery, medical/clinical professional
services, investigation and supply of consumables and related products.
The patient is obligated to pay for healthcare services at amounts estimated to be receivable based upon the Company''s
standard rates or at rates determined under reimbursement arrangements. The reimbursement arrangements are generally
with third party administrators. The reimbursement is also made through national, international or local government
programs with reimbursement rates established by statute or regulation or through a memorandum of understanding.
Revenue is recognised at the transaction price when each performance obligation is satisfied at a point in time when
inpatient/outpatients has actually received the service.
Revenue from health care patients, third party payers and other customers are billed at our standard rates net of contractual
allowances or discounts to reflect the estimated amounts to be receivable from these payers.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company
and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
Export incentive
Export incentives and subsidies are recognised when following conditions are met:
- There is reasonable assurance that the Company will comply with the conditions attached to the incentives or
subsidies.
- It is highly probable that the Company will receive the incentives or subsidies.
Once these conditions are satisfied, the export incentives and subsidies are recognised as Other operating revenue. This
recognition reflects the economic benefits expected to be realised by the Company.
Rental income
The Companyâs policy for recognition of revenue from operating leases is described in note F below.
F. Leases
The Company as lessor
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Where the
rentals are structured solely to increase in line with expected general inflation to compensate for the Company''s expected
inflationary cost increases, such increases are recognised in the period in which such benefits accrue.
The Company as lessee
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease
commencement date except for short term leases (defined as leases with a lease term of 12 months or less) or leases
of low value assets. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial
measurement of the lease liability adjusted for any lease payments made at or before the commencement date or after
the end of lease period. The right-of-use assets is subsequently measured at cost less any accumulated depreciation,
accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets
is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of
right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of property,
plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying
amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement
date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with
reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate
specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed
payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company
is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects
the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the
carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made
and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance
fixed lease payments. The Company recognises the amount of the re-measurement of lease liability due to modification as
an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where
the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the
lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
G. Borrowings and borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in
the income statement over the period of the borrowings using the effective interest rate method. Borrowings are classified
as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months
after the reporting date.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for their intended use or sale.
I nterest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets
is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.
H. Cash flow statement
The Cash and cash equivalent in the balance sheet comprises of cash at banks and on hand and short-term deposits with
a maturity period of three months or less from the balance sheet date, which are subject to an insignificant risk of changes
in value.
The cash flow statement is prepared in accordance with the Indian Accounting Standard (Ind AS) - 7 âStatement of Cash
flowsâ using the indirect method for operating activities.
I. Employee benefits
Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered
service entitling them to the contributions.
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method,
with actuarial valuations being carried out at the end of each reporting period. Remeasurement, comprising actuarial
gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net
interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income
in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in
retained earnings and is not reclassified to profit or loss. Past service cost and net interest cost is recognised in statement
of profit and loss.
Short-term employee benefits
Short Term Employee Benefits are recognised as an expense on an undiscounted basis in the Statement of Profit and Loss
of the year in which the related service is rendered.
Long-term employee benefits
The liability for leave encashment and other compensated absences is recognised on the basis of actuarial valuation made
at the end of each reporting period.
J. Taxation
Income tax expense represents the sum of the current tax and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before tax'' as reported in
the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and
items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted
or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises
from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting
profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability
is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the
end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in
which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.
K. Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any.
Depreciation is provided for property, plant and equipment so as to write off the cost over their estimated useful lives based
on evaluation. The estimated useful lives and residual value are reviewed at the end of each reporting period, with the effect
of any changes in estimate accounted for on a prospective basis. Based on technical evaluation, the management believes
that its estimates of useful lives as given below best represent the period over which management expects to use these
assets.
I f significant parts of an item of property, plant & equipment have different useful life, then they are accounted for as
separate items (major components) of property, plant & equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property,
plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and
is recognised in statement of profit and loss.
Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is
ready for its intended use.
L. Intangible assets
Intangible assets purchased are measured at cost as of the date of acquisition, as applicable, less accumulated amortisation
and accumulated impairment, if any.
Intangible assets consist of software licenses which are amortised over license period which equates the useful life of 3
years on a straight line basis.
M. Impairment of assets
Non-financial assets
Intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such
cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognised in the statement of profit and loss is
measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the
asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used
to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount,
provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated
amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.
Financial assets
The Company recognises loss allowances using the expected credit loss (ECL) model for the financial assets which are
not fair valued through profit or loss.
Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime
ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless
there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL.
N. Inventories
i) I nventories of medicines and consumables are valued at cost or Net realisable value whichever is less. Crockery and
utensils are valued at cost and are subject to 1/5 write off. In the absence of any further estimated costs of completion
and estimated costs necessary to make the sale, the Net realisable value is not applicable.
ii) The cost in respect of the items constituting the inventories has been computed on FIFO basis.
O. Earnings per share
Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the
weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive
securities in any of the years presented.
P. Foreign currency
The functional currency of the Company is Indian rupee. These financial statements are presented in Indian rupees.
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying to the foreign
currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the
transaction.
The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Non¬
monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate
at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary
items at rates different from those at which they were translated on initial recognition during the period or in previous
financial statements are recognised in statement of profit and loss in the period in which they arise.
Mar 31, 2024
29. MATERIAL ACCOUNTING POLICIES
A. Basis of preparation of financial statements
These financial statements are prepared on the going concern basis and in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis (except certain Financial Instruments which are measured at fair value and Building, Plant & Medical Equipment, which are recognised at deemed cost on the basis of fair values), as per the provisions of the Companies Act , 2013 (''Act'') (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2023.
B. Statement of compliance
The financial statements have been prepared in accordance with Ind ASs notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended.
C. Capital Management
The capital includes issued equity capital and other equity reserves attributable to the equity holders of the company. The primary objective of the companyâs capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings. In order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
D. Use of Estimates and Judgements
The preparation of the financial statements is in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
E. Revenue recognition Healthcare Services
The Healthcare services income include revenue generated from outpatients, which mainly consist of activities for physical examinations, treatments, surgeries and tests, as well as that generated from inpatients, which mainly consist of activities for clinical examinations and treatments, surgeries, and other fees such as room charges, and nursing care. The performance obligations for this stream of revenue include food & beverage, accommodation, surgery, medical/ clinical professional services, investigation and supply of consumables and related products.
The patient is obligated to pay for healthcare services at amounts estimated to be receivable based upon the Company''s standard rates or at rates determined under reimbursement arrangements. The reimbursement arrangements are generally with third party administrators. The reimbursement is also made through national, international or local government programs with reimbursement rates established by statute or regulation or through a memorandum of understanding.
Revenue is recognised at the transaction price when each performance obligation is satisfied at a point in time when inpatient/outpatients has actually received the service.
Revenue from health care patients, third party payers and other customers are billed at our standard rates net of contractual allowances or discounts to reflect the estimated amounts to be receivable from these payers.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
Export Incentive
Export incentives and subsidies are recognized when following conditions are met:
- There is reasonable assurance that the company will comply with the conditions attached to the incentives or subsidies.
- It is highly probable that the company will receive the incentives or subsidies.
Once these conditions are satisfied, the export incentives and subsidies are recognized as Other operating revenue. This recognition reflects the economic benefits expected to be realized by the company
Rental income
The Company''s policy for recognition of revenue from operating leases is described in note F below.
F. Leases
The Company as lessor
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases, such increases are recognised in the period in which such benefits accrue.
The Company as lessee
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date except for short term leases (defined as leases with a lease term of 12 months or less) or leases of low value assets. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date or after the end of lease period. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
G. Borrowings and Borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest rate method. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.
H. Cash flow statement
The Cash and cash equivalent in the balance sheet comprises of cash at banks and on hand and short-term deposits with a maturity period of three months or less from the balance sheet date, which are subject to an insignificant risk of changes in value.
The cash flow statement is prepared in accordance with the Indian Accounting Standard (Ind AS) - 7 âStatement of Cash flowsâ using the indirect method for operating activities.
I. Employee benefits
Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost and net interest cost is recognised in statement of profit and loss.
Short-term employee benefits
Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the Statement of Profit and Loss of the year in which the related service is rendered.
Long-term employee benefits
The liability for leave encashment and other compensated absences is recognized on the basis of actuarial valuation made at the end of each reporting period.
J. Taxation
Income tax expense represents the sum of the current tax and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
K. Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any.
Depreciation is provided for property, plant and equipment so as to write off the cost over their estimated useful lives based on evaluation. The estimated useful lives and residual value are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Based on technical evaluation, the management believes that its estimates of useful lives as given below best represent the period over which management expects to use these assets.
If significant parts of an item of property, plant & equipment have different useful life, then they are accounted for as separate items (major components) of property, plant & equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in statement of profit and loss.
Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use.
L. Intangible assets
Intangible assets purchased are measured at cost as of the date of acquisition, as applicable, less accumulated amortisation and accumulated impairment, if any.
Intangible assets consist of software licenses which are amortised over license period which equates the useful life of 3 years on a straight line basis.
M. Impairment of assets Non-financial assets
Intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
Financial assets
The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss.
Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL.
N. Inventories
i) Inventories of medicines and consumables are valued at cost or Net realisable value whichever is less. Crockery and utensils are valued at cost and are subject to 1/5 write off. In the absence of any further estimated costs of completion and estimated costs necessary to make the sale, the Net realisable value is not applicable.
ii) The cost in respect of the items constituting the inventories has been computed on FIFO basis.
O. Earnings per share
Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive securities in any of the years presented.
P. Foreign currency
The functional currency of the company is Indian rupee. These financial statements are presented in Indian rupees.
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognised in statement of profit and loss in the period in which they arise.
Mar 31, 2023
GENERAL INFORMATION
Indraprastha Medical Corporation Limited (âthe Company'') is a Public Company incorporated in India. The address of its registered office and principal place of business is at Sarita Vihar, Mathura Road, New Delhi, India. The main business of the company is to enhance the quality of life of patients by providing comprehensive, high-quality hospital services on a cost-effective basis. The company has its primary listings on BSE Limited and National Stock Exchange of India Limited.
SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis (except certain Financial Instruments which are measured at fair value and Building, Plant & Medical Equipment, which are recognised at deemed cost on the basis of fair values), the provisions of the Companies Act , 2013 fAct'') (to the extent notified) and guidelines issued by the Securities and Exchange Board of India
(SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
B. STATEMENT OF COMPLIANCE
The financial statements have been prepared in accordance with Ind ASs notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended.
C. CAPITAL MANAGEMENT
The capital includes issued equity capital and other equity reserves attributable to the equity holders of the company. The primary objective of the company''s capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings. In order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
D. USE OF ESTIMATES AND JUDGEMENTS
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
E. REVENUE RECOGNITION Healthcare Services
Revenue primarily comprises fees charged for inpatient and outpatient hospital services. Services include charges for accommodation, theatre, medical professional services, equipment, radiology and laboratory. Revenue is recorded and recognised during the period in which the hospital service is provided, based upon the estimated amounts due from patients and/or medical funding entities in respect of services rendered. Unbilled revenue is recorded for the service where the patients are not discharged and invoice is not raised for the service.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
Export Incentive
Under the âService Export from India Schemeâ introduced by Government of India, an exporter of service is entitled to export benefits on foreign currency earned. The revenue in respect of export benefits is recognized on the basis of the foreign exchange earned at the rate at which the said entitlement accrues to the extent there is reasonable assurance as to the amount of consideration that would be derived and as to its ultimate collection.
Rental income
The Company''s policy for recognition of revenue from operating leases is described in note F below.
F. LEASES
The Company as lessor
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases, such increases are recognised in the period in which such benefits accrue.
The Company as lessee
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date or after the end of lease period. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
The Company has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months. The lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term.
G. BORROWINGS AND BORROWING COSTS
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest rate method. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.
H. CASH FLOw Statement
The Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with a maturity period of three months or less from the balance sheet date, which are subject to an insignificant risk of changes in value.
The cash flow statement is prepared in accordance with the Indian Accounting Standard (Ind AS) - 7 âStatement of Cash flowsâ using the indirect method for operating activities.
I. EMPLOYEE BENEFITS
Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost and net interest cost is recognised in statement of profit and loss.
Short-term employee benefits
Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the Statement of Profit and Loss of the year in which the related service is rendered.
Long-term employee benefits
The liability for leave encashment and other compensated absences is recognized on the basis of actuarial valuation made at the end of each reporting period.
j. taxation
Income tax expense represents the sum of the current tax and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
K. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any.
Depreciation is provided for property, plant and equipment so as to write off the cost over their estimated useful lives based on evaluation. The estimated useful lives and residual value are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Based on technical evaluation, the management believes that its estimates of useful lives as given below best represent the period over which management expects to use these assets.
If significant parts of an item of property, plant & equipment have different useful life, then they are accounted for as separate items (major components) of property, plant & equipment.
The estimated useful lives are as mentioned below:
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in statement of profit and loss.
Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use.
For transition to Ind AS, the company had elected to adopt fair value of Building, Plant and Medical Equipment recognised as of April 1,2015 as the deemed cost as of the transition date. The resulting adjustments had been directly recognised in retained earnings.
L. INTANGIBLE ASSETS
Intangible assets purchased are measured at cost as of the date of acquisition, as applicable, less accumulated amortisation and accumulated impairment, if any.
Intangible assets consist of software licenses which are amortised over license period which equates the useful life of 3 years on a straight line basis.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as of April 1, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
M. IMPAIRMENT OF ASSETS Non-financial assets
Intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the
asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
Financial assets
The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss.
Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL.
N. INVENTORIES
i) Inventories are valued at cost. Crockery and utensils are valued at cost and are subject to 1/5 write off. In the absence of any further estimated costs of completion and estimated costs necessary to make the sale, the Net realisable value is not applicable.
ii) The cost in respect of the items constituting the inventories has been computed on FIFO basis.
O. EARNINGS PER SHARE
Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive securities in any of the years presented.
P. FOREIGN CURRENCY
The functional currency of the company is Indian rupee. These financial statements are presented in Indian rupees.
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognised in statement of profit and loss in the period in which they arise.
q. provisions, contingent liabilities and contingent ASSETS
A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liability is disclosed in the case of a present obligation arising from a past event when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or a possible obligation, unless the probability of outflow in settlement is remote.
r. financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial Recognition and measurement
On initial recognition, all the financial assets and liabilities are recognized at their fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
Subsequent measurement
(i) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) financial assets at fair value through other comprehensive income (FvTDCI)
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(iii) financial assets at fair value through profit or loss (FvTpL)
A financial asset which is not classified in any of the above categories is subsequently measured at fair value through profit or loss.
(iv) financial liabilities
The financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short-term maturity of these instruments.
fair value measurement of financial instruments
The fair value of financial instruments is determined using the valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Based on the three level fair value hierarchy, the methods used to determine the fair value of financial assets and liabilities include quoted market price, discounted cash flow analysis and valuation certified by the external valuer.
In case of financial instruments where the carrying amount approximates fair value due to the short maturity of those instruments, carrying amount is considered as fair value.
Derecognition of financial instrument
A financial asset is derecognized when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability is derecognized when the obligation specified in the contract is discharged or cancelled or expired.
Equity instruments
Equity shares issued by the company are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.
s. recent accounting pronouncements
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time.On 31 March 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment
is annual periods beginning on or after 1st April, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of âaccounting estimates'' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after 1st April 2023. The Company has evaluated the amendment and there is no impact on its financial statements.
Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after 1st April 2023. The Company has evaluated the amendment and there is no impact on its financial statement.
A. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 23.40 crore (Previous year Rs. 3.54 crore).
B. CONTINGENT LIABILITY
i) Claims against the company not acknowledged as debt Rs. 61.78 crore ( Previous Year Rs. 66.83 crore) and interest thereon, if any. This represents suits filed against the company and the consultant doctor. Based on the facts and circumstances, possibility of any of the claims resulting in a major financial loss to the company is remote. Notwithstanding above, the company is adequately insured to mitigate the possibility of any loss.
ii) Bank guarantees outstanding on account of stores / spares and medical equipment amounting to Rs. 0.33 crore (Previous year Rs. 1.07 crore)
|
(Rs. in crore) |
||
|
In respect of : |
31.03.2023 |
31.03.2022 |
|
a) Service Tax (Net of amount paid under protest of Rs. 0.77 crore) |
1.99 |
1.99 |
|
b) Others |
1.00 |
1.00 |
C. On a Public Interest Litigation (PIL) regarding free treatment in the hospital the Hon''ble Delhi High Court vide its order dated 22nd September, 2009 has held that free treatment provided by the hospital as per the terms of lease deed with Government of National Capital Territory of Delhi shall be inclusive of medicines and consumables. In response to the said order the company filed a Special Leave Petition in the Hon''ble Supreme Court for appropriate directions. The Hon''ble Supreme Court of India has admitted the Special Leave Petition and passed an interim order on 30th Nov, 2009. In pursuance of the interim order, the Hospital has been providing free treatment to the patients referred by the Govt. of NCT of Delhi. The hospital is charging for medicines & medical consumables from patients referred by the Govt. of NCT of Delhi for free treatment in the Hospital in accordance with the directions of the Hon''ble Supreme Court of India. As the matter is sub-judice, the financial impact in the matter can be quantified only upon a decision by the Hon''ble Supreme Court of India.
D. The Govt. of NCT of Delhi had issued an order dated 25th Jun, 2018, which inter-alia provides that in case of more than 200 bedded hospitals, salary given to private nurses should be at par with the salary of the nurses in the State Government hospitals. The order issued by Govt. of NCT Delhi is based on the recommendations of the Expert Committee of Ministry of Health and Family Welfare, Govt. of India, which was constituted in compliance of the Hon''ble Supreme Court judgment dated 29th Jan, 2016 in WP (C) 527/2011 in the matter of Trained Nurses Association of India Vs. Union of India & Ors.
The Association of Healthcare Providers of India (AHPI) of which the Company is a member had filed a writ petition in the High Court of Delhi challenging the order issued by DGHS. The Hon''ble High Court of Delhi upheld the order dated 25th June, 2018, issued by DGHS.
AHPI had filed an LPA (Letter Patent Appeal) before the division bench of the Hon''ble High Court. The division bench has admitted the LPA and the matter was sub-judice. Meanwhile, The Directorate General of Health Services (DGHS) of Govt. of NCT Delhi has withdrawn the order dated 25th June, 2018.
E. i) Under the terms of the agreement between the Government of NCT of Delhi and the company, the Hospital
building has been constructed on the land leased out to the company by the Government of NCT of Delhi. The Government of NCT of Delhi has met the expenditure to the extent of Rs. 15.48 crore out of IMCL Building fund account (funds earmarked for the project) together with the interest thereon for construction of building while the balance amount of the cost of the building was borne by the Company. The cost of the building and net carrying amount in the books of account as on 31st March 2023 is Rs. 192.89 crore and Rs. 132.55 crore respectively. The ownership of the building between Government of NCT of Delhi and the company will be decided at a future date keeping in view of the lease agreement. ii) Other expenses include Rs. 12/- (previous year Rs. 12/-) towards leasehold ground rent as per the terms of agreement between Govt. of NCT of Delhi and the company.
F. EMPLOYEE BENEFITS Defined benefit plan Gratuity (Funded)
The Company provides to the eligible employees, defined benefit plans in the form of gratuity. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days'' salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service.
The following table sets out the details of the defined benefit retirement plans and the amounts recognised in the financial statements:
Mar 31, 2018
1. SIGNIFICANT ACCOUNTING POLICIES
A. Basis of preparation of financial statements
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis (except certain Financial Instruments which are measured at fair value and Building, Plant & Medical Equipment, which are recognised at deemed cost on the basis of fair values), the provisions of the Companies Act , 2013 (âActâ) (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
B. Statement of compliance
The financial statements have been prepared in accordance with Ind ASs notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended.
C. Capital Management
The capital includes issued equity capital and other equity reserves attributable to the equity holders of the company. The primary objective of the companyâs capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings. In order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
D. Use of estimates and Judgements
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
E. Revenue recognition Healthcare Services
Revenue primarily comprises fees charged for inpatient and outpatient hospital services. Services include charges for accommodation, theatre, medical professional services, equipment, radiology and laboratory. Revenue is recorded and recognised during the period in which the hospital service is provided, based upon the estimated amounts due from patients and/or medical funding entities in respect of services rendered. Unbilled revenue is recorded for the service where the patients are not discharged and invoice is not raised for the service.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assetâs net carrying amount on initial recognition.
Export Incentive
Under the âServed from India Schemeâ and âService Export from India Schemeâ introduced by Government of India, an exporter of service is entitled to export benefits on foreign currency earned. The revenue in respect of export benefits is recognized on the basis of the foreign exchange earned at the rate at which the said entitlement accrues to the extent there is reasonable assurance as to the amount of consideration that would be derived and as to its ultimate collection.
Rental income
The Companyâs policy for recognition of revenue from operating leases is described in note F below.
F. Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Company as lessor
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Companyâs expected inflationary cost increases, such increases are recognised in the period in which such benefits accrue.
The Company as lessee
Rental expense from operating leases is recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
G. Borrowings and Borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest rate method.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.
H. Cash flow statement
The Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with a maturity period of three months or less from the balance sheet date, which are subject to an insignificant risk of changes in value.
The cash flow statement is prepared in accordance with the Indian Accounting Standard (Ind AS) - 7 âStatement of Cash flowsâ using the indirect method for operating activities.
I. Employee benefits
Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost and net interest cost is recognised in statement of profit and loss.
Short-term employee benefits
Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the Statement of Profit and Loss of the year in which the related service is rendered.
Long-term employee benefits
The liability for leave encashment and other compensated absences is recognized on the basis of actuarial valuation made at the end of each reporting period.
J. Taxation
Income tax expense represents the sum of the current tax and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before taxâ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
K. Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any.
Depreciation is provided for property, plant and equipment so as to write off the cost over their estimated useful lives based on evaluation. The estimated useful lives and residual value are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Based on technical evaluation, the management believes that its estimates of useful lives as given below best represent the period over which management expects to use these assets.
If significant parts of an item of property, plant & equipment have different useful life, then they are accounted for as separate items (major components) of property, plant & equipment.
The estimated useful lives are as mentioned below:
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in statement of profit and loss.
Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use.
For transition to Ind AS, the company has elected to adopt fair value of Building, Plant and Medical Equipment recognised as of April 1, 2015 as the deemed cost as of the transition date. The resulting adjustments have been directly recognised in retained earnings.
L. Intangible assets
Intangible assets purchased are measured at cost as of the date of acquisition, as applicable, less accumulated amortisation and accumulated impairment, if any.
Intangible assets consist of software licences which are amortised over license period which equates the useful life of 3 years on a straight line basis.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as of April 1, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
M. Impairment of assets Non-financial assets
Intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
Financial assets
The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss.
Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL.
N. Inventories
(i) Inventories are valued at cost. Crockery and utensils are valued at cost and are subject to 1/5 write off. In the absence of any further estimated costs of completion and estimated costs necessary to make the sale, the Net realisable value is not applicable.
(ii) The cost in respect of the items constituting the inventories has been computed on FIFO basis.
O. EARNINGS PER SHARE
Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive securities in any of the years presented.
P. FOREIGN CURRENCY
The functional currency of the company is Indian rupee. These financial statements are presented in Indian rupees.
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognised in statement of profit and loss in the period in which they arise.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is recognised when the Company has a present obligation as a result of past event and it is probable than an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liability is disclosed in the case of a present obligation arising from a past event when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or a possible obligation, unless the probability of outflow in settlement is remote.
R. FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial Recognition and measurement
On initial recognition, all the financial assets and liabilities are recognized at their fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
Subsequent measurement
(i) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(iii) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories is subsequently measured at fair value through profit or loss.
(iv) Financial liabilities
The financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short-term maturity of these instruments.
Fair value measurement of financial instruments
The fair value of financial instruments is determined using the valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Based on the three level fair value hierarchy, the methods used to determine the fair value of financial assets and liabilities include quoted market price, discounted cash flow analysis and valuation certified by the external valuer. In case of financial instruments where the carrying amount approximates fair value due to the short maturity of those instruments, carrying amount is considered as fair value.
Derecognition of financial instrument
A financial asset is derecognized when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability is derecognized when the obligation specified in the contract is discharged or cancelled or expired.
Equity instruments
Equity shares issued by the company are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.
Mar 31, 2016
D. Fixed Assets
Fixed Assets are stated at historical cost less accumulated depreciation.
E. Depreciation
i) Depreciation is charged on straight line method based on the useful life prescribed under Schedule II to the Companies Act, 2013. Where the life of asset is different from the useful life specified in the schedule, the depreciation is charged as per useful life of the asset determined by the company.
ii) When impairment loss / reversal is recognized, the depreciation charge for the asset is adjusted in future periods to allocate the asset''s revised carrying amount, less its residual value (if any) on a systematic basis over its remaining useful life.
F. Intangible Assets
Intangible Assets are stated at cost less accumulated amortization.
G. Amortization of Intangible Assets
i) Intangible assets are amortized on straight line method over the estimated useful life of the asset.
ii) The useful life of the intangible assets for the purpose of amortization is estimated to be three years.
H. Impairment of Assets
Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the Company''s fixed assets. If any indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is determined on the basis of value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.
Reversal of impairment losses, recognized in prior years, is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in the carrying amount of the asset due to reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years.
I. Inventories
i) Inventories are valued at lower of cost or net realizable value.
ii) The cost in respect of the items constituting the inventories has been computed on FIFO basis.
J. Expenditure incurred during the construction period
In respect of new / major expansion of units, the indirect expenditure incurred during construction period up to the date of commencement of business, which is attributable to the construction of the project, is capitalized on various category of fixed assets on proportionate basis.
K. Employee benefits
Short Term Employee Benefits
Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the Statement of Profit and Loss of the year in which the related service is rendered.
Post Employment Benefits
Defined Contribution Plans
The Employer''s contribution to Provident Fund and Employees Pension Scheme, a defined contribution plan is made in accordance with the Provident Fund Act,1952 read with the Employees Pension Scheme,1995.
The Employer''s contribution to Employees State Insurance is made on the basis of actual liability accrued and paid to authority
Defined Benefit Plans
The Employees Gratuity Fund Scheme, managed by HDFC Standard Life Insurance Company Ltd. is a defined benefit plan. The liability for gratuity is provided on actuarial basis. The Present Value of the companyâs obligation is determined on the basis of actuarial valuation at the year end and the fair value of plan assets is reduced from the gross obligations under the gratuity scheme to recognize the obligation on a net basis.
Long Term Employee Benefits
The liability for leave encashment and other compensated absences is recognized on the basis of actuarial valuation made at the end of the year.
L. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the transaction.
Exchange difference arising on the settlement of monetary items or on reporting the company''s monetary items at rates different from those at which they are initially recorded during the year or, reported in previous financial statements are recognized as income or expense in the year in which they arise.
M. Borrowing costs
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of the asset. Other costs are recognized as expense in the year in which they are incurred.
N. Taxation
(i) Provision for Taxation comprises of Income Tax Liability on the profits for the year chargeable to tax and Deferred Tax resulting from timing differences between Book and Tax Profits. The Deferred Tax Asset/ Liability is provided in accordance with the Accounting Standard - 22 (AS-22), âAccounting for Taxes on Incomeâ, issued by the Institute of Chartered Accountants of India.
O. Provisions and Contingent Liabilities
A Provision is recognized (for Liabilities that can be measured by using a substantial degree of estimation). When :
(a) the company has a present obligation as a result of a past event,
(b) a probable outflow of resources embodying economic benefits is expected to settle the obligation; and
(c) the amount of obligation can be reliably measured.
Contingent liability is disclosed in the case of:
(a) a present obligation arising from a past event when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or
(b) a possible obligation, unless the probability of outflow in settlement is remote
Mar 31, 2015
A. Accounting Convention
The accounts are prepared on accrual basis under the historical cost
convention and in accordance with the accounting principles generally
accepted in India including the accounting standards referred to in
Section 133 of the Companies Act,2013 read together with Rule 7 of the
Companies ( Accounts ) Rules , 2014 and other relevant provisions of
the said Act.
B. Use of Estimates
The preparation of financial statements, in conformity with the
generally accepted accounting principles, requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities as on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results materialize.
C. Revenue Recognition
i) Revenue is recognized on accrual basis. Hospital Revenue comprises
of income from services rendered to the out-patients and in-patients.
Revenue also includes value of services rendered pending billing in
respect of in- patients undergoing treatment as at the end of the year.
ii) Under the "Served from India Scheme" introduced by Government of
India, an exporter of service is entitled to certain export benef ts on
foreign currency earned. The revenue in respect of export benef ts is
recognized on the basis of the foreign exchange earned at the rate at
which the said entitlement accrues to the extent there is no signif
cant uncertainty as to the amount of consideration that would be
derived and as to its ultimate collection.
D. Fixed Assets
Fixed Assets are stated at historical cost less accumulated
depreciation.
E. Depreciation
i) Depreciation is charged on straight line method based on the useful
life prescribed under Schedule II to the Companies Act, 2013. Where the
life of asset is different from the useful life specified in the
schedule, the depreciation is charged as per useful life of the asset
determined by the company.
ii) When impairment loss / reversal is recognized, the depreciation
charge for the asset is adjusted in future periods to allocate the
asset's revised carrying amount, less its residual value (if any) on a
systematic basis over its remaining useful life.
F. Intangible Assets
Intangible Assets are stated at cost less accumulated amortisation.
G. Amortisation of Intangible Assets
i) Intangible assets are amortised on straight line method over the
estimated useful life of the asset.
ii) The useful life of the intangible assets for the purpose of amortisation
is estimated to be three years.
H. Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the Company's fixed assets. If
any indication exists, the asset's recoverable amount is estimated. An
impairment loss is recognised whenever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is determined on
the basis of value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value based on an
appropriate discount factor.
Reversal of impairment losses, recognised in prior years, is recorded
when there is an indication that the impairment losses recognised for
the asset no longer exist or have decreased. However, the increase in
the carrying amount of the asset due to reversal of an impairment loss
is recognised to the extent it does not exceed the carrying amount that
would have been determined (net of depreciation) had no impairment loss
been recognised for the asset in prior years.
I. Inventories
i) Inventories are valued at lower of cost or net realizable value.
ii) The cost in respect of the items constituting the inventories has
been computed on FIFO basis.
J. Expenditure incurred during the construction period
In respect of new / major expansion of units, the indirect expenditure
incurred during construction period up to the date of commencement of
business, which is attributable to the construction of the project, is
capitalised on various category of fixed assets on proportionate basis.
K. Employee benefits
Short Term Employee Benefits
Short Term Employee Benefits are recognized as an expense on an
undiscounted basis in the Statement of Profit and Loss of the year in
which the related service is rendered.
Post Employment Benefits
Defined Contribution Plans
The Employer's contribution to Provident Fund and Employees Pension
Scheme, a defined contribution plan is made in accordance with the
Provident Fund Act,1952 read with the Employees Pension Scheme,1995.
The Employer's contribution to Employees State Insurance is made on the
basis of actual liability accrued and paid to authority
Defined Benefit Plans
The Employees Gratuity Fund Scheme, managed by HDFC Standard Life
Insurance Company Ltd. is a defined benefit plan. The liability for
gratuity is provided on actuarial basis. The Present Value of the
company's obligation is determined on the basis of actuarial valuation
at the year end and the fair value of plan assets is reduced from the
gross obligations under the gratuity scheme to recognize the obligation
on a net basis.
Long Term Employee Benefits
The liability for leave encashment and other compensated absences is
recognized on the basis of actuarial valuation made at the end of the
year.
L. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of the transaction.
Exchange difference arising on the settlement of monetary items or on
reporting the company's monetary items at rates different from those at
which they are initially recorded during the year or, reported in
previous financial statements are recognised as income or expense in
the year in which they arise.
M. Borrowing costs
Borrowing costs that are directly attributable to the acquisition or
construction of a qualifying asset are capitalized as part of the cost
of the asset. Other costs are recognized as expense in the year in
which they are incurred.
N. Taxation
(i) Provision for Taxation comprises of Income Tax Liability on the
profits for the year chargeable to tax and Deferred Tax resulting from
timing differences between Book and Tax Profits. The Deferred Tax
Asset/ Liability is provided in accordance with the Accounting Standard
- 22 (AS-22), "Accounting for Taxes on Income", issued by the Institute
of Chartered Accountants of India.
O. Provisions and Contingent Liabilities
A Provision is recognised (for Liabilities that can be measured by
using a substantial degree of estimation). When :
(a) the company has a present obligation as a result of a past event,
(b) a probable outflow of resources embodying economic benefits is
expected to settle the obligation; and
(c) the amount of obligation can be reliably measured.
Contingent liability is disclosed in the case of:
(a) a present obligation arising from a past event when it is not
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation or
(b) a possible obligation, unless the probability of outflow in
settlement is remote .
Mar 31, 2014
A. Accounting Convention
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the accounting standards referred to in
section 211 (3C) of the Companies Act, 1956 and other relevant
provisions of the said Act.
B. Revenue Recognition
i) Revenue is recognized on accrual basis. Hospital Revenue comprises
of income from services rendered to the out-patients and in-patients.
Revenue also includes value of services rendered pending billing in
respect of in-patients undergoing treatment as at the end of the year.
ii) Under the "Served from India Scheme" introduced by Government
of India, an exporter of service is entitled to certain export benefits
on foreign currency earned. The revenue in respect of export benefits
is recognized on the basis of the foreign exchange earned at the rate
at which the said entitlement accrues to the extent there is no
significant uncertainty as to the amount of consideration that would be
derived and as to its ultimate collection.
C. Fixed Assets
Fixed Assets are stated at historical cost less accumulated
depreciation.
D. Depreciation
i) Depreciation is charged on straight line method at the rates
prescribed under schedule XIV to the Companies Act, 1956 (considered
the minimum rate) or at higher rates, if the estimated useful life
based on technological evaluation of the assets are lower than as
envisaged under Schedule XIV to the Companies Act. In case of additions
and deletions during the year, the computations are on the basis of
number of days for which the assets have been in use. Assets costing
not more than Rs. 5,000/- each, individually have been depreciated
fully in the year of purchase.
ii) When impairment loss / reversal is recognized, the depreciation
charge for the asset is adjusted in future periods to allocate the
asset''s revised carrying amount, less its residual value (if any) on
a systematic basis over its remaining useful life.
E. Intangible Assets
Intangible Assets are stated at cost less accumulated amortisation.
F. Amortisation of Intangible Assets
i) Intangible assets are amortised on straight line method over the
estimated useful life of the asset.
ii) The useful life of the intangible assets for the purpose of
amortisation is estimated to be three years.
G. Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the Company''s fixed assets.
If any indication exists, the asset''s recoverable amount is
estimated. An impairment loss is recognised whenever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is determined on the basis of value in use. In assessing value
in use, the estimated future cash flows are discounted to their present
value based on an appropriate discount factor.
Reversal of impairment losses, recognised in prior years, is recorded
when there is an indication that the impairment losses recognised for
the asset no longer exist or have decreased. However, the increase in
the carrying amount of the asset due to reversal of an impairment loss
is recognised to the extent it does not exceed the carrying amount that
would have been determined (net of depreciation) had no impairment loss
been recognised for the asset in prior years
H. Inventories
i) Inventories are valued at lower of cost or net realizable value.
ii) The cost in respect of the items constituting the inventories has
been computed on FIFO basis.
I. Expenditure incurred during the construction period
In respect of new / major expansion of units, the indirect expenditure
incurred during construction period up to the date of commencement of
business, which is attributable to the construction of the project, is
capitalised on various category of fixed assets on proportionate basis.
J. Employee benefits
Short Term Employee Benefits
Short Term Employee Benefits are recognized as an expense on an
undiscounted basis in the Statement of Profit and Loss of the year in
which the related service is rendered.
Post Employment Benefits
Defined Contribution Plans
The Employer''s contribution to Provident Fund and Employees Pension
Scheme, a defined contribution plan is made in accordance with the
Provident Fund Act,1952 read with the Employees Pension Scheme,1995.
Defined Benefit Plans
The Employees Gratuity Fund Scheme, managed by HDFC Standard Life
Insurance Company Ltd. is a defined benefit plan. The liability for
gratuity is provided on actuarial basis. The Present Value of the
company''s obligation is determined on the basis of actuarial
valuation at the year end and the fair value of plan assets is reduced
from the gross obligations under the gratuity scheme to recognize the
obligation on a net basis.
Long Term Employee Benefits
The liability for leave encashment and other compensated absences is
recognized on the basis of actuarial valuation made at the end of the
year.
K. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of the transaction.
Exchange difference arising on the settlement of monetary items or on
reporting the company''s monetary items at rates different from those
at which they are initially recorded during the year or, reported in
previous financial statements are recognised as income or expense in
the year in which they arise.
L. Borrowing costs
Borrowing costs that are directly attributable to the acquisition or
construction of a qualifying asset are capitalized as part of the cost
of the asset. Other costs are recognized as expense in the year in
which they are incurred.
M. Taxation
(i) Provision for Taxation comprises of Income Tax Liability on the
profits for the year chargeable to tax and Deferred Tax resulting from
timing differences between Book and Tax Profits. The Deferred Tax
Asset/ Liability is provided in accordance with the Accounting Standard
- 22 (AS-22), "Accounting for Taxes on Income", issued by the
Institute of Chartered Accountants of India.
N. Provisions and Contingent Liabilities
A Provision is recognised (for Liabilities that can be measured by
using a substantial degree of estimation). When :
(a) the company has a present obligation as a result of a past event,
(b) a probable outflow of resources embodying economic benefits is
expected to settle the obligation; and
(c) the amount of obligation can be reliably measured.
Contingent liability is disclosed in the case of :
(a) a present obligation arising from a past event when it is not
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation or
(b) a possible obligation, unless the probability of outflow in
settlement is remote .
Mar 31, 2013
A. Accounting Convention
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the accounting standards referred to in
section 211 (3C) of the Companies Act, 1956 and other relevant
provisions of the said Act.
B. Revenue Recognition
i) Revenue is recognized on accrual basis. Hospital Revenue comprises
of income from services rendered to the out-patients and in-patients.
Revenue also includes value of services rendered pending billing in
respect of in-patients undergoing treatment as at the end of the year.
ii) Under the "Served from India Scheme" introduced by Government of
India, an exporter of service is entitled to certain export benefits on
foreign currency earned. The revenue in respect of export benefits is
recognized on the basis of the foreign exchange earned at the rate at
which the said entitlement accrues to the extent there is no
significant uncertainty as to the amount of consideration that would be
derived and as to its ultimate collection.
C. Fixed Assets
Fixed Assets are stated at historical cost less accumulated
depreciation.
D. Depreciation
i) Depreciation is charged on straight line method at the rates
prescribed under schedule XIV to the Companies Act, 1956 (considered
the minimum rate) or at higher rates, if the estimated useful life
based on technological evaluation of the assets are lower than as
envisaged under Schedule XIV to the Companies Act. In case of additions
and deletions during the year, the computations are on the basis of
number of days for which the assets have been in use. Assets costing
not more than Rs. 5,000/- each, individually have been depreciated
fully in the year of purchase.
ii) When impairment loss / reversal is recognized, the depreciation
charge for the asset is adjusted in future periods to allocate the
asset''s revised carrying amount, less its residual value (if any) on a
systematic basis over its remaining useful life.
E. Intangible Assets
Intangible Assets are stated at cost less accumulated amortisation.
F. Amortisation of Intangible Assets
i) Intangible assets are amortised on straight line method over the
estimated useful life of the asset. ii) The useful life of the
intangible assets for the purpose of amortisation is estimated to be
three years.
G. Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the Company''s fixed assets. If
any indication exists, the asset''s recoverable amount is estimated. An
impairment loss is recognised whenever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is determined
on the basis of value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value based on an
appropriate discount factor. Reversal of impairment losses, recognised
in prior years, is recorded when there is an indication that the
impairment losses recognised for the asset no longer exist or have
decreased. However, the increase in the carrying amount of the asset
due to reversal of an impairment loss is recognised to the extent it
does not exceed the carrying amount that would have been determined
(net of depreciation) had no impairment loss been recognised for the
asset in prior years.
H. Inventories
i) Inventories are valued at lower of cost and net realizable value.
ii) The cost in respect of the items constituting the inventories has
been computed on FIFO basis.
I. Expenditure incurred during the construction period
In respect of new / major expansion of units, the indirect expenditure
incurred during construction period up to the date of commencement of
business, which is attributable to the construction of the project, is
capitalised on various category of fixed assets on proportionate basis.
J. Employee benefits
Short Term Employee Benefits
Short Term Employee Benefits are recognized as an expense on an
undiscounted basis in the Statement of Profit and Loss of the year in
which the related service is rendered.
Post Employment Benefits
Defined Contribution Plans
The Employer''s contribution to Provident Fund and Employees Pension
Scheme, a defined contribution plan is made in accordance with the
Provident Fund Act,1952 read with the Employees Pension Scheme,1995.
Defined Benefit Plans
The Employees Gratuity Fund Scheme, managed by HDFC Standard Life
Insurance Company Ltd. is a defined benefit plan. The liability for
gratuity is provided on actuarial basis. The Present Value of the
company''s obligation is determined on the basis of actuarial valuation
at the year end and the fair value of plan assets is reduced from the
gross obligations under the gratuity scheme to recognize the obligation
on a net basis.
Long Term Employee Benefits
The liability for leave encashment and other compensated absences is
recognized on the basis of actuarial valuation made at the end of the
year.
K. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of the transaction.
Exchange difference arising on the settlement of monetary items or on
reporting the company''s monetary items at rates different from those at
which they are initially recorded during the year or, reported in
previous financial statements are recognised as income or expense in
the year in which they arise.
L. Borrowing costs
Borrowing costs that are directly attributable to the acquisition or
construction of a qualifying asset are capitalized as part of the cost
of the asset. Other costs are recognized as expense in the year in
which they are incurred.
M. Taxation
(i) Provision for Taxation comprises of Income Tax Liability on the
profits for the year chargeable to tax and Deferred Tax resulting from
timing differences between Book and Tax Profits. The Deferred Tax
Asset/ Liability is provided in accordance with the Accounting Standard
 22 (AS-22), "Accounting for Taxes on IncomeÂ, issued by the Institute
of Chartered Accountants of India.
N. Provisions and Contingent Liabilities
A Provision is recognised (for Liabilities that can be measured by
using a substantial degree of estimation). When :
(a) the company has a present obligation as a result of a past event,
(b) a probable outflow of resources embodying economic benefits is
expected to settle the obligation; and
(c) the amount of obligation can be reliably measured. Contingent
liability is disclosed in the case of :
(a) a present obligation arising from a past event when it is not
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation or
(b) a possible obligation, unless the probability of outflow in
settlement is remote.
Mar 31, 2012
A. Accounting Convention
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the accounting standards referred to in
section 211 (3C) of the Companies Act, 1956 and other relevant
provisions of the said Act.
B. Revenue Recognition
i) i) Revenue is recognized on accrual basis. Hospital Revenue
comprises of income from services rendered to the out-patients and
in-patients. Revenue also includes value of services rendered pending
billing in respect of in-patients undergoing treatment as on 31st
March, 2012.
ii) Under the "Served from India Scheme" introduced by Government of
India, an exporter of service is entitled to certain export benefits on
foreign currency earned. The revenue in respect of export benefits is
recognized on the basis of the foreign exchange earned at the rate at
which the said entitlement accrues to the extent there is no
significant uncertainty as to the amount of consideration that would be
derived and as to its ultimate collection.
C. Fixed Assets
Fixed Assets are stated at historical cost less accumulated
depreciation.
D. Depreciation
i) Depreciation is charged on straight line method at the rates
prescribed under schedule XIV to the Companies Act, 1956 (considered
the minimum rate) or at higher rates, if the estimated useful life
based on technological evaluation of the assets are lower than as
envisaged under Schedule XIV to the Companies Act. In case of additions
and deletions during the year, the computations are on the basis of
number of days for which the assets have been in use. Assets costing
not more than Rs. 5,000/- each, individually have been depreciated
fully in the year of purchase.
ii) When impairment loss/reversal is recognized, the depreciation
charge for the asset is adjusted in future periods to allocate the
asset's revised carrying amount, less its residual value (if any) on a
systematic basis over its remaining useful life.
E. Intangible Assets
Intangible Assets are stated at cost less accumulated amortisation.
F. Amortisation of Intangible Assets
i) Intangible assets are amortised on straight line method over the
estimated useful life of the asset. ii) The useful life of the
intangible assets for the purpose of amortisation is estimated to be
three years.
G. Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the Company's fixed assets. If
any indication exists, an asset's recoverable amount is estimated. An
impairment loss is recognised whenever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is determined
on the basis of value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value based on an
appropriate discount factor.
Reversal of impairment losses recognised in prior years is recorded
when there is an indication that the impairment losses recognised for
the asset no longer exist or have decreased. However, the increase in
the carrying amount of an asset due to reversal of an impairment loss
is recognised to the extent it does not exceed the carrying amount that
would have been determined (net of depreciation) had no impairment loss
been recognised for the asset in prior years.
H. Inventories
i) Inventories are valued at lower of cost and net realizable value.
ii) The cost in respect of the items constituting the inventories has
been computed on FIFO basis.
I. Expenditure incurred during the construction period
In respect of new/major expansion of units, the indirect expenditure
incurred during construction period up to the date of commencement of
business, which is attributable to the construction of the project, is
capitalised on various category of fixed assets on proportionate basis.
J. Employee benefits
Short Term Employee Benefits
Short Term Employee Benefits are recognized as an expense on an
undiscounted basis in the Statement of Profit and Loss of the year in
which the related service is rendered.
Post Employment Benefits
Defined Contribution Plans
The Employer's contribution to Provident Fund and Employees Pension
Scheme, a defined contribution plan is made in accordance with the
Provident Fund Act,1952 read with the Employees Pension Scheme,1995.
Defined Benefit Plans
The Employees Gratuity Fund Scheme, managed by HDFC Standard Life
Insurance Company Ltd. is a defined benefit plan. The liability for
gratuity is provided on actuarial basis. The Present Value of the
company's obligation is determined on the basis of actuarial valuation
at the year end and the fair value of plan assets is reduced from the
gross obligations under the gratuity scheme to recognize the obligation
on a net basis.
Long Term Employee Benefits
The liability for leave encashment and other compensated absences is
recognized on the basis of actuarial valuation made at the end of the
year.
K. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of the transaction.
Exchange difference arising on the settlement of monetary items or on
reporting the company's monetary items at rates different from those at
which they are initially recorded during the year or, reported in
previous financial statements are recognised as income or expense in
the year in which they arise.
L. Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of the asset. Other costs are recognized as expense in
the year in which they are incurred.
M. Taxation
(i) Provision for Taxation comprises of Income Tax Liability on the
profits for the year chargeable to tax and Deferred Tax resulting from
timing differences between Book and Tax Profits. The Deferred Tax
Asset/Liability is provided in accordance with the Accounting Standard
à 22 (AS-22), "Accounting for Taxes on Income", issued by the Institute
of Chartered Accountants of India.
N. Provisions and Contingent Liabilities
(i) Contingent liability is disclosed in the case of :
(a) a present obligation arising from a past event when it is not
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation or
(b) a possible obligation, unless the probability of outflow in
settlement is remote.
Mar 31, 2011
A. Accounting Convention
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the accounting standards referred to in
section 211 (3C) of the Companies Act, 1956 and other relevant
provisions of the said Act.
B. Revenue Recognition
i) Revenue is recognized on accrual basis. Hospital Revenue comprises
of income from services rendered to the out-patients and in-patients.
Revenue also includes value of services rendered pending billing in
respect of in-patients undergoing treatment as on 31st March, 2011.
ii) Under the "Served from India Scheme" introduced by Government of
India, an exporter of service is entitled to certain export benefits on
foreign currency earned. The revenue in respect of export benefits is
recognized on the basis of the foreign exchange earned at the rate at
which the said entitlement accrues to the extent there is no
significant uncertainty as to the amount of consideration that would be
derived and as to its ultimate collection.
C. Fixed Assets
Fixed Assets are stated at historical cost less accumulated
depreciation.
D. Depreciation
i) Depreciation is charged on straight line method at the rates
prescribed under schedule XIV to the Companies Act, 1956 (considered
the minimum rate) or at higher rates, if the estimated useful life
based on technological evaluation of the assets are lower than as
envisaged under Schedule XIV to the Companies Act. In case of additions
and deletions during the year, the computations are on the basis of
number of days for which the assets have been in use. Assets costing
not more than Rs. 5,000/- each, individually have been depreciated
fully in the year of purchase.
ii) When impairment loss / reversal is recognized, the depreciation
charge for the asset is adjusted in future periods to allocate the
asset's revised carrying amount, less its residual value (if any) on a
systematic basis over its remaining useful life.
E. Intangible Assets
Intangible Assets are stated at cost less accumulated amortisation.
F. Amortisation of Intangible Assets
i) Intangible assets are amortised on straight line method over the
estimated useful life of the asset.
ii) The useful life of the intangible assets for the purpose of
amortisation is estimated to be three years.
G. Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the Company's fixed assets. If
any indication exists, an asset's recoverable amount is estimated. An
impairment loss is recognised whenever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is determined
on the basis of value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value based on an
appropriate discount factor.
Reversal of impairment losses recognised in prior years is recorded
when there is an indication that the impairment losses recognised for
the asset no longer exist or have decreased. However, the increase in
the carrying amount of an asset due to reversal of an impairment loss
is recognised to the extent it does not exceed the carrying amount that
would have been determined (net of depreciation) had no impairment loss
been recognised for the asset in prior years.
H. Inventories
i) Inventories are valued at lower of cost and net realizable value.
ii) The cost in respect of the items constituting the inventories has
been computed on FIFO basis.
I. Expenditure incurred during the construction period
In respect of new / major expansion of units, the indirect expenditure
incurred during construction period up to the date of commencement of
business, which is attributable to the construction of the project, is
capitalised on various category of fixed assets on proportionate basis.
J. Employee benefits
Short Term Employee Benefits
Short Term Employee Benefits are recognized as an expense on an
undiscounted basis in the Profit and Loss account of the year in which
the related service is rendered.
Post Employment Benefits
Defined Contribution Plans
The Employer's contribution to Provident Fund and Employees Pension
Scheme, a defined contribution plan is made in accordance with the
Provident Fund Act,1952 read with the Employees Pension Scheme,1995.
Defined Benefit Plans
The Employees Gratuity Fund Scheme, managed by HDFC Standard Life
Insurance Company Ltd. is a defined benefit plan. The liability for
gratuity is provided on actuarial basis. The Present Value of the
company's obligation is determined on the basis of actuarial valuation
at the year end and the fair value of plan assets is reduced from the
gross obligations under the gratuity scheme to recognize the obligation
on a net basis.
Long Term Employee Benefits
The liability for leave encashment and other compensated absences is
recognized on the basis of actuarial valuation made at the end of the
year.
K. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of the transaction.
Exchange difference arising on the settlement of monetary items or on
reporting the company's monetary items at rates different from those at
which they are initially recorded during the year or, reported in
previous financial statements are recognised as income or expense in
the year in which they arise.
L. Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of the asset. Other costs are recognized as expense in
the year in which they are incurred.
M. Taxation
(i) Provision for Taxation comprises of Income Tax Liability on the
profits for the year chargeable to tax and Deferred Tax resulting from
timing differences between Book and Tax Profits. The Deferred Tax
Asset/ Liability is provided in accordance with the Accounting Standard
à 22 (AS-22), "Accounting for Taxes on Income", issued by the Institute
of Chartered Accountants of India.
N. Provisions and Contingent Liabilities
(i) Contingent liability is disclosed in the case of :
(a) a present obligation arising from a past event when it is not
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation or
(b) a possible obligation , unless the probability of outflow in
settlement is remote
Mar 31, 2010
A. Accounting Convention
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the accounting standards referred to in
section 211 (3C) of the Companies Act, 1956 and other relevant
provisions of the said Act.
B. Revenue Recognition
i) Revenue is recognized on accrual basis. Hospital Revenue comprises
of income from services rendered to the out-patients and in-patients.
Revenue also includes value of services rendered pending billing in
respect of in-patients undergoing treatment as on 31st March, 2010.
ii) The revenue in respect of export benefits is recognized on the
basis of the foreign exchange earned during the year at the rate at
which the said entitlement accrues to the extent there is no
significant uncertainty as to the amount of consideration that would be
derived and as to its ultimate collection.
C. Fixed Assets
Fixed Assets are stated at historical cost less accumulated
depreciation.
D. Depreciation
i) Depreciation is charged on straight line method at the rates
prescribed under schedule XIV to the Companies Act, 1956 (considered
the minimum rate) or at higher rates, if the estimated useful life
based on technological evaluation of the assets are lower than as
envisaged under Schedule XIV to the Companies Act. In case of additions
and deletions during the year, the computations are on the basis of
number of days for which the assets have been in use. Assets costing
not more than Rs. 5,000/- each, individually have been depreciated
fully in the year of purchase.
ii) When impairment loss / reversal is recognized, the depreciation
charge for the asset is adjusted in future periods to allocate the
assets revised carrying amount, less its residual value (if any) on a
systematic basis over its remaining useful life.
E. Intangible Assets
Intangible Assets are stated at cost less accumulated amortisation.
F. Amortisation of Intangible Assets
i) Intangible assets are amortised on straight line method over the
estimated useful life of the asset. ii) The useful life of the
intangible assets for the purpose of amortisation is estimated to be
three years.
G. Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the Companys fixed assets. If
any indication exists, an assets recoverable amount is estimated. An
impairment loss is recognised whenever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is determined on
the basis of value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value based on an
appropriate discount factor.
Reversal of impairment losses recognised in prior years is recorded
when there is an indication that the impairment losses recognised for
the asset no longer exist or have decreased. However, the increase in
the carrying amount of an asset due to reversal of an impairment loss
is recognised to the extent it does not exceed the carrying amount that
would have been determined (net of depreciation) had no impairment loss
been recognised for the asset in prior years.
H. Inventories
i) Inventories are valued at lower of cost and net realizable value.
ii) The cost in respect of the items constituting the inventories has
been computed on FIFO basis.
I. Expenditure incurred during the construction period
In respect of new / major expansion of units, the indirect expenditure
incurred during construction period up to the date of commencement of
business, which is attributable to the construction of the project, is
capitalised on various category of fixed assets on proportionate basis.
J. Employee benefits
Short Term Employee Benefits
Short Term Employee Benefits are recognized as an expense on an
undiscounted basis in the Profit and Loss account of the year in which
the related service is rendered.
Post Employment Benefits
Defined Contribution Plans
The Employers contribution to Provident Fund and Employees Pension
Scheme, a defined contribution plan is made in accordance with the
Provident Fund Act,1952 read with the Employees Pension Scheme,1995.
Defined Benefit Plans
The Employees Gratuity Fund Scheme, managed by HDFC Standard Life
Insurance Company Ltd. is a defined benefit plan. The liability for
gratuity is provided on actuarial basis. The Present Value of the
companys obligation is determined on the basis of actuarial valuation
at the year end and the fair value of plan assets is reduced from the
gross obligations under the gratuity scheme to recognize the obligation
on a net basis.
Long Term Employee Benefits
The liability for leave encashment and other compensated absences is
recognized on the basis of actuarial valuation made at the end of the
year.
K. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of the transaction.
Exchange difference arising on the settlement of monetary items or on
reporting the companys monetary items at rates different from those at
which they are initially recorded during the year or, reported in
previous financial statements are recognised as income or expense in
the year in which they arise.
L. Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of the asset. Other costs are recognized as expense in
the year in which they are incurred.
M. Taxation
(i) Provision for Taxation comprises of Income Tax Liability on the
profits for the year chargeable to tax and Deferred Tax resulting from
timing differences between Book and Tax Profits. The Deferred Tax
Asset/ Liability is provided in accordance with the Accounting Standard
à 22 (AS-22), "Accounting for Taxes on Income", issued by the Institute
of Chartered Accountants of India.
(ii) Fringe Benefit Tax is provided on the aggregate amount of fringe
benefits determined in accordance with the provisions of the relevant
enactments at the specified rate of tax.
N. Provisions and Contingent Liabilities
(i) Contingent liability is disclosed in the case of :
(a) a present obligation arising from a past event when it is not
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation or
(b) a possible obligation, unless the probability of outflow in
settlement is remote
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