Group Information

The consolidated financial statements comprise financial statements of Suraksha Diagnostic Private Limited ("the Company"), its subsidiary and its step-down subsidiary (collectively referred herein as "the Group") as at and for the year ended March 31, 2022. The Company is a private limited company domiciled in India and incorporated on 15 March, 2005 under the provision of Companies Act, 1956. The company is principally engaged in the business of running diagnostic centers for carrying out various pathological and radiological services.

2.1. Basis of Preparation of Consolidated Financial Statements:

Basis of Preparation

The consolidated financial statements have been brpared in accordance with generally accepted accounting principles in India (Indian GAAP) under historical cost convention on an accrual basis in compliance with all material aspects of the Accounting Standards (AS) notified under section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules 2014 and the Companies (Accounting Standard) Amendment Rules, 2016 and other accounting principles generally accepted in India (referred to as "Indian GAAP"), which have been approved by the Board of Directors at their meetings held on 30thof  September 2022.

The accounting policies applied by the Group are consistent with those used in the brvious year and the adjustments related to material errors & regrouping/reclassifications has been incorporated for the financial year ended March 31, 2021, to reflect the same accounting treatment as per the accounting policy and grouping/classifications followed as at and for the period ended March 31, 2022. These notes provide a list of the significant accounting policies adopted in the brparation of these Consolidated Financial Statements. These policies have been consistently applied to all the years brsented, unless otherwise stated.

All assets and liabilities have been classified as current or non-current as per the Group's normal operating cycle and other criteria set out in the schedule III to the Companies Act, 2013. Based on the nature of business and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Group has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities

Basis of consolidation

The consolidated financial statements relate to the company, its subsidiary and step-down subsidiary company ("the Group"). The consolidated financial statements have been brpared on the following basis:

The financial statements of the Company and its subsidiaries are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions in accordance with Accounting Standard 21 - "Consolidated Financial Statements".

The difference between the cost of investment in the subsidiary, over the net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital Reserve, as the case may be.

The difference between the proceeds from disposal of investment in subsidiaries (if any) and the carrying amount of its assets less liabilities as of the date of disposal is recognized in the Consolidated Profit and Loss Statement being the profit or loss on disposal of investment in subsidiary.

Minority share of net profit of consolidated subsidiaries for the year is identified and adjusted against the income of the group in order to arrive at the net income attributable to shareholders of the Group.

Minority Interest's share of net assets of consolidated subsidiaries is identified and brsented in the Consolidated Balance Sheet separate from liabilities and the equity of the Group's shareholders.

As far as possible, the consolidated financial statements are brpared using uniform accounting policies for like transactions and other events in similar circumstances and are brsented in the same manner as the Company's separate financial statements.

The list of subsidiaries which are included in the consolidation and the Group's holdings therein are as under:

Sr. No.

Name of the Company

Country of Incorporation

Ownership in % either directly or through subsidiaries

As on March 31, 2022

As on March 31, 2021

Subsidiaries

1

Suraksha Specialty LLP

India

99.99

99.99

Step-down Subsidiaries

2

Suraksha Salvia LLP

India

60.00

60.00

Functional and brsentation currency

The Consolidated Financial Statements are brsented in Indian Rupees `INR` or "Rs." unless indicated otherwise.

Recent Accounting Developments

MCA issued notifications dated March 24, 2021, to amend Schedule III to the Companies Act, 2013 to enhance the disclosures required to be made by the Group in its consolidated financial statements. These amendments are applicable to the Group for the financial period starting April 1, 2021.

2.2. Summary of significant accounting policies:

Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.

Revenue from Diagnostic Services comprises of amount billed (net of discounts) in respect of tests conducted and is recognized as and when the samples are collected for the purposes of conducting the tests.

Rental Income and Income from Manpower Supply are recognized on an accrual basis based on the agreements/arrangement with the concern parties

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend income is recognized when the right to receive payment is established, provided it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.

Property, plant & equipment - tangible assetsThe initial cost of Property, plant & equipment comprises its purchase price, including import duties and non-refundable purchase taxes, attributable borrowing cost, and any other cost directly attributable to bringing the asset to its working condition and location for its intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

Subsequent expenditure relating to tangible assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its brviously assessed standard of performance.

ii. Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are normally charged to Profit and Loss a/c for the year in which the costs are incurred.

iii. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized net within other income/other expenses in the statement of Profit and Loss a/c.

iv. The residual values, useful lives, and methods of debrciation of property, plant and equipment are reviewed at the end of each year/period and adjusted prospectively, if appropriate.

Capital work in progress

Assets during construction are capitalized in capital work in progress account. At the point when an asset can operate in the manner intended by management, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalized when the asset is available for use but incapable of operating at normal levels until the period of commissioning has been completed. Capital work in progress is stated at cost, net of accumulated impairment loss, if any.

Debrciation on property, plant & equipment

Assets during development or construction and freehold land are not debrciated. These assets are tested for impairment.

Other property, plant and equipment are stated at cost less accumulated debrciation and accumulated impairment loss, if any. Debrciation commences when the assets are ready for their intended use.

Based on management's evaluation, useful life brscribed in Schedule II of the Companies Act, 2013 rebrsent actual useful life of property, plant and equipment. The Group uses Straight Line to provide debrciation on different class of its property, plant and equipment.

Debrciation on addition to tangible assets is provided on pro-rata basis from the date the assets are ready for intended use. Debrciation on sale/discard from tangible assets is provided for upto the date of sale, deduction or discard of tangible assets, as the case may be.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses (if any).

An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of Profit and Loss a/c when the asset is derecognized.

Amortization of intangible assets has been calculated on straight line basis at the following rates, based on management estimates, which in the opinion of the management are reflective of the estimated useful lives of the Intangible assets.

Particulars

Useful life (In years)

Computer Software

5 to 10 years

Amortization on addition to intangible assets is provided on pro-rata basis from the date the assets are ready for intended use. Amortization on sale/discard from intangible assets is provided for upto the date of sale, deduction or discard of intangible assets as the case may be.

Borrowing Costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial period of time to get ready for its intended use are capitalized. All other borrowing costs are recognized as expenditure in the period in which they are incurred.

Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

Foreign Currency transaction

Initial recognition:

Foreign currency transactions are recorded in the reporting currency by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion:

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when such values were determined.

Exchange differences:

Exchange differences arising on the settlement of monetary items or on reporting the Group's monetary items at rates different from those at which they were initially recorded during the year, or reported in brvious financial statements, are recognized as income or as expenses in the year in which they occur.

Inventories:

Inventories comprises of reagents, chemicals, surgical and laboratory supplies, and others are valued at lower of cost and net realizable value.

Cost is determined on First in First out (FIFO) method. The cost of Inventory comprise all costs of purchase and other costs incurred in bringing the inventories to their brsent location and condition.

Retirement and other Employee Benefits:

Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries, dearness allowance, leave encashment, house rent allowance, ex-gratia and various other allowance.

The Group makes defined contribution to Government Employee Provident Fund, Government Employee Pension Fund, ESI, which are recognized in the Statement of Profit and Loss on accrual basis. Such benefits are classified as Defined Contribution Schemes as the Group does not have any further obligations under these plans beyond its monthly contributions.

The Group's gratuity benefit scheme is a defined benefit plan. The calculation of the Group's obligation under the plan is performed annually by a qualified actuary using the projected unit credit method. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the year in which they arise.

The Group has taken up a Group Gratuity Scheme with Life Insurance Corporation of India (LIC), 'Suraksha Diagnostic Private Limited Employees' Gratuity Fund' to meet its obligation towards gratuity. The contributions made to the Fund are recognized as plan assets.  The gratuity benefit obligation recognized in the balance sheet rebrsents the brsent value of the defined benefit obligation as reduced by the fair value of plan assets.

Accumulated privileged leave / sick leave, which is expected to be encashed / utilized within next 12 months, is treated as short term employee benefit. The Group measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date end.

Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets' net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital.

After impairment, debrciation/amortization is provided on the revised carrying amount of the asset over its remaining useful life.

Provision, Contingent Liability & Contingent Assets

The Group creates a provision when there is brsent obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates

A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent assets are neither recorded nor disclosed in the financial statements.

Taxation

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred tax

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the reporting date.

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed debrciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and are written down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.

At each reporting date, the Group reassesses the unrecognized deferred tax assets, if any.

Leases

As a Lessee:

Operating Leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders (after deducting brference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

The weighted average numbers of equity shares are adjusted for events such as bonus issue, bonus element in the rights issue, share split and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

Cash and Cash Equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise of cash at bank and in hand and short-term investments with an original maturity of three months or less.

Use of estimates

The brparation of financial statements in conformity with Indian GAAP requires management to make judgement, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities, at the end of reporting period. Actual results could differ from those estimates under different assumptions and conditions.

Estimates and underlying assumptions are reviewed at each balance sheet date. Any revision to accounting estimates is recognized in accordance with the requirements of the respective accounting standard.

All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest lacs as per the requirements of Schedule III, unless otherwise stated. Any amount appearing as Rs 0.00 rebrsents less than Rs 500.