Accounting Policies of Krishna Institute of Medical Sciences Ltd. Company

Mar 31, 2025

1.3 Material accounting policies

A. Current and non-current classification

The Company presents assets and liabilities in the balance
sheet based current and non-current classification.

Assets

An asset is classified as current when it satisfies any of the
following criteria:

i. it is expected to be realised in, or is intended for
sale or consumption in, the companyâs normal
operating cycle;

ii. it is held primarily for the purpose of being traded;

iii. it is expected to be realised within 12 months after
the reporting date; or

iv. it is cash or cash equivalent unless it is restricted
from being exchanged or used to settle a liability for
at least 12 months after the reporting date.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the
following criteria:

i. it is expected to be settled in the companyâs normal
operating cycle;

ii. it is held primarily for the purpose of being traded;

iii. it is due to be settled within 12 months after the
reporting date; or

iv. the company does not have an unconditional right to
defer settlement of the liability for at least 12 months
after the reporting date.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as
noncurrent assets and liabilities.

Operating cycle

The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash and
cash equivalents. The Company has identified twelve
months as its operating cycle.

B. Fair value measurement:

between market participants at the measurement date.
The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability
takes place either:

â¢ In the principal market for the asset or liability, or

â¢ In the absence of a principal market, in the most
advantageous market for the asset or liability

The principal or the most advantageous market must be
accessible by the Company. The fair value of an asset
or a liability is measured using the assumptions that
market participants would use when pricing the asset
or liability, assuming that market participants act in their
economic best interest.

A fair value measurement of a non-financial asset takes
into account a market participantâs ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant that
would use the asset in its highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data is available to measure fair value, maximizing the use
of relevant observable inputs and minimizing the use of
unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the standalone financial statements are
categorised within the fair value hierarchy, described as
follows, based on the lowest level input that is significant
to the fair value measurement as a whole:

- Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities.

- Level 2: inputs other than quoted prices included
in Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).

- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).

For assets and liabilities that are recognised in the
standalone financial statements on a recurring basis,
the Company determines whether transfers have
occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the
end of each reporting period.

The Companyâs Chief Financial officer determines the
policies and procedures for both recurring fair value
measurement and for other non-recurring measurement.

At each reporting date, the Management analyses the
movements in the values of assets and liabilities which
are required to be re measured or re-assessed as per
the Companyâs accounting policies. For this analysis,
the Management verifies the major inputs applied in the
latest valuation by agreeing the information in the valuation
computation to contracts and other relevant documents.

The Management also compares the change in the fair
value of each asset and liability with relevant external
sources to determine whether the change is reasonable.

Periodically, the Management present the valuation
results to the Board of Directors/ Audit Committee and
the Companyâs independent auditors. This includes a
discussion of the major assumptions used in the valuations.

For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis of
the nature, characteristics and risks of the asset or liability
and the level of the fair value hierarchy as explained above.

The Company recognises transfers between levels of
the fair value hierarchy at the end of the reporting period
during which the change has occurred. Further information
about the assumptions made in measuring fair values is
included in Note 2.35 - financial instruments.

C. Revenue from contract with customer

The Companyâs revenue from medical and healthcare
services comprises of income from hospital services and sale
of pharmacy items. The Company has generally concluded
that it is the principal in its revenue arrangements, except
for the Operating & Maintenance (O&M) arrangements
below, because it typically controls the goods or services
before transferring them to the customer.

Revenue from contracts with customers is recognised
when control of the goods or services are transferred to
the customer at an amount that reflects the consideration
to which the Company expects to be entitled in exchange
for those goods or services.

Income from hospital services comprises of fees charged
for inpatient and outpatient hospital services. The
performance obligations for this stream of revenue include
accommodation, surgery, medical/clinical professional
services, food and beverages, investigation and supply of
pharmaceutical and related products.

and deposited back to the respective statutory authorities.
With respect to the inpatients hospital services who are
undergoing treatment/ observation on the balance sheet
date, revenue is recognised over the period to the extent
of services rendered.

Revenue from sale of pharmacy and food and beverages
(other than hospital services), where the performance
obligation is satisfied at a point in time, is recognised when
the control of goods is transferred to the customer.

Revenue from admission fees, tuition fees and other fees
for academic courses are recognised on the due date for
the receipt of fees and apportioned over the academic term
on a time proportion basis. Fee waivers, discounts, rebates
provided to students are reduced from fee received.

In respect of Medical service fee, i.e. the revenue arising
from the Operating & Maintenance (O&M) contracts where
the performance obligation is satisfied over time, revenue
is recognised along the period when the services are
received and accepted by the customer.

If the consideration in a contract includes a variable amount,
the Company estimates the amount of consideration to
which it will be entitled in exchange for transferring the
goods to the customer. The variable consideration is
estimated at contract inception and constrained until it
is highly probable that a significant revenue reversal in
the amount of cumulative revenue recognised will not
occur when the associated uncertainty with the variable
consideration is subsequently resolved. The Company
applies the most likely amount method or the expected
value method to estimate the variable consideration in
the contract. The selected method that best predicts the
amount of variable consideration is primarily driven by the
number of volume thresholds contained in the contract.
The most likely amount is used for those contracts with a
single volume threshold, while the expected value

method is used for those with more than one volume
threshold. The Company then applies the requirements on
constraining estimates in order to determine the amount
of variable consideration that can be included in the
transaction price and recognised as revenue.

Contract balances

Unbilled revenue represents value to the extent of medical
and healthcare services rendered to the patients who are
undergoing treatment/ observation on the balance sheet
date and is not billed as at the balance sheet date.

Unbilled revenue are subject to impairment assessment.
Refer to accounting policies on impairment of financial
assets in section (m) Financial instruments - initial
recognition and subsequent measurement.

A receivable is recognised if an amount of consideration that is
unconditional (i.e., only the passage of time is required before
payment of the consideration is due). Refer to accounting
policies of financial assets in section (m) Financial instruments
- initial recognition and subsequent measurement.

A contract liability is recognised if a payment is received
or a payment is due (whichever is earlier) from a customer
before the Company transfers the related goods or services.
Contract liabilities are recognised as revenue when the
Company performs under the contract (i.e., transfers
control of the related goods or services to the customer).

Other Income

Interest on deposits, loans and debt instruments are measured
at amortized cost. Interest income is recorded using the
Effective Interest Rate (EIR). EIR is the rate that exactly
discounts the estimated future cash payments or receipts over
the expected life of the financial instrument or a shorter period,
where appropriate, to the gross carrying amount of the financial
asset or to the amortized cost of a financial liability. When
calculating the effective interest rate, the Company estimates
the expected cash flows by considering all the contractual
terms of the financial instrument (for example, prepayment,
extension, call and similar options) but does not consider the
expected credit losses. Interest income is included in other
income in the statement of profit and loss.

D. Income tax

The Income-tax expense comprises current tax and
deferred tax. It is recognised in profit and loss except to
the extent that is relates to an item recognised directly in
equity or in other comprehensive income.

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 in the country where the Company
operates and generates taxable income.

Current income tax relating to items recognised outside
profit or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Current tax items
are recognised in correlation to the underlying transaction
either in OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect to
situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable
temporary differences, except:

â¢ When the deferred tax liability arises from the initial
recognition of goodwill or an asset or liability in
a transaction that is not a business combination
and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss and
does not give rise to equal taxable and deductible
temporary differences.

â¢ In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, when the
timing of the reversal of the temporary differences can
be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable
profit will be available against which the deductible
temporary differences, and the carry forward of unused
tax credits and unused tax losses can be utilised, except:

â¢ When the deferred tax asset relating to the
deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor
taxable profit or loss and does not give rise to equal
taxable and deductible temporary differences

â¢ In respect of deductible temporary differences
associated with investments in subsidiaries, associates
and interests in joint ventures, deferred tax assets are
recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable
future and taxable profit will be available against which
the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed
at each reporting date and are recognised to the extent
that it has become probable that future taxable profits will
allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realised, or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted
at the reporting date.

Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items
are recognised in correlation to the underlying transaction
either in OCI or directly in equity.

The Company offsets deferred tax assets and deferred
tax liabilities if and only if it has a legally enforceable right
to set off current tax assets and current tax liabilities and
the deferred tax assets and deferred tax liabilities relate
to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities
which intend either to settle current tax liabilities and
assets on a net basis, or to realise the assets and settle
the liabilities simultaneously, in each future period in which
significant amounts of deferred tax liabilities or assets are
expected to be settled or recovered.

Goods and Service taxes paid on acquisition of assets
or on incurring expenses

Expenses and assets are recognised net of the amount of
Goods and service taxes paid, except:

â¢ When the tax incurred on a purchase of assets
or services is not recoverable from the taxation
authority, in which case, the tax paid is recognised as
part of the cost of acquisition of the asset or as part
of the expense item, as applicable

â¢ When receivables and payables are stated with the
amount of tax included

The net amount of tax recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables in the balance sheet.

E. Property, plant and equipment

Freehold land is carried at cost net of accumulated
impairment, if any. All other items of property, plant and
equipment are stated at cost, net of tax / duty credit
availed, less accumulated depreciation and accumulated
impairment losses, if any. Cost of an item of property, plant
and equipment comprises its purchase price, including
import duties and non-refundable purchase taxes, after
deducting trade discounts and rebates, any directly
attributable cost of bringing the item to its working condition
for its intended use and estimated costs of dismantling and
removing the item and restoring the site on which it located.
Such cost includes the cost of replacing part of the plant and
equipment and borrowing costs for long-term construction
projects if the recognition criteria are met. When significant
parts of plant and equipment are required to be replaced
at intervals, the Company depreciates them separately
based on their specific useful lives. All other repair and
maintenance costs are recognised in the consolidated
statement of profit and loss as incurred.

Capital work in progress is stated at cost, net of
accumulated impairment loss, if any.

The cost of self-constructed item of property, plant and
equipment comprises the cost of materials and direct
labour, any other cost directly attributable to bringing
the item to working conditions for its intended use, and
estimated costs of dismantling and removing the item and
restoring the site on which it is located.

Amounts paid towards the acquisition of property, plant
and equipment outstanding as of each reporting date are
recognised as capital advance and the cost of property,
plant and equipment not ready for intended use before
such date are disclosed under capital work-in-progress.

The Company has elected to continue with the carrying
value for all of its Property, Plant and Equipment recognised
as of April 01,2016 (date of transition to Ind AS) measured
as per the previous GAAP and used that carrying value as
its deemed cost as at the date of transition.

Derecognition

The carrying amount of an item of property, plant and
equipment is derecognized on disposal or when no future
economic benefits are expected from its use or disposal.
The gain or loss arising from the de-recognition of an
item of property, plant and equipment is measured as
the difference between the net disposal proceeds and
the carrying amount of the item and is recognized in the
Statement of Profit and Loss when the item is derecognized.

Depreciation

Depreciation is provided on the straight-line method,
based on the useful life of the assets as estimated
by the management. The management believes that
these estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are likely
to be used. The Company has estimated the following
useful lives to provide depreciation on its Property, plant
and equipment which are in compliance with the Schedule
II of Companies Act, 2013:

Based on the planned usage of certain specific assets and
technical assessment, the management has estimated the
useful lives of Property, plant and equipment which are
different from the useful life prescribed in Schedule II to
the Companies Act, 2013 for the following:

â¢ Individual asset not exceeding Rs. 5,000 have been
fully depreciated in the year of purchase.

â¢ Leasehold land is in the nature of perpetual lease
without any limited useful life is not amortised.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are reviewed
at each financial year end and adjusted prospectively, if
appropriate. In particular, the Company considers the
impact of health, safety and environmental legislation in
its assessment of expected useful lives and estimated
residual values.

F. Intangible assets

Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in
which the expenditure is incurred.

Intangible assets with finite lives are amortised over the
useful economic life and assessed for impairment whenever
there is an indication that the intangible asset may be
impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period.
Changes in the expected useful life or the expected pattern
of consumption of future economic benefits embodied in
the asset are considered to modify the amortisation period
or method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the
statement of profit and loss unless such expenditure forms
part of carrying value of another asset.

Derecognition

An intangible asset is derecognised 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. when the asset is derecognised.

The Company has elected to continue with the carrying
value for all of its other intangibles recognised as of April
01,2016 (date of transition to Ind AS) measured as per the
previous GAAP and used that carrying value as its deemed
cost as at the date of transition.

Amortisation

The estimated useful life of an identifiable intangible asset
is based on a number of factors including the effects of
obsolescence, demand, competition and other economic
factors (such as the stability of the industry and known
technological advances) and the level of maintenance
expenditures required to obtain the expected future cash
flows from the asset.

G. Borrowing costs

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost of
the asset. All other borrowing costs are expensed in the
period in which they occur. Borrowing costs consist of
interest and other costs that an entity incurs in connection
with the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.

H. Leases

The Company assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except for shortÂ¬
term leases and leases of low-value assets. The Company
recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the
underlying assets.

i) Right-of-use assets

depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before
the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets.

If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset. The right-of-use assets are
also subject to impairment. Refer to the accounting
policies of Impairment of non-financial assets.

ii) Lease Liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease
term. The lease payments include fixed payments
(including in substance fixed payments) less any lease
incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase
option reasonably certain to be exercised by the
Company and payments of penalties for terminating
the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease
payments that do not depend on an index or a rate are
recognised as expenses (unless they are incurred to
produce inventories) in the period in which the event
or condition that triggers the payment occurs.

In calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the
lease commencement date because the interest rate
implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the
lease payments (e.g., changes to future payments resulting
from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an
option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition
exemption for those leases that have a lease term of
12 months or less from the commencement date and
do not contain a purchase option.

The Company also applies the low-value asset
recognition exemption on a lease-by-lease basis, if
the lease qualifies as leases of low-value assets, with
a value of up to Rs. 10 mn on date of recognistion.
In making this assessment, the Group also factors
below key aspects:

â¢ The assessment is conducted on an absolute
basis and is independent of the size, nature, or
circumstances of the lessee.

â¢ The assessment is based on the value of the
asset when new, regardless of the assetâs age
at the time of the lease.

â¢ The lessee can benefit from the use of the
underlying asset either independently or
in combination with other readily available
resources, and the asset is not highly dependent
on or interrelated with other assets.

â¢ If the asset is subleased or expected to be
subleased, the head lease does not qualify as a
lease of a low-value asset.

Based on the above criteria, the Group has classified
multiple leases such as IT equipment, office
equipments, accomodations for hospital and nursing
staff etc. as leases of low value assets.

Lease payments on short-term leases and leases of
low-value assets are recognised as expense on a
straight-line basis over the lease term.

Company as a lessor

Leases in which the Company does not transfer
substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases.
Rental income arising is accounted for on a straight-line
basis over the lease terms. Initial direct costs incurred
in negotiating and arranging an operating lease are
added to the carrying amount of the leased asset and
recognised over the lease term on the same basis as
rental income. Contingent rents are recognised as
revenue in the period in which they are earned.

I. Inventories

The inventories comprising of medical consumables,
drugs and surgical instruments are measured at the lower
of cost and net realisable value. The cost of inventories is
based on the monthly moving weighted average method.
Cost includes cost of purchase and other costs incurred
in bringing the inventories to their present location and
condition and also includes expenditure incurred towards
Goods and Services Tax (GST) wherever credit is not
available. The comparison of cost and net realisable value
is made on an item by item basis.

Net realisable value is the estimated selling price in the
ordinary course of business.

The factors that the Company considers in determining
the allowance for slow moving, obsolete and other nonÂ¬
saleable inventory include estimated shelf life and price
changes. The Company considers all these factors
and adjusts the inventory provision to reflect its actual
experience on a periodic basis.

J. Impairment of non-financial assets

The Company assesses, at each reporting date, whether
there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for
an asset is required, the Company estimates the assetâs
recoverable amount. An assetâs recoverable amount is
the higher of an assetâs or cash-generating unitâs (CGU)
fair value less costs of disposal and its value in use. The
recoverable amount is determined for an individual asset,
unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups
of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
In determining net selling price, recent market transactions
are taken into account, if available. If no such transactions
can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed
budgets and forecast calculations which are prepared
separately for each of the Companyâs cash-generating units
to which the individual assets are allocated. These budgets
and forecast calculations are generally covering a period
of five years. For longer periods, a long-term growth rate
is calculated and applied to project future cash flows after
the fifth year. To estimate cash flow projections beyond
periods covered by the most recent budgets/forecasts, the
Company extrapolates cash flow projections in the budget
using a steady or declining growth rate for subsequent years,
unless an increasing rate can be justified. In any case, this
growth rate does not exceed the long-term average growth
rate for the products, industries in which the Company
operates, or for the market in which the asset is used.

An assessment is made for all assets at each reporting
date to determine whether there is an indication that
previously recognised impairment losses no longer exist
or have decreased. If such indication exists, the Company
estimates the assetâs or CGUâs recoverable amount. A
previously recognised impairment loss is reversed only
if there has been a change in the assumptions used to

determine the assetâs recoverable amount since the last
impairment loss was recognised. The reversal is limited
so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount
that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in
prior years. Such reversal is recognised in the statement
of profit and loss unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a
revaluation increase.

Mar 31, 2024

1.1 Company Overview

Krishna Institute of Medical Sciences Limited (âthe Companyâ) was originally incorporated on 26 July 1973 under the name âJagjit Singh and Sons Private Limitedâ which was subsequently changed to âKrishna Institute of Medical Sciences Private Limitedâ on 2 January 2004. The Company was converted into a public limited company under the Companies Act, 1956 on 29 January 2004 and consequently, the name was changed to âKrishna Institute of Medical Sciences Limitedâ.

The Company is primarily engaged in the business of rendering medical and healthcare services. The Companyâs shares are listed on the BSE Limited and National Stock Exchange of India Limited on 28 June 2021.

The Company is a listed company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The registered office of the company is located at D. No. 1-8-31/1, Minister''s Road, Secunderabad, Telangana, India - 500003.

The standalone financial statements were authorised for issue by the Companyâs Board of Directors on 16 May 2024.

1.2 Basis of preparation of standalone financial statements

a) Statement of Compliances:

The Standalone financial statements of the Company as at and for the year ended 31 March 2024, have been prepared in accordance with requirements of Indian Accounting Standards (âInd ASâ), as prescribed under Section 133 of the Companies Act, 2013 (âActâ) read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India and presentation requirements of Division II of Schedule III of the Act.

All amounts are in Indian Rupees millions, rounded off to two decimals, except share data, unless otherwise stated.

b) Basis of measurement:

The standalone financial statements have been prepared on the historical cost basis except for the following items:

Items	Measurement basis
Certain financial	Fair value - refer accounting policy
assets and liabilities	regarding financial instruments
Net defined benefit	Defined benefit plan - plan assets
(asset)/ liability	measured at fair value

c) Functional and presentation currency:

These standalone financial statements are presented in Indian Rupees Rs. which is also the Companyâs functional currency. All amounts are in Indian Rupees millions, rounded off to two decimals, except share data and per share data, unless otherwise stated.

d) Significant accounting judgement, estimates and assumptions:

contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the standalone financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Provision for expected credit losses of trade receivables and contract assets

The Company uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by product type, customer type and other forms of credit insurance).

The provision matrix is initially based on the Companyâs historical observed default rates. The Company will calibrate the matrix to adjust the historical credit loss experience with forward-looking information.

At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Companyâs historical credit loss experience and forecast of economic conditions may also not be representative of customerâs actual default in the future.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Refer Note 2.36 - Recognition of deferred tax assets, availability of future taxable profit against which tax losses carried forward can be used.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other postemployment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Refer Note 2.27 - Measurement of defined benefit obligations, key actuarial assumptions.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in

assumptions about these factors could affect the reported fair value of financial instruments. See Note 2.35 for further disclosures.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted cash flow model (âDCF modelâ). The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Impairment of investments in subsidiaries

The Company reviews its carrying value of investments carried at cost annually, or more frequently when there is indication for impairment. Impairment exists when the carrying value exceeds its recoverable amount, and the recoverable value is measured based on value in use. The value in use calculation is based on a Discounted cash flow model (âDCF modelâ). The cash flows are derived from the budget for the next eight years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

1.3 Material accounting policies

A. Current and non-current classification

The Company presents assets and liabilities in the balance sheet based current and non-current classification.

Assets

An asset is classified as current when it satisfies any of the following criteria:

i. it is expected to be realised in, or is intended for sale or consumption in, the companyâs normal operating cycle;

ii. it is held primarily for the purpose of being traded;

iii. it is expected to be realised within 12 months after the reporting date; or

iv. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

i. it is expected to be settled in the companyâs normal operating cycle;

ii. it is held primarily for the purpose of being traded;

iii. it is due to be settled within 12 months after the reporting date; or

iv. the company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

Operating cycle

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

B. Fair value measurement:

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

â¢ In the principal market for the asset or liability, or

â¢ In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

For assets and liabilities that are recognised in the standalone financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company''s Chief Financial officer determines the policies and procedures for both recurring fair value measurement and for other non-recurring measurement.

At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be re measured or re-assessed as per the Company''s accounting policies. For this analysis, the Management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

The Management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

Periodically, the Management present the valuation results to the Board of Directors/ Audit Committee and the Company''s independent auditors. This includes a discussion of the major assumptions used in the valuations.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in Note 2.35 - financial instruments.

C. Revenue from contract with customer

The Companyâs revenue from medical and healthcare services comprises of income from hospital services and sale of pharmacy items.

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

Income from hospital services comprises of fees charged for inpatient and outpatient hospital services. The performance obligations for this stream of revenue include accommodation, surgery, medical/clinical professional services, food and beverages, investigation and supply of pharmaceutical and related products.

Revenue is measured based on the transaction price, which is the fixed consideration adjusted for components of variable consideration which constitutes discounts, estimated disallowances and any other rights and obligations as specified in the contract with the customer. Revenue also excludes taxes collected from customers and deposited back to the respective statutory authorities. With respect to the inpatients hospital services who are undergoing treatment/ observation on the balance sheet date, revenue is recognised over the period to the extent of services rendered.

Revenue from sale of pharmacy and food and beverages (other than hospital services), where the performance obligation is satisfied at a point in time, is recognised when the control of goods is transferred to the customer.

Revenue from admission fees, tuition fees and other fees for academic courses are recognised on the due date for the receipt of fees and apportioned over the academic term on a time proportion basis. Fee waivers, discounts, rebates provided to students are reduced from fee received.

estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the

amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. The Company applies the most likely amount method or the expected value method to estimate the variable consideration in the contract. The selected method that best predicts the amount of variable consideration is primarily driven by the number of volume thresholds contained in the contract. The most likely amount is used for those contracts with a single volume threshold, while the expected value

method is used for those with more than one volume threshold. The Company then applies the requirements on constraining estimates in order to determine the amount of variable consideration that can be included in the transaction price and recognised as revenue.

Contract balances

Contract assets represents value to the extent of medical and healthcare services rendered to the patients who are undergoing treatment/ observation on the balance sheet date and is not billed as at the balance sheet date.

Contract assets are subject to impairment assessment. Refer to accounting policies on impairment of financial assets in section (m) Financial instruments - initial recognition and subsequent measurement.

A receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section (m) Financial instruments - initial recognition and subsequent measurement.

A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the Company transfers the related goods or services. Contract liabilities are recognised as revenue when the Company performs under the contract (i.e., transfers control of the related goods or services to the customer).

Other Income

Interest on deposits, loans and debt instruments are measured at amortized cost. Interest income is recorded using the Effective Interest Rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial

instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in other income in the statement of profit and loss.

D. Income tax

The Income-tax expense comprises current tax and deferred tax. It is recognised in profit and loss except to the extent that is relates to an item recognised directly in equity or in other comprehensive income.

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 in the country where the Company operates and generates taxable income.

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

â¢ When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences.

â¢ In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax

credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

â¢ When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences

â¢ In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised, or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

The Company offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Goods and Service taxes paid on acquisition of assets or on incurring expenses

Expenses and assets are recognised net of the amount of Goods and service taxes paid, except:

â¢ When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable

â¢ When receivables and payables are stated with the amount of tax included

The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

E. Property, plant and equipment

Freehold land is carried at cost net of accumulated impairment, if any. All other items of property, plant and equipment are stated at cost, net of tax / duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it located. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognised in the consolidated statement of profit and loss as incurred.

Capital work in progress is stated at cost, net of accumulated impairment loss, if any.

The cost of self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other cost directly attributable to bringing the item to working conditions for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.

Amounts paid towards the acquisition of property, plant and equipment outstanding as of each reporting date are recognised as capital advance and the cost of property, plant and equipment not ready for intended use before such date are disclosed under capital work-in-progress.

The Company has elected to continue with the carrying value for all of its Property, Plant and Equipment recognised as of April 01,2016 (date of transition to Ind AS) measured as per the previous GAAP and used that carrying value as its deemed cost as at the date of transition.

Derecognition

The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de-recognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.

Depreciation

Depreciation/Amortisation is provided on the straightline method, based on the useful life of the assets as estimated by the management. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used. The Company has estimated the following useful lives to provide depreciation on its Property, plant and equipment which are in compliance with the Schedule II of Companies Act, 2013:

Category of Assets	Useful life (In years)
Buildings	60
Medical and surgical equipment	13-14
Plant and equipment	15
Office equipment	5
Electrical equipment	10
Computers	3-6
Furniture and fixtures	10
Vehicles	8

Based on the planned usage of certain specific assets and technical assessment, the management has estimated the useful lives of Property, plant and equipment which are different from the useful life prescribed in Schedule II to the Companies Act, 2013 for the following:

â¢ Individual asset not exceeding Rs. 5,000 have been fully depreciated in the year of purchase.

â¢ Leasehold land is in the nature of perpetual lease without any limited useful life and hence is not amortised.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. In particular, the Company considers the impact of health, safety and environmental legislation in

its assessment of expected useful lives and estimated residual values.

F. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost.Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

Derecognition

An intangible asset is derecognised 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. when the asset is derecognised.

The Company has elected to continue with the carrying value for all of its other intangibles recognised as of April 01,2016 (date of transition to Ind AS) measured as per the previous GAAP and used that carrying value as its deemed cost as at the date of transition.

Amortisation

The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

The estimated useful lives of intangibles are as follows:

Category of Assets Useful life (In years)

Software 6

G. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

H. Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a lessee

The Company applies a single recognition and measurement approach for all leases, except for shortterm leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

i) Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies of Impairment of non-financial assets.

ii) Lease Liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease

payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

Company as a lessor

lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

I. Inventories

The inventories comprising of medical consumables, drugs and surgical instruments are valued at lower of cost or net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis. The comparison of cost and net realisable is made on an item by item basis.

J. Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Companyâs cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets/ forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the

long-term average growth rate for the products, industries in which the Company operates, or for the market in which the asset is used.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the assetâs or CGUâs recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

K. Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

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 liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the standalone financial statements.

A contingent asset is not recognised unless it becomes virtually certain that an inflow of economic benefits will

arise. When an inflow of economic benefits is probable, contingent assets are disclosed in the standalone financial statements.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

L. Retirement and other employee benefits

Defined contribution plans

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

Defined benefit plans

The Companyâs gratuity benefit scheme is a defined benefit plan. The Companyâs net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned and returned for services in the current and prior periods; that benefit is discounted to determine its present value. The calculation of Companyâs obligation under the plan is performed annually by a qualified actuary using the projected unit credit method.

The gratuity scheme is administered by third party. Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

benefit plans are recognised in the statement of profit and loss. The Company recognises gains and losses in the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in the statement of profit and loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised in the Statement of Profit and Loss account on the earlier of amendment or curtailment.

The Company recognises the following changes in the net defined benefit obligation as an expense in the Statement of Profit and Loss:

â¢ Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and

â¢ Net interest expense or income Short term employee benefits

Short term employee benefits are measured on an undiscounted basis and are expensed as the relative service is provided. A liability is recognised for the amount expected to be paid e.g., under short term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of the past service provided by the employee, and the amount of obligation can be estimated reliably.

Compensated Absences

As per the leave encashment policy of the Company, the employees have to utilise their eligible leave during the financial year and lapses at the end of the financial year. Accrual towards compensated absences at the end of the financial year are based on last salary drawn and outstanding leave absence at the end of the financial year.

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company 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. The company recognizes expected cost of short-term employee benefit as an expense, when an employee renders the related service.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such

long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The obligations are presented as current liabilities in the Balance sheet if the entity does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

M. 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.

Financial Assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial assetâs contractual cash flow characteristics and the Companyâs business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are âsolely payments of principal and interest (SPPI)â on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

The Companyâs business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with

the objective of both holding to collect contractual cash flows and selling.

Subsequent measurement

On initial recognition, a financial asset is classified as measured at

- Financial assets at amortised cost

- Financial assets at fair value through profit or loss (FVTPL)

Financial assets at amortised cost

A financial asset is measured at amortised cost if it meets both of the following conditions:

- the asset is held within a business model whose objective is to hold assets 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.

This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in interest income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the profit or loss. The Companyâs financial assets at amortised cost includes trade receivables and loan to subsidiaries included under other non-current financial assets. For more information on receivables, refer to Note 2.35.

Financial assets at fair value through profit or loss

All financial assets not classified as measured at amortised cost as described above are measured at FVTPL. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers

nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.

Impairment of financials assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

â¢ Financial assets that are debt instruments, and are measured at amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance.

â¢ Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115.

ECL is the difference between all contractual cash flows that are due to the company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR.

For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.

The Company considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due.

The Company considers a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

Mar 31, 2022

1.1 Company Overview

The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The registered office of the company is located at D. No. 1-8-31/1, Minister''s Road, Secunderabad, Telangana, India - 500003.

The standalone financial statements were authorised for issue by the Companyâs Board of Directors on 19 May 2022.

1.2 Basis of preparation of standalone financial statementsa) Statement of Compliances:

The Standalone financial statements of the Company as at and for the year ended 31 March 2021, have been prepared in accordance with requirements of Indian Accounting Standards (âInd ASâ), as prescribed under Section 133 of the Companies Act, 2013 (âActâ) read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India and presentation requirements of Division II of Schedule III of the Act.

All amounts are in Indian Rupees millions, rounded off to two decimals, except share data, unless otherwise stated.

b) Basis of measurement:

The standalone financial statements have been prepared on the historical cost basis except for the following items:

Items	Measurement basis
Certain financial assets and liabilities	Fair value - refer accounting policy regarding financial instruments
Net defined benefit (asset)/ liability	Defined benefit plan - plan assets measured at fair value

c) Functional and presentation currency:

d) Significant accounting judgement, estimates and assumptions:

The preparation of Companyâs standalone financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make judgments, estimates and assumptions that affect the reported balances of revenue, expenses, assets and liabilities, accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The following are the critical judgements, apart from those involving estimations that the directors have made in the process of applying the Company''s accounting policies and that have the most significant effect on the amounts recognised in the standalone financial statements.

Estimates and assumptions

Provision for expected credit losses of trade receivables and contract assets

At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

Taxes

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Refer Note 2.27 - Measurement of defined benefit obligations, key actuarial assumptions.

Fair value measurement of financial instruments

Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company âwould have to payâ, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

Impairment of non-financial assets

Classification of financial instruments as equity

The Company has entered into Shareholders agreement (âSHAâ) with private equity (âPEâ or the âInvestorsâ) investors for purchase of equity shares. As per the terms of the SHA, the Company needs to provide an exit to Investor either through an Initial Public Offering (âIPOâ) based on best effort basis, till such time that IPO is successful or Marketed sale process based on best effort basis, which are in the control of the Company. Accordingly, the Company has classified and measured the aforesaid instruments as equity.

1.3 Significant accounting policiesA. Current and non-current classification

The Company presents assets and liabilities in the balance sheet based current and non-current classification. Assets