Material accounting policies
This note provides a list of the material accounting
policies adopted in the preparation of the standalone
financial statements. These policies have been
consistently applied to all the years presented unless
otherwise stated.
| APPLICATION OF NEW AND REVISED INDIAN
ACCOUNTING STANDARDS (IND AS)
The Company has applied all the Ind ASs notified
(including amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time) by the Ministry of
Corporate Affairs.
| STATEMENT OF COMPLIANCE
The standalone financial statements have been
prepared in accordance with the Indian Accounting
Standards (Ind AS) as per the Companies (Indian
Accounting Standards) Rules, 2022 notified under
section 133 of the Companies Act 2013 (the act) and
other relevant provisions of the Act.
The financial statements were authorised for
issue by the Company's Board of Directors on
May 20, 2026.
3.2 Basis of preparation and presentation
The standalone financial statements have been
prepared on the historical cost basis except for certain
financial instruments that are measured at fair values
at the end of each reporting period, as explained in the
accounting policies below.
Historical cost is generally based on the fair value of
the consideration given in exchange for goods and
services.
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, regardless of whether that price
is directly observable or estimated using another
valuation technique. In estimating the fair value of an
asset or a liability, the Company takes into account
the characteristics of the asset or liability if market
participants would take those characteristics into
account when pricing the asset or liability at the
measurement date. Fair value for measurement and/
or disclosure purposes in these financial statements
is determined on such a basis, except for leasing
transactions that are within the scope of Ind AS 116
and measurements that have some similarities to fair
value but are not fair value, such as net realisable value
in Ind AS 2 or value in use in Ind AS 36.
I n addition, for financial reporting purposes, fair value
measurements are categorised into Level 1, 2, or 3
based on the degree to which the inputs to the fair value
measurements are observable and the significance of
the inputs to the fair value measurement in its entirety,
which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity
can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the
asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or
liability.
The Material accounting policies are set out below3.3 Business combinations
Acquisitions of businesses are accounted for using
the acquisition method. The consideration transferred
in a business combination is measured at fair value,
which is calculated as the sum of the acquisition-
date fair values of the assets transferred by the
Company, liabilities incurred by the Company to the
former owners of the acquiree and the equity interests
issued by the Company in exchange of control of the
acquiree. Acquisition-related costs are recognised in
statement of profit and loss as incurred.
At the acquisition date, the identifiable assets acquired
and the liabilities assumed are recognised at their fair
value, except that:
Deferred tax assets or liabilities, and assets or
liabilities related to employee benefit arrangements are
recognised and measured in accordance with Ind AS
12 Income Taxes and Ind AS 19 Employee Benefits
respectively;
Goodwill is measured as the excess of the sum of
the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair
value of the acquirer's previously held equity interest
in the acquiree (if any) over the net of the acquisition-
date amounts of the identifiable assets acquired and
the liabilities assumed. The same is carried at cost
and tested for impairment on an accrual basis in
accordance with impairment policy stated below.
3.4 Goodwill
Goodwill arising on an acquisition of a business is
carried at cost as established at the date of acquisition
of the business (see note 3.3 above) less accumulated
impairment losses, if any.
For the purposes of impairment testing, goodwill
is allocated to each of the cash-generating units or
group of cash-generating units that is expected to
benefit from the synergies of the combination.
On disposal of the relevant cash-generating unit,
the attributable amount of goodwill is included in the
determination of the statement of profit and loss on
disposal.
3.5 Revenue recognition
The Company earns revenue primarily by providing
healthcare services and sale of pharmaceutical
products. Other sources of revenue include revenue
earned through Operation and Management (O&M)
contracts, brand license agreements and contracts
for clinical trials.
Revenue is recognised upon transfer of control of
promised products or services to customers in an
amount that reflects the consideration which the
Company expects to receive in exchange for those
products or services. When there is uncertainty
on ultimate collectability, revenue recognition is
postponed until such uncertainty is resolved.
3.5.1 Healthcare services
The Healthcare services income include revenue
generated from outpatients, which mainly consist
of activities for physical examinations, treatments,
surgeries and tests, as well as that generated from
inpatients, which mainly consist of activities for clinical
examinations and treatments, surgeries, and other
fees such as room charges, and nursing care. The
performance obligations for this stream of revenue
include food & beverage, accommodation, surgery,
medical/clinical professional services, supply of
equipment, investigation and supply of pharmaceutical
and related products.
The patient is obligated to pay for healthcare services
at amounts estimated to be receivable based
upon the Company's standard rates or at rates
determined under reimbursement arrangements. The
reimbursement arrangements are generally with third
party administrators. The reimbursement is also made
through national, international or local government
programs with reimbursement rates established by
statute or regulation or through a memorandum of
understanding.
Revenue is recognised at the transaction price when
each performance obligation is satisfied over the
period of time when inpatient/outpatients has actually
received the service.
Revenue from health care patients, third party payers
and other customers are billed at our standard
rates net of contractual or discretionary allowances,
discounts or rebates to reflect the estimated amounts
to be receivable from these payers.
3.5.2 Pharmaceutical products
I n respect of sale of pharmaceutical products, where
the performance obligation is satisfied at a point in
time, revenue is recognised when the control of goods
is transferred to the customer.
3.5.3 Project consultancy income and brand license
fee
I n respect of project consultancy income, i.e. the
revenue arising from the Operating and 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.
I n respect of brand license fee, i.e. the revenue arising
from the brand licensing agreements, the revenue
is recognised at the point in time when the licensee
completes the contractual performance obligation.
3.5.4 Clinical trials
I n respect of clinical trials, where the performance
obligation is satisfied at a point in time, revenue is
recognised when the service has been received and
accepted by the customer.
3.5.5 Dividend and interest income
Dividend income from investments is recognised
when the shareholder's right to receive payment has
been established (provided that it is probable that the
economic benefits will flow to the Company and the
amount of income can be measured reliably).
I nterest income from a financial asset is recognised
when it is probable that the economic benefits will flow
to the Company and the amount of income can be
measured reliably. Interest income is accrued on a time
basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that
asset's net carrying amount on initial recognition.
3.5.6 Rental income
The Company's policy for recognition of revenue from
operating leases is described in note 3.6.2 below.
3.5.7 Contract assets and liabilities
Revenue recognised by the Company where services
are rendered to the customer and for which invoice
has not been raised (which we refer as unbilled
revenue) are classified as contract assets. Amount
collected from the customer and services have not yet
been rendered are classified as contract liabilities.
3.5.8 Transaction Price
Revenue is measured based on the transaction
price, which is the fixed consideration adjusted for
discounts, estimated disallowances, amounts payable
to customer in the nature of commissions, principal
versus agent considerations, loyalty credits 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.
Principal versus agent considerations
The Company performs assessment on principal
versus agent considerations based on the facts
of each scenario. The Company is a principal and
records revenue on a gross basis when the Company
is primarily responsible for fulfilling the service, has
discretion in establishing pricing and controls the
promised service before transferring that service to
customers.
When the patient services are provided by visiting
consultants and/or by Fee for Service (FFS) doctors,
who are doctors/medical experts without labour
contracts with the Company and not considered as
the Company's employees. As these consultants/
doctors have the discretion to take their patients to
other hospital for the required treatment and set
their own consultation fee charged to patients, the
Company is an agent in such arrangement. The
Company collects fees on behalf of these consultants/
doctors and records revenue on a net amount basis.
Sometimes the Company engages third-party
providers to provide medical examination and disease
screening services. The Company evaluates the
services provided by third parties to determine whether
to recognize the revenues on a gross or net basis.
The determination is based upon an assessment
as to whether the Company acts as a principal or
agent when providing the services. Some of these
revenues involving third-party providers providing
medical examination or disease screening services
are accounted for on a net basis since the third-party
providers are the primary obligor, have the latitude in
establishing prices.
3.5.9 Contract modifications
Contract modifications are accounted for when
additions, deletions or changes are approved either to
the contract scope or contract price. The accounting
for modifications of contracts involves assessing
whether the services added to an existing contract are
distinct and whether the pricing is at the standalone
selling price. Services added that are not distinct are
accounted for on a cumulative catch-up basis, while
those that are distinct are accounted for prospectively,
either as a separate contract, if the additional services
are priced at the standalone selling price, or as a
termination of the existing contract and creation of
a new contract if not priced at the standalone selling
price.
3.5.10 Trade accounts and other receivables and
allowance for doubtful accounts
Trade receivables from healthcare services are
recognized and billed at amounts estimated to
be collectable under government reimbursement
programs, reimbursement arrangements with third
party administrators and contractual arrangements
with corporates including public sector undertakings.
The billing on government reimbursement programs
are at pre-determined net realizable rates per
treatment that are established by statute or regulation.
Revenues for non-governmental payers with which the
Group has contracts are recognized at the prevailing
contract rates. The remaining non-governmental
payers are billed at the Group's standard rates for
services and a contractual adjustment is recorded to
recognize revenues based on historic reimbursement.
The contractual adjustment and the allowance for
doubtful accounts are reviewed quarterly for their
adequacy. The collectability of receivables is reviewed
on a regular basis.
Receivables where the expected credit losses are
not assessed individually are grouped based on
geographical regions and the impairment is assessed
based on macroeconomic indicators.
Write offs are taken on a claim-by-claim basis. Due
to the fact that a large portion of its reimbursement
is provided by public health care organizations and
private insurers, the Company expects that most of its
accounts receivables will be collectible. A significant
change in the Company's collection experience,
deterioration in the aging of receivables and collection
difficulties could require that the Company increases
its estimate of the allowance for doubtful accounts.
Any such additional bad debt charges could materially
and adversely affect the Company's future operating
results. When all efforts to collect a receivable have
been exhausted, and after appropriate management
review, a receivable deemed to be uncollectible is
considered a bad debt and written off.
3.5.11 Revenue from Third Party Administrator (TPA)
I npatient services rendered to TPA are paid according
to a fee-for-service schedule. These rates vary
according to a patient classification system that
is based on clinical, diagnostic and other factors.
Inpatient services generated through TPA are recorded
on an accrual basis in the period in which services are
provided at established rates.
The Group determines the transaction price on the
TPA contracts based on established billing rates
reduced by contractual adjustments provided to
TPAs. Contractual adjustments and discounts are
based on contractual agreements, discount policies
and historical experience. Implicit price concessions
are based on historical collection experience. Most
of our TPA contracts contain variable consideration.
However, it is unlikely a significant reversal of revenue
will occur when the uncertainty is resolved, and
therefore, the Company has included the variable
consideration in the estimated transaction price.
3.6 Leases
Leases are classified as finance leases whenever the
terms of the lease transfer substantially all the risks
and rewards of ownership to the lessee. All other
leases are classified as operating leases.
3.6.1 The Company as Lessee
The Company enters into an arrangement for lease of
land, buildings, plant and machinery including computer
equipment and Furniture. Such arrangements are
generally for a fixed period but may have extension or
termination options. The Company assesses, whether
the contract is, or contains, a lease, at its inception. A
contract is, or contains, a lease if the contract conveys
the right to -
(a) control the use of an identified asset,
(b) obtain substantially all the economic benefits
from use of the identified asset, and
(c) direct the use of the identified asset.
The Company determines the lease term as the non¬
cancellable period of a lease, together with periods
covered by an option to extend the lease, where the
Company is reasonably certain to exercise that option.
The Company recognises a right-of-use asset and a
corresponding lease liability with respect to all lease
agreements in which it is the lessee, except for short¬
term leases (defined as leases with a lease term of
12 months or less) and leases of low value assets.
For these leases, the Company recognises the lease
payments as an operating expense on a straight¬
line basis over the term of the lease unless another
systematic basis is more representative of the time
pattern in which economic benefits from the leased
asset are consumed. This expense is presented within
‘other expenses' in statement of profit and loss.
Lease Liabilities:
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, the Company uses its incremental
borrowing rate.
Lease payments included in the measurement of the
lease liability comprise:
i) fixed lease payments (including in-substance
fixed payments), less any lease incentives;
ii) variable lease payments that depend on an index
or rate, initially measured using the index or rate
at the commencement date;
iii) the amount expected to be payable by the lessee
under residual value guarantees;
iv) lease payments in optional renewal periods,
where exercise of extension options is reasonably
certain, and
v) payments of penalties for terminating the lease, if
the lease term reflects the exercise of an option
to terminate the lease.
The lease liability is presented as a separate
line in the Balance Sheet. The lease liability
is subsequently measured by increasing the
carrying amount to reflect interest on the lease
liability (using the effective interest method) and
by reducing the carrying amount to reflect the
lease payments made.
Lease Liability payments are classified as cash
used in financing activities in Statement of cash
flows
The Company remeasure the lease liability (and
makes a corresponding adjustment to the related
right-of-use asset) whenever
i) the lease term has changed or there is a
change in the assessment of exercise of a
purchase option, in which case the lease
liability is remeasured by discounting the
revised lease payments using a revised
discount rate.
ii) the lease payments change due to changes
in an index or rate or a change in expected
payment under a guaranteed residual
value, in which cases the lease liability is
remeasured by discounting the revised
lease payments using the initial discount
rate (unless the lease payments change is
due to a change in a floating interest rate, in
which case a revised discount rate is used).
iii) a lease contract is modified and the lease
modification is not accounted for as a
separate lease, in which case the lease
liability is remeasured by discounting the
revised lease payments using a revised
discount rate.
Right-of-Use Assets:
The Group recognises right-of-use asset at
the commencement date of the respective
lease. Right-of-use asset are stated at cost
less accumulated depreciation. Upon initial
recognition, cost comprises of:
• the initial lease liability amount,
• l nitial direct costs incurred when entering into
the lease,
• l ease payments before commencement date
of the respective lease, and
• an estimate of costs to dismantle and
remove the underlying asset,
• less any lease incentives received.
Prepaid lease payments (including the difference
between nominal amount of the deposit and the
fair value) are also included in the initial carrying
amount of the right of use asset.
They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated on a straight
line basis over the shorter period of lease term
and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or
the cost of the right-of-use asset reflects that the
Company expects to exercise a purchase option,
the related Right-of-use asset is depreciated
over the useful life of the underlying asset. The
depreciation starts at the commencement date
of the lease.
The Right-of-use assets are presented as a
separate line in the Balance Sheet.
The Company applies Ind AS 36 to determine
whether a ROU asset is impaired and accounts
for any identified impairment loss as described in
the impairment of non-financial assets below.
The Company incurs obligation for costs to
dismantle and remove a leased asset, restore
the site on which it is located or restore the
underlying asset to the condition required by the
terms and conditions of the lease. The Company
has assessed that such restoration costs are
negligible and hence no provision under Ind-AS
37 has been recognised.
Variable rents that do not depend on an index
or rate are not included in the measurement of
the lease liability and the Right-of-use asset. The
related payments are recognised as an expense
in the period in which the event or condition that
triggers those payments occurs and are included
in the line “other expenses” in the statement of
profit and loss.
3.6.2 The Company as lessor
Amounts due from lessees under finance leases
are recognised as receivables at the amount of the
Company's net investment in the leases. Finance
lease income is allocated to accounting periods so
as to reflect a constant periodic rate of return on the
Company's net investment outstanding in respect of
the leases.
Rental income from operating leases is generally
recognised on a straight-line basis over the term of the
relevant lease. Where the rentals are structured solely
to increase in line with expected general inflation to
compensate for the Company's expected inflationary
cost increases, such increases are recognised in the
year in which such benefits accrue. Initial direct costs
incurred in negotiating and arranging an operating
lease are added to the carrying amount of the leased
asset and recognised on a straight-line basis over the
lease term.
3.7 Foreign currencies
Exchange differences on monetary items are
recognised in the statement of profit and loss in
the period in which they arise except for exchange
differences on foreign currency borrowings relating to
assets under construction for future productive use,
which are included in the cost of those assets when
they are regarded as an adjustment to interest costs
on those foreign currency borrowings.
3.8 Borrowings and Borrowing costs
Borrowings are recognised initially at fair value,
net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost. Any difference
between the proceeds (net of transaction costs) and
the redemption value is recognised in the statement of
profit and loss over the period of the borrowings using
the effective interest rate method. Borrowings are
classified as current liabilities unless the Company has
an unconditional right to defer settlement of the liability
for at least 12 months after the reporting date.
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period of
time to get ready for their intended use, are added to
the cost of those assets, until such time as the assets
are substantially ready for their intended use.
l nterest income earned on the temporary investment
of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs
eligible for capitalisation.
All other borrowing costs are recognised in statement
of profit and loss in the period in which they are
incurred.
3.9 Employee benefits3.9.1 Retirement benefit costs and termination
benefits
Payments to defined contribution retirement
benefit plans are recognised as an expense when
employees have rendered service entitling them to the
contributions.
For defined benefit retirement benefit plans, the
cost of providing benefits is determined using the
projected unit credit method, with actuarial valuations
being carried out at the end of each annual reporting
period. Remeasurement, comprising actuarial gains
and losses and the return on plan assets (excluding
net interest), is reflected immediately in the balance
sheet with a charge or credit recognised in other
comprehensive income in the period in which
they occur. Remeasurement recognised in other
comprehensive income is not reclassified to statement
of profit and loss. Past service cost is recognised in
the statement of profit and loss in the period of a plan
amendment. Net interest is calculated by applying the
discount rate at the beginning of the period to the net
defined benefit liability or asset. Defined benefit costs
are categorised as follows:
- Service cost (including current service cost, past
service cost, as well as gains and losses on
curtailments and settlements);
- Net interest expense or income; and
- Remeasurement
The Company presents the first two components of
defined benefit costs in statement of profit and loss in
the line item ‘Employee benefits expense'.
The retirement benefit obligation recognised in the
balance sheet represents the actual deficit or surplus
in the Company's defined benefit plans. Any surplus
resulting from this calculation is limited to the present
value of any economic benefits available in the form
of refunds from the plans or reductions in future
contributions to the plans.
3.9.2 Short-term and other long-term employee
benefits
Leave Encashment
The employees of the Company are entitled to encash
the unutilized leave. The employees can carry forward
a portion of the unutilized accumulating leave and
utilize it in future periods or receive cash as per the
Company's policy upon accumulation of minimum
number of days. The Company records an obligation
for leave encashment in the period in which the
employee renders the services that increases this
entitlement. The Company measures the expected
cost of leave encashment as the additional amount
that the Company expects to pay as a result of the
unused entitlement that has accumulated at the end
of the reporting period. The Company recognizes
accumulated leave entitlements based on actuarial
valuation using the projected unit credit method. Non¬
accumulating leave balances are recognized in the
period in which the leaves occur.
Other short term employee benefits
Liabilities recognised in respect of short-term employee
benefits are measured at the undiscounted amount of
the benefits expected to be paid in exchange for the
related service.
3.10 Taxation
Income tax expense comprises current tax and the net
change in the deferred tax asset or liability during the
year.
3.10.1 Current tax
The tax currently payable is based on taxable profit for
the year. Taxable profit differs from ‘Profit before tax'
as reported in the statement of profit and loss because
of items of income or expense that are taxable or
deductible in other years and items that are never
taxable or deductible. The Company’s current tax is
calculated using tax rates that have been enacted
or substantively enacted by the end of the reporting
period. Advance taxes and provisions for current
income taxes are presented at net in the Balance
Sheet after off-setting advance tax paid and income
tax provision.
3.10.2 Deferred tax
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable
profits will be available against which those deductible
temporary differences can be utilized. Such deferred
tax assets and liabilities are not recognised if the
temporary difference arises from the initial recognition
(other than in a business combination) of assets
and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit. In addition,
deferred tax liabilities are not recognised if the
temporary difference arises from the initial recognition
of goodwill. Deferred tax assets and liabilities are
offset when they relate to income taxes levied by the
same taxation authority and the relevant entity intends
to settle its current tax assets and liabilities on a net
basis.
The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the
asset to be recovered.
Deferred tax liabilities and assets are measured at the
tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based
on tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting
period.
The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the Company expects, at the
end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities.
Temporary differences arising as a result of changes in
tax legislation. Accordingly, when additional temporary
differences arise as a result of the introduction of a
new tax, and not when an asset or a liability is first
recognised, the deferred tax effect of the additional
temporary differences should be recognised.
3.10.3 Current and deferred tax for the year
Current and deferred tax are recognised in the
statement of profit and loss, except when they relate
to items that are recognised in other comprehensive
income or directly in equity, in which case, the
current and deferred tax are also recognised in
other comprehensive income or directly in equity
respectively. Where current tax or deferred tax arises
from the initial accounting for a business combination,
the tax effect is included in the accounting for the
business combination.
3.11 Property, plant and equipment
Land and buildings held for use in providing the
healthcare and related services, or for administrative
purposes, are carried at cost less accumulated
depreciation and accumulated impairment losses.
Freehold land is not depreciated.
Expenses in the nature of general repairs and
maintenance, are charged to the statement of profit
and loss during the financial period in which they are
incurred.
Parts of some items of property, plant and equipment
may require replacement at regular intervals and
this would enhance the life of the asset such as
replacing the interior walls of a building, or to make a
nonrecurring replacement. The Company recognises
these amounts incurred in the carrying amount of an
item of property, plant & equipment and depreciated
over the period which is lower of replacement period
and its useful life. The carrying amount of those parts
that are replaced is derecognized in accordance with
the derecognition provisions of Ind AS 16.
Fixtures and medical Equipment are stated at cost
less accumulated depreciation and accumulated
impairment losses. All repairs and maintenance costs
are charged to the statement of profit and loss during
the financial period in which they are incurred.
Depreciation is recognised so as to depreciate the
cost of assets (other than freehold land and properties
under construction) less their residual values over
their useful lives, using the straight-line method. The
estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting
period, with the effect of any changes in estimate
accounted for on a prospective basis. However, the
estimates of useful lives of certain assets are based
on technical evaluation and are different from those
specified in Schedule II.
Assets held under finance leases are depreciated
over their expected useful lives on the same basis as
owned assets. However, when there is no reasonable
certainty that ownership will be obtained by the end of
the lease term, assets are depreciated over the shorter
of the lease term and their useful lives.
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.
An item of property, plant and equipment is
derecognized upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising
on the disposal or retirement of an item of property,
plant and equipment is determined as the difference
between the sales proceeds and the carrying amount
of the asset and is recognised in the statement of
profit and loss.
3.11.1 Capital work in progress
Amounts paid towards the acquisition of property,
plant and equipment outstanding as of each
reporting date are recognized 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.
Commencement of Depreciation related to property,
plant and equipment classified as Capital work in
progress (CWIP)involves determining when the assets
are available for their intended use. The criteria the
Group uses to determine whether CWIP are available
for their intended use involves subjective judgments
and assumptions about the conditions necessary for
the assets to be capable of operating in the intended
manner.
3.12 Intangible assets3.12.1 Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired
separately are carried at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over
their estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end of
each reporting period, with the effect of any changes
in estimate being accounted for on a prospective
basis. Intangible assets with finite useful lives are
evaluated for impairment when events have occurred
that may give rise to an impairment. Intangible assets
with indefinite useful lives that are acquired separately
are carried at cost less accumulated impairment
losses.
3.12.2 Intangible assets acquired in a business
combination
Intangible assets acquired in a business combination
and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date
(which is regarded as their cost).
Subsequent to initial recognition, intangible assets
acquired in a business combination are reported at
cost less accumulated amortisation and accumulated
impairment losses, on the same basis as intangible
assets that are acquired separately.
3.12.3 Internally Generated intangible
Research costs are expensed as incurred. Software
product development costs are expensed as incurred
unless technical and commercial feasibility of the
project is demonstrated, future economic benefits are
probable, the Company has an intention and ability to
complete and use the software and the costs can be
measured reliably. The costs which can be capitalized
include the cost of material, direct labour, overhead
costs that are directly attributable to preparing the
asset for its intended use.
The Company capitalizes certain development costs
incurred in connection with its internal use software.
These capitalized costs are related to the development
of its software platform that is hosted by the Company
and used by the customers. The Company capitalizes
all direct and incremental costs incurred during the
development phase, until such time when the software
is substantially complete and ready for use.
The Company also capitalizes costs related to specific
upgrades and enhancements when it is probable
the expenditures will result in additional features,
functionality and significant customer experience.
3.12.4 Derecognition of intangible assets
An intangible asset is derecognized on disposal, or
when no future economic benefits are expected
from use or disposal. Gains or losses arising from
derecognition of an intangible asset are recognised
in the statement of profit and loss.
3.13 Review of useful life and method of depreciation
Estimated useful lives are periodically reviewed, and
when warranted, changes are made to them. The
effect of such change in estimates are accounted for
prospectively.
3.14 Impairment of tangible and intangible assets other
than goodwill
The carrying values of property plant and equipment
and intangible assets with finite life are reviewed for
possible impairment whenever events, circumstances
or operating results indicate that the carrying amount
of an asset may not be recoverable. If any such
indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the
impairment loss (if any).
Recoverable amount is the higher of fair value less
costs of disposal and value in use. 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 for which
the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash¬
generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash¬
generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in the
statement of profit and loss.
If at the reporting date, there is an indication that
a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the
impairment losses previously recognized are reversed
such that the asset is recognized at its recoverable
amount but not exceeding written down value which
would have been reported if the impairment losses
had not been recognized initially.
An impairment in respect of goodwill is not reversed.
3.14.1Impairment of Goodwill and intangibles with
indefinite useful lives
Goodwill and identifiable intangibles with indefinite
useful lives are not amortized but tested for impairment
annually or when an event becomes known that could
trigger an impairment.
To perform the annual impairment test of goodwill,
the Company identified its groups of cash generating
units (CGUs) and determined their carrying value
by assigning the assets and liabilities, including the
existing goodwill and intangible assets, to those
CGUs. CGUs reflect the lowest level on which goodwill
is monitored for internal management purposes.
For the purpose of goodwill impairment testing, all
corporate assets and liabilities are allocated to the
CGUs. At least once a year, the Company compares
the recoverable amount of each CGU to the CGU's
carrying amount.
3.15 Inventories
Inventories of medical consumables, drugs and stores
& spares are valued at lower of cost or net realizable
value. Net Realizable Value represents the estimated
selling price in the ordinary course of business less
estimated costs necessary to make the sale.
Cost is determined on weighted average method
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