* The Company has carried out an impairment assessment for investment made by the Company. Based on the detailed impairment evaluation carried out by the Company duly considering the discounted future cashflows of the subsidiary, the Company has assessed that impairment loss on investment is ' Nil for the year ended 31 March 2026 (31 March 2025: ' Nil).
**During the year, the Company has invested in 774,800 Non convertible redeemable preference shares ("NCRPS") of face value ' 100 each, dividend rate of 0.001% p.a amounting to ' 77.50 million issued by Prashanthi Medicare Private Limited.These NCRPS shall get redeemed at par(a) within the maximum permissible time period under the provisions of Section 55 of the Companies Act; (b) upon termination of Shareholders agreement dated 28 June 2025; or (c) upon completion of transfer of call shares or put shares in accordance with the Shareholders Agreement dated 28 June 2025 whichever is earlier.
As per Ind AS 32, these NCRPS are classified as financial asset and initially measured at fair value of '51.55 million using an effective interest rate of 8.50%. The balance ' 25.95 million is recorded as a deemed equity investment.
***During the year, the Company has invested in 410,400 NCRPS of face value ' 1,000 each, dividend rate of 0.001% p.a amounting to ' 410.40 million issued by Pratiksha Women & Child Care Hospital Private Limited. These NCRPS shall get redeemed at par , (a) within the maximum permissible time period under the provisions of Section 55 of the Companies Act; (b) upon termination of Shareholders agreement dated 11 August 2025; or (c) upon completion of transfer of Call Shares or Put Shares in accordance with the Shareholders Agreement dated 11 August 2025 whichever is earlier.As per Ind AS 32, these NCRPS are classified as financial asset and initially measured at fair value of ' 2 72.93 million using an effective interest rate of 8.50%. The balance ' 137.47 million is recorded as a deemed equity investment.
Trade receivables are unsecured and are derived from revenue earned from providing medical, healthcare and other ancillary services. No interest is charged on the outstanding balance, regardless of the age of the balance. The Company applies Expected Credit Loss (ECL) model under simplified approach for measurement and recognition of impairment loss towards expected risk of delays and default in collection.
The Company has used a practical expedient by computing the expected credit loss allowance based on a provision matrix. Management makes specific provision in cases where there are known specific risks of customer default in making the repayments. The provision matrix takes into account historical credit loss experience and adjusted for forward- looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the provision matrix.
The Company is subject to concentration of credit risk in its trade receivables for one customer comprising of 31.14% (31 March 2025: 39%) of total trade receivables. Although the Company is directly affected by the financial condition of its customer, management does not believe significant credit risks exist at the balance sheet date. The Company does not require collateral or other securities to support its accounts receivable.
(a) The Company's exposure to credit risk and loss allowances related to trade receivables are disclosed in note 2.39.
(b) Trade receivables are non-interest bearing and are generally on terms of 30-45 days
b) Terms/Rights attached to Equity shares :
The Company has a single class of equity shares of face value ' 10 each, fully paid up. Accordingly, all equity shares rank equally with regard to dividends and share in the Company's residual assets. The equity shares are entitled to receive dividend as declared from time to time subject to payment of dividend to preference shareholders. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees.
On liquidation of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
As per records of the Company, including its register of shareholder/members and other declarations received from shareholder regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.
d) During the five years immediately preceding the reporting date, no shares have been bought back, issued for consideration other than cash other than disclosed below.
During the year ended 31 March 2022, 48,167,004 equity shares of ' 10 each, fully paid up have been allotted as bonus shares by capitalisation of securities premium.
Nature and purpose
Securities premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.
General reserve
The general reserve is a free reserve which is used from time to time to transfer profits from retained earnings. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to statement of profit and loss.
Retained earning
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends, or other distributions paid to shareholders. It includes impact of remeasurement gain/ (losses) net of taxes on defined benefit plans on account of changes in actuarial assumptions or experience adjustments within the plans.
Treasury shares
The reserve for shares of the Company held by the Rainbow Employees Welfare Trust (ESOP Trust). The Company has issued employees stock option scheme for its employees. The shares of the Company have been purchased and held by ESOP Trust to issue and allot to employees at the time of exercise of ESOP by Employees.
Share based payment reserve
The share options-based payment reserve is used to recognise the grant date fair value of options issued to employees under Employee stock option plan. The amounts recognised in this reserve are transferred to Securities Premium when Options are exercised by the employees or they expire unexercised (refer note 2.45).
* The Company is involved in the disputes, law suites, claims from patients/patient relatives that arise from time to time in ordinary course of business. Based on external legal advise, management believes none of the matters, either in individual or in aggregate will have any material effect on its standalone financial statements, as the management believes it has a reasonable case in its defence of proceedings and hence, no provision is recognised in the standalone financial statements.
The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business including litigation before tax authorities and including matters mentioned above. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the claimants or the Company, as the case may be, and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes. The Management believes that it has a reasonable case in its defence of the proceedings and accordingly no further provision is required.
2.30 EMPLOYEE BENEFIT PLANS
The employee benefit schemes are as under:
(a) Defined contribution benefit plans
The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident fund and Employee state insurance (ESI), which is a defined contribution plan. The contribution is charged to the Statement of standalone profit and loss as they accrue. The amount recognised as an expense towards contribution to Provident fund and ESI for the year ended 31 March 2026 amounts to ' 87.63 million and ' 3.87 million respectively (31 March 2025: ' 79.21 million and ' 4.96 million respectively) (refer note 2.23).
(b) Defined benefit plans
The Company provides its employees with benefits under a defined benefit plan, referred to as the “Gratuity Plan”. The Gratuity Plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days (31 March 2025: 15 days) salary for each year of completed service (service of six months and above is rounded off as one year) at the time of retirement/exit, restricted to a sum of ' 2.00 million. The Company contributes all ascertained liabilities towards gratuity to the Fund. The plan assets have been primarily invested in insurer managed funds. The Company's obligation in respect of gratuity plan, which is a defined benefit plan is provided for based on actuarial valuation carried out by an independent actuary using the projected unit credit method.
The following table sets out the status of the funded gratuity plan as required under Ind AS 19 " Employee Benefits" :
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
2.33 SEGMENT REPORTING
The Company is engaged in the business of rendering medical and healthcare services.
Ind AS 108 “Operating Segment” establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. As defined in Ind AS 108, Operating segments are to be reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) i.e. the Chairman and Managing Director. The CODM evaluates the Company's performance and allocates resources on overall basis. The Company's sole operating segment is therefore ‘Medical and Healthcare Services'. Accordingly, there are no additional disclosures to be provided under Ind AS 108 other than those already provided in the standalone financial statements.
Further the business operation of the Company are concentrated in India, and hence, the Company is considered to operate only in one geographical segment. There are no individual customer contributing more than 10% of Company's total revenue.
This information is required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 and has been determined to the extent such parties have been identified on the basis of information available with the Company.
The Company's exposure to currency and liquidity risks related to trade payables is disclosed in note 2.39.
2.37 CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the Company. The proposed areas for CSR activities, as per the CSR policy of the Company are promotion of education, sports, rural development activities, medical facilities, employment and ensuring environmental sustainability which are specified in Schedule VII of the Companies Act, 2013.
2.39 FINANCIAL RISK MANAGEMENT
Risk management framework
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's management risk policy is set by the Board of directors. The Company's activities expose it to a variety of financial risks like credit risk, liquidity risk and market risk. The Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. A summary of the risks have been given below:
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and loans given. Credit risk arises from cash held with banks, as well as credit exposure to trade receivables and other financial assets. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counter party credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Trade and other receivables
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. Trade receivables and unbilled revenue are typically unsecured and are derived from revenue earned from customers primarily located in India. The Company has a process in place to monitor outstanding receivables on a monthly basis. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including government entities, insurance companies, corporates, individual and others. The default in collection as a percentage to total receivable is low.
Cash and bank balances, loans and other financial assets
Cash and bank balances comprises of deposits with bank, interest accrued on deposits and other financial assets consists of security deposits,. These deposits are held with credit worthy banks. The credit worthiness of such banks are evaluated by the Management on an ongoing basis and is considered to be good with low credit risk. Further, the Company maintains exposure in money market liquid mutual funds and loans. The Company has set counter-parties limits based on multiple factors including financial position, credit rating, etc. Loans are assessed on lifetime expected credit loss model and no impairment loss is anticipated. The Company's maximum exposure to credit risk as at 31 March 2026 and 31 March 2025 is the carrying value of each class of financial assets.
The security deposit pertains to rent deposit given to lessors. The Company does not expect any losses from non-performance by these counter-parties.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, that it will always have sufficient liquidity to meet its liabilities when due. The Company's Management is responsible for liquidity, funding as well as settlement management.
The Company aims to maintain the level of its cash and cash equivalents and other highly marketable investments at an amount in excess of expected cash outflows on financial liabilities (other than trade payables) over the next six months. The Company also monitors the level of expected cash inflows on trade receivables and loans together with expected cash outflows on trade payables and other financial liabilities.
Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will effect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Interest risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interests rate. Interest rate risk primarily arises from the Company's investments in bank deposits and loans given.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rate. The majority of the Company's assets are located in India and Indian rupee being the functional currency for the Company. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to operating activities.
The Company has advances from and payables to employees denominated in USD and GBP and is therefore exposed to foreign exchange risk. These foreign currency monetary items are unhedged. Exchange differences arising on settlement or translation are recognised in the Statement of Profit and Loss.
2.40 CAPITAL MANAGEMENT
The Company's policy is to maintain a stable capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Management monitors the return on capital, as well as the level of dividends to equity shareholders. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to all its shareholders. For the purpose of the Company's capital management, capital includes issued capital and all other equity reserves.
The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.
2.43 NEW LABOUR CODES
Effective 21 November 2025, the Government of India consolidated multiple existing labour laws into a unified framework comprising four Labour Codes, collectively referred to as the 'New Labour Codes'. The Ministry of Labour & Employment notified Central Rules on 08 May 2026, however State Rules are yet to be notified. The Company has considered restructured compensation of its employees with effect from 01 April 2026 and assessed the impact of changes consistent with the New Labour Codes, rules and FAQs. Under Ind AS 19, changes to employee benefit plans arising from legislative amendments constitute a plan amendment and require recognition of the resulting past service cost immediately in the statement of profit and loss. The implementation of New Labour Codes has resulted in an increase of '15.39 million in the provision for defined benefit obligation, which has been recognised as an exceptional item in the statement of profit and loss in the current reporting period.
2.45 SHARE BASED PAYMENT ARRANGEMENT
(a) Stock Unit Plan 2023
Pursuant to the resolutions passed by the Board of Directors on 18 March 2023 and by the Shareholders on 06 May 2023, the Company approved ‘The Rainbow Children's Medicare Limited - Employee Stock Unit Plan 2023 (“Stock Unit Plan 2023”) in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (""SEBI SBEB SE Regulations""). The Stock Unit Plan 2023 is for issue of employee stock units to eligible employees, which may result in an issuance of a maximum number of 400,000 Equity Shares. Upon exercise and payment of the exercise price, an unit holder will be entitled to be allotted one Equity Share per employee stock unit.
Upon recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting held on 14 May 2023 and 07 August 2023, granted 275,000 and 37,414 Stock Units respectively under the Stock Unit Plan 2023 to its eligible employees which shall be exercisable into 312,414 equity shares having face value of '10 each fully paid-up. The exercise price per stock unit shall be the face value of equity shares of the Company i.e., '10 each. The vested Stock Units shall be exercisable within a period of three months from the date of each vesting. The Stock Units shall vest after the minimum vesting period of one year and not later than the maximum period of five years from the date of grant. The plan is in terms of SEBI SBEB SE Regulations.
*During the previous year, upon recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting held on 19 May 2024, vested 44,000 stock units under Stock Unit Plan 2023 at an exercise price of ' 10 per share to the Chief Operating Officer of the Company. Each stock unit represents one equity share of ' 10 each, fully paid-up. On 17 July 2024, the Nomination and Remuneration Committee through circular resolution allotted 44,000 equity shares of ' 10 each to the Chief Operating Officer of the Company.
During the previous year, upon recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting held on 13 August 2024, vested 5,986 stock units under Stock Unit Plan 2023 at an exercise price of ' 10 per share to the Chief Financial Officer of the Company. Each stock unit represents one equity share of ' 10 each, fully paid-up. On 22 August 2024, the Nomination and Remuneration Committee through circular resolution allotted 5,986 equity shares of ' 10 each to the Chief Financial Officer of the Company.
During the year, upon recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting held on 12 August 2025, vested 7,483 stock units under Stock Unit Plan 2023 at an exercise price of ' 10 per share to the Chief Financial Officer of the Company. Each stock unit represents one equity share of ' 10 each, fully paid-up. On 12 August 2025, the Nomination and Remuneration Committee through circular resolution allotted 7,483 equity shares of ' 10 each to the Chief Financial Officer of the Company.
#On 27 October 2024, the Company has accepted the resignation of an eligible employee. Accordingly, the Company has cancelled 220,000 stock units.
The weighted average share price at the date of exercise for options was ' 1,537.60 per share (31 March 2025 : ' 1,188.65 per share) and weighted average remaining contractual life for the share options outstanding as at 31 March 2026 was 2.41 years (31 March 2025: 3.41 years)
Fair value measurement
The fair value at grant date is determined using the Black Scholes valuation option-pricing model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
(b) ESOP Scheme 2025 :
Pursuant to the resolutions passed by the Board of Directors on 09 February 2025 and by the Shareholders on 02 April 2025, the Company approved ‘The Rainbow Children's Medicare Limited - Employee Stock Option Scheme 2025 (“ESOP Scheme 2025”) in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB SE Regulations"). The ESOP Scheme 2025 is for issue of employee stock options to eligible employees, which may result in an issuance of a maximum number of 1,015,000 Equity Shares. Upon exercise and payment of the exercise price, an option holder will be entitled to be allotted one Equity Share per employee stock option. The exercise price per option shall be determined by the Nomination and Remuneration Committee subject to a maximum discount of up to 20% from the market price of shares as on the date of Grant.
The Nomination and Remuneration Committee ("NRC") of the Company in its meeting held on 26 July 2025, 13 November 2025 and 28 January 2026 granted 140,810, 5,660 and 100,000 Stock options, respectively under the ESOP Scheme 2025 to its eligible employees which shall be exercisable into 246,470 equity shares, respectively, having face value of '10 each fully paid-up. The exercise price per stock option shall be determined at a discount of not more than 20% on the latest available closing price of the Company's equity shares on the National Stock Exchange of India Limited, being the stock exchange with the highest trading volume, as on 25 July 2025, 12 November 2025 and 27 January 2026, respectively, i.e., the trading day immediately preceding the date on which the grant of options was approved by the Nomination and Remuneration Committee. The stock options shall vest after the minimum vesting period of 1 year and not later than the maximum period of 10 years from the date of grant. The vested Stock options shall be exercisable within a period of maximum of 2 years from the date of each vesting.
Pursuant to the resolution passed by the Board of Directors on 09 February 2025, the Rainbow Employees Welfare Trust (the “ESOP Trust”) was formed to support the ESOP Scheme 2025 by acquiring through secondary market acquisitions, equity shares which are used for issuance to eligible employees upon exercise of stock options thereunder.
The Company has acquired 180,000 shares from the secondary market for an aggregate consideration of ' 212.96 million as at 31 March 2026. These shares are disclosed as treasury shares in other equity
2.46 OTHER STATUTORY INFORMATION
i. The Company do not have any Benami property and neither any proceedings have been initiated or is pending against the Company for holding any Benami property.
ii. The Company do not have any transactions with companies struck off.
iii. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory year.
iv. The Company has not been declared a wilful defaulter by any bank or financial institution or any other lender during the current year.
v. The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
vi. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
vii. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
viii. The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
ix. The Company has complied with the number of layers prescribed under the Companies Act, 2013.
x. The Company has not revalued its Property, plant and equipment (including right of use of assets) or intangible assets or both during the current or previous year.
xi. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
xii. There were no amounts which were required to be transferred to Investor Education Protection Fund by the Company.
2.47 The Company has used accounting software for maintaining its books of account (SAP) and software for maintenance of hospital related revenue and consumption records (Arcus Air) which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the softwares, except that audit trail feature is not enabled at the database level. Further no instance of audit trail feature being tampered with was noted in respect of the softwares where the audit trail has been enabled. Additionally, the audit trail of prior years has been preserved as per the statutory requirements for record retention to the extent it was enabled and recorded in the respective years.
2.48 SUBSEQUENT EVENTS
There are no significant adjusting events that occurred subsequent to the balance sheet date.
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