ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Gujarat Kidney and Super Speciality Ltd.

3.1 Property, plant and equipment:

Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. The cost comprises purchase price, taxes, duties (including import duties), freight
and any directly attributable cost of bringing the asset to its working condition for the intended use. Any
trade discounts and rebates are deducted in arriving at the purchase price.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total
cost of the item is depreciated separately. This applies mainly to components for machinery. 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. Likewise, when a major inspection is performed, its cost is
recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if
it increases the future benefits from its previously assessed standard of performance. All other expenses on
existing property, plant and equipment, including day-to-day repair and maintenance expenditure and cost of
replacing parts, are charged to the statement of profit and loss for the period during which such expenses are
incurred.

Borrowing costs directly attributable to acquisition of property, plant and equipment which take substantial
period of time to get ready for its intended use are also included to the extent they relate to the period till
such assets are ready to be put to use.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet
date is classified as capital advances under other non-current assets.

An item of property, plant and equipment and any significant part initially recognised is de-recognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the income statement when the Property, plant and equipment is
de-recognised.

Depreciation on property, plant and equipment is provided on written down value method based on
estimated useful life of assets as prescribed in part C of schedule II to the companies Act, 2013

3.2 Depreciation on property, plant and equipment (PPE) :

Depreciation on property, plant and equipment is calculated on a written down method over the estimated
useful lives of the assets prescribed in schedule II of the Companies Act 2013. However, in some cases, the
management basis its past experience/technical assessment made by the independent valuation expert
engaged by the Company, has estimated the useful lives, which is at variance with the life prescribed in Part C
of Schedule II to the Act and has accordingly, depreciated the assets over such useful lives. The estimated
useful lives, residual values and depreciation method are reviewed periodically, at least at each financial year-
end, with the effect of any changes in estimate accounted for on a prospective basis.

3.3 Intangible assets and intangible assets under development :

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
they are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Intangible
assets with finite lives are amortised on a straight-line basis over their useful economic lives and assessed for
impairment whenever there is an indication that their carrying amount may not be recovered. The
amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed
periodically.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and
loss when asset is de-recognised.

Development costs incurred on internally generated intangible assets, not ready for use are capitalised as
intangible assets under development.

3.4 Borrowing Costs :

Borrowing cost includes interest, commitment charges, brokerage, underwriting costs, discounts / premiums,
financing charges, exchange difference to the extent they are regarded as interest costs and all ancillary /
incidental costs incurred in connection with the arrangement of borrowing. Borrowing costs which are
directly attributable to acquisition / construction of qualifying assets that necessarily takes a substantial
period of time to get ready for its intended use are capitalised as a part of cost pertaining to those assets. All
other borrowing costs are recognised as expense in the period in which they are incurred. The capitalisation
of borrowing costs commences when the Company incurs expenditure for the asset, incurs borrowing cost
and undertakes activities that are necessary to prepare the asset for its intended use or sale. The
capitalisation of borrowing costs is suspended during extended periods in which active development of a
qualifying asset is suspended. The capitalisation of borrowing costs ceases when substantially all the activities
necessary to prepare the qualifying asset for its intended use.

3.5 Impairment of Property, plant and equipment and other intangible assets:

At the end of each reporting period, the Company reviews the carrying amounts of its PPE and other
intangible assets to determine whether there is any indication that these assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual
asset, the Company estimates the recoverable amount of the cash-generating unit (CGU) to which the asset
belongs. 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. The resulting impairment loss is
recognised in the Statement of Profit and Loss.

The recoverable amount is the higher of fair value less costs to sell 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. In
determining fair value less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used.

Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the asset or
CGU in prior years. A reversal of an impairment loss is recognised in the Statement of Profit and Loss.

3.6 Inventories:

Inventories of drugs, consumables, surgical items, and stores & spares are valued at lower of cost and net
realisable value. Cost includes the cost of purchase, duties, taxes (other than those recoverable from tax
authorities) and other cost incurred in bringing the inventories to their present location and condition. Cost is
determined on first-in first-out ("FIFO") basis. Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs necessary to make the sale.

3.7 Revenue recognition:

The Company earns revenue primarily by providing healthcare services, sale of drugs and medical
consumables. Other sources of revenue include medical service agreements, clinical trials, sponsorship etc.

a) Revenue from contracts with customers

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. Revenue is measured based on the transaction price, which is the
consideration, adjusted for discounts and other credits, if any, as specified in the contract with the customer.
Goods and services tax is not received by the Company on its own account. Rather, it is tax collected by the
seller on behalf of the government. Revenue is usually recognised when it is probable that economic benefits
associated with the transaction will flow to the entity, amount of revenue can be measured reliably and
entity retained neither ownership nor effective control over the goods sold or services rendered.

b) Revenue from 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 recognized as follows:

At a point in time: Revenue from pharmacy sales, consultation fees, and one-time medical procedures is
recognized when the customer obtains control of the service or product.

Over time: Revenue from long-term healthcare plans, inpatient hospital services, and clinical trials is
recognized as the services are rendered.

c) Revenue from sale of pharmaceutical products

Revenue from sale of pharmacy goods is recognised at a point in time when control of the goods is
transferred to the customer, and no significant uncertainty exists regarding the amount of the consideration
that will be derived from the sale of the goods and regarding its collection. The amount of revenue
recognised is net of sales returns, taxes and duties, wherever applicable.

d) Other Services rendered

Income from other services like sponsorship income, education income, clinical trials and other ancillary
activities is recognised based on the terms of the contract and when it is probable that economic benefits
associated with the transaction will flow to the entity and amount of revenue can be measured reliably.

e) Other Income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow
to the Company and the amount of income can be measured reliably. Interest income is accrued on a timely
basis, by reference to the principal outstanding and at the effective interest rate applicable. Dividend income
is recognised when the Company''s right to receive dividend is established by the reporting date. Dividend
income is included under the head "other income" in the statement of profit and loss.

3.8 Government Grant

Government grants are recognised where there is reasonable assurance that the grant will be received and all
the conditions attached with them will be complied with. When the grant relates to an expense item, it is
recognised as income on a systematic basis over the periods that the related costs, for which it is intended to
compensate, are expensed. When the grant relates to an asset, it is recognised as income in proportion to the
fulfilment of its obligations under such Government grant.

3.9 Employee Benefits

a) Short term employee benefits

Employee benefits payable wholly within twelve months of receiving services are classified as short-term
employee benefits. These benefits include salary and wages, bonus and exgratia. The undiscounted amount
of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as
the related service is rendered by the employees.

b) Post-Employment Benefits

The Company provides the following post employment benefits:

(i) Defined benefit plans such as gratuity; and

(ii) Defined contributions plan such as provident fund.

bi) Defined contribution plans - Provident fund

A defined contribution plan is a post-employment benefit plan under which an entity pays specified
contributions to separate entity and has no obligation to pay any further amounts. The Company makes
specified obligations towards employee provident fund to Government administered provident fund scheme
which is a defined contribution plan. The Company''s contributions are recognised as an expense in the
statement of profit and loss during the period in which the employee renders the related service.

bii) Defined benefit plans - Gratuity obligations

The liability or asset recognised in the balance sheet in respect of defined benefit pension and gratuity plans
is the present value of the defined benefit obligation at the end of the reporting period less the fair value of
plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit
method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows by reference to market yields at the end of the reporting period on government bonds that have
terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the
statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognised in the period in which they occur, directly in other comprehensive income.

3.10 Taxes on Income:

Tax expense comprises deferred tax and current tax expenses. Income tax expense is recognised in statement
of profit and loss except to the extent that it relates to equity, in which case it is recognised in equity or other
comprehensive income.

a) 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 in accordance with the Income Tax Act, 1961 and the Income Computation and
Disclosure Standards ("ICDS") enacted in India by using tax rates and tax laws that are enacted or
substantively enacted, at the reporting date.

Current income tax relating to items recognised outside profit or loss is included either in other
comprehensive income or in equity depending on the recognition of underlying transaction. 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.

b) Deferred tax

Deferred income tax is recognised using the balance sheet approach, deferred tax is recognised on temporary
differences at the balance sheet date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the reporting date, except when the deferred income tax arises
from the initial recognition of goodwill or an asset or liability in a transaction that is not a business
combination and affects neither accounting nor taxable profit or loss at the time of the transaction.

Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused
tax credits and unused tax losses, 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.

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 assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.

3.11 Earnings Per Share:

Basic earnings/ (loss) per share are calculated by dividing the net profit or loss for the period attributable to
equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the period. The weighted average number of equity shares
outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue,
share split, and reverse share split (consolidation of shares) that have changed the number of equity shares
outstanding, without a corresponding change in resources.

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

3.12 Cash & Cash Equivalents and cash flows

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the Company are segregated.

a) Cash and cash equivalents:

Cash and cash equivalents include cash in hand, demand deposits with banks and other short-term highly
liquid investments with original maturities of three months or less.