ಅಡಿಟರ್ಸ್ ರಿಪೋರ್ಟ್Nephrocare Health Services Ltd.

Mar 31, 2026

The key audit matter

How the matter was addressed in our audit

The Company derives revenue from providing dialysis services to patients through its network of dialysis centres. Revenue is primarily generated from contracts with governments and private hospitals, including company''s own centres. Revenue is recognized when the dialysis services are rendered to patients i.e. when all performance obligations have been satisfied. Revenue is the key performance indicator for the Company and its external stakeholders. Consequently, revenue recognition during the year has been identified as a key audit matter as there could be incentive or external pressure to meet expectations resulting in revenue being overstated or recognized before the services are rendered to patients.

In view of the significance of the matter, we applied the following audit procedures in this area, among others to obtain sufficient and appropriate audit evidence: • Assessed whether the Company''s revenue recognition policies a re consistent with applicable accounting sta nda rds. • Evaluated the design and implementation and tested the operating effectiveness of the key internal controls, including general information and technology (IT) controls and key IT application controls in relation to recognition of revenue. • Selected revenue transactions recorded during the year using statistical sampling and, for the samples selected, verified the underlying documents such as sales invoices, treatment charts and patient Know Your Customer (KYC) documents to assess whether the revenue is recorded in the period in which the revenue recognition criteria are met.

The key audit matter	How the matter was addressed in our audit
	• Performed analytical procedures on revenue recognized during the year, including analysis of number of sessions, revenue per session, and capacity utilization to identify unusual variances.
	• Performed a revenue-to-cash reconciliation for the year under audit and analysed reconciling items to identify unusual or unexpected variances.
	• Examined journal entries posted to revenue account during the year based upon specified risk-based criteria, to identify unusual or irregular items.
	• Assessed the adequacy of disclosures in the standalone financial statements are in accordance with the applicable accounti ng standards.

We have audited the standalone financial statements of
Nephrocare Health Services Limited (formerly known as
Nephrocare Health Services Private Limited) (the "Company")
which comprise the standalone balance sheet as at 31 March
2026, a nd the sta nda lone statement of profit a nd loss (i ncluding
other comprehensive income), standalone statement of
changes in equity and standalone statement of cash flows
for the year then ended, and notes to the standalone financial
statements, including material accounting policies and other
explanatory information.

In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies
Act, 2013 ("Act") in the manner so required and give a true and
fair view in conformity with the accounting principles generally
accepted in India, of the state of affairs of the Company as at
31 March 2026, and its loss and other comprehensive income,
changes in equity and its cash flows for the year ended on that
date.

Revenue RecognitionSee Note 28 to standalone financial statementsBASIS FOR OPINION

We conducted our audit in accordance with the Standards
on Auditing (SAs) specified under Section 143(10) of the Act.
Our responsibilities under those SAs are further described in
the Auditor''s Responsibilities for the Audit of the Standalone
Financial Statements section of our report. We are independent
of the Company in accordance with the Code of Ethics issued
by the Institute of Chartered Accountants of India together with
the ethical requirements that are relevant to our audit of the
standalone financial statements under the provisions of the Act
and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion on the standalone financial statements.

KEY AUDIT MATTER

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the standalone
financial statements of the current period. These matters were
addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.

OTHER INFORMATION

The Company''s Management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the annual report, but
does not include the financial statements and auditor''s report(s)
thereon. The annual report is expected to be made available to
us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not
cover the other information and we will not express any form of
assurance conclusion thereon.

In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so,
consider whether the other information is materially inconsistent
with the standalone financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated.

When we read the annual report, if we conclude that there is a
material misstatement therein, we are required to communicate
the matter to those charged with governance and take necessary
actions, as applicable under the relevant laws and regulations.

MANAGEMENT''S AND BOARD OF DIRECTOR''S
RESPONSIBILITIES FOR THE STANDALONE FINANCIAL
STATEMENTS

The Company''s Management and Board of Directors are
responsible for the matters stated in Section 134(5) of the Act
with respect to the preparation of these standalone financial
statements that give a true and fair view of the state of affairs,
profit/ loss and other comprehensive income, changes in
equity and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the

Indian Accounting Standards (Ind AS) specified under Section
133 of the Act. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions
of the Act for safeguarding of the assets of the Company and for
preventi ng a nd detecti ng frauds and other irregu la rities; selection
and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the standalone financial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the
Management and Board of Directors are responsible for
assessing the Company''s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Board
of Directors either intends to liquidate the Company or to cease
operations, or has no realistic a lternative but to do so.

The Board of Directors is also responsible for overseeing the
Company''s financial reporting process.

AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE
STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole are free
from material misstatement, whether due to fraud or error, and
to issue an auditor''s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
standalone financial statements.

As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:

• I dentify and assess the risks of material misstatement of
the standalone financial statements, whether due to fraud
or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3)

(i) of the Act, we are also responsible for expressing our
opinion on whether the company has adequate internal
financial controls with reference to financial statements in
place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by the Management and Board of
Directors.

• Conclude on the appropriateness of the Management
and Board of Directors use of the going concern basis
of accounting in preparation of standalone financial
statements and, based on the audit evidence obtained,
whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the
Company''s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required
to draw attention in our auditor''s report to the related
disclosures in the standalone financial statements or, if
such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained
up to the date of our auditor''s report. However, future
events or conditions may cause the Company to cease to
continue as a going concern.

• Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.

We communicate with those charged with governance
regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related
safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor''s report unless law or
regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order,
2020 ("the Order") issued by the Central Government
of India in terms of Section 143(11) of the Act, we give in
the "Annexure A" a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.

2 A. As required by Section 143(3) of the Act, we report
that:

a. We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.

b. I n our opinion, proper books of account as required
by law have been kept by the Company so far as it
appears from our examination of those books except
for the matters stated in the paragraph 2B(f) below
on reporting under Rule 11(g) of the Companies (Audit
and Auditors) Rules, 2014.

c. The standalone balance sheet, the standalone
statement of profit and loss (including other
comprehensive income), the standalone statement
of changes in equity and the standa lone statement of
cash flows dealt with by this Report are in agreement
with the books of account.

d. In our opinion, the aforesaid standalone financial
statements comply with the Ind AS specified under
Section 133 of the Act.

e. On the basis of the written representations received
from the directors on 1 April 2026 taken on record
by the Board of Directors, none of the directors
is disqualified as on 31 March 2026 from being
appointed as a director in terms of Section 164(2) of
the Act.

f. the qualification relating to the maintenance of
accounts and other matters connected therewith are
as stated in the paragraph 2A(b) above on reporting
under Section 143(3)(b) of the Act and paragraph
2B(f) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.

g. With respect to the adequacy of the internal financial
controls with reference to financial statements of the
Company and the operating effectiveness of such
controls, refer to our separate Report in "Annexure B".

B. With respect to the other matters to be included in
the Auditor''s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and
according to the explanations given to us:

a. The Company has disclosed the impact of pending
litigations as at 31 March 2026 on its financial position
in its standalone financial statements - Refer Note
41(A) to the standalone financial statements.

b. The Company did not have any long-term contracts
including derivative contracts for which there were
any material foreseeable losses.

c. There were no amounts which were required to be
transferred to the Investor Education and Protection
Fund by the Company.

d (i) The management has represented that, to the
best of their knowledge and belief, other than
as disclosed in the Note 46(i) to the standalone
financial statements, no funds have been
advanced or loaned or invested (either from
borrowed funds or share premium or any other
sources or kind of funds) by the Company to or
in any other person(s) or entity(ies), including
foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or
otherwise, that the Intermediary shall 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 provide any guarantee,
security or the like on behalf of the Ultimate
Beneficiaries.

(ii) The management has represented that, to the
best of their knowledge and belief, as disclosed
in the Note 46(ii) to the standalone financial
statements, no funds have been received by
the Company from any person(s) or entity(ies),
including foreign entities ("Funding Parties"),
with the understanding, whether recorded in
writing or otherwise, that the Company shall
directly or indirectly, lend or invest in other
persons or entities identified in any manner
whatsoever by or on behalf of the Funding
Parties ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the
Ultimate Beneficiaries.

(iii) Based on the audit procedures that have been
considered reasonable and appropriate in
the circumstances, nothing has come to our
notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of
Rule 11(e), as provided under (i) and (ii) above,
contain any material misstatement.

e. The Company has neither declared nor paid any
dividend during the year.

f. Based on our examination which included test
checks, the Company has used accounting softwares
for maintaining its books of account which have 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 in
the absence of independent auditor''s report in relation
to the database level controls at service organisation
for accounting software used for maintaining general
ledger, which is operated by a third-party software
service provider, we are unable to comment whether
audit trail feature of the said software was enabled at
the database level and operated throughout the year
for all relevant transactions recorded in the software.

Further, for the periods where audit trail (edit log)
facility was enabled and operated for the respective
accounting softwares, we did not come across any
instance of the audit trail feature being tampered with.
Additionally, except where independent auditors''
reports on audit trail for softwares operated by third
party service providers are not available and except

for instances where the audit trail was not enabled
at the application layer during the previous year, the
audit trail has been preserved by the Company as per
the statutory requirements for record retention.

C. With respect to the matter to be included in the
Auditor''s Report under Section 197(16) of the Act:

In our opinion and according to the information and
explanations given to us, the remuneration paid by the
Company to its directors during the current year is in
accordance with the provisions of Section 197 of the Act.
The remuneration paid to any director is not in excess
of the limit laid down under Section 197 of the Act. The
Ministry of Corporate Affairs has not prescribed other

details under Section 197(16) of the Act which are required
to be commented upon by us.

For B S R and Co

Chartered Accountants
Firm''s Registration No.:128510W

Amit Kumar Bajaj

Partner

Place: Hyderabad Membership No.: 218685

Date: 19 May 2026 ICAI UDIN:26218685AGUPXX7208