The following discussion of our financial condition and results of operations should be read in conjunction with our "Restated Consolidated Financial Information" on page 296. Unless otherwise indicated or the context otherwise requires, the financial information for the six months ended September 30, 2024 and Fiscals 2024, 2023 and 2022 included herein is derived from the Restated Consolidated Financial Information, included in this Draft Red Herring Prospectus, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. For further information, see "Restated Consolidated Financial Information" on page 296.
This Draft Red Herring Prospectus also contains forward-looking statements that involve risks, assumptions, estimates and uncertainties and other factors, many of which are beyond our control and may affect our business, financial condition or results of operations. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to the considerations described below and elsewhere in this Draft Red Herring Prospectus. For details, see "Forward-Looking Statements", on page 28 of this Draft Red Herring Prospectus.
Unless otherwise indicated, industry and market data used in this section has been derived from the report titled "Assessment of Healthcare delivery sector in India with a focus on North India" dated March 2025 (the "CRISIL Report"), exclusively prepared and issued by CRISIL M&IA, who were appointed by our Company pursuant to an engagement letter dated December 20, 2024. The CRISIL Report has been exclusively commissioned and paid for by us in connection with the Offer. The data included herein includes excerpts from the CRISIL Report and may have been re-ordered by us for the purposes of presentation. A copy of the CRISIL Report is available on the website of https://www.parkhospital.in/investor-relations/shareholders-information/ipo-documents. Unless otherwise indicated, financial, operational, industry and other related information derived from the CRISIL Report and included herein with respect to any particular year refers to such information for the relevant calendar year. For further information, see "Risk Factors Industry information included in this Draft Red Herring Prospectus has been derived from an industry report commissioned by us, and paid for by us for such a purpose." on page 53. Also see, "Certain Conventions, Presentation of Financial, Industry and Market Data and Currency of Presentation Industry and
Market Data" on page 26.
Our Companys financial year commences on April 1 and ends on March 31 of the subsequent year, and references to a particular Fiscal are to the 12 months ended March 31 of that year.
OVERVIEW
For information in relation to our business, see "Our Business" on page 233.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Our results of operations and financial condition are affected by a number of important factors including:
Patient volume, utilization levels and mix of healthcare services
Our results of operations are influenced by the number of patients utilizing our services across our hospitals and the utilization rates of the healthcare services we offer. These services include hospitalizations, surgeries, emergency care and consultations. Patient volume and utilization rates are impacted by various factors, including the location of our hospitals and demand for healthcare services from local communities, the quality of care we provide, the reputation of our doctors, the range of services offered, our ability to stay current with advancements in medical technology, seasonal illness trends, and competition from other healthcare providers.
The table below provides certain operational and financial information during the six months ended September 30, 2024 and the last three Fiscals:
| Particulars | As of the six months ended September 30, 2024 | As of the year ended March 31, 2024 | As of the year ended March 31, 2023 | As of the year ended March 31, 2022 |
| Bed capacity(1) (count) | 3,000 | 2,900 | 2,550 | 2,250 |
| Number of operational beds(2) (count) | 2,800 | 2,700 | 2,400 | 2,150 |
| In-patient volume(3) (count) | 40,368 | 73,284 | 73,084 | 62,106 |
| In-patient revenue(4) ( million) | 6,652.04 | 11,851.95 | 12,212.44 | 10,403.56 |
| Out-patient volume(5) (count) | 308,352 | 497,694 | 358,511 | 343,933 |
| Out-patient revenue(6) ( million) | 252.87 | 438.69 | 311.31 | 309.59 |
| Particulars | As of the six months ended September 30, 2024 | As of the year ended March 31, 2024 | As of the year ended March 31, 2023 | As of the year ended March 31, 2022 |
| Bed occupancy rate(7) (%) | 62.25% | 59.81% | 75.13% | 71.60% |
| Average revenue per occupied bed(8) ("ARPOB") ( ) | 25,674 | 24,919 | 24,575 | 24,407 |
| Average length of stay(9) ("ALOS") (in days) | 6.66 | 6.73 | 6.97 | 7.07 |
Notes:
1. Bed capacity is as at end of the relevant period / year and denotes the number of beds for which the civil structure has been planned for.
2. Number of operational beds includes census beds (beds available for mid-night occupancy such as ICUs and wards) and non-census beds (all other beds available other than census beds, such as day-care beds and casualty beds).
3. In-patient volume refers to the total number of patients who have been admitted to a healthcare facility for treatment and subsequently discharged in the relevant period / year.
4. In-patient revenue refers to the income generated from patients who are admitted to the hospital for at least one overnight stay during the relevant period / year.
5. Out-patient volume refers to the total number of out-patient visits for consultations within the relevant period / year.
6. Out-patient revenue includes revenue earned from services provided to patients who visit the hospital or clinic for treatment during the relevant period / year, but do not require an overnight stay.
7. Bed occupancy rate is calculated by dividing the total number of occupied beds by the total number of operational beds.
8. ARPOB is calculated as revenue from sale of services - healthcare divided by number of occupied bed days in the relevant period / year.
9. ALOS is calculated as the average number of days spent by admitted in-patients in the relevant period / year.
During the six months ended September 30, 2024 and the last three Fiscals, we have witnessed an increase in our ARPOB as reflected in the table above. We have also focussed on optimizing our ALOS, which refers to the average number of days that a patient spends in our hospital. We have increased our bed capacity from 2,250 beds as of March 31, 2022 to 3,000 beds as of September 30, 2024. We will continue to invest capital in increasing our bed capacity, modernizing infrastructure at our hospitals, introducing new technologies, and expanding our range of services.
Further, the mix of healthcare services that we provide also affects our revenues, since complex procedures generate higher revenues. In addition, international, cash walk-in and privately insured patients may account for a higher ARPOB for such procedures as compared to publicly insured patients or patients under government schemes, primarily due to tariff differences. The table below provides details of revenue generated by specialties across our hospitals in the periods indicated:
| Specialty | Six months ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Amount (in million) | Percentage of Revenue from Operations | Amount (in million) | Percentage of Revenue from Operations | Amount (in million) | Amount (in million) | Amount (in million) | Amount (in million) | |
| Internal Medicine | 2,558.42 | 37.00% | 4,640.74 | 37.70% | 5,165.28 | 41.17% | 4,986.68 | 45.99% |
| Neurology | 1,022.48 | 14.79% | 1,626.96 | 13.22% | 1,728.46 | 13.78% | 1,101.96 | 10.16% |
| Urology | 748.01 | 10.82% | 1,303.21 | 10.59% | 1,231.77 | 9.82% | 848.22 | 7.82% |
| Gastroenterology | 637.09 | 9.21% | 1,027.70 | 8.35% | 991.16 | 7.90% | 908.39 | 8.38% |
| Cardiology | 629.93 | 9.11% | 1,169.49 | 9.50% | 934.75 | 7.45% | 692.23 | 6.38% |
| General Surgery | 404.18 | 5.84% | 978.30 | 7.95% | 869.29 | 6.93% | 758.30 | 6.99% |
| Orthopedic | 373.42 | 5.40% | 684.22 | 5.56% | 673.15 | 5.37% | 506.12 | 4.67% |
| Oncology | 299.88 | 4.34% | 681.97 | 5.54% | 615.25 | 4.90% | 617.89 | 5.70% |
| Others* | 241.66 | 3.49% | 198.06 | 1.61% | 336.84 | 2.68% | 424.05 | 3.91% |
| Total | 6,915.06 | 100.00% | 12,310.66 | 100.00% | 12,545.95 | 100.00% | 10,843.83 | 100.00% |
Others primarily includes revenue from other specialty services as well as revenue from sale of medicines by Park Medicity Haryana Private Limited.
Attracting new and retaining existing doctors, nurses and medical professionals
We depend on our doctors, nurses, medical professionals and support staff for our day-to-day operations and overall performance. Consequently, our ability to attract and retain such personnel is critical to our business. In India, the demand for skilled and experienced medical professionals is substantial, yet their availability remains limited, posing challenges in hiring and retaining senior doctors. Critical factors influencing doctors employment decisions include the reputation of the hospital, the quality of the facilities, the range of specialties offered by the hospital, the ability of the hospital to attract adequate patient load, research and teaching opportunities and compensation. As of September 30, 2024, we had a team of over 891 doctors, 1,912 nurses, 671 medical professionals and 1,761 support staff. The table below provides details of our employee benefit expenses and professional and consultancy fees for the six months ended September 30, 2024 and the last three Fiscals:
| Particulars | Six months ended September 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Amount (in million) | Percentage of total expenses (%) | Amount (in million) | Percentage of total expenses (%) | Amount (in million) | Percentage of total expenses (%) | Amount (in million) | Percentage of total expenses (%) | |
| Employee benefit expenses | 1,306.80 | 23.34% | 2,319.56 | 22.27% | 2,182.17 | 22.84% | 1,373.57 | 16.84% |
| Professional and consultancy fees | 934.04 | 16.68% | 1,562.89 | 15.00% | 1,344.65 | 14.07% | 1,188.89 | 14.58% |
We believe that the retention of our staff aids in achieving our goal of providing high levels of patient care at affordable rates. As we continue to expand our network of hospitals, we will focus on attracting and retaining our clinicians and other healthcare providers. While recruiting new clinicians will increase our employee benefits expenses and professional and consultancy fees, we believe that in the long term it will help drive our revenue growth and profitability.
Cost of medical consumables and drugs
Our profitability is affected by the cost of medical consumables, pharmacy items, drugs and surgical instruments that we require for our operations. Our cost of materials consumed / services rendered were 1,486.82 million, 2,468.33 million, 1,944.91 million and 1,559.77 million, representing 21.02%, 19.54%, 15.29% and 14.26% of our total income for the six months ended September 30, 2024 and Fiscals 2024, 2023 and 2022, respectively. We source medical consumables and drugs from third party vendors. For details, see "Risk Factors We rely on third party vendors for certain of our supplies and equipment and the provision of certain services at our hospitals. Failure to procure such supplies and equipment or obtain such services from third parties on a timely basis, or failure of such third parties to meet their obligations to us, could adversely affect our business, results of operations and cash flows" on page 46. We select vendors on the basis of factors including price and financial terms offered, quality of products and services supplied, vendor history and delivery capability. The cost of our supplies are affected by factors such as our ability to negotiate with our vendors and we have a supply chain management team that monitors the purchase of our supplies at a central level. As we continue to grow our network of hospitals and increase our bed capacity, we expect our cost of material consumed to increase and we will continue to optimize such expenses by leveraging economies of scale available to us and lower such expenses as a percentage of our total income.
Extensive Government Regulations in the Healthcare Sector
The healthcare industry is heavily regulated by the Government of India and state governments in order to ensure that quality treatment is available for the public at large at affordable rates. The laws, regulations, policies, guidelines and licensing and accreditation requirements that we are subject to cover many aspects of our business. The regulations applicable to us may be frequently updates and changed, requiring continuous monitoring and adaptation, which can be resource-intensive. While these regulations aim to ensure patient safety and high-quality care, we may incur substantial costs to comply with current or future laws, rules and regulations.
Further, government agencies have broad discretion to change or eliminate programs that contribute to our results of operations. For example, our revenues have been impacted in the past due to policy changes in the price of central government health scheme ("CGHS"), adoption of CGHS pricing by many state governments and PSUs, price caps on implants by the National Pharmaceutical Pricing Authority and fixed price for treatments by state governments during the COVID-19 pandemic. However, the Government has recently increased the prices of CGHS scheme which is generally followed by all the government schemes. We believe that the prices of such schemes will continue to increase in order to meet the corresponding increase in inflation levels and will help us increase our revenues.
We are also governed by laws and regulations concerning our relationships with employees, including minimum wage, maximum working hours, overtime, working conditions, and the hiring and termination of staff. Our results of operations may be affected by changes in labour laws including the Code on Social Security, 2020, which has yet to come in effect and may result in an increase in our employee cost. Should labour laws become more stringent, it may become challenging to maintain and optimize our flexible human resource policies.
The performance of our existing hospitals and our expansion plans
We operate 13 NABH accredited hospitals across New Delhi, Haryana, Punjab and Rajasthan and our results of operations are affected by our ability to manage our network of hospitals. Our concentration in North India exposes us to adverse economic and other circumstances that affect demand for healthcare services in the region. Geographic concentration leads to susceptibility to any regional economic downturns, political instability, or changes in local healthcare policies that could disproportionately impact our results of operations. Further, competition from other healthcare providers in North India affects our ability to attract and retain patients.
Our results of operations will also be affected by our expansion plans. We have historically undertaken several acquisitions to increase our overall bed capacity and will continue to evaluate inorganic opportunities and construct new hospitals to expand our network. For details of the acquisitions completed by us, see "Our Business Strengths Track record of successfully acquiring and integrating hospitals" on page 239. As part of our current expansion plans, in Ambala, we have bought land adjacent to our existing hospital and are in the process of increasing our bed capacity from 250 beds to 450 beds and set up an onco-radiation facility, which is expected to be operational by October 2027. In Panchkula, we are in the process of constructing a hospital with a capacity of 300 beds, which is expected to be operational by April 2026, while in Rohtak, we are constructing a hospital with a capacity of 250 beds, which is expected to be operational by December 2026. Further, one of our Subsidiaries, Blue Heavens, has submitted a resolution plan dated June 18, 2024, before the resolution professional, for the proposed acquisition of Durah Vitrak Private Limited (i.e., Febris Multi Specialty Hospital in New Delhi). Pursuant to a Letter of Intent dated July 22, 2024, issued by the resolution professional, Blue Heavens has been declared as a successful resolution applicant. The resolution plan will be effective once it is approved by the National Company Law Tribunal, New Delhi. As on the date of this Draft Red Herring Prospectus, our resolution plan is under consideration before the National Company Law Tribunal, New Delhi. Further, our Company has entered into an operations and management agreement dated July 3, 2024 with Lalji Superspeciality Hospital and Research Centre Gorakhpur Private Limited and Dr. Saranjit Singh to operate a hospital with a capacity of 400 beds in Gorakhpur, Uttar Pradesh for a term of 30 years until December 2055 on a revenue share basis. We expect to commence operations at this hospital by April 2026. Our expansion plans may require us to incur significant expenditure in constructing and establishing our hospitals. We are required to have most of the infrastructure of a new hospital in place before we commence operations and will incur operating expenses before we are able to ramp up our operations. A new hospital typically has a gestation period of 12 to 24 months before patient volumes reach targeted levels and it may take us some time to become profitable at such locations.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
Basis of Preparation and Presentation
Our Restated Consolidated Financial Information comprise the restated consolidated statement of assets and liabilities as at September 30, 2024, March 31, 2024, March 31, 2023 and March 31, 2022, the restated consolidated statements of profit and loss (including other comprehensive income), the restated consolidated statement of changes in equity and the restated consolidated statement of cash flows for the six months ended September 30, 2024 and the years ended March 31, 2024, March 31, 2023 and March 31, 2022, and the notes, comprising material accounting policy information and other explanatory information. The Restated Consolidated Financial Information have been approved by our Board of Directors at their meeting and has been specifically prepared for inclusion in this Draft Red Herring Prospectus to be filed by us with SEBI and the Stock Exchanges in connection with the Offer. The Restated Consolidated Financial Information has been prepared by our management to comply in all material respects with the requirements of:
a) Section 26 of Part I of Chapter III of the Companies Act, 2013 as amended from time to time; b) SEBI ICDR Regulations; and c) Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India, as amended from time to time.
The Restated Consolidated Financial Information has been compiled by the management from the audited consolidated financial statements of the Group as at and for the six month period ended September 30, 2024 and year ended 31 March 2024, and special purpose consolidated financial statements for the years ended 31 March 2023 and 31 March 2022 prepared in accordance with Ind AS as prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India.
The Restated Consolidated Financial Information have been prepared so as to contain information / disclosures and incorporating adjustments set out below in accordance with the SEBI ICDR Regulations:
a) Adjustments to the profits or losses of the earlier years and of the year in which the change in the accounting policy has taken place is recomputed to reflect what the profits or losses of those years would have been if a uniform accounting policy was followed in each of these years, if any; b) Adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities, in order to bring them in line with the groupings as per the consolidated financial statements of the Group as at and for the period ended March 31, 2024 and the requirements of the SEBI ICDR Regulations, if any; and c) The resultant impact of tax due to the aforesaid adjustments, if any.
The Restated Consolidated Financial Information have been prepared on accrual and going concern basis. The accounting policies have been consistently applied by our Company in preparation of the Restated Consolidated Financial Information and are consistent with those adopted in the preparation of the consolidated financial statements as at and for the six-month period ended September 30, 2024.
Functional and presentation currency
These Restated Consolidated Financial Information are prepared in INR millions, which is the Groups functional and presentation currency. All amounts have been rounded-off to the nearest millions and two decimals thereof except share data and per share data, unless otherwise stated.
Basis of Measurement
These Restated Consolidated Financial Information have been prepared on the historical cost basis, except for share based payments and certain financial assets and financial liabilities which are measured at fair value.
Current versus non-current classification
All assets and liabilities have been classified as current or non-current as per the operating cycle and other criteria set out in Division II of Schedule III of the Companies Act, 2013. Based on the nature of the operations and the time between the acquisition of assets for processing/servicing and their realisation in cash or cash equivalents, the Group has ascertained its operating cycle as twelve months for the purpose of current/non-current classification of assets and liabilities.
Recent accounting pronouncement
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules 2015, as issued from time to time. For the period ended September 30, 2024 and year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Group.
Use of Estimates and Judgements
The preparation of these Restated Consolidated Financial Information in conformity with recognition and measurement principles of Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses as well as disclosures. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods prospectively.
In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effects on the amount recognised in the Restated Consolidated Financial Information pertains to:
Useful lives of property plant and equipment
The Group depreciates property, plant and equipment on a written down value basis over estimated useful lives Of the assets. the charge in respect of periodic depreciation is derived based on an estimate of an assets expected useful life and the expected residual value at the end of its life. the lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. The Group reviews the estimated useful life of Property plant and equipment and intangible assets at each reporting period.
Impairment of Financial Assets
The impairment provisions for trade receivables is based on assumptions about risk of default and expected loss rates. The Group uses judgements in making certain assumptions and selecting inputs to determine impairment of these trade receivables, based on the reasonable and supportable information including historic loss rates, present developments such as liquidity issues and information about future economic conditions, to ensure foreseeable changes in the customer-specific or macroeconomic environment are considered.
Income tax
Recognition of deferred tax assets/ liabilities involves making judgements and estimations about the availability of future taxable profit against which tax losses carried forward can be used. A deferred tax asset is recognised for unused tax losses and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Provision for tax liabilities require judgements on the interpretation of tax legislation, developments in case laws and the potential outcomes of appeals which may be subject to significant uncertainty. Therefore, the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax assets and therefore the tax charge in the restated consolidated statement of profit and loss.
Litigations
The Group is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made, and the amount of the loss can be reasonably estimated. Significant judgement is made when evaluating, among other factors, the probability of unfavourable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting period and revisions made for the changes in facts and circumstances.
Employee Benefits Obligations
The cost of the defined benefit plans is based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, attrition and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Leases
Factors in determining the lease term
Ind AS 116 defines a lease term as the non-cancellable period for which the lessee has the Right-to- use an underlying asset including optional periods, when an entity is reasonably certain to exercise an option to extend (or not to terminate) a lease. The Group considers all relevant facts and circumstances that create an economic incentive for the lessee to exercise the option when determining the lease term. The option to extend the lease term is included in the lease term, if it is reasonably certain that the lessee would exercise the option. The Group reassesses the option when significant events or changes in circumstances occur that are within the control of the lessee.
Factors in determining the discount rate
The discount rate is generally established keeping in view the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics and other factors.
Impairment of investments in subsidiaries, associates and joint ventures:
The Group conducts impairment reviews of investments in subsidiaries / associates / joint arrangements whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable or tests for impairment annually. Determining whether an asset is impaired requires an estimation of the recoverable amount, which requires the Group to estimate the value in use determined using a discounted cash flow approach based upon the cash flow expected to be generated by the investment. In case that the value in use of the investment is less than its carrying amount, the difference is at first recorded as an impairment of the carrying amount of the goodwill.
Impairment of Non - Financial Assets
Determining whether the asset is impaired requires assessing the recoverable amount of the asset or Cash Generating Unit (CGU) which is compared to the carrying amount of the asset or CGU, as applicable. Recoverable amount is the higher of fair value less costs of disposal and value in use. Where the carrying amount of an asset or CGU exceeds the recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
Measurement of Fair Value
The Group measures financial instruments at fair value at each reporting date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
(i) In the principal market for asset or liability, or
(ii) In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non- financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Restated Consolidated Summary Statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the Restated Consolidated Summary Statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to fair value measurement as a whole) at the end of each reporting period.
Basis of Consolidation
The Restated Consolidated Financial Information comprises the financial statements of our Company and our Subsidiaries. Subsidiaries are all entities over which the Group has control. Control exists when the parent has power over the entity or has rights to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entitys returns. Subsidiaries are consolidated from the date control commences until the date control ceases. The financial statements of the Group companies are consolidated on a line-by-line basis and intra-group balances and transactions including unrealized gain / loss from such transactions are eliminated upon consolidation. These financial statements are prepared by applying uniform accounting policies in use at the Group. Non-controlling interests which represent part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by our Company, are excluded.
Property, Plant and Equipment
Property, Plant and Equipment are measured at cost less accumulated depreciation and accumulated impairment losses. The cost comprises of purchase price, taxes, duties, freight and other incidental expenses directly attributable and related to acquisition and installation of the concerned assets and are further adjusted by the amount of input tax credit availed wherever applicable. Leasehold land which is perpetual in nature is not depreciated.
Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long term construction projects if the recognition criteria are met.
When significant parts of plant and equipment are required to be replaced at intervals, the Group 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. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
Subsequent costs are included in assets carrying amount or recognised as separate assets, as appropriate, only when it is probable that future economic benefit associated with the item will flow to the Group and the cost of item can be measured reliably.
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.
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. Capital work in progress is stated at cost, net of accumulated impairment loss, if any. Capital work-in-progress includes property, plant and equipment under construction and not ready for intended use as on the balance sheet date.
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.
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 written down value 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 of the Companies Act, 2013.
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.
Estimated useful lives of the assets are as follows:
| Category of Assets | Useful (Life in years) |
| Buildings | 60 years |
| Electrical Installation and Generators | 10 years |
| Medical Equipment | 10 years |
| Furniture and Fixtures | 10 years |
| Vehicles | 8 years |
| Office Equipments | 5 years |
| Computers and servers | 3 years |
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.
Investment Property
Properties held to earn rentals are classified as investment property and are measured and reported at cost, including transaction costs, in accordance with the Groups accounting policy. Policies with respect to depreciation, useful life and derecognition are on the same basis as stated for Property, Plant & Equipment above.
Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss, when the asset is derecognised.
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.
Useful Lives of Intangible Assets
Estimated useful lives of the intangible assets are as follows:
| Category of assets | Useful Life (In years) |
| Software License | 3 |
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.
Inventories
Inventories of are valued at lower of cost or net realizable value. Inventories consists of stores and spare parts and other consumables. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in, first out basis. Net Realizable Value represents the estimated selling price in the ordinary course of business less estimated costs necessary to make the sale.
Leases
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset is classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Group to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Groups 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 net investment outstanding in respect of the lease.
The Group as Lessee
The Group enters into an arrangement for lease of land, buildings, plant and machinery including office equipment. Such arrangements are generally for a fixed period but may have extension or termination options. The Group 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
control the use of an identified asset,
obtain substantially all the economic benefits from use of the identified asset, and direct the use of the identified asset.
The Group 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 Group is reasonably certain to exercise that option.
The Group 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 Group 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 Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
fixed lease payments (including in-substance fixed payments), less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; the amount expected to be payable by the lessee under residual value guarantees; lease payments in optional renewal periods, where exercise of extension options is reasonably certain, and 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 the statement of cash flows.
The Group remeasure the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
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; 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); or 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,
initial direct costs incurred when entering into the lease,
(lease) 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 Group 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 Group 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 Group 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 Group 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 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.
Borrowings and Borrowing Costs
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 is substantially ready for their intended use.
Interest 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.
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
Debt instruments at amortised cost
Debt instruments at fair value through other comprehensive income ("FVOCI")
Debt instruments, derivatives and equity instruments at fair value through profit or loss ("FVTPL")
Equity instruments measured at fair value through other comprehensive income ("FVOCI")
Impairment of financial assets
The Group recognises loss allowance using the expected credit loss ("ECL") model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all financial assets with contractual cash flows other than trade receivable, ECLs are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting date is recognised as an impairment gain or loss in the statement of profit or loss. The Group considers a financial asset to be in default when the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held).
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Groups balance sheet) when:
The rights to receive cash flows from the asset have expired, or
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘passthrough arrangement; and either:
o the Group has transferred substantially all the risks and rewards of the asset, or o the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Groups continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Write-off of financial assets
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Groups procedures for recovery of amounts due.
Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
The Groups financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and financial guarantee contracts.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in two categories:
Financial liabilities at fair value through profit or loss
Financial liabilities at amortised cost
All financial liabilities are subsequently measured at amortised cost using the effective interest method.
The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included in the ‘Finance costs line item.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Financial guarantee contracts
Financial guarantee contracts issued by the group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115.
Derecognition of Financial Liabilities
The Group derecognises financial liabilities when, and only when, the Groups obligations are discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognised in the statement of profit and loss.
Equity Instruments
Repurchase of the Groups own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in statement of profit and loss on the purchase, sale, issue or cancellation of the Groups own equity instruments.
Debt Instruments
Debt instruments at amortised cost
A ‘debt instrument is measured at the amortised cost if the asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest ("SPPI") on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate
("EIR") method. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the gross carrying amount of the financial asset or the amortised cost of the financial liability. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in other income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss. This category generally applies to trade and other receivables.
Debt instrument at FVOCI
A ‘debt instrument is classified as at the FVOCI if the objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and the assets contractual cash flows represent SPPI.
Debt instruments included within the FVOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in the other comprehensive income ("OCI"). On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified to the statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVOCI, is classified as at FVTPL. In addition, at initial recognition, the Group may irrevocably elect to designate a debt instrument, which otherwise meets amortised cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch).
Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit or loss.
Equity Investments
On initial recognition, the Group can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the ‘Reserve for equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to statement of profit and loss on disposal of the investments.
A financial asset is held for trading if: it has been acquired principally for the purpose of selling it in the near term; or on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or it is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.
Dividends on these investments in equity instruments are recognised in statement of profit and loss when the Groups right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
Dividends recognised in statement of profit and loss are included in the ‘Other income line item.
Cash and Cash Equivalents
The Group considers all highly liquid financial instruments which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which have remaining maturity of less than three months. Restricted cash and bank balances having remaining maturity of more than three months but less than 12 months are disclosed as other bank balances.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data: significant financial difficulty of the debtor; a breach of contract such as a default; the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise; it is probable that the debtor will enter bankruptcy or other financial reorganisation; or the disappearance of an active market for a security because of financial difficulties.
Presentation of allowance for ECL
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
Financial liabilities and equity instruments classification as debt or equity
Debt and equity instruments issued by a Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Derivative Financial Instruments
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The change in fair value of derivatives is recorded in the statement of profit and loss.
Derivatives embedded in host contracts are accounted for as separate derivatives if their economic characteristics and risks are not closely related to those of the host contracts. These embedded derivatives are measured at fair value with changes in fair value recognized in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Non-Current Asset Held for Sale
The Group classifies non-current assets held for sale if their carrying amounts will be principally recovered through a sale rather than through continuing use of assets. The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale/ distribution should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the sale and the sale expected within one year from the date of classification.
For these purposes, sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance. The criteria for held for sale classification is regarded met only when the assets or disposal group is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets (or disposal groups), its sale is highly probable; and it will genuinely be sold, not abandoned. The group treats sale of the asset or disposal group to be highly probable when:
The appropriate level of management is committed to a plan to sell the asset (or disposal group),
An active programme to locate a buyer and complete the plan has been initiated (if applicable),
The asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value,
The sale is expected to qualify for recognition as a completed sale within one year from the date of classification, and
Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Property, plant and equipment and intangible are not depreciated, or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately from other items in the balance sheet.
Impairment of Non- Financial Assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units ("CGU") fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining 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. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Groups CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five to eight years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the 8th year.
To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Group extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the Group operates, or for the market in which the asset is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of profit and loss, except for properties previously revalued with the revaluation surplus taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation surplus.
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the assets or CGUs recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior periods/years. Such reversal is recognised in the statement of profit and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
Goodwill is tested for impairment annually at each reporting date and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. Intangible assets with indefinite useful lives are tested for impairment annually at each reporting date at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired
Provisions and Contingent Liabilities
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Decommissioning costs are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognised as part of the cost of the particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognised in the statement of profit and loss as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate.
Contingent Liabilities
Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities acquired in a business combination are initially measured at fair value at the acquisition date. At the end of subsequent reporting periods, such contingent liabilities are measured at the higher of the amount that would be recognised in accordance with Ind AS 37 and the amount initially recognised less cumulative amortisation recognised in accordance with Ind AS 115 Revenue from contracts with customers.
Provisions and contingent liabilities are reviewed at each Balance Sheet date.
Revenue from Contract with Customers
The Group earns revenue primarily by providing healthcare services.
Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Group 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.
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.
The inpatient revenue mainly consists of activities for clinical examinations and treatments, surgeries, and other fees such as room charges, and nursing care. This stream of revenue includes 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 Groups 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, 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 at a point in time when inpatient/ outpatients has actually received the service except for few specific services in the dialysis and oncology specialty where the performance obligation is satisfied over a period of time.
Revenue from health care patients, third party payors 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 payors.
While recognizing the revenue, the Group deducts the pre-determined discount agreed with government agencies / others from the billed amount. Revenue also excludes taxes collected from customers and deposited back to the respective statutory authorities, if any.
Inpatient 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 Group has included the variable consideration in the estimated transaction price.
Trade Accounts and Other Receivables and Allowance for Doubtful Accounts
A receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
Contract Assets and Liabilities
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional. A receivables represents the Groups right to an amount of consideration that is unconditional.
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer.
If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Group performs under the contract.
Other Income
Interest Income
Interest is recognised using the effective interest rate method. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Group estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.
Rental Income
Rental income from sub-leasing and leasing is recognised in restated consolidated statement of profit and loss on a straight-line basis over the term of the lease except where the rentals are structured to increase in line with expected general inflation. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.
Employee Benefits
Short Term Employee Benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., wages and salaries, short-term cash bonus, etc., if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
Long term Employee Benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.
Provident fund, employees state insurance scheme and labour welfare fund are defined contribution plans.
These contributions are recognised as an expense in the restated consolidated statement of profit and loss during the period in which the employee renders the related services.
Defined Benefit Plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group has defined benefit plan, gratuity.
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 Group 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 Groups 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.
Income Tax
Income tax expense comprises current tax and deferred tax. It is recognised in restated consolidated statement of profit and loss except to the extent that it relates to an item recognised directly in equity or in other comprehensive income. 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.
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 Groups 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.
Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Consolidated 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 Group 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.
Segment Reporting
In accordance with Ind AS 108, Segment Reporting, the Groups chief operating decision maker ("CODM") has been identified as the board of directors.
The Group is engaged only in healthcare business and therefore the Groups CODM (Chief Operating Decision Maker; which is the Board of Directors of the Group) decided to have only one reportable segment as at the March 31, 2024, in accordance with IND AS 108 "Operating Segments".
Earnings Per Share
Basic earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of exceptional items, if any) by the weighted average number of equity shares outstanding during the year. The weighted average number of ordinary shares outstanding during the year is number of shares outstanding at the beginning of the year, adjusted by the number of ordinary shares issued during the year multiplied by a time-weighting factor.
For the purpose of calculating diluted earnings 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.
Business Combination
Business combinations, other than through common control transactions, are accounted for using the purchase (acquisition) method. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange.
The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Business combinations through common control transactions are accounted on a pooling of interest method. Under pooling of interest method, the assets and liabilities of the combining entities are reflected at their carrying amounts, with adjustments only to harmonise accounting policies.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non- controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in other comprehensive income
("OCI") and accumulated in other equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in other equity as capital reserve, without routing the same through OCI. Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group.
Consideration transferred also includes the fair value of any contingent consideration. Consideration transferred does not include amounts related to the settlement of pre-existing relationships. Any goodwill that arises on account of such business combination is tested annually for impairment.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured, and the settlement is accounted for within other equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recorded in the Restated Consolidated Statement of Profit and
Loss. A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non- controlling interests proportionate share of the acquirees identifiable net assets.
Transaction costs that the Group incurs in connection with a business combination, such as stamp duty for title transfer in the name of the Group, finders fees, legal fees, due diligence fees and other professional and consulting fees, are expensed as incurred.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in our accounting policies during the six months ended September 30, 2024, Fiscal 2024, 2023 and 2022.
NON-GAAP MEASURES
EBITDA, EBITDA Margin, EBIT, PAT Margin, Return on Equity, Return on Capital Employed, Net Asset Value per Equity Share and Return on Net Worth (together, "Non-GAAP Measures"), presented in this Draft Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP. In addition, these Non-GAAP Measures are not standardized terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. Although such Non-GAAP Measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance. For more information, see "Risk Factors Certain non-GAAP financial measures and certain other statistical information relating to our operations and financial performance have been included in this Draft Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable to similarly titled measures presented by other companies" on page 58.
Reconciliation of EBITDA and EBITDA Margin
The table below provides a reconciliation of restated profit for the period / year to EBITDA and EBITDA Margin:
| Particulars | Six months ended September, 30 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| ( million, except percentages) | ||||
| Restated profit (A) | 1,128.90 | 1,520.07 | 2,281.86 | 1,993.80 |
| Finance costs (B) | 305.36 | 703.18 | 506.02 | 398.41 |
| Total tax expenses (C) | 346.16 | 661.56 | 868.42 | 789.92 |
| Depreciation and amortisation expenses (D) | 275.24 | 505.74 | 405.16 | 350.69 |
| Exceptional items (E ) | - | 32.64 | 17.77 | - |
| Other income (F) | 159.46 | 320.18 | 175.82 | 95.74 |
| EBITDA (G = A+B+C+D+E-F) | 1,896.20 | 3,103.01 | 3,903.41 | 3,437.08 |
| Revenue from operations (H) | 6,915.06 | 12,310.66 | 12,545.95 | 10,843.83 |
| EBITDA Margin (I = G/H) (%) | 27.42% | 25.21% | 31.11% | 31.70% |
Reconciliation of EBIT
The table below provides a reconciliation of EBIT:
| Particulars | Six months ended September, 30 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| ( million, except percentages) | ||||
| EBITDA (A) | 1,896.20 | 3,103.01 | 3,903.41 | 3,437.08 |
| Particulars | Six months ended September, 30 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| ( million, except percentages) | ||||
| Depreciation and amortisation expenses (B) | 275.24 | 505.74 | 405.16 | 350.69 |
| EBIT (C = A-B) | 1,620.96 | 2,597.27 | 3,498.25 | 3,086.39 |
Reconciliation of PAT Margin
The table below provides a reconciliation of restated profit after tax to PAT Margin:
| Particulars | Six months ended September, 30 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| ( million, except percentages) | ||||
| Restated profit after tax (A) | 1,128.90 | 1,520.07 | 2,281.86 | 1,993.80 |
| Revenue from operations (B) | 6,915.06 | 12,310.66 | 12,545.95 | 10,843.83 |
| PAT Margin (C = A/B) (%) | 16.33% | 12.35% | 18.19% | 18.39% |
Reconciliation of Return on Equity
The table below provides a reconciliation of restated profit after tax to return on equity:
| Particulars | Six months ended September, 30 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| ( million, except percentages) | ||||
| Restated profit after tax (A) | 1,128.90 | 1,520.07 | 2,281.86 | 1,993.80 |
| Total equity (B) | 10,482.10 | 9,355.06 | 7,299.72 | 5,439.86 |
| Average total equity* (C) | 9,918.59 | 8,327.40 | 6,369.79 | 4,698.21 |
| Return on Equity (D = A/C) (%) | 11.38%# | 18.25% | 35.82% | 42.44% |
*Average total equity is calculated as the sum of opening total equity at the beginning of the period / year and closing total equity and the end of the period / year, divided by two.
# Not annualized
Reconciliation of Return on Capital Employed
The table below provides a reconciliation of return on capital employed:
| Particulars | Six months ended September, 30 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| ( million, except percentages) | ||||
| EBIT (A) | 1,620.96 | 2,597.27 | 3,498.25 | 3,086.39 |
| Total equity (B) | 10,482.10 | 9,355.06 | 7,299.72 | 5,439.86 |
| Total borrowings (C) | 5,965.17 | 6,326.52 | 5,572.4 | 5,033.47 |
| Total lease liabilities (D) | 524.45 | 540.61 | 184.41 | 140.71 |
| Deferred tax liabilities (E) | - | - | 4.85 | 68.26 |
| Deferred tax assets (F) | 139.38 | 62.13 | - | - |
| Capital employed (G = B+C+D+E-F) | 16,832.34 | 16,160.06 | 13,061.38 | 10,682.30 |
| Return on Capital Employed (H = A/G) (%) | 9.63%# | 16.07% | 26.78% | 28.89% |
# Not annualized
Reconciliation of Net Asset Value per Equity Share
The table below provides a reconciliation of net asset value per Equity Share:
| Particulars | Six months ended September, 30 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| ( million, except percentages) | ||||
| Equity share capital (A) | 768.80 | 768.80 | 768.80 | 768.80 |
| Other equity* (B) | 8,463.11 | 7,390.97 | 5,906.69 | 3,608.94 |
| Equity attributable to equity holders (C = A+B) | 9,231.91 | 8,159.77 | 6,675.49 | 4,377.74 |
| Weighted average number of equity shares outstanding during the period/year (D) | 384,400,000 | 384,400,00 | 384,400,00 | 384,400,00 |
| Net Asset Value per Equity Share ( ) (C/D*10^6)# | 24.02 | 21.23 | 17.37 | 11.39 |
*Other equity excludes revaluation reserves and capital reserves.
#Net Asset Value is computed as the Equity attributable to owners of the company at the end of year March 31, 2024 divided by the equity shares outstanding as on March 31, 2024 (adjusted for any bonus or split of equity shares, as applicable). Equity attributable to owners means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account and debit or credit balance of profit and loss account (i.e. excluding revaluation reserves and capital reserves) for the relevant period/year
Reconciliation of Return on Net Worth
The table below provides a reconciliation of return on net worth:
| Particulars | Six months ended September, 30 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| ( million, except percentages) | ||||
| Restated profit for the year/period attributable to equity holders of the parent company(A) | 1,073.96 | 1,534.92 | 2,196.74 | 1,807.73 |
| Equity share capital (B) | 768.80 | 768.80 | 768.80 | 768.80 |
| Other equity* (C) | 8,463.11 | 7,390.97 | 5,906.69 | 3,608.94 |
| Equity attributable to equity holders (D = B+C) | 9,231.91 | 8,159.77 | 6,675.49 | 4,377.74 |
| Return on Net Worth (A/D) (%) | 11.63%# | 18.81% | 32.91% | 41.29% |
*Other equity excludes revaluation reserves and capital reserves. #Not annualised
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
Total income
Our total income comprises:
(i) revenue from operations; and
(ii) other income.
Revenue from Operations
Revenue from operations comprises:
(i) revenue from sale of services from in-patient and out-patient hospital receipts; and (ii) other operating revenue.
Other Income
Other income includes
(i) rental income;
(ii) interest income on bank deposits;
(iii) finance income on financial guarantee provided in terms of
(a) income tax refund and
(b) other financial assets (measured at amortised cost);
(iv) profit on sale of property, plant and equipment;
(v) insurance claim;
(vi) gain on reassessment of lease;
(vii) recovery of bad debts;
(viii) liabilities no longer required written back;
(ix) scrap sale; and
(x) miscellaneous income.
Expenses
Our expenses comprise
(i) cost of material consumed / services rendered;
(ii) changes in inventory of stores and consumables;
(iii) employee benefit expenses;
(iv) professional and consultancy fees;
(v) finance costs;
(vi) depreciation and amortisation expense; and
(vii) other expenses.
Cost of material consumed / services rendered
Cost of material consumed / services rendered comprises medical consumables, pharmacy items, drugs and surgical instruments that we require to provide healthcare services.
Changes in inventory of stores and consumables
Changes in inventory of stores and consumables includes inventories at the end of the period and inventories at the beginning of the period.
Employee Benefit Expenses
Employee benefit expenses comprises
(i) salary, wages, bonus and allowances;
(ii) employers contribution to provident and other funds;
(iii) expenses related to post employment defined benefit plans; and
(iv) staff welfare expenses.
Professional and consultancy fees
Professional and consultancy fees comprises amounts paid to doctors. It also includes professional fees paid to directors.
Finance Costs
Finance costs comprises
(i) interest expense on
(a) financial liabilities and borrowing measured at amortised cost; and
(b) lease liabilities;
(ii) interest on delay deposit of income tax; and
(iii) other finance costs.
Depreciation and Amortisation Expense
Depreciation and amortisation expense comprises
(i) depreciation on property, plant and equipment;
(ii) amortisation of intangible assets; and
(iii) depreciation of right-of-use assets.
Other Expenses
Other expenses primarily comprises:
(i) power, fuel and water charges;
(ii) housekeeping expenses;
(iii) security charges;
(iv) advertisement and business promotion;
(v) claim disallowed;
(vi) travelling and conveyance;
(vii) legal and professional;
(viii) allowance for expected credit loss;
(ix) corporate social responsibility expense;
(x) repairs and maintenance of plant and machinery, buildings and others;
(xi) printing and stationery; and
(xii) miscellaneous expenses.
RESULTS OF OPERATIONS
The following table sets forth certain information with respect to our results of operations on a consolidated basis for the six months ended September 30, 2024 and Fiscals 2024, 2023 and 2022:
| Particulars | Six months ended September 30, 2024 | Fiscal | ||||||
| 2024 | 2023 | 2022 | ||||||
| (in million) | Percentage of Total Income (%) | (in million) | Percentage of Total Income (%) | (in million) | Percentage of Total Income (%) | (in million) | Percentage of Total Income (%) | |
| Income | ||||||||
| Revenue from operations | 6,915.06 | 97.75% | 12,310.66 | 97.47% | 12,545.95 | 98.62% | 10,843.83 | 99.12% |
| Other income | 159.46 | 2.25% | 320.18 | 2.53% | 175.82 | 1.38% | 95.74 | 0.88% |
| Total Income | 7,074.52 | 100.00% | 12,630.84 | 100.00% | 12,721.77 | 100.00% | 10,939.57 | 100.00% |
| Expenses | ||||||||
| Cost of material consumed / Services rendered | 1,486.82 | 21.02% | 2,468.33 | 19.54% | 1,944.91 | 15.29% | 1,559.77 | 14.26% |
| Changes in inventory of stores and consumables | (1.95) | (0.03)% | 6.18 | 0.05% | 43.20 | 0.34% | 20.80 | 0.19% |
| Employee benefit expenses | 1,306.80 | 18.47% | 2,319.56 | 18.36% | 2,182.17 | 17.15% | 1,373.57 | 12.56% |
| Professional and consultancy fees | 934.04 | 13.20% | 1,562.89 | 12.37% | 1,344.65 | 10.57% | 1,188.89 | 10.87% |
| Finance costs | 305.36 | 4.32% | 703.18 | 5.57% | 506.02 | 3.98% | 398.41 | 3.64% |
| Depreciation and amortization expense | 275.24 | 3.89% | 505.74 | 4.00% | 405.16 | 3.18% | 350.69 | 3.21% |
| Other expenses | 1,293.15 | 18.28% | 2,850.69 | 22.57% | 3,127.61 | 24.58% | 3,263.72 | 29.83% |
| Total expenses | 5,599.46 | 79.15% | 10,416.57 | 82.47% | 9,553.72 | 75.10% | 8,155.85 | 74.55% |
| Restated profit before exceptional items and tax | 1,475.06 | 20.85% | 2,214.27 | 17.53% | 3,168.05 | 24.90% | 2,783.72 | 25.45% |
| Exceptional items | - | - | 32.64 | 0.26% | 17.77 | 0.14% | - | - |
| Restated profit before tax | 1,475.06 | 20.85% | 2,181.63 | 17.27% | 3,150.28 | 24.76% | 2,783.72 | 25.45% |
| Tax expenses | ||||||||
| Current tax | 422.81 | 5.98% | 823.17 | 6.52% | 927.34 | 7.29% | 738.61 | 6.75% |
| Income tax for earlier years | - | - | 2.05 | 0.02% | 5.85 | 0.05% | 5.20 | 0.05% |
| Deferred tax (benefit) / charge | (76.65) | (1.08)% | (163.66) | (1.30)% | (64.77) | (0.51)% | 46.11 | 0.42% |
| Total tax expenses | 346.16 | 4.89% | 661.56 | 5.24% | 868.42 | 6.83% | 789.92 | 7.22% |
| Restated profit after tax | 1,128.90 | 15.96% | 1,520.07 | 12.03% | 2,281.86 | 17.94% | 1,993.80 | 18.23% |
SIX MONTHS ENDED SEPTEMBER 30, 2024
Total Income
Total income was 7,074.52 million in the six months ended September 30, 2024, primarily due to our revenue from operations.
Revenue from Operations
Revenue from operations was 6,915.06 million in the six months ended September 30, 2024. The table below provides details of our revenue from operations:
| Particulars | Six months ended September 30, 2024 |
| (in million) | |
| Revenue from sale of service hospital receipts | |
| In-patient | 6,652.04 |
| Out-patient | 252.87 |
| Other operating revenue | 10.15 |
| Total | 6,915.06 |
Other Income
Other income was 159.46 million in the six months ended September 30, 2024, primarily comprising interest income on bank deposits of 106.76 million, financial income on other financial assets (measured at amortised cost) of 23.13 million and recovery of bad debts of 23.08 million.
Expenses
Total expenses were 5,599.46 million in the six months ended September 30, 2024, primarily comprising (i) cost of material consumed /services rendered; (ii) employee benefit expenses; (iii) professional and consultancy fees; (iv) finance costs; (v) depreciation and amortisation expense; (vii) other expenses.
Cost of Material Consumed / Services Rendered
Cost of material consumed /services rendered was 1,486.82 million in the six months ended September 30, 2024.
Changes in inventory of stores and consumables
Changes in inventory of stores and consumables was (1.95) million in the six months ended September 30, 2024. Opening stock in the six months ended September 30, 2024 was 22.04 million while closing stock was 23.99 million.
Employee Benefit Expenses
Employee benefit expenses was 1,306.80 million in the six months ended September 30, 2024, primarily comprising salary, wages, bonus and allowances of 1,271.16 million.
Professional and consultancy fees
Professional and consultancy fees was 934.04 million in the six months ended September 30, 2024.
Finance Costs
Finance costs was 305.36 million in the six months ended September 30, 2024, primarily comprising interest expense on financial liabilities and borrowing measured at amortised cost of 272.73 million.
Depreciation and amortisation expense
Depreciation and amortisation expense was 275.24 million in the six months ended September 30, 2024, primarily due to depreciation on property, plant and equipment of 247.68 million.
Other Expenses
Other expenses were 1,293.15 million in the six months ended September 30, 2024, primarily comprising: power, fuel and water charges of 147.66 million; housekeeping expenses of 129.60 million; claim disallowed of 529.39 million on account of rejection of claims made by us to TPAs or government agencies or public sector undertakings towards payment of patient bills; allowance for expected credit loss of 79.13 million; and expenses towards repairs and maintenance of plant and machinery of 57.63 million.
Restated profit/ (loss) before tax
Our restated profit before tax was 1,475.06 million in the six months ended September 30, 2024.
Tax Expenses
We recorded a current tax expense of 422.81 million and a deferred tax benefit of 76.65 million for the six months ended September 30, 2024. As a result, our total tax expense was 346.16 million in the six months ended September 30, 2024.
Restated profit after tax
For the reasons discussed above, we recorded a restated profit after tax of 1,128.90 million in the six months ended September 30, 2024.
FISCAL 2024 COMPARED TO FISCAL 2023
Key Developments
We acquired the Grecian Hospital in Mohali and consolidated its results with ours with effect from May 8, 2023.
Total Income
Total income decreased by 0.71% from 12,721.77 million in Fiscal 2023 to 12,630.84 million in Fiscal 2024 on account of a decrease in revenue from operations for the reasons indicated below:
Revenue from Operations
Revenue from operations decreased by 1.88% from 12,545.95 million in Fiscal 2023 to 12,310.66 million in Fiscal 2024 primarily on account of a decrease in sale of services in in-patient hospital receipts from 12,212.44 million in Fiscal 2023 to
11,851.95 million in Fiscal 2024. This was partially offset by an increase in sale of services in out-patient hospital receipts from 311.31 million in Fiscal 2023 to 438.69 million in Fiscal 2024.
The table below provides details of our revenue from operations:
| Particulars | Fiscal | Percentage increase/(decrease) (%) | |
| 2024 | 2023 | ||
| (in million) | |||
| Revenue from sale of service hospital receipts | |||
| In-patient | 11,851.95 | 12,212.44 | (2.95)% |
| Out-patient | 438.69 | 311.31 | 40.92% |
| Other operating revenue | 20.02 | 22.20 | (9.82)% |
| Total | 12,310.66 | 12,545.95 | (1.88)% |
Our total in-patient revenue decreased by 2.95% from 12,212.44 million in Fiscal 2023 to 11,851.95 million in Fiscal 2024 primarily due to floods in Punjab briefly affecting the operations of our hospitals in Ambala and Patiala and our hospital in New Delhi undergoing renovation, while our out-patient revenue increased by 40.92% from 311.31 million in Fiscal 2023 to
438.69 million in Fiscal 2024 primarily due to an increase in public outreach undertaken by us to attract patients.
Other Income
Other income increased by 82.11% from 175.82 million in Fiscal 2023 to 320.18 million in Fiscal 2024 primarily on account of an increase in interest income from (i) bank deposits from 109.64 million in Fiscal 2023 to 194.18 million in Fiscal 2024; and (ii) other financial assets (measured at amortised cost) from 40.52 million in Fiscal 2023 to 50.37 million in Fiscal 2024; liabilities no longer required written back from nil in Fiscal 2023 to 19.72 million in Fiscal 2024; profit on sale of property, plant and equipment from nil in Fiscal 2023 to 14.44 million in Fiscal 2024; and miscellaneous income from 14.04 million in Fiscal 2023 to 25.92 million in Fiscal 2024.
Expenses
Total expenses increased by 9.03% from 9,553.72 million in Fiscal 2023 to 10,416.57 million in Fiscal 2024 primarily on account of an increase in cost of material consumed / services rendered; (ii) employee benefit expenses; (iii) professional and consultancy fees; (iv) finance costs; and (v) depreciation and amortization expense.
Cost of material consumed / Services rendered
Cost of material consumed / services rendered increased by 26.91% from 1,944.91 million in Fiscal 2023 to 2,468.33 million in Fiscal 2024 primarily on account of a change in the mix of specialties and super-specialties offered at our hospitals, which resulted in higher material costs.
Changes in inventory of stores and consumables
Changes in inventory of stores and consumables was 43.20 million in Fiscal 2023 compared to 6.18 million in Fiscal 2024. For Fiscal 2024, closing stock was 22.04 million while opening stock was 16.84 million.
Employee Benefit Expenses
Employee benefit expenses increased by 6.30% from 2,182.17 million in Fiscal 2023 to 2,319.56 million in Fiscal 2024 primarily on account of increase in salary, wages, bonus and allowances from 2,116.67 million in Fiscal 2023 to 2,244.88 million in Fiscal 2024 on account of hiring of new employees and an increase in compensation levels for existing employees.
Professional and consultancy fees
Professional and consultancy fees increased by 16.23% from 1,344.65 million in Fiscal 2023 to 1,562.89 million in Fiscal 2024 on account of an increase in the number of consultants engaged by us at our hospitals, as well as the hiring of new consultants pursuant to the acquisition of the Grecian hospital in Mohali, Punjab.
Finance Costs
Finance costs increased by 38.96% from 506.02 million in Fiscal 2023 to 703.18 million in Fiscal 2024 primarily on account of increase in interest expense on (i) financial liabilities and borrowing measured at amortised cost from 465.00 million in Fiscal 2023 to 657.02 million in Fiscal 2024 on account of the acquisition of the Grecian hospital in Mohali; and (ii) lease liabilities from 16.48 million in Fiscal 2023 to 30.89 million in Fiscal 2024.
Depreciation and amortisation expense
Depreciation and amortisation expense increased by 24.82% from 405.16 million in Fiscal 2023 to 505.74 million in Fiscal 2024 on account of an increase in depreciation on property, plant and equipment from 382.25 million in Fiscal 2023 to 464.30 million in Fiscal 2024 and depreciation on right-of-use assets from 21.34 million in Fiscal 2023 to 39.06 million in Fiscal 2024.
Other Expenses
Other expenses decreased by 8.85% from 3,127.61 million in Fiscal 2023 to 2,850.69 million in Fiscal 2024, primarily on account of a decrease in:claim disallowed from 1,976.89 million in Fiscal 2023 to 1,341.53 million in Fiscal 2024 on account of acceptance of certain claims submitted by us to TPAs, government agencies or public sector undertakings towards payment of patient bills; bad debts from 137.24 million in Fiscal 2023 to 47.63 million in Fiscal 2024 on account of recovery of bad debts in Fiscal 2024 amounting to 82.59 million; sundry balances written off from 44.91 million in Fiscal 2023 to nil in Fiscal 2024 on account of recovery of claims submitted by one of our Subsidiaries, Ratangiri, to government authorities under the Rajasthan Government Health Scheme for payment of patient bills; advertisement and business promotion expenses from 78.90 million in Fiscal 2023 to 66.41 million in Fiscal 2024; insurance expenses from 17.64 million in Fiscal 2023 to 9.99 million in Fiscal 2024; legal and professional expenses from 45.28 million in Fiscal 2023 to 26.78 million in Fiscal 2024; and expenses towards repairs and maintenance of buildings from 34.42 million in Fiscal 2023 to 15.14 million in Fiscal 2024 on account of repair and maintenance undertaken at our hospitals in Gurugram and Sonipat in Haryana in Fiscal 2023.
Restated profit/ (loss) before exceptional items and tax
Our restated profit before exceptional items and tax was 3,168.05 million in Fiscal 2023 compared to 2,214.27 million in Fiscal 2024.
Exceptional items
Exceptional items increased from 17.77 million in Fiscal 2023 to 32.64 million in Fiscal 2024. In Fiscal 2023, we entered into an agreement to lease land and set up a hospital in Mohali, Punjab, however, we did not proceed with this expansion and the expenditure incurred, amounting to 17.77 million, was claimed as a loss and charged to our statement of profit and loss.
In Fiscal 2024, we made a provision for loss of obsolete fixed assets of 32.64 million on the basis of an interim fix assets verification report.
Restated profit/ (loss) before tax
For the reasons discussed above, profit before tax was 3,150.28 million in Fiscal 2023 compared to 2,181.63 million in Fiscal 2024.
Tax Expense
We recorded a current tax expense of 927.34 million in Fiscal 2023 as compared to 823.17 million in Fiscal 2024. We recorded a deferred tax benefit of (64.77) million in Fiscal 2023 as compared to (163.66) million in Fiscal 2024. Income tax for earlier years was 5.85 million in Fiscal 2023 compared to 2.05 million in Fiscal 2024. As a result, total tax expense decreased by 23.82% from 868.42 million in Fiscal 2023 to 661.56 million in Fiscal 2024.
Restated profit/ (loss) after tax
For the reasons discussed above, restated profit after tax was 2,281.86 million in Fiscal 2023 compared to 1,520.07 million in Fiscal 2024.
FISCAL 2023 COMPARED TO FISCAL 2022
Key Developments
Our Park Hospital, Patiala commenced operations in November 2022.
Total Income
Total income increased by 16.29% from 10,939.57 million in Fiscal 2022 to 12,721.77 million in Fiscal 2023 on account of an increase in revenue from operations and other income for the reasons indicated below:
Revenue from Operations
Revenue from operations increased by 15.70% from 10,843.83 million in Fiscal 2022 to 12,545.95 million in Fiscal 2023 primarily on account of an increase in revenue from sale of services of in-patient hospital receipts from 10,403.56 million in
Fiscal 2022 to 12,212.44 million in Fiscal 2023. This was partially offset by a decrease in other operating revenue to 22.20 million in Fiscal 2023 from 130.68 million in Fiscal 2022.
The table below provides details of our revenue from operations:
| Particulars | Fiscal | Percentage increase/(decrease) (%) | |
| 2023 | 2022 | ||
| (in million) | |||
| Revenue from sale of service hospital receipts | |||
| In-patient | 12,212.44 | 10,403.56 | 17.39% |
| Out-patient | 311.31 | 309.59 | 0.55% |
| Other operating revenues | 22.20 | 130.68 | (83.02)% |
| Total | 12,545.95 | 10,843.83 | 15.70% |
This increase was mainly driven by an increase in total in-patient revenue by 17.39% from 10,403.56 million in Fiscal 2022 to 12,212.44 million in Fiscal 2023 and out-patient revenue by 0.55% from 309.59 million in Fiscal 2022 to 311.31 million in Fiscal 2023, primarily since we commenced operations at our Park Hospital, Patiala in November 2022 and growth in the revenue generated from the Amar Hospital and Research Centre, Jaipur, wherein we commenced operations in February 2022.
Other Income
Other income increased by 83.64% from 95.74 million in Fiscal 2022 to 175.82 million in Fiscal 2023 primarily on account of interest income on bank deposits from 52.54 million in Fiscal 2022 to 109.64 million in Fiscal 2023; and interest income on other financial assets (measured at amortised cost) from 10.70 million in Fiscal 2022 to 40.52 million in Fiscal 2023.
This was partially offset by a decrease in liabilities no longer required written back from 20.40 million in Fiscal 2022 to nil in Fiscal 2023.
Expenses
Total expenses increased by 17.14% from 8,155.85 million in Fiscal 2022 to 9,553.72 million in Fiscal 2023 primarily on account of an increase in cost of material consumed / services rendered; (ii) employee benefit expenses; (iii) professional and consultancy fees; (iv) finance costs; and (v) depreciation and amortization expense.
Cost of material consumed / services rendered
Cost of material consumed /services rendered increased by 24.69% from 1,559.77 million in Fiscal 2022 to 1,944.91 million in Fiscal 2023 primarily on account of a change in the mix of specialties and super-specialties offered at our hospitals, which resulted in higher material costs.
Changes in inventory of stores and consumables
Changes in inventory of stores and consumables was 20.80 million in Fiscal 2022 compared to 43.20 million in Fiscal 2023. For Fiscal 2022, closing stock was 60.04 million while opening stock was 80.84 million. Closing stock in Fiscal 2023 was
16.84 million while opening stock was 60.04 million.
Employee benefit expenses
Employee benefit expenses increased by 58.87% from 1,373.57 million in Fiscal 2022 to 2,182.17 million in Fiscal 2023 primarily on account of increase in salary, wages, bonus and allowances from 1,315.40 million in Fiscal 2022 to 2,116.67 million in Fiscal 2023 on account of hiring of new employees and an increase in compensation levels for existing employees.
Professional and consultancy fees
Professional and consultancy fees increased by 13.10% from 1,188.89 million in Fiscal 2022 to 1,344.65 million in Fiscal 2023 on account of an increase in the number of consultants engaged by us at our hospitals, as well as the hiring of new consultants pursuant to the commencement of operations in Park Hospital, Patiala.
Finance Costs
Finance costs increased by 27.01% from 398.41 million in Fiscal 2022 to 506.02 million in Fiscal 2023 primarily on account of increase in interest expense on (i) financial liabilities and borrowing measured at amortised cost from 333.19 million in Fiscal 2022 to 465.00 million in Fiscal 2023 on account of an increased utilization of cash credit limits and disbursement of additional term loans; and (ii) lease liabilities from 7.43 million in Fiscal 2022 to 16.48 million in Fiscal 2023 on account of the commencement of operations in Park Hospital, Patiala.
Depreciation and amortization expense
Depreciation and amortization expense increased by 15.53% from 350.69 million in Fiscal 2022 to 405.16 million in Fiscal 2023 on account of an increase in depreciation on property, plant and equipment from 338.32 million in Fiscal 2022 to 382.25 million in Fiscal 2023 and depreciation on right-of-use assets from 10.55 million in Fiscal 2022 to 21.34 million in Fiscal 2023.
Other Expenses
Other expenses decreased by 4.17% from 3,263.72 million in Fiscal 2022 to 3,127.61 million in Fiscal 2023, primarily on account of a decrease in:
allowance for expected credit loss from 190.75 million in Fiscal 2022 to 42.93 million in Fiscal 2023;
bad debts from 365.97 million in Fiscal 2022 to 137.24 million in Fiscal 2023 on account of a write-off of bad debts of the hospitals acquired by us in Fiscals 2021 and 2022, namely Healing Touch Hospital in Ambala, Haryana, Metro Hospital in Palam Vihar, Haryana and Nidaan Hospital in Sonipat, Haryana;
legal and professional expenses from 63.87 million in Fiscal 2022 to 45.28 million in Fiscal 2023; and
expenses towards repairs and maintenance of buildings from 81.93 million in Fiscal 2022 to 34.42 million in Fiscal
2023, on account of repair and maintenance undertaken at Nidaan Hospital in Sonipat, Haryana and Amar Hospital and Research Centre in Jaipur, Rajasthan.
Restated profit/ (loss) before exceptional items and tax
Our restated profit before exceptional items and tax was 2,783.72 million in Fiscal 2022 compared to 3,168.05 million in Fiscal 2023.
Exceptional Items
Exceptional item for Fiscal 2022 was nil compared to 17.77 million in Fiscal 2023. In Fiscal 2023, we entered into an agreement to lease land and set up a hospital in Mohali, Punjab, however, we terminated such plans and the expenditure that we had incurred as capital work in progress amounting to 17.77 million was claimed as a loss and charged to our statement of profit and loss.
Restated profit/ (loss) before tax
For the reasons discussed above, restated profit before tax was 2,783.72 million in Fiscal 2022 compared to 3,150.28 million in Fiscal 2023.
Tax Expense
Current tax expense increased from 738.61 million in Fiscal 2022 to 927.34 million in Fiscal 2023. Income tax pertaining to earlier years was 5.20 million in Fiscal 2022 compared to 5.85 million in Fiscal 2023. Deferred tax charge was 46.11 million in Fiscal 2022 compared to deferred tax benefit of (64.77) million in Fiscal 2023.
Restated profit/ (loss) after tax
For the reasons discussed above, restated profit after tax was 1,993.80 million in Fiscal 2022 compared to 2,281.86 million in Fiscal 2023.
LIQUIDITY AND CAPITAL RESOURCES
We have historically financed the expansion of our business and operations primarily through debt financing, owned funds and funds generated from our operations. From time to time, we may obtain loan facilities to finance our short term working capital requirements. Further, we believe that after taking into account the expected cash to be generated from our business and operations, the Net Proceeds from the Fresh Issue and the proceeds from our existing bank loans, and new loans for any new expansion or capital expenditure we will have sufficient capital to meet our anticipated capital requirements for our working capital and capital expenditure requirements.
CASH FLOWS
The following table sets forth certain information relating to our cash flows in the periods indicated:
| Particulars | Six months ended September 30, 2024 | Fiscal | ||
| 2024 | 2023 | 2022 | ||
| (in million) | ||||
| Net cash flow generated from/(used in) operating activities | 1,188.83 | 3,668.04 | 1,986.05 | 1,552.57 |
| Net cash flow from investing activities | (2,430.08) | (762.95) | (2,337.98) | (2,480.03) |
| Net cash inflow from/(used in) financing activities | (676.44) | (1,297.29) | 10.40 | 1,625.34 |
| Net increase/(decrease) in cash and cash equivalents | (1,917.69) | 1,607.80 | (341.53) | 697.88 |
| Cash and cash equivalents at the end of the year/period | 855.57 | 2,773.26 | 1,165.46 | 1,506.99 |
Operating Activities
Six months ended September 30, 2024
Net cash generated from operating activities was 1,188.83 million. Restated profit before tax was 1,475.06 million. Primary adjustments consisted of depreciation and amortisation expense of 275.24 million; finance costs of 305.36 million; allowance for expected credit loss of 79.13 million; provision for gratuity of 18.03 million; and interest income of (106.76) million. Adjustments for changes in working capital were (i) trade receivables of ( 420.85) million; (ii) trade payables of 270.52 million; (iii) provisions of (197.85) million; (iv) other non-financial assets of (145.99) million and (v) other financial liabilities of 258.77 million. Cash generated from operations in the six months ended September 30, 2024 was 1,740.82 million. Income tax paid (net of refunds) was (551.99) million.
Fiscal 2024
Net cash generated from operating activities was 3,668.04 million. Restated profit before tax was 2,181.61 million. Primary adjustments consisted of depreciation and amortisation expense of 505.74 million; finance costs of 703.18 million; allowance for expected credit loss of 414.52 million; interest income of (194.18) million; and other non cash adjustments of (70.67) million. Adjustments for changes in working capital were (i) trade receivables of 648.36 million; (ii) other non-financial liabilities of 154.62 million; (iii) trade payables of 316.39 million; (iv) other financial liabilities of 140.80 million and (v) provisions of (533.45) million. Cash generated from operations in Fiscal 2024 was 4,670.03 million. Income tax paid (net of refunds) was (1,001.99) million.
Fiscal 2023
Net cash generated from operating activities was 1,986.05 million. Restated profit before tax was 3,150.28 million. Primary adjustments consisted of depreciation and amortisation expense of 405.16 million; finance costs of 506.02 million; interest income of (157.02) million, balances written off of 44.91 million; allowance for expected credit loss of 42.93 million; and bad debts of 137.24 million. Adjustments for changes in working capital were (i) inventories of 43.20 million; (ii) trade receivables of (1,497.83) million; (iii) other financial assets of (421.41) million; (iv) trade payables of 158.96 million; (v) other financial liabilities of 137.07 million; (vi) provision of 323.08 million; and (vii) other non-financial liabilities of (15.41) million. Cash generated from operations in Fiscal 2023 was 2,986.58 million. Income tax paid (net of refunds) was (1,000.53) million.
Fiscal 2022
Net cash generated from operating activities was 1,552.57 million. Restated profit before tax was 2,783.72 million. Primary adjustments consisted of depreciation and amortisation expense of 350.69 million; finance costs of 398.41 million; allowance for expected credit loss of 190.75 million, interest income of (63.32) million; ; liabilities no longer required written back of (20.40) million and provision for gratuity of 19.59 million. Adjustments for changes in working capital were (i) trade receivables of (1,910.61) million; (ii) other financial assets of (272.96) million; (iii) other non-financial assets of (103.51) million; (iv) trade payables of 248.58 million; and (v) provisions of 404.12 million. Cash generated from operations in Fiscal 2022 was 2,497.25 million. Income tax paid (net of refunds) was (944.68) million.
Investing Activities
Six months ended September 30, 2024
Net cash used in investing activities was 2,430.08 million in the six months ended September 30, 2024, primarily on account of purchase of property, plant and equipment and capital work in progress of (925.71) million; proceeds from sale of property, plant and equipment of 24.19 million; increase in investments of (76.64) million, increase in bank deposits of (1,529.34) million; loans given of (29.34) million; and interest income of 106.76 million.
Fiscal 2024
Net cash used in investing activities was 762.95 million in Fiscal 2024, primarily on account of payments for purchase of property, plant and equipment and capital work in progress of (714.50) million; proceeds from sale of property, plant and equipment of 36.63 million; decrease in investments of 898.60 million; increase in bank deposits of (265.29) million; purchase consideration paid for acquisition of business of (892.27) million; loans given of (20.29) million, and interest income of 194.18 million.
Fiscal 2023
Net cash used in investing activities was 2,337.98 million in Fiscal 2023, primarily on account of payments for purchase of property, plant and equipment and capital work in progress of (984.32) million; proceeds from sale of property, plant and equipment of 53.53 million; increase in investments of (569.32) million; increase in bank deposits of (444.36) million; purchase consideration paid for acquisition of business of (426.27) million; loans given of (124.26) million, and interest income of 157.02 million.
Fiscal 2022
Net cash used in investing activities was 2,480.03 million in Fiscal 2022, primarily on account of payments for purchase of property, plant and equipment and capital work in progress of (926.77) million; proceeds from sale of property, plant and equipment of 11.22 million; increase in investments of (454.71) million; increase in bank deposits of (390.62) million; purchase consideration paid for acquisition of business of (445.33) million; loans given of (337.14) million, and interest income of 63.32 million.
Financing Activities
Six months ended September 30, 2024
Net cash used in financing activities was 676.44 million in the six months ended September 30, 2024, primarily on account of repayment of non current borrowings of (268.87) million, movement in current borrowings (net) of (192.38) million, payment of lease liabilities of (38.83) million and finance costs paid of (276.26) million. This was offset by proceeds from non current borrowings of 99.90 million.
Fiscal 2024
Net cash used in financing activities was 1,297.29 million in Fiscal 2024, primarily on account of repayment of non current borrowings of (1,992.56) million, movement in current borrowings (net) of (1,296.55) million, payment of lease liabilities of (51.41) million and finance costs paid of (666.56) million. This was offset by proceeds from non current borrowings of
2,709.78 million.
Fiscal 2023
Net cash from financing activities was 10.40 million in Fiscal 2023, primarily on account of proceeds from non current borrowings of 1,162.95 million and movement in current borrowings (net) of 792.89 million. This was offset by repayment of non current borrowings of (1,416.92) million, payment of lease liabilities of (31.63) million and finance costs paid of (496.89) million.
Fiscal 2022
Net cash inflow from financing activities was 1,625.34 million in Fiscal 2022, primarily on account of proceeds from non current borrowings of 3,136.78 million and movement in current borrowings (net) of 192.74 million. This was offset by repayment of non current borrowings of (1,306.43) million, payment of lease liabilities of (15.45) million and finance costs paid of 382.30 million.
INDEBTEDNESS
As of September 30, 2024, we had total borrowings (consisting of non-current borrowings of 3,866.07 million and current borrowings of 2,099.10 million) of 5,965.17 million. Our debt/ equity ratio was 0.62 as of September 30, 2024.
The following table sets forth certain information relating to our total borrowings as of September 30, 2024, and our repayment obligations in the periods indicated:
| Particulars | As of September 30, 2024 | |||
| Payment due by period | ||||
| (in million) | ||||
| Total | Up to 1 year | 1-5 years | More than 5 years | |
| Borrowings | 5,965.17 | 2,099.10 | 3,471.73 | 394.34 |
| Lease liabilities | 524.45 | 31.18 | 198.20 | 295.07 |
| Trade payables | 1,173.93 | 1,173.93 | - | - |
| Other financial liabilities | 1,033.43 | 1,033.43 | - | - |
| Total | 8,696.98 | 4,337.64 | 3,669.93 | 689.41 |
CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS
As of September 30, 2024, our contingent liabilities as per Ind AS 37 were as follows:
(i) The liabilities in respect of any infringement, breach / omission or difference of opinion with the government department, if any, under any direct / indirect tax or labour laws including interest and penalties on late deposit of tax / filing of returns is contingent and uncertain and hence amount cannot be quantified. (ii) Our Company is having pending demand of 0.18 million from income tax for assessment year 2017-18. This demand is mainly due to disallowance of expenditure. An appeal has been filed with the income tax department for response of wrong demand. (iii) Our Company is having pending demand of 1.13 million from income tax for assessment year 2019-20. This demand is mainly due to disallowance of expenditure. An appeal has been filed with the income tax department for response of wrong demand. (iv) Our Company is having pending demand of 0.45 million from income tax for assessment year 2022-23. This demand is mainly due to disallowance of expenditure. An appeal has been filed with the income tax department for response of wrong demand. (v) Our Company is having pending demand of 0.73 million as on March 2024 and March 2023 from income tax for assessment year 2021-22. This demand is mainly due to disallowance of expenditure. An appeal has been filed with the income tax department for response of wrong demand. (vi) Our Company is having pending demand of 2.48 million as on March 2024 from income tax for assessment year 2022-23. This demand is mainly due to disallowance of expenditure. An appeal has been filed with the income tax department for response of wrong demand.
(vii) Our Company is having pending demand of 2.74 million as on March 2024 from income tax for assessment year 2021-22. This demand is mainly due to disallowance of expenditure. An appeal has been filed with the income tax department for response of wrong demand. (viii) Our Company is having pending demand of 3.81 million as on March 2024 from income tax for assessment year 2023-24. This demand is mainly due to disallowance of expenditure. An appeal has been filed with the income tax department for response of wrong demand. (ix) Our Company is having pending demand of 16.89 million from income tax for assessment year 2024-25. This demand is mainly due to disallowance of expenditure. An appeal has been filed with the income tax department for response of wrong demand. (x) During the financial year ended March 31, 2024, our Company received an intimation under Section 74(1) read with Section 50 of the Central Goods and Services Tax Act, 2017 in one of our Subsidiaries (Blue Heavens) for payment of tax liability of 1,119.01 million. However, our Company has filed the submissions against the said notice. The case is pending before the Honble High Court of Haryana. No contingent liability is created for the said amount our Company expects the outcome to be in its favour based on the opinion received from the counsel of our Company. The legal proceedings when ultimately concluded will not, in the opinion of management, have a material effect on the result of operations or the financial position of the Group.
(xi) Our Company has provided corporate guarantees to banks on behalf of our certain Subsidiaries for obtaining loans by such Subsidiaries as follows:
| Entity | Amount as at September 30, 2024 |
| ( million) | |
| Park Medicenters | 2,085.00 |
| Aggarwal Hospital | 266.50 |
| Umkal Health Care | 688.13 |
| Ratangiri | 100.00 |
| RGS | 690.00 |
| Blue Heavens | 993.70 |
| Kailash Super-Speciality | 400.00 |
| Park Medicity India | 360.00 |
| DMR Hospitals | 310.00 |
| Park Medicity World | 750.00 |
| Total | 6,643.33 |
(xii) One of our Subsidiaries has issued corporate guarantees to banks on behalf of our Company for the renewal of our
Companys credit facilities as follows:
| Entity | Amount as at September 30, 2024 |
| ( million) | |
| Park Medicity World | 120.00 |
| Total | 120.00 |
For further information, see "Restated Consolidated Financial Information Note 46 Contingent liabilities and commitments" on page 346.
As of September 30, 2024, we did not have any off-balance sheet arrangements.
CONTRACTUAL OBLIGATIONS AND CAPITAL COMMITMENTS
The following table sets forth certain information relating to our capital commitments:
| Particulars | As at September 30, 2024 | As at March 31, 2024 | As at March 31, 2023 | As at March 31, 2022 |
| (in million) | ||||
| Total amount of commitment towards | 371.13 | 371.13 | 675.31 | - |
CAPITAL EXPENDITURE
In the six months ended September 30, 2024 and Fiscal 2024, 2023 and 2022, our capital expenditure (primarily related to payments for purchase of property, plant and equipment and excluding fixed assets acquired through business combination) was 925.71 million, 714.50 million, 984.32 million and 926.77 million, respectively.
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business. These transactions principally include managerial remuneration, retainers and consultants fees, directors sitting fees, rental income, loan from related party, interest expenses on loan taken, and repayment of loan and interest.
For further information relating to our related party transactions, see "Restated Consolidated Financial Information Note 50
Related party disclosures" on page 361.
AUDITORS OBSERVATIONS
Our Statutory Auditors have included certain matters of emphasis in the notes to the Restated Consolidated Financial Information, which do not require any corrective adjustments to the Restated Consolidated Financial Information. For details, see "Restated Consolidated Financial Information Note 21A Restated Statement of Material Adjustments (IV) Emphasis of matter not requiring adjustment to Restated Consolidated Summary Statements" on page 331.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have exposure to the following risks arising from financial instruments:
Credit risk
Liquidity risk
Market risk
Credit Risk
Credit risk is a risk of financial loss to our Company arising from counterparty failure to repay according to contractual terms or obligations. Majority of our transactions are earned in cash or cash equivalents. The Trade Receivables comprise mainly of receivables from Insurance Companies, Corporate customers, Public Sector Undertakings, State/Central and International Governments. The Insurance Companies are required to maintain minimum reserve levels and the Corporate Customers are enterprises with high credit ratings. Accordingly, our exposure to credit risk in relation to trade receivables is considered low. Before accepting any new credit customer, we use an internal credit scoring system to assess the potential customers credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed annually. The outstanding with the debtors is reviewed periodically.
Liquidity Risk
Liquidity risk is the risk that we will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Our approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation.
We believe that our liquidity position of 855.57 million as at September 30, 2024 (March 31, 2024: 2,773.26 million, March
31, 2023: 1165.46 million and March 31, 2022: 1,506.99 million) and the anticipated future internally generated funds from operations will enable it to meet our future known obligations in the ordinary course of business.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. Our policy is to regularly monitor its liquidity requirements to ensure that it maintains sufficient reserves of cash and funding from Group companies to meet our liquidity requirements in the short and long term.
Our liquidity management process as monitored by management, includes the following:
Day to Day funding, managed by monitoring future cash flows to ensure that requirements can be met.
Maintaining rolling forecasts of our liquidity position on the basis of expected cash flows.
Market Risk
Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, we mainly have exposure to two type of market risk namely: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Interest Rate Risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our main interest rate risk arises from long-term borrowings with variable rates, which expose us to cash flow interest rate risk.
Currency Risk
Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. We are exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on our financial position and cash flows to the extent of earnings and expenses in foreign currencies. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from our operating, investing and financing activities.
UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS
Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
SIGNIFICANT ECONOMIC CHANGES THAT MATERIALLY AFFECT OR ARE LIKELY TO AFFECT INCOME FROM CONTINUING OPERATIONS
Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations identified above under " Significant Factors Affecting our Results of Operations and Financial Condition" and the section "Our Business" on pages 396 and 233, respectively.
KNOWN TRENDS OR UNCERTAINTIES
Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in " Significant Factors Affecting our Results of Operations and Financial Condition" and the uncertainties described in "Risk Factors" on pages 396 and 30, respectively. To our knowledge, except as discussed in this Draft Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income from continuing operations.
FUTURE RELATIONSHIP BETWEEN COST AND INCOME
Other than as described in "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 30, 233 and 396, respectively, to our knowledge there are no known factors that may adversely affect our business prospects, results of operations and financial condition.
NEW PRODUCTS OR BUSINESS SEGMENTS
Other than as described in "Our Business" on page 233 there are no new products or business segments in which we operate.
COMPETITIVE CONDITIONS
We operate in a competitive environment. See "Our Business", "Industry Overview" and "Risk Factors" on pages 233, 141 and 30, respectively, for further information on competitive conditions that we face across our various business verticals.
EXTENT TO WHICH MATERIAL INCREASES IN NET SALES OR REVENUE ARE DUE TO INCREASED SALES VOLUME, INTRODUCTION OF NEW PRODUCTS OR SERVICES OR INCREASED SALES PRICES
Changes in revenue in the six months ended September 30, 2024 and the last three Fiscals are as described in " Six months ended September 30, 2024", " Fiscal 2024 compared to Fiscal 2023", and " Fiscal 2023 compared to Fiscal 2022" above on pages 417, 419 and 421, respectively.
SEGMENT REPORTING
As at September 30, 2024, our Chief Operating Decision Maker ("CODM"), i.e., our Board of Directors, examines our performance from a service perspective and has identified ‘Healthcare business as a single business segment in accordance with IND AS 108 "Operating Segments". We are operating in India which constitutes a single geographical location.
For further information, see "Restated Consolidated Financial Information Note 53 Disclosure as per Ind AS 108 on Operating segments" on page 380.
SIGNIFICANT DEPENDENCE ON SINGLE OR FEW CUSTOMERS
Given the nature of our business operations, we are not dependent on any single or few customers for our revenue from operations. There are no transaction with a single external customer which would amount to 10% or more of our revenue from operations.
SEASONALITY/ CYCLICALITY OF BUSINESS
Our business is not subject to seasonal variations, however, our income and profits may vary from quarter to quarter depending on factors including change in weather, outbreak of viral and seasonal diseases.
SIGNIFICANT DEVELOPMENTS AFTER SEPTEMBER 30, 2024 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS
Except as disclosed in this Draft Red Herring Prospectus, to our knowledge, no circumstances have arisen since September 30, 2024, that could materially and adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
Download The App Now
Follow us on
2026, IIFL Capital Services Ltd. All Rights Reserved
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016, BSE Enlistment Number (RA): 5016
ARN NO : 47791 (AMFI Registered Mutual Fund & Specialized Investment Fund Distributor), PFRDA Reg. No. PoP 20092018
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
