Accounting Policies of Hannah Joseph Hospital Ltd. Company

Mar 31, 2026

3. Significant Accounting Policies

The note provides a list of significant accounting policies adopted in the preparation of
Financial Statements of the Company for the year ended 31st March 2026. These policies
have been consistently applied to all the years presented, unless otherwise stated.

Basis of measurement

These financial statements have been prepared in accordance with Indian Accounting
Standards (“Ind AS”) notified under Section 133 of the Companies Act, 2013 read w ith
the Companies (Indian Accounting Standards) Rules, 2015. as amended.

The financial statements have been prepared on the historical cost basis and on accrual
basis of accounting, except for certain financial instruments which are measured at fair
value or amortised cost at the end of each reporting period, as explained in the accounting
policies below.

Historical cost is generally based on the fair value of the consideration given in exchange
for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.

The financial statements have been prepared on a going concern basis, as the
management has no intention to liquidate the Company or cease its operations.

Current versus non-current classification

The Company presents assets and liabilities in the Balance Sheet based on current/non-
current classification.

An asset is classified as current when it is:

• expected to be realised or intended to be sold or consumed in the normal
operating cycle;

• held primarily for the purpose of trading;

• expected to be realised within twelve months after the reporting period; or

. cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

• it is expected to be settled in the normal operating cycle;

• it is held primarily for the purpose of trading;

• it is due to be settled within twelve months after the reporting period; or

. there is no unconditional right to defer settlement of the liability for at least
twelve months after the reporting period.

All other liabilities are classified as non-current.

Based on the nature of products and the time between acquisition of assets for processing
and their realisation in cash and cash equivalents, the Company has determined its
operating cycle as twelve months for the purpose of current and non-current classification
of assets and liabilities.

Use of Estimates

The preparation of the financial statements in conformity with Indian Accounting
Standards ("Ind AS”) requires the management to make estimates, judgements and
assumptions that affect the reported amounts of assets, liabilities, income, expenses and
the accompanying disclosures, including contingent liabilities.

The management believes that the estimates and assumptions used in the preparation of
the financial statements are prudent and reasonable. Actual results may differ from these
estimates. /

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognized prospectively in the period in which the estimates
are revised and in any future periods affected thereby.

Revenue Recognition

Revenue is recognised when control of the promised sendees or goods is transferred to
the patient or customer at an amount that reflects the consideration expected to be
received in exchange for such services or goods, in accordance with Ind AS 115 —
Revenue from Contracts with Customers.

Revenue is measured net of discounts, concessions, rebates, Goods and Services Tax
(“GST’) and other amounts collected on behalf of third parties.

Healthcare Services

The Hospital primarily earns revenue from inpatient, outpatient, diagnostic, pharmacy
and other allied healthcare services.

Revenue from healthcare sendees is recognised over time as and when the sendees are
rendered to patients, since the patient simultaneously receives and consumes the benefits
of the services provided by the Hospital.

Revenue is recognised based on the value of sendees provided during the reporting
period and is stated net of estimated deductions, concessions and adjustments, wherever
applicable.

Sale of Medicines and Consumables

Revenue from sale of medicines, consumables and pharmacy items is recognised at the
point in time when the goods are delivered or dispensed to the patient or customer and
control over the goods is transferred.

Insurance and TPA Claims

Revenue relating to patients covered under insurance/TPA arrangements is recognised
based on the services rendered and the amount expected to be realised from the respective
insurance companies/TPAs, considering the terms of arrangement and historical
settlement experience.

Financing Component

The Hospital generally receives payments within a short period from the date of
rendering services or sale of goods. Accordingly, there is no significant financing
component in such transactions.

Significant Judgements

The Hospital evaluates the timing of revenue recognition, estimated deductions,
concessions and recoverability of amounts receivable from patients, insurance companies
and TP As based on historical experience and available information.

Interest Income

Interest income on short-term fixed deposits with banks and financial institutions is
recognised on accrual basis using the applicable interest rate, which approximates the
effective interest rate due to the short-term maturity of such deposits.

Property, Plant and Equipment-IND AS16

Property, plant and equipment, including land, buildings, medical equipment, furniture
and fixtures, vehicles, computers and other equipment held for use in rendering
healthcare services or for administrative puiposes, are stated at cost less accumulated
depreciation and impairment losses, if any.

Freehold land is carried at historical cost and is not depreciated.

Cost of an item of property, plant and equipment comprises purchase price, non¬
refundable taxes and duties, directly attributable expenditure incurred in bringing the
asset to its working condition and location for its intended use. and estimated costs of
dismantling, where applicable.

Capital work-in-progress includes cost of property, plant and equipment under
installation or under development as at the reporting date.

Subsequent expenditure related to an item of property, plant and equipment is capitalised
only when it is probable that future economic benefits associated with the item will flow
to the Hospital and the cost can be measured reliably. Expenditure incurred on repairs
and maintenance is charged to the Statement of Profit and Loss during the period in
which it is incurred.

An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on derecognition of the asset is recognised in the
Statement of Profit and Loss within other income or other expenses.

Depreciation

Depreciation on Freehold property, plant and equipment is provided on the Written Down
Value (“WDV”) method over the useful lives of the assets prescribed under Schedule II
to the Companies Act. 2013, based on the estimated useful life of the respective assets.

Depreciation on additions to property, plant and equipment is provided on a pro-rata basis
from the date the asset is ready for its intended use, and depreciation on assets sold,
discarded or demolished during the year is provided up to the date of disposal.

Freehold land is not depreciated.

Impairment of Assets

The carrying amounts of property, plant and equipment are reviewed at each reporting
date to determine whether there is any indication of impairment.

If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss, if any. Recoverable amount is the higher of an
asset''s fair value less costs of disposal and its value in use.

An impairment loss is recognised in the Statement of Profit and Loss whenever the
carry ing amount of an asset exceeds its recoverable amount.

An impairment loss recognised in prior periods is reversed if there has been a change in
the estimates used to determine the asset’s recoverable amount. The carrying amount of
the asset after reversal shall not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in prior years.

Based on the assessment carried out by the management, no impairment loss is required
to be recognised during the year.

Foreign currency transactions
Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary
economic environment in which the Company operates, i.e. Indian Rupees (INR) and all
values are rounded off to the nearest lakhs except otherwise indicated.

Transactions and balances

Transactions in foreign currency are recorded at the exchange rates prevailing on the date
of transaction.

Inventories

inventories comprising medicines, medical consumables, surgical items, laboratory
materials and other stores are valued at the lower of cost and net realisable value.

Cost of inventories includes purchase cost and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined on the First-ln
First-Out ("FIFO") / weighted average cost method, (retain whichever method is actually
followed by the Hospital).

Net realisable value represents the estimated selling price in the ordinary course of
business less estimated costs necessary to make the sale.

Provision is made for obsolete, slow-moving and expired inventories wherever
considered necessary by the management.

Cash and cash equivalent

For the purpose of presentation in the Statement ot Cash Flows, cash and cash
equivalents comprise cash on hand, balances with banks, and short-term deposits with
original maturities of three months or less that are readily convertible into known
amounts of cash and which arc subject to an insignificant risk of changes in value.

Cash and cash equivalents are held for the purpose of meeting short-term cash
commitments rather than for investment or other purposes.

Bank deposits with original maturity of more than three months but less than twelve
months are classified as “other bank balances” and are not considered as cash and cash
equivalents.

Lease

The Company recognises right-of-use assets at the commencement date of the lease, i.e.,
the date on which the underlying asset is available for use.

Right-of-use assets are initially measured at cost, w''hich comprises:

• the amount of the initial measurement of the lease liability;

• any lease payments made at or before the commencement date, less any lease
incentives received:

• any initial direct costs incurred; and

• an estimate of costs to dismantle or restore the underlying asset.

Subsequently, right-of-use assets are measured at cost less accumulated depreciation and
impairment losses, if any, and adjusted for any remeasurement of the lease liability.

Right-of-use assets are depreciated on a straight-line basis

Lease Liabilities

Lease liabilities are initially measured at the present value of lease payments that are not
paid at the commencement date, discounted using the incremental borrowing rate.

Subsequently, lease liabilities are increased by interest cost and reduced by lease
payments made.

Interest expense on lease liabilities is recognised in the Statement of Profit and Loss.

Disclosures under IND AS 116

General description of leasing activities

• The Company has taken assets under lease arrangements primarily comprising
medical equipment and related hospital equipment.

• The lease term is generally 72 months.

• Certain lease arrangements include renewal options as per contractual terms.

• The Company is responsible for maintenance and upkeep of the leased assets
during the lease term.

Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset arc capitalized as part of the cost of such asset. A
qualifying asset is one that necessarily takes a substantial period of time to get ready for
its intended use or sale.

Employee Benefits

Employee benefits are accounted for in accordance with Ind AS 19 - Employee Benefits.

1. Short-term Employee Benefits

Short-term employee benefits including salaries, wages, bonus and other benefits
expected to be settled wholly within twelve months after the end of the reporting period
in which the employees render the related sendees are recognised as an expense in the
Statement of Profit and Loss in the period in which the related services are rendered.

The undiscounted amount of such benefits expected to be paid is recognised as a liability
in the Balance Sheet.

2. Post-employment Benefits
Defined Benefit Plan - Gratuity

The Hospital provides for gratuity, a defined benefit retirement plan covering eligible
employees, in accordance with the Payment of Gratuity Act, 1972.

The gratuity liability is determined based on actuarial valuation carried out at the end of
each reporting period using the Projected Unit Credit Method by an independent actuary.

The obligation is unfunded and no separate trust or insurance policy is maintained for
gratuity.

Re-measurements of the net defined benefit liability are recognised in Other
Comprehensive Income (“OCI") and are not reclassified to the Statement of Profit and
Loss in subsequent periods.

Defined Contribution Plans

The Hospital contributes to Provident Fund, Employees’ State Insurance Scheme and
other statutory defined contribution plans.

The contributions are recognised as an expense in the Statement of Profit and Loss as and
when they become due.

The Hospital has no further obligation beyond the contributions made.

Bonus

Bonus payable to employees is recognised as an expense in the year in which the related
services are rendered.

Termination Benefits

Termination benefits are recognised as an expense when the Hospital has a present
obligation and when it is probable that settlement will be required.

Share-based Payments

The Hospital does not have any share-based payment schemes.Other borrowing costs are
recognized as an expense in the Statement of Profit and Loss in the period in which they
are incurred.

Borrowing costs include interest expense calculated using the effective interest rate
method, and other costs incurred in connection with the borrowing of funds.

Capitalization of borrowing costs commences when:

• expenditures for the qualifying asset are being incurred;

• borrowing costs are being incurred; and

• activities necessary to prepare the asset for its intended use or sale are in progress.

Capitalization is suspended during extended periods in which active development is
interrupted and ceases when substantially all the activities necessary'' to prepare the
qualifying asset for its intended use or sale are complete.

Accounting for Taxes on income

Tax expenses comprises of current and deferred. Current income tax is measured at the
amount expected to be paid to the tax authorities in accordance with the Indian Income-
tax Act, 1961. Deferred Income taxes reflect the impact of current year differences
between taxable income and accounting income for the year and reversal of timing
differences of earlier years.

Deferred income tax is provided in full, using the balance sheet method, for temporary
differencesarising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements. Deferred tax assets are recognized only if it is
probable that further taxable amount will be available to utilize those temporary
differences and losses. Current and deferred tax is recognized in profit and loss.

.Prior Period Items, Changes in Accounting Policies and Estimates

All items of income and expenses are recognised in the Statement of Profit and Loss for
the current period unless otherwise required or permitted by an Indian Accounting
Standard.

Prior Period Items

There are no material prior period items during the current financial year.

Changes in Accounting Estimates

During the current financial year, the Company has determined its gratuity liability based
on an actuarial valuation carried out in accordance with lnd AS 19 - Employee Benefits,
using the Projected Unit Credit Method by an independent actuary.

The actuarial valuation has resulted in a revision of the estimated gratuity obligation as at
the reporting date. The change in the gratuity liability primarily arises due to updated
actuarial assumptions such as discount rate, salary escalation rate, employee attrition rate
and other demographic factors.

The impact arising from such changes in estimates relating to earlier expectations has
been recognised in the current financial year as a change in accounting estimate in
accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and
Errors. Accordingly, no restatement of previous financial statements has been made.

The effect of such change in estimate has been recognised as follows:

• Remeasurement gains/(losses) arising from actuarial valuation have been
recognised in Other Comprehensive Income and are not reclassified to the
Statement of Profit and Loss in subsequent periods: and

• Service cost and net interest cost of earlier years have been adjusted to the
opening balance of profit and loss account

Earnings per share

Earnings per share is computed in accordance with Ind AS 33 — Earnings per Share.

Basic earnings per share is calculated by dividing the profit or loss attributable to equity
shareholders of the Company by the weighted average number of equity shares
outstanding during the period.

There are no potential equity shares outstanding during the year; hence basic and diluted
earnings per share are the same.

Cash Flow Statement

Cash flows are reported using the indirect method in accordance with Ind AS 7 -
Statement of Cash Flows, whereby profit before tax is adjusted for the effects of

transactions of a non-cash nature, any deferrals or accruals of past or future operating
cash receipts or payments, and items of income or expenses associated with investing or
financing cash flows.

Cash flows of the Company are classified into operating, investing and financing
activities in a manner that is most appropriate to the business of the Company.

Operating activities include all cash flows that arc principally derived from the principal
revenue-producing activities of the Company.

Investing activities relate to acquisition and disposal of long-term assets and other
investments.

Financing activities relate to changes in equity and borrowings of the Company.

Cash and cash equivalents comprise cash on hand, balances with banks and short-term
deposits with original maturities of three months or less that are readily convertible into
known amounts of cash and subject to insignificant risk of changes in value.

Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting
provided to the Chief Operating Decision Maker. The company has only one segment, so
the company has not prepared a separate Segment Report.

All transactions with related parties are made on terms equivalent to those that prevail in
arm''s length transactions.

No amounts are written oil or provided for during the year in respect of related party
transactions.

No guarantees or security have been given or received in respect of related parties.
Discontinuing Operations

The Company has not discontinued any operation during the reporting period or previous
period