‘MedPlus Health Services Limited (formerly known as MedPlus Health Services Private Limited)
Annexure: V

‘Summary of Significant Accounting Policies

(All amounts are in Rs. i millions except as otherwise stated)

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Summary of significant accounting policies (continued)
Financial Instruments (continued)
Equity:

‘An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are
recognised at the proceeds received, net of direct issue costs,

A. conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the company’s own equity instruments is an
equity instrument.

‘Compound instruments:
‘Compound financial instruments issued by the Group comprise of compulsorily convertible preference shares that can be converted into equity shares where the number of
shares to be issued is fixed and does not vary with change in fair value. When establishing the accounting treatment for these non-derivative instruments, the company first
establishes whether the instrument is a compound instrument and classifies such instrument's components separately as financial liabilities or equity instruments in
accordance with Ind AS32.

‘The liability component of a compound financial instrument is initially recognised at the fair value of a similar liability that does not have an equity conversion option. The
equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability
component. Subsequently the liability is measured as per requirement of Ind AS 109.The equity component of a compound financial instrument is not subsequently
‘measured.

 

A Cumulative Compulsorily Convertible Preference Shares (CCPS), with an option to holder to convert the instrument into variable number of equity shares of the entity
upon redemption is classified as a financial liability and dividend including dividend distribution tax is accrued on such instruments and recorded as finance cost.

‘Subsequent measurement
‘The measurement of financial liabilities depends on their classification, as deseribed below:

Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value
through profit or loss, Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term,

Gains or losses on liabilities held for trading are recognised in the consolidated statement of profit and loss,
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in
Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognised in OCI. These gains/ losses are
not subsequently transferred to the statement of profit and loss,

However, the Group may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit and loss.

Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the
consolidated statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process.

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 as finance costs in the consolidated statement of profit and loss.

Derecognition
‘A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another
from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the consolidated statement of
profit and loss,

 

‘The Group also derecognises a financial liabil

   

ty when its terms are modified and the cash flows under the modified terms are substantially different.

Reclassification of financial assets
‘The Group determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for
‘managing those assets. Changes to the business model are expected to be infrequent

‘The Group senior management determines change in the business model as a result of external or internal changes which are significant to the Group operations. Such
changes are evident to external parties. A change in the business model occurs when the Group either begins or ceases to perform an activity that is significant to its
‘operations.

If the Group reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting
period following the change in business model. The Group does not restate any previously recognised gains, losses (including impairment gains oF losses) or interest.

Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the 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.

Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are
subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as
they are considered an integral part of the Group's cash management

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