APPENDIX F

APPENDIX F – PLANNING MEMORANDUM

To M/s. M S K A & Associates Chartered Accountants, Hyderabad

From KY & Co., Hyderabad
Date 31 March 2025
Subject Work on the financial information (reporting package) of following
components for period ending 31 December 2024
Name of the components:
1. MOI Healthcare Private Limited
2. Sahrudaya Balaji Health care (Srikakulam) Private Limited
3. Sahrudaya Health care (Mumbai) Private Limited

1. Understanding the component and its environment and the applicable

financial reporting framework

a. Background information. Document your understanding of the component and its

environment and the applicable financial reporting framework. Consider the following
areas of understanding:
 External factors affecting the component
 General economic conditions and their effect on the component
 Applicable laws and regulations, including the applicable financial reporting
framework
 Performance of sub-consolidations at component level and applicable foreign
exchange conversions
 Internal factors affecting the component, including important characteristics of
the component, the component’s business objectives and strategies, and the
related business risks that may result in a material misstatement of the financial
statements
 Significant changes in the component business, markets, and other
environmental factors from the prior period
 History of errors/unadjusted misstatements
 Management’s process for measurement and review of the component’s financial
performance
 Competence of local management
 Operating locations.

Companies are primarily engaged in the business of rending hospital, Medical and
Healthcare services.

b. Accounting policies. Provide a brief summary of the material group accounting

policies used by the component. Consider the following:
 Extent of adoption of the group accounting policies as described in the group
accounting guidelines/manual at the component (if the component auditor does
not have a copy of the group accounting policies or group management did not
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provide the group accounting guidelines/manual, include a copy in the Group

Auditor Instructions).
 Instances of the component’s non-compliance with material group accounting
policies and the reporting package.
 The introduction of new accounting standards and their effect on the component.
 Any significant changes in accounting policies applied by the component
compared to prior period.
 Significant accounting and financial reporting matters, for example issues
encountered during the period and/or the impact of new standards.
 Significant accounting estimates and related judgments.

The accounting policies applied by companies are in accordance with group applicable
financial reporting framework and current practices in the Healthcare industry.

c. Significant events, unusual transactions outside the normal course of

business and related party transactions. Summarize significant events, unusual
transactions outside the normal course of business and related party transactions
that have occurred at the component since the prior period to date.
NA

d. Reporting on related party transactions as instructed in Appendix C

(Component Instructions Report)
NA

e. Optional When a (sub)consolidation process is performed by the component:

Include information regarding the (sub)consolidation process used by the component
including:
a. A description of the process and internal controls in place regarding the
consolidation process including an evaluation of the controls in place
regarding the appropriateness, completeness and accuracy of consolidation
adjustments and reclassifications
b. An overview of judgments made by management in the consolidation process
including the evaluation whether management’s judgments made in the
consolidation process give rise to indicators of possible management bias
c. Identified deficiencies in the consolidation process, and
d. The planned procedures to mitigate the risks in the consolidation process.
NA

f. Understanding the component’s system of internal control

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Provide a summary of the elements of the component’s system of internal control. In

addition to the summary, include a description of any significant changes in the
entity’s system of internal control.
Elements of internal control are the following:
 Control environment relevant to the preparation of the financial statements –
provide a summary of processes, controls, and structures in place.
 Entity’s risk assessment process – provide a summary of the process for
identifying business risks, assessment thereof and addressing it.
 Process to monitor the system of internal control (including control activities)
– provide a summary of the processes regarding the evaluation thereof,
identification and remediation of control deficiencies identified, as well as the
sources of information used for monitoring purposes.
The Company has adequate internal controls in place having appropriate standard
operating procedures including risk control matrix and also appropriate segregation of
duties in place which is established at group level and implemented at the level of each
component.

g. Describe your understanding of the IT environment of the component to

identify potential risks arising from the use of IT, including those related to IT
General Controls, through identifying key IT applications and IT processes relevant to
the audit, which might impact the group audit. Include in your response any changes
to the IT application during the period as well as any system failures, disruptions,
cyber incidents or loss of date during the period. (Alternatively complete Appendix
G1 (Understanding the IT environment template)
The Company is using Dynamics and Tech pro - Integrated ERPs

h. Optional when the centrally controlled IT systems are being audited by the group
auditor.
All component auditors are required to verify the (name of system) system’s
availability throughout the period under audit and the IT controls of any locally
managed systems for the risk of unauthorized access or unauthorized changes to the
IT systems. Describe the procedures performed and the related findings.
NA

i. Internal control deficiencies, including those related to IT General Controls

Consider what has been requested in the Group Auditor Instructions and, if necessary,
request that the component auditor documents the internal control deficiencies related
to risks of material misstatements.
Document the details of any deficiencies in the component’s internal control identified
during the planning stage.
Also include your planned audit response to risks arising from any significant internal
control deficiencies, especially those deficiencies in the design and implementation of
control activities related to Elevated and Significant IRMMs.

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Significant deficiency as a Description including Audit response

result of the lack of internal considerations regarding (can be
control (please cross potential fraud risks documented here or
reference to the number of refer to section 4
the RMM raised in section below)
4)

NA

j. Preliminary analytical review

Provide a preliminary analytical review of the component (ensure you provide details as
to the financial information / financial statements used in your work (e.g., figures at a
date other than period end) and the date of the information used).
We have already shared the final OAR upto December 31, 2024 during group audit.
We do not foresee any major issues or concerns during our December group reporting.
Pls refer the same for details. Additionally We will complete the final OAR soon and will
be shared within the due dates.

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k. Risk assessment procedures and further audit procedures

 The first 3 rows of the table in Table (i), are completed by the group auditor before providing Appendix F to the
component auditor. The group auditor obtains and copy and pastes all Significant risks of material misstatement
(Significant RMMs) communicated in the Group Auditor Instructions (GAIs) and potentially in Appendix C
(Component Instructions Report) into the table below. The remainder of the table in section (i) is completed by the
component auditor.
As group auditor is required to take responsibility for the nature, timing and extent of supervision of component
auditors taking into account areas of higher assessed risk, consider communicating, to the component auditors,
those RMMs for which the inherent risk is close to the higher end of the spectrum of inherent risk (e.g., include
Elevated RMMs in the table below).
As per the Audit Approach and Audit Manual, financial statement level risks are defined as engagement level risks
(ELRs) and assertion level risks are defined as inherent risks of material misstatement (IRMMs).
 Sections (ii) and (iii) are completed by the component auditor. In addition, Appendix G2 (Risk assessment template)
may be used to document the results of risk assessment procedures.
Instructions to complete Table (i) to (iii)
 Significant and Elevated1 risks of material misstatement (RMMs) identified by the group auditor - Table (i): the
first 3 rows of Table (i) are already completed by the group auditor. The component auditor completes the
remaining fields of Table (i).
 Significant and Elevated RMMs identified by the component auditor in addition to those identified by the group
auditor - Table (ii): The component auditor completes the entire Table (ii).
 Elevated RMMs identified by the component auditor, excluding Significant RMMs - Table (iii): The component
auditor completes the entire Table (iii).
 There is no limit on the number of Significant RMMs or RMMs close to the higher end of the spectrum of inherent
risks (Elevated RMMs) identified. The tables below are guides to the information we require. If there are
insufficient columns to document the RMMs identified, copy the tables and add additional columns as needed.

1
For which the assessment of inherent risk is close to the upper end of the spectrum of inherent risk due to the degree to which inherent risk factors affect the
combination of the likelihood of a misstatement occurring and the magnitude of the potential misstatement should that misstatement occur; or that is to be
treated as a significant risk in accordance with the requirements of other SAs or ISAs.

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i. The group auditor has provided the Significant2 risks of material misstatements (Significant RMMs) (including Financial
Statement Level Risks (i.e., Engagement Level Risks in the Audit Approach) and Assertion Level Risk (i.e., IRMMs in the
Audit Approach)) identified at the group level as communicated to you in the Group Auditor Instructions.
Complete the remaining fields in the table below, including a summary of the work planned to respond to these risks.
Table (i) Significant RMMs (and Elevated RMMs/risks at the higher end of the spectrum of inherent risk) or
all RMMs pertaining to the component identified by the group auditor
Significant RMM 1 Significant RMM 2 Elevated RMM 3 Elevated RMM 4

Description Fraud risk due to Fraud risk due to Provisioning of Incorrect

improper revenue management debtors is recognition of
recognition. override of controls inaccurate / ROU and lease
incorrect liabilities.
There is a There is a
presumption of fraud presumption of
risk related to revenue material
recognition. misstatement due
to fraud related to
management
override of controls

The nature of the Because this risk is a Since management is in Inaccurate / incorrect Incorrect Accrual or
RMM including the potential management an unique position to provisioning of debtors recording of
related class of bias/fraud risk, the perpetrate fraud, they may lead to inaccurate ROU,Amortisation of
appropriate risk level is a may mis represent the debtor balances & ROU and Interest
transaction or account Significant risk of financial statements and incorrect estimation of Expense on Lease
balance(s) or material misstatement it becomes recoverability of obligation under
disclosure and affecting Revenue class difficult to identify the debtor applicable reporting
relevant assertion(s). of transaction. Relevant fraud. balances. framework.
Is this a RMM due to Yes Yes No No
fraud?
Identified control(s) Revenue is recorded Year end financial Accurate Controls over ROU
that address the after meeting revenue statements are provisioning of and lease liability
Significant RMM recognition criteria reviewed and debtors will be made recognised, finance
(consider ITGC’s, IT approved and are in cost recorded
dependant manual compliance with

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Significant RMM 1 Significant RMM 2 Elevated RMM 3 Elevated RMM 4

controls and manual applicable reporting

controls). framework
Planned procedures to Verify that each invoice 1. Verify that the 1. Verify that the 1. Check whether the
test the design and is supported by accounting period is provisioning workings lease agreement is
implementation of the Registration form/ closed by AGM Accounts are prepared by the signed by both the
control(s) related to Admission by Manager parties
form signed by the subsequent month. F&A. 2.Check whether the
the patient/ attendant and 2.Verify that the post 2. Verify that the GM ROUA, lease liability,
Significant/Elevated the hospital and obtains closing of accounting finance reviews the depreciation, finance
RMM. ID period the accounting ECL provisioning of cost, lease rent
proof from every patient period debtors. payments updation is
before admission. is opened only with the done by authorised
prior approval of GM personnel.
Finance & Accounts.
3.Verify that financial
statements reviewed by
GM Finance & Accounts
and approved by CFO.
Planned further audit 1) Obtain the break-up of Review management NA 1. Check whether the
procedures to revenue from judgements and lease rent, lease term
respond to the risk. Inpatient,outpatient and decisions in making considered, lessor
pharmacy from Techpro significant name,
(HIMS). accounting estimates in lessee name is as per
2) Reconcile the revenue the current year’s the record
with the Dynamics 365 financial statements for 2. Check whether the
and Techpro (HIMS). biases. Using discount rate applied is
3) Obtain the listing of professional scepticism, approved by
Revenue on the basis of evaluate whether the authorised
customers category i.e circumstances producing personnel
cash customer,corporate the biases, if any, 3. Reperform the
customer,Insurance represent a risk of calculation of
customer and others. material depreciation , finance
4) Verfy the MOU's with misstatement due to cost, ROUA and
the fraud in the financial lease liability balances
corporates ,agreements statements as a whole. 4. Perform the
with the Insurance payment testing by
companies and checking the invoices
Perform a retrospective
assistance letter from and bank
review of management
the government. payments on sample
judgements and
5)Perform Analytical basis
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Significant RMM 1 Significant RMM 2 Elevated RMM 3 Elevated RMM 4

review of revenue strems assumptions related to 5. Perform the expene

in comparision with PY. significant accounting reconciliation of the
6) Verified sample of estimates in the prior lease expenses
Invoices on the basis of year’s financial recorded
sampling calculator statements to assess if 6. Check the security
based biases existed. Using deposits paid,
on the category of professional scepticism, discounted secuirty
customers. evaluate whether the deposit
circumstances producing
the biases, if any,
represent a risk of
material misstatement
due to fraud
in the financial
statements as a whole.
Planned NA NA NA NA
consultation(s)
related to the
Significant RMM (or
Elevated RMM), if
applicable.
Information (including Sales register and Year end financial Workings on ROU Assets & ROU
information produced bank statement, statements Board and reconciliation and Liability Workings
by the component) debtors reconciliations AGM Minutes provision of debtors
used in performing
tests and planned
procedures to test the
accuracy and
completeness of the
information.

ii. Complete the table below for each Significant RMM identified by you, other than the Significant RMMs
identified by the group auditor in the table above, including a summary of the work planned to address these
risks.
Consider the following matters where potential Significant RMMs may arise:

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 Accounting estimates highly dependent upon judgment or assumptions

 Matters that are significant due to the selection and application of accounting policies, as well as ensuring
consistency of accounting policies
 Matters that are significant due to the transaction(s) being complex or unusual in nature.
 Potential fraud risks

Table (ii) Significant RMMs of the component, other than those identified by the group auditor

Significant RMM 1 Significant RMM 2 Significant RMM 3 Significant RMM 4

Description NA NA NA NA

The nature of the

Significant RMM
including the related
class of transaction or
account balance(s) or
disclosure and
relevant assertion(s).
Is this a Significant
RMM due to fraud?
Identified control(s)
that address the
Significant RMM.
Planned procedures to
test the design and
implementation of the
control(s) related to
the Significant RMM.
Planned audit
procedures to
respond to the risk.
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Significant RMM 1 Significant RMM 2 Significant RMM 3 Significant RMM 4

Planned
consultation(s)
related to the
Significant RMM, if
applicable.
Information (including
information produced
by the component)
used in performing
tests and planned
procedures to test the
accuracy and
completeness of the
information.

iii. Complete the table below for any other identified and assessed RMMs by you which are close to the higher end of
the spectrum of inherent risk or all other RMMs pertaining to the component, excluding Significant RMMs (i.e., Elevated
risks in the Audit Approach).
Table (iii) Other RMMs of the component excluding Significant RMMs
RMM 1 RMM 2 RMM 3 RMM 4

Description NA NA NA NA

The nature of the

RMM including the
related class of
transaction or account
balance(s) or
disclosure and
relevant assertion(s).
Was the RMM
identified during the

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RMM 1 RMM 2 RMM 3 RMM 4

prior year audit?

Describe what
changed in the current
period.
Identify control(s) that
address the RMM.
Planned procedures to
test the design and
implementation of the
controls related to the
RMM, if applicable.
Planned audit
procedures to respond
to the risk.
Planned consultations
related to the RMM, if
applicable.
Information (including
information produced
by the component)
used in performing
tests and planned
procedures to test the
accuracy and
completeness of the
information.

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l. Additional risks identified:

Describe any Significant RMMs (or RMMs close to the higher end of the spectrum i.e.,
Elevated RMMs) that you may be aware of at the component that you believe to be of
significance to the group financial statements, but that are not scoped in for your
component(s) as per Appendix C (Component Instructions Report).
NA

m. Revenue recognition
Describe your understanding of the component’s revenue recognition policies for all
significant revenue streams.
The revenues generated by the Group are mainly driven by services provided from
public and private payers. The main revenues streams identified are :
a. Public pay relates to medical, or laboratory services funded by a government
institution or statutory health body;
b. Earned premiums in respect of insurance contracts, received for access to a pre
determined range of medical services of benefits. This type of revenue is also referred
to as funded payments;
c. Fee-for-Service (FFS) refers to fees paid for access to medical or laboratory services
on a per usage basis; and
d. Other services include non-medical related services such as gym memberships and
benefit cards.
Revenue is one of key performance indicators therefore the existence is the main
assertion to address.

n. Fraud risk considerations

a. Inquire of management, and where different, those charged with governance, and
others within the component (e.g., internal audit, if it exists etc.), to determine how
they identify and assess fraud risk, as well as the nature, extent, and frequency of
management’s assessment of the risk that the financial statements may be
materially misstated due to fraud. Document your conclusion regarding the
adequacy of management’s fraud risk assessment.
Management has prepared a Risk Control Matrix and also has appropriate internal
controls in place.

b. Summarize the significant items noted during your component auditor engagement
team discussion regarding the susceptibility of the component’s financial statements
to material misstatements, including any fraud-related matters and related
responses. Include in your summary items such as the following:

 How and where the component auditor engagement team believes material
misstatement due to fraud or error is most likely to occur

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 APPENDIX F

 The existence of internal or external factors that may impact the component’s
susceptibility to fraud
 Any history of fraud or known fraud that has occurred at the component
 Other matters that may affect the potential for material misstatement due to
fraud.

[Note: All significant fraud risks identified need to be included in Section 4 (i) or 4 (ii)
above. Management override of internal controls and revenue recognition are
presumed fraud risks.]

NA

o. Going concern
Document whether events or conditions exist that may cast significant doubt on the
component’s ability to continue as a going concern, including any identified issues
relating to going concern, include in your response the procedures to be performed.
Indicators may include decreases in profit margins, lower income, decreases in working
capital levels, increasing operating cycle, negative operating cash flow despite reported
profits, problems in complying with financial covenants, potential loss of financing, loss
of significant customers, relationship problems with key suppliers and unusually high
dependence on debt.

NO Issue

p. Use of Experts
If you plan to use the work of an auditor’s expert or management’s expert, complete the
table below. (Copy and paste this table for each expert that will be used.) If No, insert
‘not applicable’.
Name and Organization Not Applicable

Nature of the matter to

which that expert’s
work relates, including
the significant classes of
transactions, account
balances and
disclosures affected and
the related risks of
material misstatement

Planned procedures to
assess the competence,
capabilities, and
objectivity of the expert
(including our
knowledge of and
experience with
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 APPENDIX F

previous work
performed by that
expert)

Planned procedures to
assess the relevance,
completeness, and
accuracy of source data
provided to the expert

Planned procedures to
assess the relevance
and reasonableness of
the significant
assumptions and
methods used by the
expert

Planned procedures to
assess the expert’s
findings or conclusions
and whether these are
relevant, reasonable,
and consistent with
other audit evidence

q. Internal audit function and/or the work of others

If applicable, summarize your planned use of the work of the internal audit function (or
similar function) and others, including your evaluation of whether, in which areas, and to
what extent the work can be used, and our planned audit procedures to evaluate the
adequacy of the work used. If internal audit is not used, insert ‘not applicable’ below.
NA

r. Accounting, assurance, ethics, or independence consultations

If you plan or are required to complete any accounting, assurance, ethics, or
independence consultations, document the nature and extent of any planned
consultations and the effect on your audit strategy. If No, insert ‘not applicable’ below.
Not Applicable

s. Other significant matters

Other matters of significance to the group as deemed appropriate.
NA

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Component engagement CA Harikanth Yadav Godha

partner’s name

Component engagement
partner’s signature

Component auditor’s firm KY & Co., M – 06, Shangri La Plaza, Road No.2, Banjara
and address Hills, Hyderabad – 500034

Date 18 April 2025

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