1(a) Accounting Conventions:
The financial statement have been prepared under the historical cost
convention on accrual basis, except where specifically stated
otherwise. These have been prepared in accordance with applicable
Accounting Standards and relevant provisions of the Companies Act,
1(b) Fixed Assets:
Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises of cost of acquisition and attributable expenses incurred for
the purpose of bringing the assets to its present for its intended use.
1(c) Depreciation on Fixed Assets:
a. Depreciation on Fixed Assets acquired upto 31st March, 1987 are
being provided on straight line method at the rate prevalent at the
time of acquisition of such assets in accordance with Circular No. 1 of
1986 (1-86-CL-V) dated 21st May, 1986 of the Company Law Board.
b. On assets acquired on or after 1st April, 1987, the depreciation has
been provided on straight line method at the rates prescribed in
Schedule XIV of the Companies (Amendment) Act, 1988, except that on
Assets acquired on or after 16th December, 1993, the rates as amended
by Ministry of Law, Justice and Company Affairs notification dated
10.12.1993 have been provided.
c. On assets acquired / sold during the year, the depreciation is being
provided on prorate basis.
The inventories of diagnostic consumable and trading goods are stated
at cost or net realisable value, whichever is lower. The method used in
determining the cost of inventories is First In First Out.
1(e) Foreign Currency Transactions:
All foreign currency transactions are accounted for at the rates
prevailing on the date of such transactions. Exchange fluctuation in
foreign currency transactions other than those relating to Fixed Assets
are recognized to the Profit and Loss Account. Exchange fluctuation in
relation Fixed Assets are apportioned to the original cost of such
assets acquired. Other assets and liabilities are restated at the rate
prevailing at the year end and the profit/loss is credited/ charged to
the Profit and Loss Account.
1(f) Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the report amounts of assets and
liabilities and the disclosure of contingent liabilities as at the date
of the financial statements and reported amounts of revenue and
expenses during the reporting period. Actual results could differ from
these estimates. Any revision to accounting estimates is recognised
prospectively in current and future periods.
Bonus paid to the employees is being accounted for on cash basis.
1(h) EMPLOYEE BENEFITS
(i) Short term Employee Benefits :
a. The undiscounted amount of Short-term Employee Benefits, such as
medical benefits, casual leave etc. which are expected to be paid in
exchange for the services rendered by employees are recognised during
the period when the employee renders the service.
(ii)Long Term Employment Benefits:
a. Provision for leave Encashment, which can be accumulated over the
tenure the employment or can be claimed as encashment during the
period employment, at the discretion of the employee, is made/
accounted for on the basis of the amount due to the employees in
respect of the earned leaves standing to their credit at the year end.
ii) Post Employment Benefit:
a. The Company provides Provident Fund as post employment benefit to
all its employees which is a defined contribution plan. The annual
contribution to Employee Provident Fund Organization is charged to the
Profit and Loss Account of the year to which the contribution relates.
b. The Company''s annual contribution to State Plan viz. Employee''s
Pension Scheme, 1995 are also charged to the Profit and Loss Account of
the year to which the contribution relates.
c. The Company provides for Gratuity which is a defined benefit plan.
The liability is determined on the basis of actuarial valuation under
the projected unit credit method at the balance sheet date. The
Gratuity is funded under the Group Gratuity Scheme with the Life
Insurance Corporation of India under an irrevocable trust for making
provision of the Payment of the Gratuity Act, 1972. Actuarial gains and
losses comprise of experience adjustments and the effects of changes in
actuarial assumptions, and are recognized immediately in the Profit and
Loss Account as income or expense.
1 (i) Revenue Recognition:
i. From patients on completions of the Diagnostic Procedure.
ii. From Sale of Trading Goods on transfer of title in the goods to the
iii. From Service Contracts on pro-rata basis over the period of the
iv. From Installation and Commissioning Contracts on completion of the
v. From Commission Income as per the Contract or in Receipt of Credit
vi. From Interest Income on Time Proportion Basis.
a. The provision for income tax is ascertained on the basis of
assessable profits computed in accordance with the provisions of the
Income Tax Act, 1961.
b. The Provision for deferred tax is recognised, subject to the
consideration of prudence on timing differences being the differences
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
1 (k) Borrowing Cost: Borrowing Cost that are attributable to the
acquisition of qualifying assets are capitalized as part of the cost f
such assets upto the date, the assets are ready for their intended use.
All other borrowing cost are recognized as an expense in the year in
which they are incurred.
1 (i) Impairment:
Fixed Assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset exceeds its
recoverable amount, an impairment loss is recognised in the income
stated for the items of fixed assets carried at cost. The recoverable
amount is the higher of an asset''s net selling price and value in use.
The selling price is the amount obtained from the sale of an assets in
an arms length transaction while value in use is the present value of
estimated future value cash flow expected to arise from the continuing
use of an asset, from its disposal at the end of its useful life.
Recoverable amounts are estimated for individual assets or, if not
possible, for the cash generating unit.
An impairment loss recognised for and asset in earlier accounting
periods is reversed, to the extent of its recoverable amount, if there
has been a change in the estimates used to determine the assets
recoverable amount since the impairment loss was recognised.
1 (m) Contingent Liabilities and Assets:
The Company recognizes provisions only when it has a present obligation
as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation, when a reliable estimate of the amount of the obligation
can be made.
No provision is recognized for:
i. any possible obligation that arises from past events and the
existence of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within
the control of the Company; or
ii. any present obligation that arises from past events but is not
a. it is not probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; or
b. a reliable estimate of the amount of obligation cannot be made.
Such obligations are recorded as Contingent Liabilities. These are
assessed at regular intervals and only that part of the obligation for
which an outflow of resources embodying economic benefits is probable,
is provided for, except in the extremely rare circumstances where no
reliable estimate can be made.
Contingent Assets are not recognized in the financial statements as
this may result in the recognition of income that may never be
1 (n) Earnings Per Share:
Basic and Diluted Earnings Per Share is computed in accordance with
Accounting Standard(AS-20) - Earnings Per Share issued by the
Institute of Chartered Accountants of India. Basic Earnings per Share
is computed by dividing the net profit after tax by the weighted
average number of equity shares outstanding during the year. Diluted
Earnings Per Share reflect the potential dilution that could occur, if
securities or contracts to issue equity shares were exercised or
converted during the year. Diluted Earnings Per Share is computed using
the weighted average number of equity shares outstanding during the
year and dilutive potential equity shares outstanding at the year end.