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Notes to Accounts of ADS Diagnostic Ltd.

Mar 31, 2014

1. Terms/rights/restrictions attached to equity shares:

The company has only one class of Equity Shares at par value of Rs 10 per share.

Each holder of equity shares is entitled to one vote per share and entitled for pro-rata dividend.

Year ended Year ended 31.3.2014 31.3.2013 Rs. Rs 2. Contingent Liabilities & Commitments (to the extent not provided for):

A. Claims against the Company / Disputed Liabilities not Acknowledged as Debts

(a) Custom Authorities demand in respect of which the Company is in appeal 4,000,000 4,000,000 (Amount deposited under protest - Rs. 500000)

(b) Directorate of Revenue show 5,601,507 5,601,507 cause notice contested by the Company

(c) Income Tax demand in respect of which the Income Tax Department is in appeal 1,873,290 1,873,290

(d) Income Tax demand for AY 2012-13 557,380 -

(e) TDS Demands for various financial years 69,700 -

B. Guarantees

Performance Guarantee given by the Bank on behalf of the Company to Third Parties 31,768,104 14,504,410

Margin Money against the above 8,791,004 4,875,000

3. Estimated amount of contracts, remaining to be executed on capital account (net of advances) - Nil (Previous Year - Nil)

4. In the opinion of Board of Directors the assets, other than fixed assets and non-current investments, have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

5. Segment Information for the year ended 31st March, 2014.

a. The Company is organized into two main business segments, namely:

1. Diagnostic Services - includes Scanning, Ultrasound and X-ray.

2. Trading and Other Activities- Includes Sale of Trading Goods, Servicing and Installation of Medical Equipments.

The segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure and internal financial reporting systems.

b. Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and are determined as part of the process of preparation of the financial statements. The Segment Revenues and Results do not include Interest Income, Interest Expenses and Provision for income Tax and Deferred Tax, and these have been grouped under the head "Unallocable".

c. Segment Assets exclude Miscellaneous Expenditure & Income Tax Assets. Segment Liabilities exclude Income Tax Liabilities.

6. Related Party Disclosures, as required in terms of Accounting Standard [AS] -18'' are given below. Relationships (Related party relationships are as identified by the Company and relied upon by the Auditors)

A. Key Management Personnel:

i) Dr. Gautam Sehgal, Managing Director

ii) Dr. (Mrs.) Versha Sehgal, Director

iii) Dr. Vivek Sehgal, Director

iv) Mrs. Radhika Sehgal, Director

(Dr. Gautam Sehgal, Managing Director, is related to Dr. (Mrs.) Versha Sehgal, Director, Dr. Vivek Sehgal, Director and Mrs. Radhika Sehgal, Director)

B. Enterprises Over which Key Managerial Personnel are able to Exercise Signficant Influence:

i) Ved Med Software & Trading Private Limited

ii) Cardiovas Medical Private Limited

iii) Dr. A. D. Sehgal & Sons (HUF)

iv) A Small Gift Shop 7. As per Revised Accounting Standard 15 "Employee Benefits" the disclosure as defined in the Accounting Standard are enumerated below. The Company has classified the various benefits provided to the employees as under:

I. Defined Contribution Plan-Provident Fund:

During the year, the Company has recognized the Employer''s Contribution to the Employees Provident Fund Organization amounting to Rs. 5,03,961 (Previous Year Rs. 3,43,120).

II. State Plans-Employer Contribution to Employees'' Pension Scheme 1995:

During the year, the Company has recognized the Employer''s Contribution to the Employees Pension Fund amounting to Rs. 50313 (Previous Year Rs. 46,526).

III. Defined Benefit Plans-Gratuity:

Gratuity Report under the revised Accounting Standard 15 for the year ended 31.3.2014 in respect of Trustees -ADS Diagnostic Ltd Employees Group Gratuity Scheme was done in respect of the aforesaid defined benefits using the following assumptions:

8. Previous year figures have been reworked/regrouped/rearranged wherever necessary to conform to those of current year.


Mar 31, 2013

1 Contingent Liabilities & Commitments (to the extent not provided for):

Year ended Year ended 31.3.2013 31.3.2012 Rs. Rs.

A. Claims against the Company / Disputed Liabilities not Acknowledged as Debts

(a) Custom Authorities demand in respect of which the Company is in appeal 4,000,000 4,000,000

(b) Directorate of Revenue show cause notice contested by the Company 5,601,507 5,601,507

(c) Income Tax demand in respect of which the Income Tax Department is in appeal 1,873,290 1,873,290

B. Guarantees

Performance Guarantee given by the Bank on behalf of the Company to Third Parties 14,504,410 17,478,000

Margin Money against the above 4,875,000 4,025,000

2 Estimated amount of contracts, remaining to be executed on capital account (net of advances) - Nil (Previous Year - Nil)

3 In the opinion of Board of Directors the assets, other than fixed assets and non-current investments, have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

4 Some of the debit and credit balances are pending confirmation and the same have been taken as per the balances appearing in the books.

5 Segment Information for the year ended 31st March, 2013.

a. The Company is organized into two main business segments, namely:

1. Diagnostic Services - Includes Scanning, Ultrasound and X-ray.

2. Trading and Other Activities- Includes Sale of Trading Goods, Servicing and Installation of Medical Equipments.

The segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure and internal financial reporting systems.

b. Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and are determined as part of the process of preparation of the financial statements. The Segment Revenues and Results do not include Interest Income, Interest Expenses and Provision for Income Tax and Deferred Tax, and these have been grouped under the head "Unallocable".

c. Segment Assets include all operating assets used by a segment and consist principally of Debtors, Inventories, Advances and Fixed Assets. Assets which are not allocable on a reasonable basis have been classified under the head "Unallocable". Segment Liabilities include all Operating Liabilities and consist principally of Creditors and Accrued Liabilities. Liabilities which are not allocable on a reasonable basis have been classified under the head "Unallocable".

6 Related Party Disclosures, as required in terms of ''Accounting Standard [AS] -18'' are given below. Relationships (Related party relationships are as identified by the Company and relied upon by the Auditors)

A. Key Management Personnel :

i) Dr. Gautam Sehgal, Managing Director

ii) Dr. (Mrs.) Versha Sehgal, Director

iii) Dr. Vivek Sehgal, Director

iv) Mrs. Radhika Sehgal, Director

(Dr. Gautam Sehgal, Managing Director, is related to Dr. (Mrs.) "Versha Sehgal, Director, Dr. Vivek Sehgal, Director and Mrs. Radhika Sehgal, Director)

B. Enterprises Over which Key Managerial Personnel are able to Exercise Signficant Influence: i) Ved Med Software & Trading Private Limited

ii) Cardiovas Medical Private Limited iii) Dr. A. D. Sehgal & Sons (HUF)

7 (a) As per Revised Accounting Standard 15 "Employee Benefits" the disclosure as defined in the Accounting Standard are enumerated below. The Company has classified the various benefits provided to the employees as under :

I. Defined Contribution Plan - Provident Fund:

During the year, the Company has recognized the Employer''s Contribution to the Employees Provident Fund Organization amounting to Rs. 3,43,120 (Previous Year Rs. 1,65,326).

II. State Plans - Employer''s Contribution to Employees'' Pension Scheme 1995:

During the year, the Company has recognized the Employer''s Contribution to the Employees Pension Fund amounting to Rs. 46,526 (Previous Year Rs. 37,870).

8 The previous year figures have been re-grouped, rearranged and reclassified wherever nececcary to make them comparable with the current figures.

9 The figures have been rounded off to the nearest rupee.


Mar 31, 2012

1 There are no contractors remaining to be executed on capital account or any other commitment remaining to be executed nor are there any partly paid Investments and shares as at 31st March, 2012.

2. In the opinion of the Board, Assets have atleast the value at which these are stated in the Balance sheet, if realized in the ordinary course of the business. During the year the company has evaluated all customer dues based on various factors considered collectively and has written off amounts due to the Company to the turn of Rs. 4,49,400, which are non recoverable. Further in the opinion of the Board, the provision for liabilities outstanding as on 31st March, 2012 is adequate and is not in excess of the amount considered necessary and in line with the said evaluation a provision of Rs. 60,115, which in the opinion of the Board is no longer required, has been written back.

3. Some of the debit and credit balances are pending confirmation and the same have been taken as per the balances appearing in the books. The differences arising on confirmation., if any, as compared to the Company's books, that in the opinion of the Board, are not likely to be material, will be made as and when these accounts are confirmed.

4 Segment Information for the period ended 31st March, 2012.

a. The Company is organised into two main business segments, namely:

1. Diagnostic Services - Includes Scanning, Ultrasound, X-ray and ECG.

2. Trading and other Activities - Includes Sale of Trading Goods, Servicing and Installation of Medical Equipments.

The segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and internal financial reporting systems

b. Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and are determined as part of the process of preparation of the financial statements. The Segment Revenue and Results does not include Interest Income, Interest Expense and Provision for Income Tax and Deferred Tax, these have been grouped under the head Unallocable.

c. Segment assets include all operating assets used by a segment and consist principally of Debtors, Inventories, Advances and Fixed Assets. Assets which are not allocable on a reasonable basis have been classified under the head of Unallocable. Segment Liabilities include all operating Liabilities and consist Principally of Creditors and Accrued Liabilities. Liabilities which are not allocable on a reasonable basis have been classified under the head Unallocable.

5 The Cash Flow Statement has been prepared under the indirect method set out in the Accounting Standard(AS-3) "Cash Flow Statements" issued by the Institute of Chartered Accountants of India. The Cash and cash Equivalents include Fixed Deposits of Rs. 40,25,000 (Previous Year Rs. 44,25,000), given as Margin against Bank Guarantees and are not available for use by the Company.

6 Related Party Disclosures under Accounting Standard-18 (as identified and certified by the management)

i. Key Management Personnel

a. Dr. Gautam Sehgal, Managing Director

b. Dr. (Mrs.) Versha Sehgal, Director

c. Dr. Vivek Sehgal, Director

d. Mrs.Radha Sehgal, Director

ii. Enterprises Over which Key Management Personnel are able to Exercise Significant Influence:

i. VedMed Software & Trading Private Limited

ii. Cardiovaa Medical Private Limited

iii. Dr. A. D. Sehgal & Sons (HUF)



Disclosure in Respect of Material Related Party Transactions for the year:

1) Sale of Goods and Services include to Dr. A. D. Sehgal & Sons (HUF) Rs. 0 (Previous Year Rs. 1,95,275).

2) Purchase of Goods and Services include from Cardiovas Medical Private Limited Rs. 52,876 (Previous Year Rs. 0) and from vedMed Software & Trading Private Limited Rs. 2,41,500 (Previous Year Rs. 0).

3) Interest Received includes from VedMed Software & Trading Private Limited Rs. 15,610 (Previous Year Rs. 55,530).

4) Interest Paid includes to vedMed Software & Trading Private Limited Rs. 0 (Previous Year Rs. 6,773).

5) Managerial Remuneration includes to Dr. Gautam Sehgal, Managing Director Rs. 23,30,000 (Previous Year Rs. 18,50,000).

6) Loan Given includes to VedMed Software & Trading Private Limited Rs. 4,95,000 (Previous Year Rs. 32,00,000).

7) Loan Recovered includes from VedMed Software & Trading Private Limited Rs. 4,95,000 (Previous Year Rs. 32,00,000).

8) Loan Taken includes from Dr. Gautam Sehgal, Managing Director Rs. 20,25,000 (Previous Year Rs. 18,00,000) and VedMed Software & Trading Private Limited Rs. 0 (Previous Year Rs. 18,00,000).

9) Loan Repaid includes to Dr. Gautam Sehgal, Managing Director Rs. 17,75,000 (Previous Year Rs. 21,25,000), Dr. (Mrs.) Versha Sehgal, Director Rs. 1,00,000 (Previous Year Rs. 2,82,734) and VedMed Software & Trading Private Limited Rs. 0 (Previous Year Rs. 18,00,000).

10. Directors Sitting Fee includes to Dr. Vivek Sehgal, Director Rs. 1,000 (Previous Year Rs. 1,000) and Mrs. Radhika Sehgal Rs. 5,000 (Previous Year Rs. 4,000).

11) Sharing of Common Expenses includes with VedMed Software & Trading Private Limited Rs. 46,878 (Previous Year Rs. 46,001).

7 Dr. Gautam Sehgal, Managing Director, is related to Dr. (Mrs.) Versha Sehgal, Director, Dr. Vivek Sehgal, Director and Mrs. Radhika Sehgal, Director.

8 Contingent Liabilities

For the year For the year ended ended 31st March 31st March 2012 2011

A) Claims against the Company/Disputed Liabilities not Acknowledged as Debts a) Custom Authorities demand in respect of which the Company is in appeal 4,000,000.00 4,000,000.00

b) Directorate of Revenue show cause notice contested by the Company 5,601,507.00 5,601,507.00

c) Income Tax demand in respect of which the Income Tax Department is in appeal 1,873,290.00 1,873,290.00

B) Guarantee

a) Performance Guarantee given by the Bank on behalf of the Company to Third Parties 17,478,000.00 16,232,000.00

The above liabilities are dependent upon, the outcome of the court/appellate authority/ out of court settlement, disposal of appeals, the amount being called up, the terms of the contractual obligations and raising of demand by concerned authorities. No reimbursement is expected in such cases.

9. The previous year figures have been regrouped, rearranged and reclassified wherever necessary to make them comparable with the current year figures.

As per our Report of even date attached.


Mar 31, 2011

1. On 16th August, 1995, the Commissioner of Customs II, New Delhi passed an order imposing a redemption fine of Rs. 40 Lacs and also a penalty of Rs. 10 Lacs on South Delhi Cancer Detection and Research Institute, a unit of the Company. Personal penalties amounting to Rs. 5 Lacs each was also imposed on the then Managing Director and the Executive Director respectively and a penalty of Rs. 2 Lacs was also imposed on the then General Manager of the Company.

The Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi heard the case and passed orders asking the Company and the concerned Directors to deposit 50% of the penalty amount and the General Manager to deposit Rs. 18,000/- within two months and the same was deposited on 15th February, 1996. The Tribunal however did not pass any order on the redemption fine imposed on the Company.

The above mentioned stay order of CEGAT as well as the impugned order passed by the Commissioner had been challenged by the Company by way of writ petition before the Delhi High Court. The Hon'ble court on 6th February, 1996 directed the Company to pre deposit the penalty and granted a stay for payment of redemption fine. Accordingly, the Company has pre- deposited an amount of Rs. 5 Lacs in the Government Account.

The CEGAT passed the final order on 19th March, 1999 and allowed the appeal of the Company by way of remanding the matter to the Jurisdictional Commissioner.

The Company has filed a letter with the Commissioner of Customs to verify the necessary records on 4th September, 1999, but there has been no response from the Commissioner of Customs till the date of the Annual Accounts.

Pending final decision in the matter by the adjudicating authority, the actual liability, if any, which may arise, cannot be ascertained and hence not provided for in the books of account. The pre-deposited amount of Rs. 5 Lacs, in the opinion of the Management, is recoverable since the matter is sub judice.

2. The company had received a show cause notice, from Directorate of Revenue Intelligence, Delhi Zonal Unit on 6th January, 1993 asking the Company to show cause as to why Custom Duty of Rs. 56,01,507/- be not levied on the Company on the Import of one Magnetic Resonance Imaging Scanner (MRI) due to the non fulfilment of certain post importation conditions. The Company has submitted its reply to the above show cause notice and no order has been passed by the Adjudicating Authority in the above matter till the date of the Annual Accounts.

3. On 21st May, 2003 the Income Tax Department filed an appeal in the Delhi High Court against an order passed by the Income Tax Appellate Tribunal in favour of the Company in a matter relating to the availment of Investment Allowance Rebate during the assessment year 1988 - 1989 and 1989 - 1990. The amount of rebate disputed by the Income Tax Department is to the tune of Rs. 18,73,290/-.

In the opinion of the management since the matter is sub-judice and till the time a final decision in the matter is arrived at, which the Management is hopeful would be in favour of the Company, no provision for the same is required to be made in the book of accounts.

4. In the opinion of the Board, Current Assets, Loans and Advances have at least the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business. During the year the Company has evaluated all customer dues based on various factors considered collectively and has written off amounts due to the Company to the tune of Rs. 6.61 lacs, which are non-recoverable. Further, in the opinion of the Board, the provision for liabilities outstanding as on 31st March, 2011 is adequate and is not in excess of the amount considered necessary and in line with the said evaluation a provision of Rs. 0.79 lacs, which in the opinion of the Board is no longer required, has been written back.

5. Some of the debit and credit balances are pending confirmation and the same have been taken as per the balances appearing in the books. The differences arising on confirmation, if any, as compared to the Company's books, that in the opinion of the Board, are not likely to be material, will be made as and when these accounts are confirmed.

Current Year Previous Year (Rs. In Lacs) (Rs. In Lacs)

7. Contingent Liabilities

a. Custom Authorities Demand against the Company not acknowledged as debt and not provided for in respect of which the Company is in appeal. 40.00 40.00

b. Directorate of Revenue show cause notice contested by the Company. 56.02 56.02

c. Income Tax demand against the Company not acknowledge as debt and not provided for in respect of which the Income Tax Department is in appeal. 18.73 18.73

d. Performance Guarantee given by the Bank of behalf of the Company to Third Parties. 162.52 130.26

The above liabilities at serial number 7a to 7d are dependent upon, the outcome of the court / appellate authority / out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations and raising of demand by concerned authorities. No reimbursement is expected in such cases.

10. The Cash Flow Statement has been prepared under the indirect method set out in the Accounting Standard (AS - 3) "Cash Flow Statements" issued by the Institute of Chartered Accountants of India.

Cash and Cash Equivalents include Fixed Deposits of Rs. 44.25 Lacs (Previous Year Rs. 32.42 Lacs), given as Margin against Bank Guarantees and Letter of Credit and are not available for use by the Company.

11. As per practice consistently followed the payment of bonus is being charged to revenue on cash basis.

12. The Company has classified the various benefits provided to the employees as under :

I. Defined Contribution Plan - Provident Fund:

During the year, the Company has recognized the Employer's Contribution to Employees Provident Fund Organization amounting to Rs. 1.37 Lacs (Previous Year Rs. 1.03 Lacs) as part of the Schedule -J (Payments to Employees) of the Financial Statement.

II. State Plans - Employer's Contribution to Employees' Pension Scheme 1995:

During the year, the Company has recognized the Employer's Contribution to Employees Pension Fund amounting to Rs. 0.26 Lacs (Previous Year Rs. 0.39 Lacs) as part of the Schedule -J (Payments to Employees) of the Financial Statement.

III. Defined Benefit Plans - Gratuity:

In accordance with the revised Accounting Standard 15, actuarial valuation was done in respect of the aforesaid defined benefits using the following assumptions:

The estimate of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

13. As per practice consistently followed Leave Encashment has been 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.

14. As per the compliance of the Accounting Standard (AS - 22) 'Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has charged the net deferred tax liability as at 31st March, 2011 of Rs. 0.04 Lacs to the Profit and Loss Account.

15. Segment information for the period ended 31st March, 2011.

a. The Company is organized into two main business segments, namely:

1. Diagnostic Services - includes Scanning, Ultrasound, X-ray and ECG.

2. Trading and Other Activities- includes Sale of Trading Goods, Servicing and Installation of Medical Equipments.

The segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure and internal financial reporting systems.

b. Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and are determined as part of the process of preparation of the financial statements.

Segment Revenue and Results does not include Interest Income, Interest Expenses and Provision for Income Tax and Deferred Tax, these have been grouped under the head Unallocable.

c. Segment Assets include all operating assets used by a segment and consist principally of Debtors, Inventories, Advances and Fixed Assets. Assets which are not allocable on a reasonable basis have been classified under the head Unallocable.

Segment Liabilities include all Operating Liabilities and consist principally of Creditors and Accrued Liabilities. Liabilities which are not allocable on a reasonable basis have been classified under the head Unallocable.

16. Related Party Disclosures under Accounting Standard - 18 (as identified and certi- fied by the Management.)

i Key Management Personnel :

a. Dr. Gautam Sehgal, Managing Director

b. Dr. (Mrs.) Versha Sehgal, Director

c. Dr. Vivek Sehgal, Director

d. Mrs. Radhika Sehgal, Director

ii. Others:

i. Ved Med Software & Trading Private Limited

ii. Cardiovas Medical Private Limited

iii. Dr. A. D. Sehgal & Sons - HUF

iv. ADS Hospital Charitable Trust

17. During the year 2004-2005 the Company retired from active use its old Magnetic Resonance Imaging Scanner on account of technical obsolescence and is holding the same for disposal subject to approval from appropriate authorities. In line with the compliance of Accounting Standard (AS-10) "Accounting for Fixed Assets" and the Accounting Standard (AS-28) "Impairment of Assets" issued by the Institute of Char- tered Accountants of India, the asset was written down to nil value. This Impaired Asset is the old Magnetic Resonance Imaging Scanner belonging to the Diagnostic Services Segment, as identified in line with the Accounting Standard (AS-17) "Seg- ment Reporting" issued by the Institute of Chartered Accountants of India.

18. The Company has not received information from vendors regarding their status un- der the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at the year end together with interest paid / payable under this Act have not been given.

19. The requirements of Accounting Standard (AS - 21) "Consolidated Financial State- ments" issued by the Institute of Chartered Accountants of India are not applicable to the Company.

21. Additional Information Pursuant to the Provisions of Part II of Schedule VI to the Companies Act, 1956 to the extent applicable.

a) The requirement regarding licensed, installed capacity and production is not applicable to the Company.

b) Details of Material Consumed

24. The previous year figures have been regrouped, rearranged and reclassified wherever necessary to make them comparable with the current year figures.

25. Schedules 'A' to 'N' form an integral part of the Accounts and have been duly authenticated.

26. Dr. Gautam Sehgal, Managing Director, is related to Dr. Vivek Sehgal, Dr. (Mrs.) Versha Sehgal and Mrs. Radhika Sehgal, Director.

27. Additional information as required under Part IV of Schedule VI to the Companies Act, 1956.


Mar 31, 2010

1. On 16th August, 1995, the Commissioner of Customs II, New Delhi passed an order imposing a redemption fine of Rs. 40 Lacs and also a penalty of Rs. 10 Lacs on South Delhi Cancer Detection and Research Institute, a unit of the Company. Personal penalties amounting to Rs. 5 Lacs each was also imposed on the then Managing Director and the Executive Director respectively and a penalty of Rs. 2 Lacs was also imposed on the then General Manager of the Company.

The Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi heard the case and passed orders asking the Company and the concerned Directors to deposit 50% of the penalty amount and the General Manager to deposit Rs. 18,000/- within two months and the same was deposited on 15th February, 1996. The Tribunal however did not pass any order on the redemption fine imposed on the Company.

The above mentioned stay order of CEGAT as well as the impugned order passed by the Commissioner had been challenged by the Company by way of writ petition before the Delhi High Court. The Honble court on 6th February, 1996 directed the Company to pre deposit the penalty and granted a stay for payment of redemption fine. Accordingly, the Company has pre- deposited an amount of Rs. 5 Lacs in the Government Account.

The CEGAT passed the final order on 19th March, 1999 and allowed the appeal of the Company by way of remanding the matter to the Jurisdictional Commissioner.

The Company has filed a letter with the Commissioner of Customs to verify the necessary records on 4th September, 1999, but there has been no response from the Commissioner of Customs till the date of the Annual Accounts.

Pending final decision in the matter by the adjudicating authority, the actual liability, if any, which may arise, cannot be ascertained and hence not provided for in the books of account. The pre-deposited amount of Rs. 5 Lacs, in the opinion of the Management, is recoverable since the matter is sub-judice.

2. The company had received a show cause notice, from Directorate of Revenue Intelligence, Delhi Zonal Unit on 6th January, 1993 asking the Company to show cause as to why Custom Duty of Rs. 56,01,507/- be not levied on the Company on Import of one Magnetic Resonance Imaging Scanner (MRI) due to the non fulfilment of certain post importation conditions. The Company has submitted its reply to the above show cause notice and no order has been passed by the Adjudicating Authority in the above matter till the date of the Annual Accounts.

3. On 21st May, 2003 the Income Tax Department filed an appeal in the Delhi High Court against - an order passed by the Income Tax Appellate Tribunal in favour of the Company in a matter relating to the availment of Investment Allowance Rebate during the assessment year 1988- 89,1989-90. The amount of rebate disputed by the Income Tax Department is to the tune of Rs. 18,73,290/-.

In the opinion of the management since the matter is sub-judice and till the time a final decision in the matter is arrived at, which the Management is hopeful would be in favour of the Company, no Provision for the same is required to be made in the book of accounts.

4. In the opinion of the Board, Current Assets, Loans and Advances have at least the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business. During the year the Company has evaluated all customer dues based on various factors considered collectively and has written off amounts due to the Company to the tune of Rs. 3.83 lacs, which are non-recoverable. Further, in the opinion of the Board, the provision for liabilities outstanding as on 31st March, 2010 is adequate and is not in excess of the amount considered necessary and in line with the said evaluation a Provision of Rs. 0.76 lacs, which in the opinion of the Board is no longer required, has been written back.

5. Some of the debit and credit balances are pending confirmation and the same have been taken as per the balances appearing in the books. The differences arising on confirmation, if any, as compared to the Companys books, that in the opinion of the Board, are not likely to be material, will be made as and when these accounts are confirmed.

6. The Cash Flow Statement has been prepared under the indirect method set out in the Accounting Standard (AS - 3) "Cash Flow Statements" issued by the Institute of Chartered Accountants of India.

Cash and Cash Equivalents include Fixed Deposits of Rs. 32.42 Lacs (Previous Year Rs. 24.60 Lacs), given as Margin against Bank Guarantees and Letter of Credit and are not available for use by the Company.

7. As per practice consistently followed the payment of bonus is being charged to revenue on cash basis.

8. The Company has classified the various benefits provided to the employees as under:

I. Defined Contribution Plan - Provident Fund:

During the year, the Company has recognized the Employers Contribution to Employees Provident Fund Organization amounting to Rs. 1.03 Lacs (Previous Year Rs. 1.12 Lacs) as part of the Schedule -J (Payments to Employees) of the Financial Statement.

II. State Plans - Employers Contribution to Employees Pension Scheme 1995:

During the year, the Company has recognized the Employers Contribution to Employees Pension Fund amounting to Rs. 0.39 Lacs (Previous Year Rs. 0.71 Lacs) as part of the Schedule -J (Payments to Employees) of the Financial Statement.

III. Defined Benefit Plans - Gratuity:

In accordance with the revised Accounting Standard 15, actuarial valuation was done in respect of the aforesaid defined benefits using the following assumptions:

The estimate of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

The other disclosures required under Revised Accounting Standard (AS-15) "Employee Benefits" are as follows:

9. As per practice consistently followed Leave Encashment has been 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.

10. As per the compliance of the Accounting Standard (AS - 22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has charged the net deferred tax liability as at 31st March 2010 of Rs. 12.00 Lacs to the Profit and Loss Account.

11. Segment information for the period ended 31st March, 2010.

a. The Company is organized into two main business segments, namely:

1. Diagnostic Services - includes Scanning, Ultrasound, X-ray and ECG

2. Trading and Other Activities- includes Sale of Trading Goods, Servicing and Installation of Medical Equipments.

The segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure and internal financial reporting systems.

b. Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and are determined as part of the process of preparation of the financial statements.

Segment Revenue and Results does not include Interest Income, Interest Expenses and Provision for Income Tax, Fringe Benefit Tax and Deferred Tax, these have been grouped under the head Unallocable.

c. Segment Assets include all operating assets used by a segment and consist principally of Debtors, Inventories, Advances and Fixed Assets. Assets which are not allocable on a reasonable basis have been classified under the head Unallocable.

Segment Liabilities include all Operating Liabilities and consist principally of Creditors and Accrued Liabilities. Liabilities which are not allocable on a reasonable basis have been classified under the head Unallocable.

12. During the year 2004-2005 the Company retired from active use its old Magnetic Resonance Imaging Scanner on account of technical obsolescence and is holding the same for disposal subject to approval from appropriate authorities. In line with the Accounting Standard (AS-10) "Accounting for Fixed Assets" issued by the Institute of Chartered Accountants of India, the asset was written down to Rs. 2.50 lacs, as on 31st March 2009 based on management estimates and was declared under "Other Current Assets" (Schedule - E). During the year as per the compliance of Accounting Standard (AS-28) "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the Company at the beginning as well as at the end of the year, reviewed the future earnings of all its cash generating units, as the carrying amount of the machine which was retired on 1st April,2004 from active use has been determined as nil as on 31st March, 2010 on the basis of the future recoverable amount which was reviewed as on 31st March, 2010 and a further impairment loss of Rs. 2.50 Lacs was recognised to the Profit and Loss Account during the year. This Impaired Asset is the old Magnetic Resonance Imaging Scanner belonging to the Diagnostic Services Segment, as identified in line with the Accounting Standard (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India.

13. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at the year end together with interest paid / payable under this Act have not been given.

14. The requirements of Accounting Standard (AS - 21) "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India are not applicable to the Company.

15. The Operating Leases relate to various rented premises and such leases extend for a maximum period of four years from their Lease Agreement dates. The Lease Rental paid during the year and maximum obligations payable as per the Rentals stated in the respective agreements are as follows:

16. Additional Information Pursuant to the Provisions of Part II of Schedule VI to the Companies Act, 1956 to the extent applicable.

a) The requirement regarding licensed, installed capacity and production is not applicable to the Company.

b) Details of Material Consumed

17. The previous year figures have been regrouped, rearranged and reclassified wherever necessary to make them comparable with the current year figures.

18. Schedules A to N form an integral part of the Accounts and have been duly authenticated.

19. Dr. Gautam Sehgal, Managing Director, is related to Dr. Vivek Sehgal, Dr. (Mrs.) Versha Sehgal and Mrs. Radhika Sehgal, Director.

20. Additional information as required under Part IV of Schedule VI to the Companies Act, 1956.

 
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