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Regency Hospitals Ltd. Accounting Policies | Accounting Policy of Regency Hospitals Ltd.
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Accounting Policies of Regency Hospitals Ltd. Company

Mar 31, 2014

A) Basis of accounting and preparation of Financial Statements :

The Financial statements/ accounts have been prepared under historical cost convention on the "Accrual Concept" of accountancy and as going concern, in accordance with the Accounting Principles Generally Accepted (GAAP) in India and they comply with the Accounting Standards notified as per the Companies (Accounting Standard) Rules, 2006 (as amended) issued by the Central Government to the extent applicable and with the applicable provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non -current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of services and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non - current classification of assets and liabilities.

b) Use of Estimates:

The preparation of Financial Statement in conformity with the Accounting Standards Generally accepted in India requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) Inventories:

I) The inventories of all medicines, medicare items traded and dealt with by the Company are valued at cost. Cost of

these inventories comprises of all cost of purchase and other costs incurred in bringing the inventories to their present location after adjusting for VAT wherever applicable applying the FIFO Method.

ii) Stocks of Provisions, stores (including lab materials and other consumables), stationeries and housekeeping items are stated at cost. The net realizable value is not applicable in absence of any further modification /alteration before being consumed in house only. Cost of these inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to present location after adjusting for VAT wherever applicable applying the FIFO Method.

iii) Surgical instruments, linen, crockery and cutlery are valued at cost. The net realizable value is not applicable in absence of any further modification /alteration before being consumed in house only. Cost of these inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to present location after adjusting for VAT wherever applicable applying the FIFO Method.

d) Investments:

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other are classified as Long term investments. Long term investments including trade investments are stated at cost, after providing for any diminution in value, if such diminution is other than temporary in nature. Investments comprise of investment in subsidiary company in which the Company has strategic business interest.

e) Cash and Cash Equivalents:

In the cash flow statement, Cash and Cash Equivalents includes Cash in Hand, term deposit with Bank and short term highly liquid investments with original maturities of three months or less.

f) Cash Flow Statement:

Cash flows are reported using the Indirect Method 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 item of income or expenses associated with investing or financing cash flows. The cash flows from operating investing and financing activities of the company are segregated.

g) Prior Period items and Extra Ordinary items:

Prior Period items and Extra Ordinary Items are separately classified, identified and dealt with as required under Accounting Standard 5 on "Net Profit or Loss for the period, Prior Period Items and Changes in Accounting Policies" issued by the Institute of Chartered Accountants of India.

h) Fixed Assets:

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to date. The Company has adopted the provisions of paragraph 46A of AS - 11 " The Effects of Changes in Foreign Exchange Rates", accordingly, exchange differences arising on restatement/ settlement of long term foreign currency borrowing relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such assets beyond its previously assessed standard of performance.

Capital work-in-progress comprises of amounts expended on development/acquisition of Fixed Assets that are not yet ready for their intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest.

i) Depreciation:

Depreciation for the year has been provided on Straight Line Method (SLM) as per Section 205 (2) (b) of the Companies, 1956 at the rates prescribed in Schedule XIV of the Companies Act, 1956, on pro-rata basis from the date of acquisition of assets till the date of transfer / sale of assets.

j) Foreign Currencies in Transactions and translations:

i) Transactions denominated in foreign currency are recorded at exchange rates prevailing at the date of transaction or rates that closely approximate the rate at the date of transaction.

ii) Foreign Currency monetary items (other than derivative contracts) of the Company, outstanding at the balance sheet date are restated at the year-end rates. Non monetary items of the Company are carried at historical cost.

iii) Exchange differences arising on settlement/restatement of long term foreign currency monetary assets and liabilities of the Company and its integral foreign operations are recognized as income or expense in the Statement of Profit and Loss.

The exchange differences arising on restatement / settlement of long term foreign currency monetary items are capitalised as part of the depreciable fixed assets to which the monetary item relates and depreciated over the remaining useful life of such assets or amortised on settlement over the maturity period of such items if such items do not relate to acquisition of depreciable fixed assets.

k) Revenue Recognition:

i) Income from Healthcare Services is recognised on completed service contract method. The hospital collections of the Company are net of discounts. Revenue also includes the value of services rendered pending final billing in respect of in-patients undergoing treatment as on 31st March, 2014.

ii) Pharmacy Sales are recognised when the risk and reward of ownership is passed to the customer and are stated net of returns, discounts and inclusive of VAT wherever applicable.

iii) Interest income is recognised on a time proportion basis taking into account the principal amount outstanding and the rate applicable.

iv) Income from Educational services is recognized on the basis of fee due on each semester from students.

l) Borrowing Costs:

Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalization of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during the extended periods when active development activity on the qualifying asset is interrupted.

m) Employee Benefits:

Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost.

Long-term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which employees render service), and post employment benefits (benefits which are payable after completion of employment),are measured on a discounted basis by the Projected Unit Credit Method, on the basis of annual third party actuarial valuations.

Defined Contribution Plan

The Company makes contribution towards Provident Fund and Employees State Insurance Fund as a defined contribution retirement benefit fund for qualifying employees.

The Provident Fund Plan is operated by the Regional Provident Fund Commissioner and Employees State Insurance Plan is operated by Regional Director Employees State Insurance Corporation Under both the

schemes, the Company is required to contribute a specified percentage of payroll cost, as per the statute, to the retirement benefit schemes to fund the benefits.

Defined Benefit Plans

For Defined Benefit Plan the cost of providing benefits is determined using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial Gains or Losses are recognised in full in the Statement of Profit and Loss for the period in which they occur.

Gratuity

The Company makes provision of gratuity on the basis of annual third party actuarial valuations at the end of the accounting period.

Leave Encashment Benefits

The Company has a policy not to accumulate leave encashment benefits of the employees. The Company pays leave encashment Benefits to employees at end of each accounting period.

n) Segment Reporting :

(i) Identification of Segments

The Company has complied with Accounting Standard 17- ''Segment Reporting'' with Business as the primary segment. The business segments are primarily healthcare and educational services. The Company operates in a single geographical segment, which is India, and the products sold in the pharmacies, are regulated under the Drug Control Act, which applies uniformly all over the Country. The risk and returns of the enterprise are very similar in different geographical areas within the Country and hence there is no reportable secondary segment as defined in Accounting Standard 17.

(ii) Segment Policies

The accounting policies adopted for segment reporting are in line with the accounting policies adopted in consolidated financial statements with the following additional policies for Segment Reporting:

a. Revenue and expenses directly attributable to segments are reported under each segment. Expenses which are not directly identifiable to specific segment have been allocated on the basis of associated revenues of the segment and manpower efforts. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under '' unallocable expenses''.

b. Assets and liabilities directly attributable or allocable to segments are disclosed under each reportable segment All other assets liabilities are disclosed as unallocable.

The Company has disclosed this Segment Reporting in Consolidated Financial Statements as per para (4) of Accounting Standard - 17- ''Segment Reporting.

0) TAXATION:

1) Income Tax

Income taxes are accounted for in accordance with Accounting Standard 22 (AS 22) "Accounting for Taxes on Income". Tax expense comprises both Current Tax and Deferred Tax. Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

ii) Deferred Tax:

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

p) Earning Per Share:

In determining the earnings per share, the Company considers the net profit after tax before extraordinary item and after extraordinary items and includes post - tax effect of any extraordinary items. The number of shares used in computing the basic earnings per share is the weighted average number of shares outstanding during the period. For computing diluted earnings per share, potential equity shares are added to the above weighted average number of shares.

q) Leases:

Operating Leases: Assets taken on lease under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments under operating leases are recognized in the Statement of Profit and Loss on a straight line basis in accordance with the respective lease agreements.

Finance leases: The lower of the fair value of the lease assets at the inception of the lease and present value of the minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to the Statement of Profit and Loss.

r) Impairment of Assets:

In terms of the requirements of the Accounting standard - 28 on Impairment of Assets "issued by ICAI, the amount recoverable against Fixed Assets has been estimated for the period by the management based on present value of estimated future cash flows expected to arise from continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, therefore no provision for impairment in value thereof has been considered necessary, by the management.

s) Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent liabilities are disclosed for (1) possible obligations which will be confirmed only by future events not wholly within the control of the Company or (2) present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements as this may result in the recognition of income that may never be realised.

(iii) Terms/rights of Equity Shares

The Company has issued only one class of the shares referred to as equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share.

In the event of liquidiation of the Company, the holders of equity shares will be entitiled to receive remaining assets of the Company, after distribution of all the preferential amount , in proporation of the number of equity shares held by each shareholder.

*The Company''s Fixed deposit receipts amounting to Rs. 576.25 Lacs are under lien with bankers for obtaining Bank Guarantee and buyer''s credit.

a) Defined contribution plans:

The Company makes contribution towards Provident Fund and Employees State Insurance Fund as a defined contribution retirement benefit fund for qualifying employees. Under the Scheme company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs.18,53,061/- (31st March, 2013 - Rs. 7,68,619/-) for provident fund & Employees State Insurance Fund contributions in the statement of profit and loss. The contributions payable to these plans by the Company are at the rates specified in the rules of the schemes.

b) Defined benefit plans:

The present value of the defined benefit obligation and related current service cost were measured using the projected Unit Credit Method, with actuarial valuation being carried out as on 31st March, 2014.

The disclosure in respect of defined benefit gratuity plan is based on report given by actuary as on 31st March, 2014.

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


Mar 31, 2013

A) Basis of accounting and preparation of Financial Statements:

The Financial statements/ accounts are prepared under historical cost convention on the "Accrual Concept" of accountancy and as going concern, in accordance with the accounting principles generally accepted in India and they comply with the Accounting Standards prescribed in the Companies [Accounting Standards] Rules, 2006 (as amended) issued by the Central Government to the extent applicable and with the applicable provisions of the Companies Act, 1956.

b) Use of Estimates:

The preparation of Financial Statement in conformity with the Accounting Standards generally accepted in India requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) Inventories:

i) The inventories of all medicines, medicare items traded and dealt with by the Company are valued at cost. Cost of these inventories comprises of all cost of purchase and other costs incurred in bringing the inventories to their present location after adjusting for VAT wherever applicable applying the FIFO Method.

ii) Stocks of Provisions, stores (including lab materials and other consumables), stationeries and housekeeping items are stated at cost. The net realizable value is not applicable in absence of any further modification /alteration before being consumed in house only. Cost of these inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to present location after adjusting for VAT wherever applicable applying the FIFO Method.

iii) Surgical instruments, linen, crockery and cutlery are valued at cost. The net realizable value is not applicable in absence of any further modification /alteration before being consumed in house only. Cost of these inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to present location after adjusting for VAT wherever applicable applying the FIFO Method.

d) Investments:

Investments comprise of investment in associate company in which the Company has strategic business interest. Long term investments including trade investments are carried at cost, after providing for any diminution in value, if such diminution is other than temporary in nature.

e) Prior Period items and Extra Ordinary items:

Prior Period items and Extra Ordinary Items are separately classified, identified and dealt with as required under

Accounting Standard 5 on "Net Profit or Loss for the period, Prior Period items and Changes in Accounting Policies- issued by the Institute of Chartered Accountants of India.

f) Fixed Assets:

Ail fixed assets are stated at cost of acquisition less accumulated depreciation and impairment of losses. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the assets. However, fixed assets, which are revalued by the Company, are stated at their revalued book values. Capital work - in - progress comprises of and amounts expended on development/acquisition of Fixed Assets that are not yet ready for their intended use at the Balance Sheet Date. Expenditure during construction period directly attributable to the projects under implementation is included under Capital work-in-progress, pending allocation to the assets. Advances paid to acquire fixed assets have been included under long term loans and advances as per revised Schedule VI.

g) Depreciation:

Depreciation for the year has been provided on straight-line method as per Section 205 (2) (b) of the Companies, 1956 at the rates prescribed in Schedule XIV of the Companies Act, 1956,on pro-rata basis from the date of acquisition of assets till the date of transfer/sale of assets.

h) Transactions in Foreign Currencies:

(i) Monetary items relating to foreign currency transactions remaining unsettled at the end of the year are translated at the exchange rates prevailing at the date of Balance Sheet. The difference in translation of monetary items and the realized gains and losses on foreign exchange transactions are recognised in the Statement of Profit and Loss in accordance with Accounting Standard 11 - "The Effects of Changes in Foreign Exchange Rates (Revised 2003)'', as notified under the Companies (Accounting Standards) Rules, 2006.

(ii) Exchange differences arising on settlement or restatement of foreign currency denominated liabilities borrowed for the acquisition of Fixed Assets, are capitalised based on Para46A of Accounting Standard 11 - "The Effects of Changes in Foreign Exchange Rates (Revised 2003)''.

i) Revenue Recognition:

(i) Income from Healthcare Services is recognised on completed service contract method. The hospital collections of the Company are net of discounts. Revenue also includes the value of services rendered pending final billing in respect of in-patients undergoing treatment as on 31 st March, 2013.

(ii) Pharmacy Sales are recognised when the risk and reward of ownership is passed to the customer and are stated net of returns, discountsand inclusiveofVATwhereverapplicable.

(iii) Interest income is recognised on a time proportion basis taking into account the principal amount outstanding and the rate applicable.

j) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition or constructions of qualifying assets are capitalized as part of such assets. As per Accounting Standard 16 ''Borrowing costs'', a qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are expensed as and when incurred.

k) Employee Benefits:

Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost.

Long-term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which employees render service), and post employment benefits (benefits which are payable after completion of employment),are measured on a discounted basis by the Projected Unit Credit Method, on the basis of annual third party actuarial valuations.

Defined Contribution Plan

The Company makes contribution towards Provident Fund as a defined contribution retirement benefit fund for qualifying employees.

The Provident Fund Plan is operated by the Regional Provident Fund Commissioner. Underthe scheme, the Company is required to contribute a specified percentage of payroll cost, as per the statute, to the retirement benefit schemes to fund the benefits.

Defined Benefit Plans

For Defined Benefit Plan the cost of providing benefits is determined using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial Gains or Losses are recognised in full in the Statement of Profit and Loss for the period in which they occur. Gratuity

The Company makes provision of gratuity on the basis of annual third party actuarial valuations at the end of the accounting period.

Leave Encashment Benefits

The Company has a policy not to accumulate leave encashment benefits of the employees. The Company pays Leave

Encashment Benefits to employees at end of each accounting period.

I) Segment Reporting:

(i) Identification of Segments

The Company has complied with Accounting Standard 17 - ''Segment Reporting1 with Business as the primary segment. The business segments are primarily healthcare and educational services. The Company operates in a single geographical segment, which is India, and the products sold in the pharmacies, are regulated underthe Drug Control Act, which applies uniformly all over the Country. The risk and returns of the enterprise are very similar in different geographical areas within the Country and hence there is no reportable secondary segment as defined in Accounting Standard 17.

(ii) Segment Policies

The accounting policies adopted for segment reporting are in line with the accounting policies adopted in consolidated financial statements with the following additional policies for Segment Reporting:

a. Revenue and expenses directly attributable to segments are reported under each segment. Expenses which are not directly identifiable to specific segment have been allocated on the basis of associated revenues of the segment and manpower efforts. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under'' unallocable expenses''.

b. Assets and liabilities directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable.

The Company has disclosed this Segment Reporting in Financial Statements as per para (4) of Accounting Standard - 17- ''Segment Reporting".

m) TAXATION:

i) Income Tax

Income taxes are accounted for in accordance with Accounting Standard 22 (AS 22) "Accounting for Taxes on Income". Tax expense comprises both Current Tax and Deferred Tax. Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

ii) Deferred Tax

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

n) Earning Per Share:

In determining the earning per share, the Company considers the net profit aftertax before extraordinary item and after extraordinary items and includes post - tax effect of any extraordinary items. The number of shares used in computing the basic earning per share is the weighted average number of shares outstanding during the period. For computing diluted earning per share, potential equity shares are added to the above weighted average number of shares.

o) Operating Leases:

Assets taken on finance lease are accounted in accordance with the Accounting Standard-19 on Leases. Lease payments are apportioned between finance charges and reduction of outstanding liabilities.

p) Impairment of Assets:

In terms of the requirements of the Accounting Standard-28 on "Impairment of Assets" issued by ICAI, the amount recoverable against Fixed Assets has been estimated for the period by the management based on present value of estimated future cash flows expected to arise from continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, therefore no provision for impairment in value thereof has been considered necessary, by the management.

q) Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent Liabilities are disclosed in the Notes. Contingent Liabilities are disclosed for (1) possible obligations which will be confirmed only by future events not wholly within the control of the Company or (2) present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements as this may result in the recognition of income that may never be realised.


Mar 31, 2012

A) Basis of accounting and preparation of Financial Statements :

The Financial statements/accounts are prepared under historical cost convention on the "Accrual Concept" of accountancy and as going concern, in accordance with the accounting principles generally accepted in India and they comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 (as amended) issued by the Central Government to the extent applicable and with the applicable provisions of the Companies Act, 1956.

b) Use of Estimates:

The preparation of Financial Statement in conformity with the Accounting Standards Generally accepted in India requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) Inventories:

i) The inventories of all medicines, medicare items traded and dealt with by the Company are valued at cost. Cost of these inventories comprises of all cost of purchase and other costs incurred in bringing the inventories to their present location after adjusting for VAT wherever applicable applying the FIFO Method.

ii) Stocks of Provisions, stores (including lab materials and other consumables), stationeries and housekeeping items are stated at cost. The net realizable value is not applicable in absence of any further modification/alteration before being consumed in house only. Cost of these inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to present location after adjusting for VAT wherever applicable applying the FIFO Method.

iii) Surgical instruments, linen, crockery and cutlery are valued at cost. The net realizable value is not applicable in absence of any further modification/alteration before being consumed in house only. Cost of these inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to present location after adjusting for VAT wherever applicable applying the FIFO Method.

d) Investments;

Investments comprise of investment in subsidiary company in which the Company has strategic business interest. Long term investments including trade investments are carried at cost, after providing for any diminution in value, if such diminution is other than temporary in nature.

e) Prior Period items and Extra Ordinary items:

Prior Period items and Extra Ordinary Items are separately classified, identified and dealt with as required under Accounting Standard 5 on "Net Profit or Loss for the period, Prior Period Items and Changes in Accounting Policies" issued by the Institute of Chartered Accountants of India.

f) Fixed Assets:

All fixed assets are stated at cost of acquisition less accumulated depreciation and impairment losses. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the assets. However, fixed assets, which are revalued by the Company, are stated at their revalued book values.

Capital work - in - progress comprises of and amounts expended on development/acquisition of Fixed Assets that are not yet ready for their intended use at the Balance Sheet Date. Expenditure during construction period directly attributable to the projects under implementation is included under Capital work-in-progress, pending allocation to the assets. Advances paid to acquire fixed assets have been included under long term loans and advance as per revised Schedule VI.

g) Depreciation:

Depreciation for the year has been provided on straight-line method as per Section 205 (2) (b) of the Companies Act, 1956 at the rates prescribed in Schedule XIV of the Companies Act, 1956, on pro-rata basis from the date of acquisition of assets till the date of transfer/sale of assets.

h) Transactions in Foreign Currencies

(i) Monetary items relating to foreign currency transactions remaining unsettled at the end of the year are translated at the exchange rates prevailing at the date of Balance Sheet. The difference in translation of monetary items and the realized gains and losses on foreign exchange transactions are recognised in the Statement of Profit and Loss in accordance with Accounting Standard 11 - The Effects of Changes in Foreign Exchange Rates (Revised 2003)', as notified under the Companies (Accounting Standards) Rules, 2006.

(ii) Exchange differences arising on settlement or restatement of foreign currency denominated liabilities borrowed for the acquisition of Fixed Assets, are capitalised based on Para 46A of Accounting Standard 11 - "The Effects of Changes in Foreign Exchange Rates (Revised 2003)'.

i) Revenue Recognition:

(i) Income from Healthcare Services is recognised on completed service contract method. The hospital collections of the Company are net of discounts. Revenue also includes the value of services rendered pending final billing in respect of in-patients undergoing treatment as on 31st March 2012.

(ii) Pharmacy Sales are recognised when the risk and reward of ownership is passed to the customer and are stated net of returns, discounts and inclusive of VAT wherever applicable,

(iii) Interest income is recognised on a time proportion basis taking into account the principal amount outstanding and the rate applicable.

j) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition or constructions of qualifying assets are capitalized as part of such assets. As per Accounting Standard 16 Borrowing costs', a qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are expensed as and when incurred.

k) Employee Benefits :

Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost.

Long-term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which employees render service), and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method, on the basis of annual third party actuarial valuations.

Defined Contribution Plan

The Company makes contribution towards Provident Fund as a defined contribution retirement benefit fund for qualifying employees.

The Provident Fund Plan is operated by the Regional Provident Fund Commissioner. Under the scheme, the Company is required to contribute a specified percentage of payroll cost, as per the statute, to the retirement benefit schemes to fund the benefits.

Defined Benefit Plans

For Defined Benefit Plan the cost of providing benefits is determined using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial Gains or Losses are recognised in full in the Statement of Profit and Loss for the period in which they occur.

Gratuity

The Company makes provision of gratuity on the basis of annual third party actuarial valuations at the end of the accounting period.

Leave Encashment Benefits

The Company has a policy not to accumulate leave encashment benefits of the employees. The Company pays Leave Encashment Benefits to employees at end of each accounting period.

l) Segment Reporting :

(i) Identification of Segments

The Company has complied with Accounting Standard 17 - 'Segment Reporting' with Business as the primary segment. The business segments are primarily healthcare and educational services. The Company operates in a single geographical segment, which is India, and the products sold in the pharmacies, are regulated under the Drug Control Act, which applies uniformly all over the Country. The risk and returns of the enterprise are very similar in different geographical areas within the Country and hence there is no reportable secondary segment as defined in Accounting Standard 17.

(ii) Segment Policies

The accounting policies adopted for segment reporting are in line with the accounting policies adopted in consolidated financial statements with the following additional policies for Segment Reporting:

a. Revenue and expenses directly attributable to segments are reported under each segment. Expenses which are not directly identifiable to specific segment have been allocated on the basis of associated revenues of the segment and manpower efforts. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under 'unallocable expenses'.

b. Assets and liabilities directly attributable or allocable to segments are disclosed under each reportable segment. All other assets liabilities are disclosed as unallocable.

The Company has disclosed this Segment Reporting in Consolidated Financial Statements as per para (4) of Accounting Standard - 17- "Segment Reporting".

m) TAXATION:

i) Income Tax

Income taxes are accounted for in accordance with Accounting Standard 22 (AS 22) "Accounting for Taxes on Income". Tax expense comprises both Current Tax and Deferred Tax. Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

ii) Deferred Tax :

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

n) Earning Per Share:

In determining the earnings per share, the Company considers the net profit after tax before extraordinary item

and after extraordinary items and includes post - tax effect of any extraordinary items. The number of shares used in computing the basic earnings per share is the weighted average number of shares outstanding during the period. For computing diluted earnings per share, potential equity shares are added to the above weighted average number of shares.

o) Operating Leases:

Assets taken on finance lease are accounted in accordance with the Accounting Standard 19 on Leases. Lease payments are apportioned between finance charges and reduction of outstanding liabilities.

p) Impairment of Assets:

In terms of the requirements of the Accounting Standard -28 on Impairment of Assets "issued by ICAI, the amount recoverable against Fixed Assets has been estimated for the period by the management based on present value of estimated future cash flows expected to arise from continuing use of such assets . The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, therefore no provision for impairment in value thereof has been considered necessary, by the management.

q) Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent liabilities are disclosed for (1) possible obligations which will be confirmed only by future events not wholly within the control of the Company or (2) present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements as this may result in the recognition of income that may never be realised.


Mar 31, 2010

A. Basis of Preparation of Financial Statements :

The Financial statements/ accounts are prepared under historical cost convention under accrual method of accounting and as going concern, in accordance with generally accepted accounting principles (GAAP) prevalent in India and mandatory Accounting Standards issued by Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act, 1956 as adopted consistently by the Company unless stated otherwise.

B. Inventories:

a. The inventories of medicines and surgical items traded and dealt with by the Company are valued at cost. Cost of these inventories comprises of all cost of purchase and other costs incurred in bringing the inventories to present location, applying the FIFO Method.

b. Stocks of Provisions, stores, stationeries and housekeeping items are stated at cost. The net realizable value is not applicable in absence of any further modification /alteration before being consumed in house. Cost of these inventories comprises of all cost of purchase and other costs incurred in bringing the inventories to present location, applying the FIFO Method.

C. Prior Period Items and Extra Ordinary Items :

Prior Period items and Extra Ordinary Items are separately classified, identified and dealt with as re- quired under Accounting Standard 5 on "Net Profit or Loss for the period ,Prior Period Items and Changes in Accounting Policies" issued by the Institute of Chartered Accountants of India .

D. Depreciation:

a. Fixed Assets are depreciated in accordance with Schedule XIV of the Companies Act, 1956 based on straight-line method on a pro-rata basis from the date of acquisition of assets till the date of transfer/ sale of assets.

b. Leasehold Land is being amortised over the period of lease.

E. Revenue Recognition:

a. Income from Healthcare services is recognized on completed service contract method. Revenue also includes the value of services rendered pending billing in respect of inpatients undergoing treatment as on 31st March, 2010.

b. Pharmacy Sales are stated net of returns, discounts and inclusive of Sales tax.

F. Fixed Assets :

All fixed assets are stated at their original cost of acquisition less depreciation and impairment losses are recognized where necessary. However, fixed assets, which are revalued by the Company, are stated at their revalued book values.

G. Borrowing Costs:

Borrowing costs that are attributable to acquisition or construction of qualifying assets are capitalized as part of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs recognized as an expense in the period in which they are incurred.

H. Treatment of Retirement Benefits :

Contribution to Provident fund is made in accordance with provisions of the Provident Fund Act, 1952 and treated as revenue expenditure. Provisions for gratuity and leave encashment benefits are made as per actual liability at the end of the accounting period.

I. Accounting for Taxes in Income:

a. Income Tax: Provision for Income tax Minimum Alternative Tax (MAT) as per Income tax Act, 1961.

b. Deferred Tax: The Difference that result between the profit calculated for income tax purposes and profit as per financial statements are identified and thereafter deferred tax asset or deferred tax liability is recorded for timing differences namely the differences that originate in one accounting period and get reversed in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing difference at the beginning of this accounting year based on the prevailing enacted or substantially enacted regulations.

J. Earning Per Share :

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by weighted average number of equity shares outstanding during the period. For the pur- pose of calculating diluted earning per share, the net profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilative potential equity shares.

K. Amortization and write off:

Value of leasehold land is amortised in 30 years (lease/period) by straight-line method.


Mar 31, 2009

A. Basis of Preparation of Financial Statements:

The Financial statements/ accounts are prepared under historical cost convention under accrual method of accounting and as going concern, in accordance with Generally Accepted Accounting Principles(GAAP) prevalent in India and mandatory Accounting Standards issued by Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act,1956 as adopted consistently by the Company unless stated otherwise.

B. Inventories:

a. The inventories of medicines and surgical items traded and dealt with by the Company are valued at cost . Cost of these inventories comprises of all cost of purchase and other costs incurred in bringing the inventories to present location, applying the FIFO Method.

b. Stocks of Provisions, stores, stationeries and Housekeeping items are stated at cost. The net realisable value is not applicable in absence of any further modification /alteration before being consumed in house. Cost of these inventories comprises of all cost of purchase and other costs incurred in bringing the inventories to present location .applying the FIFO Method.

C. Prior Period items and Extra Ordinary Items:

Prior Period items and Extra Ordinary Items are separately classified ,dentified and dealt with as required under Accounting Standard 5 on "Net Profit or Loss for the period .Prior Period Items and Changes in Accounting Policies" issued by the Institute of Chartered Accountants of India .

D. Depreciation:

a. Fixed Assets are depreciated in accordance with Schedule XIV of the Companies Act, 1956 based on straight-line method on a pro-rata basis from the date of acquisition of assets till the date of transfer/ sale of assets.

b. Leasehold Land is being amortised over the period of lease.

E. Revenue Recognition:

a. income from Healthcare services is recognized on completed service contract method. Revenue also includes the value of services rendered pending billing in respect of inpatients undergoing treatment as on 31st March, 2009.

b. Pharmacy Sales are stated net of returns, discounts and inclusive of Sales tax.

F. Fixed Assets:

All fixed assets are stated at their original cost of acquisition less depreciation and impairment losses are recognized where necessary. However, fixed assets ,which are revalued by the Company ,are stated a? their revalued book values.

G. Borrowing Costs:

Borrowing costs that are attributable to acquisition or construction of a qualifying assets are Capitalized as part of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs recognized as an expense in the period in which they are incurred.

H. Treatment of Retirement Benefits:

Contribution to Provident fund is made in accordance with provisions of the Provident Fund Act,1952 and treated as revenue expenditure. Provisions for gratuity and leave encashment benefits are made as per actual liability at the end of the accounting period.

I. Accounting for Taxes in Income :

a. Income Tax: Provision for Income tax comprises of current tax on fringe benefits and Minimum alternative tax(MAT) as per Income tax Act,1961.

b. Deferred Tax: The Difference that result between the profit calculated for income tax purposes and profit as per financial statements are identified and thereafter deferred tax asset or deferred tax liability is recorded for timing differences namely the differences that originate in one accounting period and get reversed in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing difference at the beginning of this accounting year based on the prevailing enacted or substantially enacted regulations.

J. Earning Per Share :

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earning per share , the net profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilative potential equity shares.

K. Amortization and write off :

Value of leasehold land is amortised in 30 years (lease/period) by straight-line method.

 
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