The financial statements 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, 1956.

1(b) Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. Cost comprises of cost of acquisition and any attributable expenses incurred for the purpose of bringing the assets to its present condition 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, 1 986 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.

1(d) Inventories:

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 to 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 reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenues 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.

1(g) Bonus:

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 recognized during the period when the employee renders the service.

(ii) Long Term Employee Benefits:

a. Provision for Leave Encashment, which can be accumulated over the tenure the employment or can be claimed as encashment during the period of 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.

(iii) Post Employment Benefits:

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. Employees' 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 gratuity payable on resignation / retirement / death of the employees, under the provisions 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 completion of the Diagnostic Procedure.

ii. From Sale of Trading Goods on transfer of title in the goods to the buyers.

iii. From Service Contracts on pro-rata basis over the period of the Contract.

iv. From Installation and Commissioning Contracts on completion of the Product Service.

v. From Commission Income as per the Contract or in Receipt of Credit Note.

vi. From Interest Income on Time Proportion Basis.

1(j) Taxation:

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 Costs that are attributable to the acquisition of qualifying assets are capitalized as part of the cost of such assets upto the date, the assets are ready for their intended use. All other borrowing costs are recognised as an expense in the year in which they are incurred.

1(1) Impairment:

Fixed Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the income statement 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 asset in an arms length transaction while value in use is the present value of estimated future value cash flows 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.

Impairment loss recognised for an 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 asset's recoverable amount since the last 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 recognized because

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 realized.

1(n) Earning Per Share:

Basic and Diluted Earnings per Share is computed in accordance with Accounting Standard (AS-20) - "Earning Per Share" issued by the Institute of Chartered Accountants of India. Basic Earning per Share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year. Diluted Earning 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.