1.1 Overview of the Group
 
 3i Infotech Limited (Parent) was promoted by erstwhile ICICI limited.
 The Parent and its subsidiaries are collectively referred to as the
 Group. The Group is a global information technology conglomerate
 headquartered in Mumbai, India. The Group undertakes sale of software
 products, software development and consulting services, IT enabled
 managed services and Transaction services.
 
 1.2 Basis of preparation of consolidated fnancial statements
 
 The consolidated fnancial statements are prepared and presented under
 historical cost convention, on the accrual basis of accounting, in
 accordance with the accounting principles generally accepted in India
 (GAAP) and in compliance with the Accounting Standards (AS) issued
 by Companies (Accounting Standards) Rules, 2006, to the extent
 applicable. Accounting policies have been consistently applied except
 where a newly issued accounting standard is initially adopted or a
 revision to an existing accounting standard required a change in
 accounting policy hitherto in use.
 
 1.3 Use of estimates
 
 The preparation of the consolidated fnancial statements in conformity
 with GAAP requires management to make estimates and assumptions that
 affect the reported amount of assets, liabilities, revenues and
 expenses and disclosure of contingent liabilities on the date of
 fnancial statements. The recognition, measurement, classifcation or
 disclosures of an item or information in the fnancial statements are
 made relying on these estimates. Any revision to accounting estimates
 is recognized prospectively.
 
 1.4 Principles of consolidation
 
 The consolidated fnancial statements include the fnancial statements of
 The Parent and all its subsidiaries, which are more than 50% owned or
 controlled and have been prepared in accordance with the consolidation
 procedures laid down in AS 21- Consolidated Financial Statements.
 
 The consolidated fnancial statements have been prepared on the
 following basis:
 
 - The fnancial statements of the Parent and the subsidiaries have been
 combined on a line-by-line basis by adding together the book values of
 like items of assets, liabilities, income and expenses after
 eliminating intra-group balances / transactions and resulting profts in
 full. Unrealized losses resulting from intra-group transactions have
 also been eliminated except to the extent that recoverable value of
 related assets is lower than their cost to the Group.
 
 - The consolidated fnancial statements are presented, to the extent
 possible, in the same format as that adopted by the Parent for its
 standalone fnancial statements.
 
 - The consolidated fnancial statements are prepared using uniform
 accounting policies across the Group.
 
 - Goodwill arising on consolidation - The excess of cost to the Parent
 Company, of its investment in subsidiaries over its portion of equity
 in the subsidiaries at the respective dates on which investment in
 subsidiaries was made, is recognized in the fnancial statements as
 goodwill and in the case where equity exceeds the cost; the same is
 being adjusted in the said goodwill. The Parent Companys portion of
 equity in the subsidiaries is determined on the basis of the value of
 assets and liabilities as per the fnancial statements of the
 subsidiaries as on the date of investment.
 
 - Entities acquired during the year have been consolidated from the
 respective dates of their acquisition.
 
 (a) In April 2010, the Parent Company has sold its investment in aok
 In-house Factoring Services Private Ltd.  to 3i Infotech BPO Limited
 (formerly known as Linear Financial and Management Systems Pvt. Ltd.)
 and in May 2010, Delta Services (India) Private Limited to 3i Infotech
 Consultancy Services Limited.
 
 (b) Refer note no. 2.4.1
 
 (c) Refer note no. 2.4.2
 
 (d) In May 2010, Delta Services (India) Private Limited has sold its
 investment in Manipal Informatics Private Limited to 3i Infotech
 Consultancy Services Limited.
 
 (e) In December 2010, the Parent Company has sold its investment in
 eMudhra Consumer Services Limited (formerly known as 3i Infotech
 Consumer Services Limited) and its subsidiary and step down
 subsidiaries to Indus Innovest Holdings Private Ltd. Refer note 2.4.4.
 
 (f) 3i Infotech Consulting Inc. have been merged with 3i Infotech Inc.
 effective from December 31, 2010 and consequently the assets and
 liabilities have been transferred to 3i Infotech Inc.
 
 (g) Lantern Systems Inc., ePower Inc. & Objectsoft Group Inc. have been
 merged with 3i Infotech Inc.  effective from December 31, 2010 and
 consequently the assets and liabilities pertaining to those entities
 which were hitherto owned by J&B Software (Canada) Inc have been
 transferred to 3i Infotech Inc.
 
 (h) Share purchase agreement dated December 29, 2010 has been signed
 between 3i Infotech Insurance & Re-insurance Brokers Limited and Aretha
 Advisors pursuant to which the shares of 3i Infotech Insurance &
 Re-insurance Brokers Limited have been sold off to Aretha Advisors on
 December 31, 2010. Refer note 2.4.5
 
 (i) Refer note 2.4.6
 
 (j) 3i Infotech Consulting Services SDN BHD has been closed with effect
 from December 20, 2010.
 
 (k) Stex Software Pvt. Ltd., E-Enable Technologies Pvt. Ltd. and KNM
 Services Pvt. Ltd. have been merged with 3i Infotech Ltd. effective
 from April 01, 2010 and consequently the assets and liabilities have
 been transferred to 3i Infotech Ltd.
 
 (l) Delta Services (India) Private Limited and Manipal Informatics Pvt.
 Limited. have been merged with 3i Infotech Consultancy Services Limited
 effective from April 01, 2009 and consequently the assets and
 liabilities have been transferred to 3i Infotech Consultancy Services
 Limited.
 
 1.6 Revenue recognition
 
 a) Revenue from IT solutions:
 
 Revenue from IT solutions comprises of revenue from Software Products,
 IT Services and Sale of Hardware /Outsourced Software.
 
 i) Revenue from Software Products is recognized on delivery /
 installation, as per the predetermined / laid down policy across all
 geographies or lower, as considered appropriate by the management on
 the basis of facts in specifc cases.  Maintenance revenue in respect of
 products is deferred and recognized ratably over the period of the
 underlying maintenance agreement.
 
 ii) Revenue from IT Services is recognized either on time and material
 basis or fxed price basis or based on certain measurable criteria as
 per relevant agreements. Revenue on Time and Material Contracts is
 recognized as and when services are performed. Revenue on Fixed-Price
 Contracts is recognized on the percentage of completion method.
 Provision for estimated losses, if any, on such uncompleted contracts
 are recorded in the period in which such losses become probable based
 on the current estimates.
 
 iii) Revenue from supply of Hardware, Software License / Term License /
 Other Materials incidental to the aforesaid services recognized based
 on delivery / installation, as the case may be. Recovery of incidental
 expenses is added to respective revenue.
 
 b) Revenue from Transaction Services:
 
 Revenue from Transaction Services and Other Service contracts is
 recognized based on transactions processed or manpower deployed.
 
 1.7 Unbilled and Unearned Revenue:
 
 Revenue recognized over and above the billings on a customer is
 classifed as unbilled revenue while billing over and above the
 revenue recognized in respect of a customer is classifed as unearned
 revenue.
 
 1.8 a) Fixed Assets
 
 Intangible: Purchased software meant for in-house consumption and
 signifcant upgrades thereof, Business & Commercial Rights are
 capitalized at the acquisition price.
 
 Acquired software / products meant for sale are capitalized at the
 acquisition price.
 
 Tangible: Fixed Assets are stated at cost, which comprises of purchase
 consideration and other directly attributable cost of bringing an asset
 to its working condition for the intended use.
 
 Advances given towards acquisition of fxed assets and the cost of
 assets not ready for use as at the Balance Sheet date are disclosed
 under capital work-in-progress.
 
 b) Depreciation / Amortization:
 
 Leasehold land, leasehold building and improvements thereon are
 amortized over the period of lease or the life given below whichever is
 lower.
 
 Business and Commercial Rights are amortized at lower of the period the
 benefts arising out of these are expected to accrue and ten years,
 while purchased software meant for in-house consumption and signifcant
 upgrades thereof and Goodwill arising on merger / acquired Goodwill is
 amortized over a period of fve years.
 
 Acquired software are amortized at lower of the estimated life of the
 product and fve years.
 
 1.9 Investments
 
 Trade investments are the investments made to enhance the Parent
 Companys business interest. Investments are either classifed as
 current or long-term based on the managements intention at the time of
 purchase. Long-term investments are carried at cost and provision is
 made to recognize any decline, other than temporary, in the value of
 such investments.
 
 Current investments are carried at the lower of the cost and fair value
 and provision is made to recognize any decline in the carrying value.
 Cost of overseas investment comprises the Indian Rupee value of the
 consideration paid for the investment.
 
 1.10 Accounting for Taxes on Income
 
 Provision for current income tax is made on the basis of the estimated
 taxable income for the year in accordance with the specifc applicable
 laws.
 
 MAT Credit asset pertaining to the Parent and its Indian subsidiary
 company is recognized and carried forward only if there is a reasonable
 certainty of it being set off against regular tax payable within the
 stipulated statutory period.
 
 Deferred tax resulting from timing differences between book and tax
 profts is accounted for under the liability method, at the current rate
 of tax, to the extent that the timing differences are expected to
 crystallize. Deferred tax assets are recognized and carried forward
 only if there is a reasonable / virtual certainty that they will be
 realized and are reviewed for the appropriateness of their respective
 carrying values at each Balance Sheet date.
 
 The deferred tax assets / liabilities and tax expenses are determined
 separately for the Parent and each subsidiary company, as per their
 applicable laws and then aggregated.
 
 1.11 Translation of Foreign Currency Items
 
 Transactions in foreign currency are recorded at the rate of exchange
 in force on the date of the transactions.  Current assets, current
 liabilities and borrowings denominated in foreign currency are
 translated at the exchange rate prevalent at the date of the Balance
 Sheet. The resultant gain / loss is recognized in the Proft & Loss
 Account.  Overseas investments are recorded at the rate of exchange in
 force on the date of allotment / acquisition.
 
 All the activities of the foreign operations are carried out with a
 signifcant degree of autonomy. Accordingly, as per the provisions of AS
 11 Effects of changes in foreign exchange rates, these operations
 have been classifed as Non integral operations and therefore all
 assets and liabilities, both monetary and non-monetary, are translated
 at the closing rate while the income and expenses are translated at the
 average rate for the year. The resulting exchange differences are
 accumulated in the Foreign Currency Translation Reserve.
 
 1.12 Accounting of Employee Benefts Employee Benefts in India
 
 a) Gratuity
 
 (i) Parent
 
 The Parent Company provides for gratuity, a defned beneft retirement
 plan, covering eligible employees.  Liability under gratuity plan is
 determined on actuarial valuation done by the Life Insurance
 Corporation of India (LIC) at the beginning of the year, based upon
 which, the Parent Company contributes to the Scheme with LIC. The
 Parent Company also provides for the additional liability over the
 amount contributed to LIC based on the actuarial valuation done by an
 independent valuer using the Projected Unit Credit Method.
 
 (ii) Subsidiaries
 
 Liability for Gratuity for employees is provided on the basis of the
 actuarial valuation at the year end.
 
 b) Superannuation
 
 Certain employees in India are also participants in a defned
 superannuation contribution plan. The Parent contributes to the scheme
 with Life Insurance Corporation of India on a monthly basis. The Parent
 has no further obligations to the plan beyond its monthly
 contributions.
 
 c) Provident fund
 
 (i) Parent
 
 Eligible employees receive benefts from a provident fund, which is a
 defned contribution plan to the Trust / Government administered Trust.
 In the case of Trust aggregate contribution along with interest thereon
 is paid at retirement, death, incapacitation or termination of
 employment. Both the employee and the
 
 Parent Company make monthly contribution to the 3i Infotech Provident
 Fund Trust equal to a specifed percentage of the covered employees
 salary. The Parent Company also contributes to a Government
 administered pension fund on behalf of its employees.
 
 The interest rate payable by the trust to the benefciaries every year
 is being notifed by the government.  The Parent has an obligation to
 make good the shortfall, if any, between the return from investments of
 the trust and the notifed interest rate. Such shortfall is charged to
 Proft & Loss Account in the year it is determined.
 
 (ii) Subsidiaries
 
 Contribution is made to the state administered fund as a percentage of
 the covered employees salary.
 
 d) Liability for leave encashment / entitlement for employees is
 provided on the basis of the actuarial valuation at the year end.
 
 e) All actuarial gains / losses are charged to revenue in the year
 these arise.
 
 Employee Benefts in the Foreign Branch
 
 In respect of employees in foreign branches, necessary provision has
 been made based on the applicable laws.  Gratuity / leave encashment
 for employees in the foreign branches is provided on the basis of the
 actuarial valuation at the year end.
 
 All actuarial gains / losses are charged to revenue in the year these
 arise.
 
 Employee Benefts in Foreign Subsidiary Companies
 
 In respect of employees in Foreign Subsidiary Companies, contributions
 to defned contribution pension plans are recognized as an expense in
 the Proft & Loss Account as incurred.
 
 Liability for leave entitlement is provided on the basis of actual
 eligibility at the year end.
 
 1.13 Provisions, Contingent Liabilities and Contingent Assets
 
 i) Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outfow of resources.
 
 ii) Disclosures for a contingent liability is made, without a provision
 in books, when there is an obligation that may but probably will not,
 require outfow of resources.
 
 iii) Contingent Assets are neither recognized nor disclosed in the
 fnancial statements.
 
 1.14 Borrowing Costs
 
 Borrowing costs directly attributable to acquisition, construction and
 production of qualifying assets are capitalized as a part of the cost
 of such asset up to the date of completion. Other borrowing costs are
 charged to the Proft & Loss Account.
 
 1.15 Impairment of assets
 
 In accordance with AS 28 on Impairment of Assets, where there is an
 indication of impairment of the Groups assets related to cash
 generating units, the carrying amounts of such assets are reviewed at
 each Balance Sheet date to determine whether there is any impairment.
 The recoverable amount of such assets is estimated as the higher of its
 net selling price and its value in use. An impairment loss is
 recognized in the Proft & Loss Account whenever the carrying amount of
 such assets exceeds its recoverable amount. If at the Balance Sheet
 date there is an indication that a previously assessed impairment loss
 no longer exists, then such loss is reversed and the asset is restated
 to the extent of the carrying value of the asset that would have been
 determined (net of amortization / depreciation) had no impairment loss
 been recognized.
 
 1.16 a) Securities issue expenses
 
 Securities issue expenses, Issue expenses including expenses incurred
 on increase in authorized share capital and premium payable on
 securities are adjusted against Securities Premium Account.
 
 b) Premium payable on redemption of FCCB
 
 Premium payable on redemption of FCCB is amortized proportionately till
 the date of redemption and is adjusted against the balance in
 Securities Premium Account.
 
 1.17 Lease
 
 Where the Group has substantially acquired all risks and rewards of
 ownership of the assets, leases are classifed as fnancial lease. Such
 assets are capitalized at the inception of the lease, at the lower of
 fair value or present value of minimum lease payment and liability is
 created for an equivalent amount. Each lease rental paid is allocated
 between liability and interest cost so as to obtain constant periodic
 rate of interest on the outstanding liability for each year.
 
 Where signifcant portion of risks and reward of ownership of assets
 acquired under lease are retained by lessor, leases are classifed as
 Operating lease. Equalized lease rentals for such leases are charged to
 Proft & Loss Account.
 
 1.18 Earnings per share
 
 In determining the earnings per share, the Group considers the net
 proft after tax and post tax effect of any extra- ordinary /
 exceptional item is shown separately. The number of shares considered
 in computing basic earnings per share is the weighted average number of
 shares outstanding during the year. The number of shares considered for
 computing diluted earnings per share comprises the weighted average
 number of shares used for deriving the basic earnings per share and
 also the weighted average number of equity shares that could have been
 issued on the conversion of all dilutive potential equity shares which
 includes potential FCCB conversions. The number of shares and
 potentially dilutive equity shares are adjusted for any stock splits
 and bonus shares issues.
 
 1.19 Inventories
 
 Inventories consist of postage, paper, envelopes, hardware and
 supplies, and are stated at cost (computed on frst in frst out or
 weighted average basis as the case may be) or net realizable value,
 whichever is lower.