(a) Basis of Accounting and Preparation of Financial Statements
 
 The financial statements which have been prepared under the historical
 cost convention on the accrual basis of accounting, are in accordance
 with the applicable requirements of the Companies Act, 1956 (the ''Act'')
 and comply in all material aspects with the Accounting Standards
 prescribed by the Central Government, in accordance with the Companies
 (Accounting Standards) Rules, 2006, to the extent applicable. The
 accounting policies applied by the Company are consistent with those
 used in the previous year.
 
 (b) Use of Estimates
 
 The preparation of the 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, disclosure of contingent liabilities as at the date of
 financial statements and the reported amounts of revenues and expenses
 during the reporting year. Key estimates include estimate of useful
 lives of fixed assets, income taxes, vesting of employee stock options
 and future obligations under employee retirement benefit plans.
 Although these estimates are based upon management''s knowledge of
 current events and actions, actual results could differ from those
 estimates. Any revisions to accounting estimates are recognized
 prospectively in the current and future periods.
 
 (c) Fixed Assets, Depreciation and Amortisation
 
 (i) Fixed assets are stated at cost less accumulated depreciation,
 amortisation and impairment losses. Cost includes inward freight, taxes
 and expenses incidental to acquisition and installation, up to the
 point the asset is ready for its intended use.
 
 (ii) Capital work in progress represents expenditure incurred in
 respect of capital projects under development and are carried at cost.
 Cost includes related acquisition expenses, construction cost,
 borrowing costs (In accordance with the Accounting Standard 16 on
 ''Borrowing Costs'') capitalized and other direct expenditure
 
 (iii) Depreciation is provided, pro rata for the period of use, by the
 Straight Line Method (SLM), based on management''s estimate of useful
 lives of the fixed assets, which are higher than the SLM rates
 prescribed in Schedule XIV to the Companies Act, 1956. The management''s
 estimate of useful lives of fixed assets are given below:
 
 Plant and Machinery 5 years
 
 Factory Building 15 years
 
 Electrical Fittings 5 years
 
 Computers 3 years
 
 Air conditioner 5 years
 
 Furniture and Fixtures 5 years
 
 Motor Vehicles 5 years
 
 Office Equipment 5 years
 
 Leasehold land is amortised over the period of lease.
 
 (d) Intangible Assets
 
 Intangible assets are stated at cost of acquisition, less accumulated
 amortisation and impairment losses if any. An intangible asset is
 recognized, where it is probable that the future economic benefits
 attributable to the asset will flow to the enterprise and where its
 cost can be reliably measured. Based on management estimates, the
 depreciable amount of intangible assets is allocated over the useful
 life on a straight line basis. Management estimates the useful life of
 Technical Know-how as 5 years and Intellectual Property Rights as 3
 years.
 
 (e) Impairment of Assets
 
 The carrying amounts of the Company''s assets are reviewed at each
 Balance Sheet date if there is any indication of impairment based on
 internal/external factors. An impairment loss is recognized wherever
 the carrying amount of an asset exceeds its recoverable amount. The
 recoverable amount of the assets (or where applicable, that of the cash
 generating unit to which the asset belongs) is estimated as the higher
 of its net selling price and its value in use. In assessing value in
 use, the estimated future cash flows are discounted to their present
 value at the weighted average cost of capital.
 
 After impairment, depreciation is provided on the revised carrying
 amount of the asset over its remaining useful life.
 
 A previously recognised impairment loss is increased or reversed
 depending on changes in circumstances.  However, the carrying value
 after reversal is not increased beyond the carrying value that would
 have prevailed by charging usual depreciation, if there was no
 impairment.
 
 (f) Borrowing Cost
 
 Borrowing costs attributable to the acquisition or construction of
 qualifying assets, as defined in Accounting Standard 16 on ''Borrowing
 Costs'', are capitalized as part of the cost of qualifying assets. Other
 borrowing costs are expensed as incurred.
 
 (g) Investments
 
 The Company has presently classified all its investments as Long Term
 in accordance with Accounting Standard 13 on Accounting for
 Investments. Long-term investments are stated at cost. However,
 provision is made to recognize a decline, other than temporary, in the
 value of investments.
 
 (h) Inventories
 
 Inventories are valued at lower of cost and net realizable value. Cost
 of inventories comprise cost of purchase and other costs incurred in
 bringing the inventories to their present condition and location. Cost
 is determined by the weighted average cost method.
 
 (i) Research and Development
 
 Research and Development expenditure is recognized in the Profit and
 Loss Account as and when incurred. Capital expenditure, if any is shown
 under respective head of fixed assets.
 
 (j) Foreign Currency Transactions
 
 Initial recognition - Foreign currency transactions are recorded in the
 reporting currency, by applying to the foreign currency amount the
 exchange rate between the reporting currency and the foreign currency
 on the date of the transaction.
 
 Conversion - Monetary assets and liabilities denominated in foreign
 currency are converted at the rate of exchange prevailing on the date
 of the Balance Sheet.
 
 Exchange differences - Exchange differences arising on the settlement
 of monetary items or on reporting the Company''s monetary items at rates
 different from those at which they were initially recorded during the
 year, or reported in previous financial statements, are recognised as
 income or as expenses in the year in which they arise
 
 (k) Employee Benefits
 
 (i) All short term employee benefits are accounted on undiscounted
 basis during the accounting period based on services rendered by
 employees.
 
 (ii) The Company makes contribution to statutory provident fund in
 accordance with Employees Provident Fund and Miscellaneous Provisions
 Act, 1952 which is a defined contribution plan and contribution paid or
 payable is recognised as an expense in the year in which services are
 rendered by the employees.
 
 (iii) The Company''s employees are covered under the group gratuity cum
 life assurance scheme with the Life Insurance Corporation of India
 (''LIC''). Gratuity is a post employment benefit and is in the nature of
 a defined benefit plan. The liability recognised in the Balance Sheet
 in respect of gratuity is the present value of the defined benefit/
 obligation at the Balance Sheet date less the fair value of plan
 assets, together with adjustments for unrecognised actuarial gains or
 losses and past service costs. The defined benefit/ obligation are
 calculated at or near the Balance Sheet date by an independent actuary
 using the projected unit credit method.
 
 Actuarial gains and losses arising from past experience and changes in
 actuarial assumptions are charged or credited to the Profit and Loss
 Account in the year in which such gains or losses are determined.
 
 (iv) Liability for compensated absences is provided for on the basis of
 actuarial valuation at year-end, made by an independent actuary.
 
 (l) Stock Based Compensation
 
 The compensation cost of stock options granted to employees is
 calculated using the fair value method. The compensation expense is
 amortized uniformly over the vesting period of the option.
 
 (m) Revenue Recognition
 
 Revenue from sale of products is recognized when significant risks and
 rewards in respect of ownership of products are transferred to the
 customer and there are either no unfulfilled company obligations or any
 outstanding obligations are inconsequential or perfunctory and will not
 affect the customer''s final acceptance of the arrangement.
 
 Revenues from services are recognized as services are provided when
 arrangements are on a time and material basis. Revenue from fixed price
 contracts is generally recognised in accordance with the Percentage of
 Completion method.
 
 Further, the Company reimburses certain software installation and
 testing charges to channel partners and these installation and testing
 activities are considered to be distinct components preceding the
 actual delivery and acceptance of the software. The Company also bears
 the entire credit risk on the sale of products. Accordingly, the
 installation and testing activity is considered to be the transaction
 independent of the sale of the products and the costs relating to these
 activities are accounted as cost of revenues.
 
 Interest income is accounted on a time proportion basis.
 
 (n) Operating Lease
 
 Lease of assets under which all the risks and rewards of ownership are
 effectively retained by the lessor are classified as operating leases.
 Operating lease payments are recognized as an expense in the Profit and
 Loss Account on a straight-line basis over the lease term.
 
 (o) Taxes on Income
 
 The provision for current taxation is computed in accordance with the
 relevant tax regulations. Deferred tax is recognised on timing
 differences between the accounting and taxable income for the year and
 quantified using the tax rates and laws enacted or substantively
 enacted as at the Balance Sheet date. Deferred tax assets in respect of
 unabsorbed depreciation and carry forward losses under tax laws are
 recognised and carried forward to the extent
 
 there is virtual certainty supported by convincing evidence that
 sufficient future taxable income will be available against which such
 deferred tax assets can be realised in future. Other deferred tax
 assets are recognised only to the extent there is a reasonable
 certainty of realisation in future. Such assets are reviewed at each
 Balance Sheet date to reassess realisation.
 
 Deferred tax in respect of timing differences which originate and
 reverse during the tax holiday period is not recognized to the extent
 to which the Company''s gross total income is subject to deduction
 during the tax holiday period.
 
 Minimum Alternate Tax (MAT) credit is recognized as an asset only when
 and to the extent there is convincing evidence that the Company will
 pay normal income tax during the specified period. In the year in which
 the MAT credit becomes eligible to be recognized as an asset in
 accordance with the recommendations contained in guidance note issued
 by the Institute of Chartered Accountants of India, the said asset is
 created by way of a credit to the Profit and Loss Account and shown as
 MAT Credit Entitlement. The Company reviews the same at each Balance
 Sheet date and writes down the carrying amount of MAT Credit
 Entitlement to the extent there is no longer convincing evidence to the
 effect that Company will pay normal Income Tax during the specified
 period.
 
 (p) Earnings Per Share
 
 The earnings considered in ascertaining the Company''s earnings per
 share comprise the net profit after tax. The number of shares used in
 computing basic earnings per share is the weighted average number of
 shares outstanding during the year. The number of shares used in
 computing diluted earnings per share comprises the weighted average
 number of shares considered for deriving basic earnings per share, and
 also the weighted average number of shares, if any which would have
 been issued on the conversion of all dilutive potential equity shares
 
 (q) Provisions and Contingent Liabilities
 
 A provision is recognized 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 not discounted to its
 present value and are determined based on management 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
 management estimates. Provisions are recognised in the financial
 statements in respect of present probable obligations, for amounts
 which can be reliably estimated.
 
 Contingent Liabilities are disclosed in respect of possible obligations
 that arise from past events, whose existence would be confirmed by the
 occurrence or non occurrence of one or more uncertain future events not
 wholly within the control of the Company.
 
 (r) Share Issue Expenses and Premium Payable on Redemption of Foreign
 Currency
 
 Convertible Bonds (FCCBs)
 
 Share Issue Expenses and Premium Payable on Redemption of FCCBs are
 adjusted against the Securities Premium Account.