A.  Basis of preparation of Financial Statements : The financial
 statements have been prepared on accrual basis under the historical
 cost convention, in conformity with all material aspects with the
 generally accepted accounting principles (GAAP) in India, the
 Accounting Standards issued by the Institute of Chartered Accountants
 of India and the requirements of the Companies Act, 1956.
 
 B.  Fixed Assets and Depreciation : Fixed Assets are stated at cost
 less accumulated depreciation. Cost includes all expenses related to
 acquisition and installation of the concerned assets and any
 attributable cost of bringing the asset to the condition of its
 intended use. Direct financing cost incurred during the construction
 period on major projects is also capitalized. Exchange differences on
 repayment and year-end translation of foreign currency liabilities
 relating to acquisition of fixed assets are adjusted to the carrying
 cost of the respective assets.
 
 Pursuant to Accounting Standard-26 Intangible Assets becoming
 applicable, the Company has adopted the following accounting policy for
 Software Expenses and exclusive marketing rights:
 
 Software purchased is capitalized and written off over its useful life,
 which is normally six years, provided the software is regularly updated
 through a maintenance contract, failing which, the unamortised balance
 is charged to revenue. If the usage of software is discontinued, its
 unamortised cost is also charged to revenue.
 
 Exclusive marketing rights is capitalized and written off over its
 agreement period of ten years.
 
 Depreciation is provided under the straight-line method, based on the
 rates provided under schedule XIV to the Companies Act 1956.
 
 Fixed Assets purchased during the year for all new projects are
 depreciated equally over the respective projects life.
 
 C.  Investments : Long-term investments are carried at cost. Provision
 for diminution, if any, in the value of each long-term investment is
 made to recognize a decline, other than that of a temporary nature.
 
 Current investments intended to be held for less than one year are
 stated at lower cost and market value and the resultant decline, if
 any, is charged to revenue and the carrying amount of investments is
 reduced to that extent.
 
 Investment in subsidiary is accounted on cost method. Under the method,
 Company recognizes only dividend received from subsidiary as income.
 Undistributed profits of subsidiary are not accounted.
 
 D.  Foreign Exchange Transactions : Transactions in foreign currency
 are recorded at the exchange rates prevailing on the date of the
 transaction. Exchange gains/losses are recognized in the Profit and
 Loss Account except in respect of liabilities incurred to acquire fixed
 assets in which case, they are adjusted to the carrying amount of such
 fixed assets.
 
 E.  Revenue Recognition : Revenue from time and material contracts for
 software development is recognized on completion of contracts or at
 stages as per the applicable terms and conditions agreed with the
 customers and when the deliverables are dispatched to customers. In
 case of fixed price contracts, revenue is recognized on milestones
 achieved as specified in the contracts on the proportionate completion
 method on the basis of work completed. Interest on deployment of
 surplus funds is recognized over the period of deployment using
 interest rate implicit in the transaction. Dividend income is
 recognized when the company''s right to receive is established.
 
 F.  Impairment of Assets : The management has not identified any
 indication of impairment of asset from internal or external source of
 information.
 
 G.  Borrowing Costs : Borrowing costs that are directly attributable to
 the acquisition of an asset that necessarily takes a substantial period
 of time to get ready for its intended use are capitalised as part of
 the cost of that asset till the date it is put to use. Other borrowing
 costs are recognized as an expense in the period in which they are
 incurred.
 
 H. Income-tax : Income taxes have been computed using the tax effect
 accounting method, where taxes are accrued in the same period as the
 related revenue and expenses. Deferred tax assets and liabilities are
 recognized for the expected future tax consequences attributable to
 timing differences between the taxable income and the accounting income
 for a period. Deferred tax assets and liabilities are measured using
 enacted tax rates expected to apply to taxable income in the years in
 which the timing differences are expected to be recovered or settled.
 The effect of changes in the tax rates on deferred tax assets and
 liabilities is recognized in the statement of income in the period of
 change. Deferred tax assets are recognized based on management''s
 judgment as to the sufficiency of future taxable income against which
 the deferred tax asset can be realized.
 
 I. Retirement Benefits : The Company provides retirement / post
 retirement benefits in the form of gratuity. Such benefits are provided
 on the basis of valuation as on the date of Balance Sheet.