20.1.1.  Basis of Preparation of financial statements
 
 The financial statements are prepared and presented in accordance with
 the Indian Generally Accepted Accounting Principles (GAAP) under the
 historical cost convention on the accrual basis. GAAP comprises
 mandatory accounting standards issued by the Institute of Chartered
 Accountants of India (ICAI), Companies (Accounting Standards) Rules,
 2006 and guidelines issued by the Securities and Exchange Board of
 India.
 
 20.1.2.  Use of Estimates
 
 The preparation of financial statements in conformity with GAAP
 requires management to make estimates and assumptions that affect the
 reported amounts of assets and liabilities, the disclosures of
 contingent assets and liabilities on the date of the financial
 statements and reported amounts of revenue and expenses during the
 period reported. Actual results could differ from those estimates. Any
 revision to accounting estimates is recognized prospectively in current
 & future periods.
 
 20.1.3.  Revenue Recognition
 
 i. Revenue from sale of products is recognized, in accordance with the
 sales contract, on delivery of goods to the Customer. Revenue from
 product sales are shown net of taxes.
 
 ii. Revenue on Software Development services comprises revenue priced
 on a time and material and fixed- price contracts. Revenue priced on a
 time and material contracts are recognized as related services are
 performed. Revenue from fixed-price, fixed time-frame contracts is
 recognized in accordance with the percentage of completion method.
 
 iii. Revenue from Technical Service, Training, support and other
 services is recognized as the related services are performed over the
 duration of the contract/course.
 
 iv.  Dividend is recognized when the right to receive the dividend is
 established at the balance sheet date.
 
 20.1.4. Cash flow statement
 
 Cash flows are reported using the indirect method, whereby net profits
 before tax is adjusted for the effects of transactions of a non-cash
 nature and the changes during the period in inventories and operating
 receivables and payables. The cash flows from regular revenue
 generating, investing and financing activities of the Company are shown
 separately.
 
 20.1.5.  Fixed Assets and Capital Work-in-progress
 
 i. Fixed Assets are stated at historical cost less accumulated
 depreciation. Cost includes all expenses incurred to bring the assets
 to its present location and condition. During the year exchange
 differences on translation of foreign currency loans obtained to
 purchase fixed assets from countries outside India are recognized in
 Profit and Loss a/c.
 
 ii. Interest on borrowed money allocated to and utilized for fixed
 assets, pertaining to the period up to the date the fixed asset is
 ready for its intended use, is capitalized.
 
 iii. Advances paid towards the acquisition of fixed assets outstanding
 as of each balance sheet date and the cost of fixed assets not ready
 for its intended use before such date are disclosed under Capital
 Work-in- progress.
 
 20.1.6.  Intangible Assets -
 
 i.  All intangible assets are stated at cost less accumulated
 amortization.
 
 ii. The cost of acquired intangible assets is the consideration paid
 for acquisition and other incidental costs incurred to bring the
 intangible asset for its intended use.
 
 iii. Internally generated intangible assets are valued at cost which
 were incurred during the development phase of intangibles which
 comprises of expenditure on materials and services used or consumed,
 salaries and other employment related cost of personnel engaged in
 development of intangible asset, other direct expenditures and
 overheads that are necessary for the generation of the intangible asset
 and that can be allocated on a reasonable basis.
 
 iv. Interest on borrowed money allocated to and utilized for intangible
 assets, pertaining to the period up to the date the intangible asset is
 ready for its intended use, is capitalized in accordance with
 Accounting Standard-16.
 
 v. Amount paid towards the acquisition of intangible assets, which is
 not put to use as at reporting date and the cost of intangible assets
 not ready for its intended use before such date is disclosed under
 Capital Work-in-progress.
 
 20.1.7.  Research and Development
 
 i. The Company in association with the Centre for Sponsored Schemes and
 Projects of Indian Institute of Science, Bangalore has set up a
 designing and testing laboratory. The Indian Institute of Science and
 the Company will jointly own the Intellectual Property rights and
 patents for technologies and products developed by the laboratory.
 
 ii. The Company, also in association with Indian Institute of Science,
 and Society for Innovation and Development has entered into
 Collaborative Research Programme called Cranes -I I Sc Research
 Programme. The Parties shall be joint owners of any Intellectual
 Property Rights and Inventions that may be realized through this
 programme.
 
 iii. Research cost relating to the above are charged to Profit and Loss
 account and the expenditure incurred relating to the Development phase
 are treated as advances in Capital Work in progress and will be
 capitalized when the intangible asset is ready for use as per the
 criteria laid down by the AS-26.
 
 20.1.8. Depreciation and Amortization
 
 i. Depreciation has been provided on Straight Line method at the rates
 prescribed under Schedule XIV of the Companies Act, 1956. In respect of
 assets purchased / sold during the year, depreciation is charged on a
 pro-rata basis.
 
 ii. The Management estimates the useful life of Customized
 software/commercial rights procured for specific application as 3 years
 and accordingly amortizes over their estimated useful life on a
 straight line basis.
 
 iii. Depreciation on individual low cost assets (costing less than
 Rs.5,000) is provided for in full in the year of purchase irrespective
 of date of installation.
 
 iv. Other Intangible assets are amortized over their respective
 individual estimated useful life on a straight- line basis, commencing
 from the date the asset is available to the Company for its use.
 
 v. After recognition of impairment loss, the depreciation charge for
 the asset is on the revalued amount prospectively over the remaining
 useful life of the asset.
 
 20.1.9. Impairment of Assets
 
 The Company assesses at each balance sheet date using internal and
 external sources, whether there is any indication that an asset (both
 tangible and intangible) may be impaired more than of a temporary
 nature. If any such indications exist, the Company estimates the
 recoverable amount of the asset. If such recoverable amount of the
 asset or the recoverable amount of the cash generating unit to which
 the asset belongs to is less than its carrying amount, the carrying
 amount is reduced to its recoverable amount. The reduction is treated
 as an impairment loss and is recognized in the profit and loss account.
 If at the balance sheet date there is an indication that a previously
 assessed impairment loss no longer exists, the recoverable amount is
 reassessed and the asset is reflected at the recoverable amount subject
 to a maximum of depreciated historical cost.
 
 In the current year, in view of various reasons already covered
 elsewhere in this Report, it has not been possible to conduct this
 detailed review.
 
 20.1.10. Inventories
 
 Inventories of the company comprises of Third Party software products.
 Such software products are valued at cost or net realizable value,
 whichever is lower. The cost formula used is weighted average basis.
 Net realizable value is the estimated selling price in ordinary course
 of business, less estimated cost of completion and estimated cost
 necessary to make the sale. The cost of inventories is net of VAT
 credit.
 
 20.1.11.  Investments
 
 Investments are either classified as current or long-term based on the
 management''s intention at the time of purchase.
 
 i. Long term investments are stated at cost less provision for
 diminution in the value of such investments.  Diminution in value is
 provided for where the management is of the opinion that the diminution
 is of permanent nature.
 
 ii. Current investments are carried at the lower of cost or fair value.
 Any reduction in carrying amount and any reversals of such reduction
 are charged or credited to the profit & loss account.
 
 iii. Investments in Foreign Subsidiaries have been reflected at the
 exchange rates prevailing at the date of transactions.
 
 20.1.12.  Effect of Exchange Fluctuation on foreign currency
 transactions
 
 i.  Foreign currency transactions are recorded at the exchange rate
 prevailing on the date of the transaction.
 
 ii. Exchange differences are recorded when the amount actually received
 on sales or actually paid when the expenditure is incurred, is
 converted into Indian Rupees.
 
 iii. Exchange differences arising on foreign currency transactions are
 recognized as income or expense in the period in which they arise.
 
 iv. Period-end balances of monetary foreign currency assets and
 liabilities are translated at the closing rate.  The resulting exchange
 difference is recognized in the profit and loss account.
 
 v.  Non - Monetary assets & liabilities are translated at the rate
 prevailing on the date of transaction.
 
 vi. Foreign currency translation differences relating to liabilities
 incurred for acquiring fixed assets are recognized in Profit and Loss
 a/c.
 
 20.1.13.  Employees'' Retirement Benefits i) Post-employment benefit
 plans
 
 Contributions to defined contribution retirement benefit schemes are
 recognized as an expense when employees have rendered services
 entitling them to contributions.
 
 For defined benefit schemes, the cost of providing benefits is
 determined using the Projected Unit Credit Method, with actuarial
 valuations being carried out at each balance sheet date. Actuarial
 gains and losses are recognised in full in the profit and loss account
 for the period in which they occur. Past service cost is recognised
 immediately to the extent that the benefits are already vested, and
 otherwise is amortized on a straight-line basis over the average period
 until the benefits become vested. The retirement benefit obligation
 recognised in the balance sheet represents the present value of the
 defined benefit obligation as adjusted for unrecognised past service
 cost, and as reduced by the fair value of scheme assets. Any asset
 resulting from this calculation is limited to the present value of
 available refunds and reductions in future contributions to the scheme.
 
 ii) Short-term employee benefits
 
 The undiscounted amount of short-term employee benefits expected to be
 paid in exchange for the services rendered by employees is recognised
 during the period when the employee renders the service. These benefits
 include compensated absences such as paid annual leave, overseas social
 security contributions and performance incentives.
 
 iii) Long-term employee benefits
 
 Compensated absences which are not expected to occur within twelve
 months after the end of the period in which the employee renders the
 related services are recognized as a liability at the present value of
 the defined benefit obligation at the balance sheet date.
 
 20.1.14.  Income Tax/ Deferred Tax
 
 i.  Current tax is calculated in accordance with the relevant tax
 regulations.
 
 ii. Deferred tax assets and liabilities are recognized for the future
 tax consequences attributable to timing differences that result between
 the profit offered for income taxes and the profit as per the financial
 statements. Deferred tax in respect of timing difference which
 originate during the tax holiday period but reverse after the tax
 holiday period is recognized in the year in which the timing difference
 originate. For this purpose the timing difference which originates
 first is considered to reverse first. Deferred tax assets and
 liabilities are measured using the tax rates and tax laws that have
 been enacted or substantively enacted by the balance sheet date. The
 effect on deferred tax assets and liabilities of a change in tax rates
 is recognized in the profit and loss account in the year of charge.
 Deferred tax assets on timing differences are recognized only if there
 is a reasonable certainty that sufficient future taxable income will be
 available against which such deferred tax assets can be realized.
 Deferred tax assets are reassessed for the appropriateness of their
 respective carrying values at each balance sheet dates.
 
 iii. Minimum alternative tax (MAT) paid in accordance to the tax laws,
 which gives rise to future economic benefits in the form of adjustment
 of future income tax liability, is considered as an asset if there is
 convincing evidence that the Company will pay normal income tax after
 the tax holiday period. Accordingly, MAT is recognized as an asset in
 the balance sheet when it is probable that the future economic benefit
 associated with it will flow to the Company and the asset can be
 measured reliably.
 
 iv. Advance taxes and provisions for current income taxes are presented
 in the balance sheet after off-setting advance taxes paid and income
 tax provisions arising in the same tax jurisdiction.
 
 v. The Company offsets deferred tax assets and deferred tax liabilities
 relating to taxes on income levied by the same governing taxation laws.
 
 20.1.15.  Provisions and Contingent Liabilities
 
 The Company creates a provision when there is a present obligation as a
 result of an obligating event that probably requires an outflow of
 resources and a reliable estimate can be made of the amount of the
 obligation.  A disclosure for a contingent liability is made when there
 is a possible obligation or a present obligation that may, but probably
 will not, require an outflow of resources. Where there is a possible
 obligation or a present obligation in respect of which the likelihood
 of outflow of resources is remote, no provision or disclosure is made.
 
 20.1.16.  Earnings per Share
 
 i. Basic Earnings per share is calculated by dividing the net earning
 available to the Equity Shareholders by the weighted average number of
 Equity Shares outstanding during the year.
 
 ii. Diluted Earnings per share is calculated by dividing the net
 earnings available to existing and potential Equity Shareholders by
 aggregate of the weighted average number of Equity Shares considered
 for deriving 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 (FCCB). Dilutive potential
 equity shares are deemed converted as of the beginning of the period,
 unless issued at a later date.
 
 20.1.17. Leases
 
 i. Lease arrangements where substantial risk and rewards incidental to
 ownership vests with the less or, such leases are recognized as
 operating leases.
 
 ii.  Lease payments under operating lease are recognized as an expense
 in the profit and loss account.
 
 20.1.18. Derivative Instruments and Hedge Accounting
 
 The Company uses foreign currency forward contracts and currency
 options to hedge its risks associated with foreign currency
 fluctuations relating to certain firm commitments and forecasted
 transactions. The Company designates these hedging instruments as cash
 flow hedges applying the recognition and measurement principles set out
 in the Accounting Standard 30 Financial Instruments: Recognition and
 Measurement (AS-30).
 
 The use of hedging instruments is governed by the Company''s policies
 approved by the board of directors, which provide written principles on
 the use of such financial derivatives consistent with the Company''s
 risk management strategy.
 
 Hedging instruments are initially measured at fair value, and are
 remeasured at subsequent reporting dates.  Changes in the fair value of
 these derivatives that are designated and effective as hedges of future
 cash flows are recognised directly in shareholders'' funds and the
 ineffective portion is recognised immediately in the profit and loss
 account.
 
 Changes in the fair value of derivative financial instruments that do
 not qualify for hedge accounting are recognised in the profit and loss
 account as they arise.
 
 Hedge accounting is discontinued when the hedging instrument expires or
 is sold, terminated, or exercised, or no longer qualifies for hedge
 accounting. At that time for forecasted transactions, any cumulative
 gain or loss on the hedging instrument recognised in shareholders''
 funds is retained there until the forecasted transaction occurs. If a
 hedged transaction is no longer expected to occur, the net cumulative
 gain or loss recognised in shareholders'' funds is transferred to the
 profit and loss account for the period.