1.1.1 Basis for preparation of financial statements:
 
 The Accounts have been prepared and presented under the historical cost
 convention on the accrual basis of accounting following Generally
 Accepted Accounting Practices (GAAP) and comply with the Accounting
 Standards prescribed by the Companies (Accounting Standards) Rules,
 2006 and the relevant provisions of the Companies Act, to the extent
 applicable.
 
 Use of Estimates:
 
 The preparation of the financial statements in conformity with GAAP
 requires management to make estimates and assumptions that affect the
 reported amounts of assets and liabilities and the disclosure of
 contingent liabilities on the date of the financial statements. Actual
 results could differ from those estimates. Any revision to accounting
 estimates is recognized prospectively in current and future periods.
 
 1.1.2 Revenue Recognition:
 
 Revenue from software development services and Sale of Software is
 recognised based on the milestones achieved on a
 percentage-of-completion basis. Product sale is recognised on delivery
 and passing of title. Fee for Manufacturing License is recognized
 during the year in which the company has licensed the manufacturing
 rights using the technology. Rejections/returns if any are recognised
 when Software supplied is found inadequate / Product supplied is
 returned. Revenue from royalty is recognised when the right to receive
 the payment is established. Interest income is recorded on accrual
 basis.
 
 1.1.3 Expenditure:
 
 Expenses are accounted on accrual basis and provision is made for all
 known losses and liabilities.
 
 1.1.4 Fixed Assets:
 
 Fixed assets are stated at their original cost of acquisition and
 subsequent improvement thereto, including taxes, duties, freight and
 other incidental expenses related to acquisition, construction and
 installation of asset(s) concerned.
 
 1.1.5 Depreciation: 
 
 Depreciation on fixed assets is provided using the straight-line method
 based on useful life as estimated by the management. Depreciation is
 charged on pro-rata basis for assets purchased/sold during the year.
 Individual assets costing less than Rs. 5,000 are depreciated in full
 in the year of purchase. The management''s estimate of useful life for
 the various fixed assets is given below:
 
 1.1.6 Inventories:
 
 Inventory of finished goods, materials and components are valued at the
 lower of historic and estimated net realisable value. Products
 developed by Ncore Technology Pvt. Limited, and transferred to the
 Company on amalgamation, are treated as semi-finished products, and
 their costs are written off every year based on sales as compared to
 the estimated demand for such products.
 
 1.1.7 Employee Benefits:
 
 i) Post-employment benefit plans
 
 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 unrecognized 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.
 
 1.1.8 Research and Development:
 
 Expenditure on Research is recognized as an expense in the year in
 which it is incurred.
 
 1.1.9 Foreign Currency Conversion:
 
 Foreign currency transactions are dealt with in accordance with the
 Accounting Standard on Accounting for Effects of Changes in Foreign
 Exchange Rates (AS11), notified by the Companies (Accounting Standards)
 Rules, 2006.
 
 1.1.10 Investments:
 
 Investments are classified into current investment and long-term
 investments. Current investments are carried at the lower of cost and
 fair value, and provision is made to recognize any decline in the
 carrying value. Long-term investments are carried at cost, and
 provision is made to recognize any decline, other than temporary, in
 the value of such investment(s).
 
 1.1.11 Provision for Current and Deferred Tax:
 
 Provision for current tax is made after taking into consideration
 benefits admissible under the provisions of Income Tax Act, 1961
 
 Deferred tax resulting from timing difference between book and
 taxable profit is accounted for using the tax rates and laws that have
 been enacted or substantively enacted as on the balance sheet date.
 The deferred tax asset is recognised and carried forward only to the
 extent that there is a reasonable certainty that the asset will be
 realised in future.
 
 In view of the losses, as a conservative policy, the Company has not
 recognized additional deferred tax assets resulting on account of
 unabsorbed business losses and other benefits available under Income
 Tax.
 
 1.1.12 Impairment of Assets:
 
 An asset is treated as impaired when the carrying cost of assets
 exceeds its recoverable value. An impairment loss is charged off to the
 Profit & Loss Account in the year in which an asset is identified as
 impaired. The impairment loss recognized in prior accounting period is
 reversed if there has been a change in the estimate of the recoverable
 amount.
 
 1.1.13 Provisions, Contingent Liabilities & Contingent Assets:
 
 Provisions involving substantial degree of estimation in measurement of
 recognizing when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities are not recognized but are disclosed in the
 notes. Contingent Assets are neither recognized nor disclosed in the
 financial statements.