Share Capital
 
 1) 8235 shares of Rs 2/-each are allotted as fully paid-up pursuant to
 an agreement, without payment being received in cash.  .  
 
 2) 6015400 Equity Shares of Rs.2 Each are allotted as fully paid up
 Bonus Shares by way of Capitalisation of Reserves.
 
 3) Of the above,36327271 shares of Rs 2/- each are allotted during the
 year as fully paid up in pursuant to an agreement, without payment
 being received in cash.
 
 4) Under the Employees Stock Option Scheme, the employees have an
 option to subscribe Equity Shares of Rs.2 each subject to a maximum
 number of 81,45,101 Shares.
 
 Secured Loan:
 
 a. Secured by Charge on Book Debts, Plant & Machinery and on assets
 other than those acquired out of Term Loan .  from HDFC Bank & ICICI
 Bank.
 
 b. Secured by Hypothecation .of Computers purchased out of the Loan.
 
 c. Secured by Hypothecation of Vehicle purchased out of the Loan.
 
 Other notes
 
 1. In respect of Leave Salary, the liability has been fully provided'in
 accordance with Scheme in force.
 
 2. During the year 2003, the company acquired four companies viz.,
 System Telecom Data and Services (P) Limited, Linux. Solutions (P)
 Limited, I Trigger Technologies (P) Limited and Web net Technologies
 (P) Limited through a Share swap arrangement authorised by the General
 body on 28/8/02.
 
 The three Companies namely Linux Solutions (P) Limited, I Trigger
 Technologies (P) Limited and Web net Technologies (P) Limited were
 merged with STADS (P) Limited by a scheme of arrangement approved by
 the Shareholders of the respective companies and sanctioned by the
 Honourable High Court of Madras by their order dated 10th March 2003.
 
 3. Provision for current tax is made on the income relatable to
 Domestic Sales.
 
 4. Confirmations have been obtained from Debtors and Creditors directly
 by the company and the balances are stated as per books of account.
 
 5. Dues to Small Scale Industrial Undertakings - NIL
 
 6. Debit Balance written off Rs. 7792943/- in the Profit & Loss
 Account. In the opinion of the management the debit balances are not
 recoverable despite persistent efforts.
 
 7. Fixed Deposits with Banks represent:
 
 a) Rs. 76000/- pledged with Bank towards Margin on Guarantee issued to
 Customs Department
 
 b) Rs. 55000/- pledged with Sales tax authorities, as Deposit
 
 c) Rs. 2000000 /- Pledged with ICICI Bank, Chennai as security for loan
 against Fixed Assets.
 
 8. Computation of net profits in accordance with Section 349 of the
 Companies Act, 1956 is not furnished as no commission is paid to any
 director.
 
 9. Quantitative Details
 
 a) The company is engaged in the development and maintenance of
 Computer Software. The production and sale of such software cannot be
 expressed in any generic unit. Hence it is not possible to give
 quantitative details of sales and certain information as required under
 paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act,
 1956
 
 10. Accounting Standard AS 22
 
 The company is eligible for tax holiday u/s 10A/10 B and 80 IB of the
 Income Tax Act. Deferred Tax Liability in the case of the company
 arises only in respect of one item of timing difference, namely the
 difference between the depreciation as per Income Tax Act and the
 depreciation as per books. However, the timing difference that has now
 arisen would get reversed during the tax holiday period u/s 10 B of the
 Income Tax Act 1961. No provision, therefore, for deferred tax
 Liability is considered necessary pursuant to the Accounting Standards
 Interpretation (ASI) 5 issued by the Institute of Chartered Accountants
 of India.
 
 11. Segment Reporting
 
 The company's Operations relates to providing Information Technology
 (IT) services operating in various geographic segments
 
 Income and Direct expenses in relation to segment is categorised based
 on items that are individually identifiable to that segment, while the
 reminder of the costs are categorised in relation to the associated
 turnover of the segment, certain expenses such as deprecation which
 form the significant component of total expenses, are not specifically
 allocable to specific segment as the underlying services are used
 interchangeably. The company believes that it is not practical to
 provide segment disclosure relating those costs and expenses and
 accordingly these expenses are separately disclosed as unallocated and
 directly charged against total income.
 
 Fixed assets used in the company's business or liabilities contracted
 have not been identified to any of the reportable segment, as the fixed
 assets and services used are interchangeable between segments.
 
 The company believes that it is currently not practicable to provide
 segment disclosure relating to total assets and • liabilities.
 
 12. Figures for the previous year have been regrouped wherever
 necessary.