1.  Accounting Convention and Concepts
 
 These financial statements have been prepared under the historical cost
 convention in accordance with generally accepted accounting principles
 in India, the provisions of the Companies Act, 1956 and the applicable
 accounting standards.
 
 2.  Use of Estimates
 
 The preparation of the financial statements, in conformity with the
 generally accepted accounting principles, requires estimates and
 assumptions to be made that affect the reported amounts of assets and
 liabilities on the date of the financial statements and the reported
 amounts of revenues and expenses during the reporting period.
 Differences between actual results and estimates are recognised in the
 period in which the results are known/ materialised. Example of such
 estimates include provision for doubtful debts, employee benefits,
 provision for income taxes, accounting for contract costs expected to
 be incurred to complete software development, the useful lives of
 depreciable fixed assets and provisions for impairment.
 
 3.  Revenue Recognition
 
 a) Revenues from software solutions and consulting services are
 recognized on specified terms of contract in case of contract on time
 basis and in case of fixed price contracts revenue is recognized using
 percentage of completion method of accounting. The cumulative impact of
 any revision in estimates of the percentage of work completed is
 reflected in the year in which the change becomes known. Provisions for
 estimated losses on such engagements are made during the year in which
 a loss becomes probable and can be reasonably estimated. Amount
 received or billed in advance of services performed are recorded as
 unearned revenue. Unbilled services included in other current assets
 represents amount recognized based on services performed in advance of
 billing in accordance with contract terms.
 
 b) Dividend income is recognised when right to receive is established.
 
 c) Interest Income is recognised on time proportion basis.
 
 d) Profit on sale of investments is recorded on transfer of title from
 the Company and is determined as the difference between the sales price
 and the then carrying value of the investment.
 
 4.  Fixed Assets
 
 Fixed assets stated at cost of acquisition less accumulated
 depreciation and impairment loss, if any. Cost includes all expenses
 incurred for acquisition of assets. Intangible assets are recorded at
 cost and are carried at cost less accumulated amortisation and
 accumulated impairment loss, if any.
 
 5.  Depreciation and Amortisation
 
 Depreciation and amortisation on fixed assets is provided on
 straight-line method based on the estimated useful lives of the assets
 as determined by the management.
 
 The management estimates the useful lives for various fixed assets as
 follows:
 
 6.  Investments
 
 Long-term investments are stated at cost. Provision is made for
 diminution in the value of long term investments, if such decline is
 other than temporary. Current investments are carried at cost or fair
 value, whichever is lower.
 
 7.  Foreign Currency Transaction/ Translation
 
 Transactions in foreign currency are recorded at the original rate of
 exchange in force at the time transactions are affected.  Exchange
 differences arising on settlement of foreign currency transactions are
 recognized in the Profit and Loss Account.
 
 Monetary items denominated in foreign currency are restated using the
 exchange rate prevailing at the date of the Balance Sheet and the
 resulting net exchange difference is recognized in the Profit and Loss
 Account.
 
 In respect of forward contracts entered into to hedge foreign currency
 exposure in respect of recognized monetary items, the premium or
 discount on such contracts is amortised over the life of the contract.
 The exchange difference measured by the change in exchange rate between
 the inception dates of the contract/ last reporting date as the case
 may be and the balance sheet date is recognized in the profit and loss
 account. Any gain/ loss on cancellation of such forward contracts is
 recognised as income/ expense of the period.
 
 Foreign Branches
 
 In respect of the foreign branches, being integral foreign operations,
 all revenues and expenses (except depreciation) during the year are
 reported at average rate prevailing during the period. Monetary assets
 and liabilities are restated at the yearend exchange rate.
 Non-monetary assets and liabilities are stated at the rate prevailing
 on the date of the transaction. Balance in ''head office'' account
 whether debit or credit is translated at the amount of the balance in
 the ''foreign branch'' account in the books of the head office. Net gain/
 loss on foreign currency translation is recognized in the Profit and
 Loss Account.
 
 8.  Derivative Instruments and Hedge Accounting
 
 The Company enters into foreign currency forward contracts and currency
 options contracts to hedge its risks associated with foreign currency
 fluctuations relating to highly probable forecast transactions. The
 Company designates these instruments as hedges applying the recognition
 and measurement pr in cripples set out in the Accounting Standard (AS)
 30 Financial Instruments: Recognition and Measurement. Accordingly,
 the Company records the gain or loss on effective cash flow hedges in
 the Hedging Reserve account until the forecasted transaction
 materializes. Gain or loss on ineffective cash flow hedges is
 recognized in the profit and loss account. (Refer Note No. 14 of
 Schedule 12B).
 
 9.  Employee Benefits
 
 a) Post employment benefits and other long-term benefit plans:
 
 Payments to defined contribution retirement schemes are expensed as
 incurred. For defined benefit schemes and other long-term benefit
 plans, (compensated absences) the cost of providing benefits is
 determined using the Projected Unit Credit Method, with actuarial
 valuations being carried out at balance sheet date. Actuarial gains and
 losses are recognized in full in the profit and loss account for the
 period in which they occur. Past service cost is recognized immediately
 to the extent that the benefits are already vested, and otherwise is
 amortised on a straight line basis over the average period until the
 benefits become vested. The retirement benefit liability recognized in
 the balance sheet represents the present value of the defined benefit
 obligation as adjusted for unrecognized past service cost, as reduced
 by the fair value of scheme assets. Any asset resulting from this
 calculation is limited to the lower of the amount determined as the
 defined benefit liability and the present value of available refunds
 and reduction in future contributions to the scheme.
 
 b) 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 recognized
 as an expense during the period when the employee renders those
 services. These benefits include compensated absences such as leave
 expected to be availed within a year and bonus payable.
 
 10.  Borrowing Cost
 
 Borrowing cost attributable to the acquisition or construction of
 qualifying assets is capitalised as part of the cost of such assets. A
 qualifying asset is one that necessarily takes a substantial period of
 time to get ready for its intended use or sale. All other borrowing
 costs are charged to revenue.
 
 11.  Leases Finance Lease
 
 Assets taken on finance lease are accounted for as fixed assets at
 lower of present value of the minimum lease payments and the fair
 value. Lease payments are apportioned between finance charge and
 reduction in outstanding liability.
 
 Operating Leases
 
 Assets taken on lease under which all risks and rewards of ownership
 are effectively retained by the lesser are classified as operating
 lease. Lease payments under operating leases are recognised as expenses
 on straight line basis.
 
 Furnished and equipped premises leased out under operating lease are
 capitalised in the books of the Company. Lease income is recognised in
 Profit and Loss Account over the lease term on a straight line basis.
 
 12.  Taxes on Income
 
 Income Taxes are accounted for in accordance with Accounting Standard
 22 (AS 22) on Accounting for Taxes on Income. Tax expense comprises
 of current tax and deferred tax. Current tax is measured at the amount
 expected to be paid or recovered from the tax authorities using the
 applicable tax rates. Deferred taxes are recognised for future tax
 consequence attributable to timing difference between taxable income
 and accounting income, measured at relevant enacted tax rates and in
 the case of deferred tax assets, on consideration of prudence, are
 recognized and carried forward to the extent of reasonable certainty/
 virtual certainty, as the case maybe.
 
 Minimum Alternate Tax (MAT) credit entitlement is recognized in
 accordance with the Guidance Note on Accounting for credit available
 in respect of Minimum Alternate Tax under the Income Tax Act, 1961
 issued by ICAI. MAT credit is recognised 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. At each balance sheet
 date the Company reassesses MAT credit assets, to the extent they
 become reasonably certain or virtually certain of realization, as the
 case may be and adjusts the same accordingly.
 
 In the event of unabsorbed depreciation and carry forward of losses,
 deferred tax assets are recognised only to the extent that there is
 virtual certainty that sufficient future taxable income will be
 available to realise such assets. In other situations, deferred tax
 assets are recognised only to the extent that there is reasonable
 certainty that sufficient future taxable income will be available to
 realise these assets.
 
 Advance taxes and provisions for current income taxes are presented in
 the balance sheet after off-setting advance tax paid and income tax
 provision arising in the same tax jurisdiction and the entity intends
 to settle the asset and liability on a net basis.
 
 13.  Impairment of Assets
 
 An asset is treated as impaired when the carrying cost of asset exceeds
 its recoverable value. An impairment loss is charged to the Profit and
 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 recoverable amount.
 
 14.  Share based Compensation
 
 The compensation cost of stock options granted to employees is measured
 by the intrinsic value method, i.e. difference between the market price
 of the Company''s shares on the date of grant of options and the
 exercise price to be paid by the option holders. The compensation cost,
 if any, is amortised over the vesting period of the options.
 
 15.  Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognised 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 recognised, but are disclosed in the
 notes. Contingent assets are neither recognised nor disclosed in the
 financial statements.