1.  Accounting Convention
 
 These fi nancial statements have been prepared under historical cost
 convention from the books of accounts maintained on an accrual basis in
 conformity with accounting principles generally accepted in India and
 comply with the Accounting Standards notifi ed under Section 211 (3C)
 of the Companies Act, 1956 (the Act) and the relevant provisions of
 the Act.
 
 2.  Fixed Assets
 
 Fixed assets are stated at cost of acquisition, including any cost
 attributable for bringing the asset to its working condition for its
 intended use, less accumulated depreciation.
 
 Tangible Assets
 
 a.  Depreciation on assets for own use is provided on Straight Line
 Method on pro-rata basis at the rates prescribed under Schedule XIV to
 the Act, except for leasehold land and building and leasehold
 improvements, which are amortised over the period of the lease. Assets
 costing less than Rs. 5,000 each are depreciated fully in the year of
 acquisition.
 
 b.  Assets given to employees on contractual obligations are
 depreciated to the extent of 50% of the value over a period of four
 years, at the end of which these assets are transferred to the
 respective employees at the residual book value.
 
 Intangible Assets
 
 Computer Software having benefit of more than one year is capitalised
 and amortised over a period of 3 to 6 years.
 
 Impairment of Assets
 
 The Company assesses at each Balance Sheet date whether there is any
 indication that an asset may be impaired.  If any such indication
 exists, the Company estimates the recoverable amount of the asset. If
 such recoverable amount of the asset or recoverable amount of the cash
 generating unit to which the asset belongs is less than its carrying
 amount, the carrying amount is reduced to its recoverable amount. The
 reduction, if any, is treated as an impairment loss and is recognised
 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 refl
 ected at the recoverable amount.
 
 3.  Valuation of Investments
 
 Long term investments are stated at cost and provision is made for
 diminution, other than temporary, in value of investments. Current
 investments are valued at lower of cost and market value/ net asset
 value.
 
 4.  Revenue Recognition
 
 a.  In Call Centre Activity, revenue is recognised as the related
 services are performed, based on actual utilisation or minimum
 utilisation level, as appropriate, specifi ed in the agreements.
 
 In Claim Processing Activity, revenue is recognised based on number of
 claims processed, at contractual rates.
 
 In cases where services are rendered to customers during the year but
 invoices are yet to be raised at the year end, revenue is accrued and
 classifi ed under Sundry Debtors - Schedule G.
 
 In respect of I.T. Division, revenue is billed to clients as per terms
 of specifi c contracts once the related services are rendered. On fi
 xed-price contracts, revenue is recognised based on milestones achieved
 as specifi ed in the contracts on the basis of work completed. Revenue
 from rendering technical project and other services is recognised
 during the period in which services are rendered.
 
 b.  Interest income is accounted on accrual basis and dividend income
 is accounted on right to receipt basis.
 
 c.  In respect of other heads of income, the Company follows the
 practice of accounting of such income on accrual basis.
 
 5.  Foreign Currency Transactions
 
 a.  Foreign currency transactions are recorded at the exchange rates
 prevailing on the date of such transactions.  Foreign currency monetary
 assets and liabilities as at the Balance Sheet date are translated at
 the rates of exchange prevailing on the Balance Sheet date. Gain and
 losses arising on account of differences in foreign exchange rates on
 settlement/ translation of foreign currency monetary assets and
 liabilities are recognised in the Profit and Loss Account. Non
 monetary foreign currency items are carried at cost.
 
 b.  Forward exchange contracts are accounted for, by amortising the
 difference between the forward rate and the exchange rate on the date
 of the transaction over the life of the contract.
 
 c.  In respect of transactions related to foreign branches, all revenue
 and expense transactions during the year are reported at an average
 rate. Monetary assets and liabilities are translated at the rate
 prevailing on the Balance Sheet date whereas non-monetary assets and
 liabilities are translated at the rate prevailing on the date of the
 transaction. Net gain/ loss on foreign currency translation in respect
 of transactions of all foreign branches, which are integral to the
 Company, are recognised in the Profit and Loss Account.
 
 d.  Any profit or loss arising on settlement or cancellation of other
 derivative contracts (forward contracts in respect of fi rm commitments
 or highly probable forecast transactions, swaps and currency options)
 is recognised as income or expense for the year. Pursuant to The
 Institute of Chartered Accountants of Indias announcement Accounting
 for Derivatives, the Company marks-to-market all such outstanding
 derivative contracts at the year-end and the resulting mark-to-market
 losses, if any, are recognised in the Profit and Loss Account.
 
 6.  Employee Benefits
 
 (i) Defi ned Contribution Plan
 
 The Company has Defi ned Contribution plans for post employment benefi
 ts namely Provident Fund, Superannuation Fund and other funds.
 
 Under the Provident Fund Plan, the Company contributes to a Government
 administered provident fund on behalf of its employees and has no
 further obligation beyond making its contribution.
 
 The Superannuation Fund applicable to certain employees, constitutes an
 insured benefit, which is classifi ed as a defi ned contribution plan
 as the Company makes contributions to an insurance company and has no
 further obligation beyond making the payment to the insurance company.
 
 The Company makes contributions to State plans namely Employees State
 Insurance Fund and Employees Pension Scheme 1995 and has no further
 obligation beyond making the payment to them.
 
 There are contributory plans at certain overseas branches of the
 Company and contributions are made as per their policies/ local
 regulations.
 
 The Companys contributions to the above funds are charged to revenue
 every year.
 
 (ii) Defi ned Benefit Plan
 
 The Company has a Defi ned Benefit plan namely Gratuity for all of its
 employees in India. The gratuity scheme is funded through Group
 Gratuity Policy with Life Insurance Corporation of India (LIC). The
 Company also has pension benefit plan at certain foreign branches. The
 said plan is funded for ceratin employees through payment in trustee
 administered funds as determined by periodic actuarial calculation.
 
 The liability for the defi ned benefit plan of Gratuity and Pension is
 determined on the basis of an actuarial valuation carried out by an
 independent actuary at the year-end using Projected Unit Credit Method.
 
 Termination benefits are recognised as an expense as and when
 incurred.
 
 Actuarial gains and losses comprise experience adjustments and the
 effects of changes in actuarial assumptions and are recognised
 immediately in the Profit and Loss Account as income or expense.
 
 (iii) Other Employee Benefits
 
 The employees of the Company are entitled to leave encashment as per
 the leave policy of the Company.  The liability in respect of leave
 encashment is provided, based on an actuarial valuation carried out by
 an independent actuary as at the year end using Projected Unit Credit
 Method. Short term compensated absences, if any, are provided on cost
 to company basis.
 
 7.  Taxation
 
 a.  Provision for Income Tax is made after considering exemptions and
 deductions available under the Income Tax Act, 1961, of India and legal
 advice from time to time. Provision for Income Tax in respect of
 overseas branches are made as per the tax laws applicable to the
 relevant country.
 
 b.  Deferred Tax is recognised, subject to the consideration of
 prudence, on timing differences being the difference between taxable
 income and accounting income that orginate in one period and are
 capable of reversal in one or more subsequent periods. Deferred Tax
 Asset is not recognised unless there are timing differences, the
 reversal of which will result in suffi cient income or there is virtual
 certainty that suffi cient future taxable income will be available,
 against which, deferred tax asset can be realised.
 
 8.  Provisions and Contingent Liabilities
 
 The Company recognises a provision when there is a present obligation
 as a result of a past event that probably requires an outfl ow of
 resources and a reliable estimate can be made of the amount of the
 obligation. A disclosure of a contingent liability is made when there
 is a possible obligation or a present obligation that may, but probably
 will not, require an outfl ow of resources. Where there is a possible
 obligation or a present obligation that the likelihood of outfl ow of
 resources is remote, no provision or disclosure as specifi ed in
 Accounting Standard 29 - Provisions, Contingent Liabilities and
 Contingent Assets is made.
 
 9.  Leases
 
 a.  Leases of assets under which all the risks and benefits of
 ownership are substantially transferred to the lessee are classifi ed
 as fi nance leases. Finance leases are capitalised at the estimated
 present value of the minimum lease payments. Each lease payment is
 allocated between the liability and fi nance charges so as to achieve a
 constant rate on the fi nance balance outstanding. The corresponding
 rental obligations, net of fi nance charges, are included in secured
 loans. The interest element of the fi nance charge is charged to the
 Profit and Loss Account over the lease period. Leased assets are being
 depreciated over the lease period.
 
 b.  Assets acquired as leases where a signifi cant portion of the risks
 and rewards of the ownership are retained by the lessor are classifi ed
 as Operating Leases. Lease rentals are charged to the Profit and Loss
 Account on accrual basis.
 
 10.  Accounting for Employee Stock Options
 
 Stock options granted to employees under the Employee Stock Option
 Scheme are accounted as per the accounting treatment prescribed in the
 Guidance Note on Accounting for Employee Share-based Payments issued by
 the Institute of Chartered Accountants of India.