1.  System of Accounting
 
 The Company adopts the accrual concept in the preparation of the
 Accounts. The preparation of financial statements requires the
 management to make estimates and assumptions considered in the reported
 amounts of assets and liabilities (including contingent liabilities) as
 of the date of the financial statements and reported income and
 expenses during the reporting period. Management believes that the
 estimates used in preparation of the financial statements are prudent
 and reasonable. Future results could differ from the estimates.
 
 2.  Revenue Recognition
 
 Revenue from services are recognised as and when the services are
 performed. Sales are stated at selling price inclusive of all taxes.
 
 Expenditure on software purchase and developed/customised during the
 year is treated as revenue expenditure.  Interest income: Interest
 income is recognised on a time proportion basis.
 
 3.  Foreign Currency Transactions
 
 i) Initial Recognition: Foreign currency transactions are recorded in
 the reporting currency by applying to the foreign currency amount the
 exchange rate between the reporting currency and the foreign currency
 at the date of the transaction.
 
 ii) Exchange Differences: Exchange differences arising on the
 settlement of monetary items or on reporting companys monetary items
 at rates different from those at which they were initially recorded
 during the year or reported in previous financial statements are
 recognised as income or as expenses in the year in which they arise.
 
 iii) Conversion: Foreign Currency monetary items are reported using the
 closing rate. Non monetary items which are carried in terms of
 historical cost denominated in a foreign currency are reported using
 the exchange rate at the date of the transaction; and non monetary
 items which are carried at fair value denominated in a foreign currency
 are reported using the exchange rates, that existed when the values
 were determined.
 
 4.  Inventories
 
 Raw materials: Raw materials are valued at cost or net realisable
 values, whichever is lower on FIFO basis.
 
 Project division: Work-in-progress is valued at the contract rates less
 profit margin/estimates.  Finished goods are Valued at cost.
 
 5.  Fixed Assets 
 
 i.  Tangible Fixed Assets
 
 Tangible Fixed Assets are stated at cost, less accumulated depreciation
 and impairment losses, if any. Cost comprises the purchase price and
 any attributable cost of bringing asset to its working condition for
 its intended use. Borrowing cost relating to acquisition of fixed
 assets which take a substantial period of time to get ready for its
 intended use are also included to the extent they relate to the period
 till such assets are ready to be put to use.
 
 ii.  Intangible Fixed Assets and amortisation:
 
 Intangible assets have finite useful lives and are measured at cost and
 amortised over their expected useful economical lives as follows:
 
 Research and development cost are expensed, except for certain
 development cost which are capitalised from the time commercial and
 technological feasibility criteria are met. Expenditure already charged
 to the profit & loss account is not restated. The capitalised cost is
 amortised on completion of the project over 5 years on a straight line
 basis.
 
 6.  Depreciation and amortisation
 
 Depreciation on tangible Fixed Assets is provided using the straight
 line method, at the rates prescribed under schedule XIV of the
 Companies Act, 1956. Depreciation on additions during the year is
 provided on a pro-rata basis. Assets costing upto Rs. 5,000 each are
 written off in the year of capitalisation.
 
 Temporary sheds are amortised over the period of the project on project
 –to-project basis
 
 7.  Income Taxes
 
 Tax expense comprises of Current & Deferred tax. Current tax is
 measured at the amount expected to be paid to the tax authorities in
 accordance with the Indian Income tax Act. Deferred income tax reflects
 the impact of current year timing differences between taxable income
 and accounting income for the year and reversal of timing differences
 of earlier years.
 
 Deferred tax assets and liabilities are measured based on tax rates and
 laws enacted at the balance sheet date.
 
 Deferred tax assets are recognised only to the extent that there is
 reasonable certainty that sufficient future taxable income will be
 available against which such deferred tax assets can be realised. If
 the company has carry forward of unabsorbed depreciation and tax
 losses, deferred tax assets are recognised only if there is virtual
 certainty, supported by convincing evidence, that such deferred tax
 assets can be realised against future taxable profits. At each balance
 sheet date, the company re-assesses unrecognised deferred tax assets.
 Unrecognised deferred tax assets of earlier years are re-assessed and
 recognised to the extent that it has become reasonable certain that
 future taxable income will be available against which such deferred tax
 assets can be realised.
 
 8.  Deferred Revenue Expenditure
 
 FCCB issue expenses are being written off in proportion to conversion
 of FCCBs into Equity Shares or repayment of such FCCBs (as the case may
 be) as and when such conversion/repayment takes place.
 
 9.  Investments
 
 Investments that are readily realisable and intended to be held for not
 more than a year are classified as current investments. Current
 investments are measured at cost. All other investments are classified
 as long term investments. Long term investments are measured at cost,
 however provision for diminution in value is made to recognise a
 decline other than temporary in the value of the investments.
 
 10. Employee Benefits- Retirement benefits
 
 Employee Benefits like Provident Fund and Gratuity are charged to the
 profit and loss account of the year when the contributions to the
 respective accounts are due. There are no other obligations other than
 the contributions payable to the respective authority / account.
 
 11. Earning per share
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity share holders by the
 weighted average number of equity shares out standing during the period
 and is adjusted for the events of conversion of FCCBs.
 
 For the purpose of calculating diluted earnings per share, the net
 profit or loss for the period attributable to equity share holders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares, if
 any.
 
 12. Provisions
 
 A provision is recognised when the company has a potential obligation
 as a result of past event and it is provable that an out flow of
 resources will be required to settle the obligation, in respect of
 which a reliable estimate can be made. Provisions are not discounted to
 its present value and are determined on best estimate required to
 settle the obligation at the balance sheet date. These are reviewed at
 each balance sheet date and adjusted to reflect the current best
 estimates.
 
 13. Cash and cash equivalents:
 
 Cash and cash equivalents in the cash flow statement comprise cash at
 bank, Cash in hand, Fixed deposits and Un-claimed dividend a/c
 
 14. Use of estimates:
 
 The preparation of financial statement in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that effect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of
 financial statements and the results of operation during the reporting
 period end. Although these estimates are based upon management best
 knowledge of current events and actions, actual results could differ
 from these estimates.
 
 15. Segment report policies
 
 Identification of segments: The companys operating businesses are
 organised and managed according to the nature of products and services
 provided to offer similar products serving similar markets.
 
 16. Borrowing cost
 
 Borrowing costs include interest and commitment charges on borrowings,
 amortisation costs incurred in connection with arrangement of
 borrowings. Costs incurred on borrowings directly attributable to
 project development, which take a substantial period of time to
 complete, are capitalised within such time development / producing the
 asset for each cost center.
 
 All other borrowing costs are recognised in the profit and loss account
 in the period in which they are incurred.