1.  System of Accounting:
 
 The financial statements are prepared under the historical cost
 convention on an accrual basis of accounting and are in accordance with
 generally accepted accounting principles and mandatory accounting
 standards.
 
 2.  Revenue Recognition:
 
 Revenue (income) is recognized when no significant uncertainty as to
 its determination or realization exists. Revenue on maintenance
 contracts is recognized over the term of maintenance. Direct and
 incremental contract origination and set up costs incurred in
 connection with support / maintenance service arrangements are charged
 to expenses as incurred.
 
 ''Unbilled Revenue'' included in other Current Assets represents costs
 and earnings in excess of billings as at the Balance
 
 Sheet date.
 
 Dividend income is recognized when the company''s right to receive
 dividend is established. Interest income is recognized
 
 on the time proportion basis.
 
 Interest element in hire-purchase installment is recognized as revenue,
 in proportion to Principal portion outstanding at
 
 internal rate of return.
 
 3.  Fixed Assets:
 
 a) Fixed Assets are stated at cost of acquisition less accumulated
 Depreciation. Cost comprises the purchase price net of Value Added Tax
 (VAT)) and Excise Credit to the extent refundable and any cost
 attributable to bringing the asset to its working condition for its
 intended use.
 
 b) On the sale of fixed assets profit/loss if any, is credited/debited
 respectively to Profit and Loss Account.
 
 4.  Depreciation and Amortization:
 
 a) Depreciation on Fixed Assets is provided on Written Down Value
 method at the rates based on the estimated useful life of the asset,
 which is in accordance with the rates specified in Schedule XIV of the
 Companies Act, 1956.
 
 On Machines provided on lease basis depreciation is provided on SLM
 basis over a period of three years from the date of installations.
 
 b) Software and Intangible Assets are amortized on SLM basis over a
 period of five years.
 
 c) Depreciation on fixed assets added during the year is provided on
 pro rata basis.
 
 d) No Depreciation is provided on assets disposed off during the year.
 
 e) Development Cost - Trinetra Project / Hand Terminal Project has been
 capitalized to be written off over their useful life from their
 commercial commencement.
 
 5.  Foreign Exchange Transactions:
 
 a) Transactions in Foreign Currency are recorded at the original rates
 of exchange in force at the time the transactions are effected. At the
 year end, monetary items denominated in foreign currency and the
 relevant forward exchange contracts are reported using closing rates of
 exchange. Exchange differences arising thereon and on realization /
 payment of foreign exchange are accounted, in the relevant year, as
 income or expense.
 
 b) Dubai office transactions are accounted at the exchange rate
 prevailing at the time of payment.
 
 6.  Inventories: Items of Inventory are valued at cost or net
 realizable value, whichever is lower. Cost is determined on the
 following basis:
 
 a) Raw Material, Stores and Spares: FIFO basis
 
 b) Trading Goods: FIFO basis
 
 7.  Retirement Benefits:
 
 Retirement benefits are dealt with in the following manner.  i) Defined
 contribution plans :
 
 Defined contribution plans are Provident Fund scheme, Employee State
 Insurance Scheme for eligible employees. The
 
 Company''s contribution to defined contribution plans is recognized in
 the Profit and Loss Account in the financial year to which they relate.
 The Company makes specified monthly contributions towards employee
 provident fund.
 
 ii) Defined benefit plans :
 
 The Company operates a defined benefit gratuity and leave encashment
 plan for employees. The Company contributes to a separate entity (a
 fund), towards meeting the obligation.
 
 The cost of providing defined benefits is determined using the
 Projected Unit Credit method with actuarial valuations being carried
 out once in three years.
 
 The defined benefits obligations recognized in the Balance Sheet
 represents the present value of the defined benefit obligation as
 adjusted for unrecognized actuarial gains and losses and unrecognized
 past service costs, and as reduced bv the fair value of Dlan assets, if
 aDDlicable.
 
 8.  Investment:
 
 a) Long term investments are stated at cost less permanent diminution
 in value, if any.
 
 b) Current investments are stated at lower of cost and fair value.
 
 9.  Sales & purchases:
 
 Sales and purchases are stated at net off Taxes & Duties.
 
 10. Taxes on Income:
 
 a) Current Tax is the amount of tax payable on the taxable income for
 the year and is determined in accordance with the provisions of the
 Income Tax Act, 1961.
 
 b) Deferred Tax is recognized on timing differences; being the
 difference between the taxable incomes and accounting income that
 originate-in one period and are capable of reversal in one or more
 subsequent periods.
 
 c) Deferred Tax assets in respect of unabsorbed depreciation and carry
 forward of losses are recognized if there is virtual certainty that
 there will be sufficient future taxable income available to realize
 such losses.
 
 11. Impairment of Asset:
 
 Impairment loss is recognized wherever the carrying amount of an asset
 is in excess of its recoverable amount and the same is recognized as an
 expense in the statement of profit and loss and carrying amount of the
 asset is reduced to its recoverable amount.
 
 Reversal of impairment losses recognized in prior years is recorded
 when there is as indication that the impairment losses recognized for
 the asset no longer exist or have decreased.
 
 12. Operating Lease :
 
 Lease Arrangement, where the risks and rewards incidental to ownership
 of an assets substantially vests with the lessor, are recognized as
 operating lease. Operating lease payments under operating lease are
 recognized as an expense in the Profit & Loss Account on accrual basis.
 
 13. Contingent Liabilities:
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable 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.
 
 14. Use of Estimates:
 
 The preparation of financial statements in conformity with GAAP
 requires management to make estimates and assumptions that affect the
 reported amounts of assets and liabilities, disclosure of contingent
 assets and liabilities at the date of the financial statements and the
 results of operations during the reporting period. Examples of such
 estimates include estimates of income taxes, employment retirement
 benefit plans, provision for doubtful debts and advances and estimates
 useful life of fixed assets. Actual results could differ from
 estimates. Any revision to accounting estimates is recognized
 prospectively in current and future periods.