Basis for preparation of financial statements
 
 The financial statements are prepared in accordance with Indian
 Generally Accepted Accounting Principles (''GAAP'') under the
 historical cost convention on accrual basis. GAAP comprises mandatory
 accounting standards as prescribed by the Companies (Accounting
 Standards) Rules, 2006 and the provisions of Companies Act, 1956.
 
 1.1 Revenue recognition
 
 Revenue from software development and services on time and material
 basis is recognized based on software development, services rendered
 and related costs are incurred i.e. based on certification of
 timesheets and are billed to clients as per the contractual
 obligations.  In case of fixed price contracts, revenue is recognized
 over the life of contract based on the milestone/s achieved as agreed
 upon in the contract on proportionate completion basis and where there
 is no uncertainty as to measurement or collectability of consideration.
 Revenue from the sale of software products is recognized when the sale
 is completed with the passing of the ownership.
 
 Interest income is recognized on time proportion basis
 
 Dividend income is recognized when the Company''s right to receive
 dividend is established.
 
 1.2 Borrowing Costs
 
 Borrowing costs that are directly attributable to the acquisition,
 construction or production of a qualifying asset are capitalized as
 part of cost of that asset. All other borrowing costs are charged to
 the Statement of Profit and Loss.
 
 1.3 Trade receivables and advances:
 
 Specific debts and advances identified as irrecoverable or doubtful are
 written off or provided for, respectively.
 
 1.4 Fixed Assets
 
 (a) Fixed Assets are stated at the cost of acquisition, less
 depreciation/amortization/diminution. Costs comprises of the purchase
 price and other attributable costs.
 
 (b) Product development cost are recognised as fixed assets,when
 feasibility has been established, the Company has committed technical,
 financial and other resources to complete the development and it is
 probable that asset will generate probable future benefits.
 
 1.5 Depreciation/ Amortization/ Diminution
 
 Depreciation on tangible fixed assets is provided for on the
 straight-line method at the rates and in the manner specified in
 Schedule XIV to the Companies Act, 1956 except in respect of the
 following assets where the rates are higher:
 
 - Certain Buildings               - 7.5%
 
 - Plant and Equipment (Computers) - 25%
 
 - Certain Office Equipments       - 10% and 33.33% as applicable
 
 - Certain Furniture and Fixtures  - 12.5%
 
 Leasehold land and vehicles taken on lease are amortized over the
 period of the lease.
 
 Intangible Assets are amortized on the straight line method at the
 following rates:
 
 - Goodwill                  - Amortized over period of 3/5 years.
 
 - Product Development Cost  - Amortized over period of 3/4 years.
 
 Perpetual Software licenses are amortized over 4 years. However, time-
 based software licenses are amortized over their duration.
 
 1.6 Impairment of Fixed Assets
 
 The Management periodically assesses using, external and internal
 sources, whether there is an indication that an asset may be impaired.
 Impairment loss is recognised when the carrying value of an asset
 exceeds its recoverable amount. The recoverable amount is higher of the
 asset''s net selling price and value in use. For the purpose of
 impairment, assets are grouped at the lowest levels for which there are
 separately identifiable cash flows.
 
 1.7 Investments
 
 Current investments are carried at lower of cost and fair value.
 
 Long-term Investments are stated at cost less provision for diminution,
 other than temporary, in the value of such investments.
 
 1.8 Leases
 
 Assets acquired under finance leases are recognized at the lower of the
 fair value of the leased assets at inception of the lease and the
 present value of minimum lease payments. Lease payments are apportioned
 between the finance charge and the reduction of the outstanding
 liability. The finance charge is allocated to periods during the lease
 term at a constant periodic rate of interest on the remaining balance
 of the liability.
 
 Lease arrangements where the risks and rewards incidental to the
 ownership of an asset substantially vest with the lessor, are
 classified as Operating Leases. Lease Rentals under operating leases
 are recognised in the statement of Profit and Loss on straight line
 basis over the term of the lease.
 
 1.9 Earnings per share
 
 Basic earnings per share is computed by dividing the profit for the
 period after tax by the weighted number of equity shares outstanding
 during the year. Diluted earnings per share is computed by dividing the
 profit for the period after tax by the weighted number of equity shares
 outstanding during the year as adjusted for the effects of all dilutive
 potential equity shares except where the results are anti-dilutive.
 
 1.10 Foreign currency transactions
 
 (a) Transactions in foreign currencies are recorded at the exchange
 rates prevailing on the date of the transaction. Monetary items are
 translated at the year-end rates and the exchange differences so
 determined as also the realised exchange differences are recognised in
 the statement of profit and loss.
 
 Premiums or discount on forward exchange contracts are amortized and
 recognized in the Statement of Profit and Loss over the period of the
 contract. Forward exchange contracts and currency option contracts
 outstanding at the balance sheet date, other than designated cash flow
 hedges, are stated at fair values and any gains or losses are
 recognized in the Statement of Profit and Loss.
 
 (b) Derivative instruments and hedge accounting
 
 The Company uses foreign currency forward contracts and currency
 options to hedge its risk associated with foreign currency fluctuations
 relating to certain firm commitments and forecast transactions. The
 Company designates these hedging instruments as cash flow hedges
 applying the recognition and measurement principles set out in the
 Accounting Standard (AS) 30 Financial Instruments: Recognition and
 Measurementof the Institute of Chartered Accountants of India
 (ICAI).
 
 The use of hedging instruments is governed by the Company''s policy
 approved by the Board of Directors, which provides written principles
 on the use of such financial derivatives consistent with the
 Company''s risk management strategy. The Company does not use
 derivative financial instruments for speculative purposes. The
 counter-party to the Company''s foreign currency forward contracts is
 generally a bank.
 
 Hedging instruments are initially measured at fair value and are
 re-measured at subsequent reporting dates. Changes in fair value of
 these derivatives that are designated and effective as hedges of future
 cash flows are recognized directly in shareholder''s fund and the
 ineffective portion, if any is recognized immediately in the Statement
 of Profit and Loss.
 
 Changes in the fair value of derivative financial instruments that do
 not qualify for hedge accounting are recognized in the Statement of
 Profit and Loss as they arise.
 
 Hedge accounting is discontinued when the hedging instrument expires or
 is sold, terminated, or exercised, or no longer qualifies for hedge
 accounting. For forecast transactions any cumulative gain or loss on
 the hedging instrument recognized in shareholder''s fund is retained
 there until the forecast transaction occurs. When a hedged transaction
 occurs or is no longer expected to occur, the net cumulative gain or
 loss recognized in shareholder''s fund is transferred to the Statement
 of Profit and Loss.
 
 1.11 Retirement benefits to employees
 
 Employee benefits includes gratuity, provident fund and leave
 encashment benefits under the approved schemes of the Company.
 
 In respect of defined contribution plans, the contribution payable for
 the year is charged to the Statement of Profit and Loss.
 
 In respect of defined benefit plans, the employee benefit costs are
 accounted for based on actuarial valuation as at the Balance Sheet
 date.
 
 The liability for leave carried forward has been accounted for on
 actual basis for all eligible employees except for employees at the
 Bangalore location, where the leave liability is calculated on the
 basis of an actuarial valuation as of the Balance Sheet date, as per
 the policy of the Company.
 
 1.12 Accounting for Taxes on Income
 
 Tax expense comprises current and deferred tax.
 
 (a) Income Tax Provision
 
 Current tax is computed on taxable income determined in accordance with
 the provisions of the applicable tax rates and tax laws.  Current tax
 is net of credit for entitlement for Minimum Alternative Tax (MAT).
 
 (b) Deferred Tax Provision
 
 Deferred tax arising on account of timing differences and which are
 capable of reversal in one or more subsequent periods is recognised
 using the tax rates and tax laws that have been enacted or
 substantively enacted. Deferred tax assets are not recognised unless
 there is virtual certainty with respect to the reversal of the same in
 future years.
 
 
 1.13 Provisions, Contingent Liabilities and Contingent Assets
 
 As per Accounting Standard (AS) 29, ''Provisions, Contingent
 Liabilities and Contingent Assets'', the Company recognizes provisions
 only when it has a present obligation as a result of a past event, it
 is probable that an outflow of resources embodying economic benefits
 will be required to settle the obligation and when a reliable estimate
 of the amount of the obligation can be made.
 
 No Provisions is recognized for -
 
 (a) Any possible obligation that arises from past events and the
 existence of which will be confirmed only by the occurrence or
 non-occurrence of one or more uncertain future events not wholly within
 the control of the Company; or
 
 (b) Present obligations that arise from past events but are not
 recognized because -
 
 1) It is not probable that an outflow of resources embodying economic
 benefits will be required to settle the obligation; or
 
 2) A reliable estimate of the amount of obligation cannot be made.
 
 Such obligations are recorded as Contingent Liabilities. These are
 assessed continually and only that part of the obligation for which an
 outflow of resources embodying economic benefits is probable, is
 provided for, except in the extremely rare circumstances where no
 reliable estimate can be made.
 
 Contingent Assets are not recognized in the financial statements since
 this may result in the recognition of income that may never be
 realized.
 
 1.14 Provision for Warranty:
 
 The Company has an obligation by way of warranty to maintain the
 software during the period of warranty, which may vary from contract to
 contract. Costs associated with such sale are accrued at the time when
 related revenues are recorded and included in cost of service delivery.
 The Company estimates such cost based on historical experience and the
 estimates are reviewed periodically for material changes in the
 assumptions.
 
 1.15 Employee Stock Option:
 
 In respect of stock options granted pursuant to the company''s
 Employee Stock Option Scheme, the intrinsic value of the option is
 treated as discount and accounted as employee compensation cost over
 the vesting period.
 
 1.16 Use of Estimates:
 
 The preparation of financial statements requires the management of the
 Company to make estimates and assumptions that affect the reported
 balances of assets and liabilities and disclosures relating to the
 contingent liabilities as at the date of the financial statements and
 reported amounts of income and expenditure during the year. Differences
 between actual results and estimates are recognized in the year in
 which the results are known/materialized.