1.1 Basis of preparation of financial statements
 
 The financial statements have been prepared and presented under the
 historical cost convention on the accrual basis of accounting except
 for certain financial instruments which are measured at fair values and
 comply with the Accounting Standards prescribed by Companies
 (Accounting Standards) Rules, 2006, as amended, other pronouncements of
 the Institute of Chartered Accountants of India (ICAI) and the relevant
 provisions of the Companies Act, 1956, (the Act) to the extent
 applicable.
 
 1.2 Use of estimates
 
 The preparation of financial statements in conformity with the
 generally accepted accounting principles (GAAP) in India requires
 management to make estimates and assumptions that affect the reported
 amounts of income and expenses of the period, assets and liabilities
 and disclosures relating to contingent liabilities as of the date of
 the financial statements.  Actual results could differ from those
 estimates. Any revision to accounting estimates is recognised
 prospectively in future periods.
 
 1.3 Fixed assets and depreciation
 
 1.3.1 Fixed assets are carried at cost of acquisition (including
 directly attributable costs such as freight, installation, etc.) or
 construction less accumulated depreciation.  Borrowing costs directly
 attributable to acquisition or construction of those fixed assets,
 which necessarily take a substantial period of time to get ready for
 their intended use, are capitalised.
 
 1.3.2 Acquired intangible assets are capitalised at the acquisition
 price. Internally generated intangible assets are stated at cost that
 can be measured reliably during the development phase and when it is
 probable that future economic benefits that are attributable to the
 assets will flow to the Company.
 
 1.3.3 Leases under which the Company assumes substantially all the
 risks and rewards of ownership are classified as
 finance leases. Such assets acquired on or after April 1, 2001 are
 capitalised at fair value of the asset or present value of the minimum
 lease payments at the inception of the lease, whichever is lower. Lease
 payments under operating leases are recognized as an expense in the
 statement of profit and loss on a straight-line basis over the lease
 term.
 
 1.3.4 Advances paid towards the acquisition of fixed assets,
 outstanding at each balance sheet date and the cost of the fixed asset
 not ready for its intended use on such date, are disclosed under
 capital work-in-progress.
 
 1.3.5 Depreciation is provided on the straight-line method.  The rates
 specified under schedule XIV of the Companies Act, 1956 are considered
 as the minimum rates. If the managements estimate of the useful life
 of a fixed asset at the time of the acquisition of the asset or of the
 remaining useful life on a subsequent review is shorter than that
 envisaged in the aforesaid schedule, depreciation is provided at a
 higher rate based on the managements estimate of the useful
 life/remaining useful life. Pursuant to this policy, the management has
 estimated the useful life as under:
 
 1.3.6 Fixed assets individually costing Rs 5,000 or less are fully
 depreciated in the year of purchase/ installation.  Depreciation on
 additions and disposals during the year is provided on a pro-rata
 basis.
 
 1.3.7 The cost of leasehold land is amortised over the period of the
 lease. Leasehold improvements and assets acquired on finance lease are
 amortised over the lease term or useful life, whichever is lower.
 
 1.4 Investments
 
 1.4.1 Long-term investments are carried at cost less any
 other-than-temporary diminution in value, determined on the specific
 identification basis.
 
 1.4.2 Current investments are carried at the lower of cost (determined
 on the specific identification basis) and fair value. The comparison of
 cost and fair value is carried out separately in respect of each
 investment.
 
 1.4.3 Profit or loss on sale of investments is determined on the
 specific identification basis.
 
 1.5 Cash and cash equivalents
 
 Cash and cash equivalents in the cash flow statement comprises cash in
 hand and balance in bank in current accounts, deposit accounts and in
 margin money deposits.
 
 1.6 Cash flow statement
 
 Cash flows are reported using the indirect method, whereby net profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature and any deferrals or accruals of past or future cash receipts or
 payments. The cash flows from regular revenue generating, investing and
 financing activities of the Company are segregated.
 
 1.7 Employee benefits
 
 1.7.1 Gratuity is a defined benefit scheme and is accrued
 based on actuarial valuations at the balance sheet date, carried out by
 an independent actuary. The Company has an employees gratuity fund
 managed by
 
 ICICI Prudential Life Insurance Company, SBI Life Insurance Company and
 Life Insurance Corporation of India. Actuarial gains and losses are
 charged to the profit and loss account.
 
 1.7.2 Compensated absences are a long-term employee benefit and is
 accrued based on actuarial valuations at the balance sheet date,
 carried out by an independent actuary. The Company accrues for the
 expected cost of short-term compensated absences in the period in which
 the employee renders services.
 
 1.7.3 Contributions payable to the recognised provident fund, which is
 a defined contribution scheme, are charged to the profit and loss
 account.
 
 1.8 Revenue recognition
 
 1.8.1 The Company derives its revenues primarily from software
 services. Revenue from software development on time-and-material basis
 is recognised as the related services are rendered. Revenue from fixed
 price contracts is recognised using the proportionate completion
 method, which is determined by relating the actual project cost of work
 performed to date to the estimated total project cost for each
 contract. Unbilled revenue represents cost and earnings in excess of
 billings while unearned revenue represents the billing in excess of
 cost and earnings. Provision for estimated losses, if any, on
 incomplete contracts are recorded in the period in which such losses
 become probable based on the current contract estimates. Revenues are
 stated net of discounts and include expenses billed to the customers at
 a mark-up.
 
 Maintenance revenue is recognized ratably over the period of the
 maintenance contract.
 
 1.8.2 Provision for discounts is recognised on an accrual basis in
 accordance with contractual terms of agreements with customers and is
 shown as reduction of revenues.
 
 1.8.3 Dividend income is recognised when the right to receive payment
 is established.
 
 1.8.4 Interest income is recognized using the time proportion method,
 based on the transactional interest rates.
 
 1.9 Foreign exchange transactions
 
 1.9.1 The Company is exposed to foreign currency transactions including
 foreign currency revenues and receivables. With a view to minimize the
 volatility arising from fluctuations in currency rates, the Company
 enters into foreign exchange forward contracts and other derivative
 instruments.
 
 1.9.2 Foreign exchange transactions are recorded using the exchange
 rates prevailing on the dates of the respective transactions. Exchange
 differences arising on foreign exchange transactions settled during the
 year are recognised in the profit and loss account for the year.
 
 1.9.3 Monetary assets and liabilities denominated in foreign currencies
 as at the balance sheet date are translated at the closing exchange
 rates on that date; the resultant exchange differences are recognized
 in the profit and loss account. 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.
 
 1.9.4 Forward exchange contracts and other similar instruments that are
 not in respect of forecasted transactions are accounted for using the
 guidance in Accounting Standard (AS) 11, The effects of changes in
 foreign exchange rates. For such forward exchange contracts and other
 similar instruments covered by AS 11, based on the nature and purpose of 
 the contract, either the contracts are recorded based on the forward 
 rate/fair value at the reporting date, or based on the spot exchange 
 rate on the reporting date. For contracts recorded at the spot exchange 
 rates, the premium or discount at the inception is amortized as income 
 or expense over the life of the contract.
 
 1.9.5 For forward exchange contracts and other derivatives
 that are not covered by AS 11 and that relate to a firm commitment or
 highly probable forecasted transactions, the Company has adopted
 Accounting Standard (AS) 30, Financial Instruments: Recognition and
 Measurement which is recommendatory with effect from April 1, 2009. In
 accordance with AS 30, such derivative financial instruments, which
 qualify for cash flow hedge accounting and where Company has met all
 the conditions of cash flow hedge accounting, are fair valued at
 balance sheet date and the resultant exchange loss/(gain) is
 debited/credited to the hedge reserve until the transaction is
 completed. Other derivative instruments are recorded at fair value at
 the reporting date and the resultant exchange loss/ (gain) is debited/
 credited to profit and loss account.
 
 1.10 Warranties
 
 Warranty costs (i.e. post contract support services) are estimated by
 the management on the basis of technical evaluation and past
 experience. Provision is made for estimated liability in respect of
 warranty costs in the year of recognition of revenue.
 
 1.11 Provision and contingent liabilities
 
 The Company creates a provision when there is a present obligation as a
 result of a past event that probably requires an outflow of resources
 and a reliable estimate can be made of the amount of the obligation. A
 disclosure for a contingent liability is made when there is a possible
 obligation or a present obligation that may, but probably will not,
 require an outflow of resources. When there is a possible obligation or
 a present obligation in respect of which the likelihood of outflow of
 resources is remote, no provision or disclosure is made.
 
 Provisions for onerous contracts, i.e. contracts where the expected
 unavoidable costs of meeting the obligations under the contract exceed
 the economic benefits expected to be received under it are recognised
 when it is probable that an outflow of resources embodying economic
 benefits will be required to settle a present obligation as a result of
 an obligating event, based on a reliable estimate of such obligation.