1.  Company overview
 
 Nucleus Software Exports Ltd. (Nucleus or the Company) was
 incorporated on 9 January 1989 in India as a private limited company.
 It was subsequently converted into a public limited company on 10
 October 1994. The Company made an initial public offer in August 1995.
 As at 31 March 2011, the Company is listed on three stock exchanges in
 India namely National Stock Exchange, Bombay Stock Exchange and Madras
 Stock Exchange.  The Company has wholly owned subsidiaries in
 Singapore, USA, Japan, Netherlands and India. The Companys business
 consists of software product development and marketing and providing
 support services mainly for corporate business entities in the banking
 and financial services sector.
 
 2.  Employees stock option Plan (EsoP)
 
 The Securities and Exchange Board of India (SEBI) has issued the
 (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
 Guidelines, 1999, which is effective for all stock option schemes
 established after 19 June 1999. In accordance with these Guidelines,
 the excess of the market price of the underlying equity shares as of
 the date of the grant of the options over the exercise price of the
 option, including up-front payments, if any, is to be recognised and
 amortised on graded vesting basis over the vesting period of the
 options.
 
 The Company currently has three ESOP schemes, ESOP scheme- 2002
 (instituted in 2002), ESOP scheme-2005 (instituted in 2005) and ESOP
 scheme-2006 (instituted in 2006). These schemes were duly approved by
 the Board of Directors and Shareholders in their respective meetings.
 The 2002 scheme provides for the issue of 225,000 options, 2005 scheme
 for 600,000 options and 2006 scheme for 1,000,000 options to eligible
 employees. These schemes are administered by the Compensation Committee
 comprising four members, the majority of whom are independent
 directors.
 
 3.  Most of the operations of the company are conducted through
 Software Technology Park (STP). Income from STP are tax exempt for
 the earlier of 10 years commencing from the fiscal year in which the
 unit commences software development or 31 March 2011.
 
 Pursuant to the change in the Indian Income-tax Act, 1961, the company
 has calculated its tax liability after considering Minimum Alternative
 Tax (MAT). The MAT credit entitlement can be carried forward and set
 off against the future tax liability. Accordingly a sum of
 Rs.60,698,620 (Rs.45,300,000) is carried forward and shown under Loans
 and advances in the balance sheet as at 31 March 2011.
 
 4.  Employee Benefit obligations
 
 Defined contribution plans
 
 An amount of Rs.53,634,569 (Rs.51,493,973) for the year ended, have
 been recognized as an expense in respect of Companys contribution for
 Provident Fund and Employee State Insurance Fund deposited with the
 government authorities and has been shown under personnel expenses in
 the Profit and Loss Account.
 
 Defined benefit plans
 
 The Company operates gratuity plan wherein every employee is entitled
 to the benefit equivalent to 15 days of total basic salary last drawn
 for each completed year of service subject to a maximum of
 Rs.1,000,000. Gratuity is payable to all eligible employees of the
 Company on retirement, separation, death or permanent disablement, in
 terms of the provisions of the Payment of Gratuity Act, 1972.
 
 a) Discount rate:
 
 The discount rate is based on the prevailing market yields of Indian
 government securities as at the balance sheet date for the estimated
 term of the obligations.
 
 b) Salary escalation rate:
 
 The estimates of future salary increases considered takes into account
 the inflation, seniority, promotion and other relevant factors.
 
 5. segment reporting – Basis of preparation
 
 (i) segment accounting policies
 
 The Segment reporting policy complies with the accounting policies
 adopted for preparation and presentation of financial statements of the
 Company and is in conformity with Accounting Standard-17 on Segment
 Reporting, as specified in the Companies (Accounting Standard) Rules,
 2006. The segmentation is based on the Geographies (reportable primary
 segment) in which the Company operates and internal reporting systems.
 The secondary segmentation is based on the nature and type of services
 rendered.
 
 (ii) Composition of reportable segments
 
 The Company operates in five main geographical segments: India, Far
 East, South East Asia, Europe and Middle East.
 
 Income and direct expenses in relation to segments are categorised
 based on items that are individually identifiable to that segment,
 while the remainder of the costs are categorised in relation to the
 associated turnover and/or man months. Certain expenses such as
 depreciation, which form a significant component of total expenses, are
 not specifically allocable to specific segments as the underlying
 services are used interchangeably across geographies. The Company
 believes that it is not practicable to provide segment disclosures
 relating to those costs and expenses, and accordingly these expenses
 are separately disclosed as unallocated and directly charged against
 total income.
 
 Segment assets and liabilities represent the net assets put up and
 liabilities of that segment. All the fixed assets of the Company are
 located in India. These have not been identified to any of the
 reportable segments, as these are used interchangeably between segments
 and across geographies. Other items which are not directly attributable
 to any particular segment and which cannot be reasonably allocated to
 various segments are consolidated under Unallocated head.
 
 6. related party transactions
 
 a) List of related parties – where control exists Wholly owned
 subsidiary companies
 
 - Nucleus Software Solutions Pte Ltd, Singapore
 
 - Nucleus Software Japan Kabushiki Kaisha, Japan
 
 - Nucleus Software Inc., USA
 
 - Nucleus Software (Australia) Pty Ltd., Australia (de registered
 w.e.f. 5 April 2010)
 
 - VirStra i-Technology Services Limited, India
 
 - Nucleus Software Netherlands B.V, Netherlands
 
 - Nucleus Software Limited, India
 
 other subsidiary company (wholly owned subsidiary of Virstra i
 technology services Limited)
 
 - Virstra i-Technology (Singapore) Pte. Ltd., Singapore
 
 other related parties:
 
 Key managerial personnel:
 
 - Vishnu R Dusad (Managing director)
 
 b) transactions with related parties
 
 Related party Transactions are defined as transactions of the Company
 of material nature, with promoters, Directors or the Management, their
 subsidiaries or relatives etc.
 
 7. Capital commitments and contingent liabilities
 
 Estimated amount of contracts remaining to be executed on capital
 account and not provided for in the books of account (net of advances)
 Rs.1,798,667 (Rs.1,775,062).
 
 8.  The company has established a comprehensive system of maintenance
 of information and documents as required by the transfer pricing
 legislation under sections 92-92F of the Income Tax Act, 1961. Since
 the law requires existence of such information and documentation to be
 contemporaneous in nature, the Company is in the process of updating
 the documentation for the international transactions entered into with
 associated enterprises during the financial year and expects such
 records to be in existence latest by the due date of filing of the
 return of income, as required under law. The management is of the
 opinion that its international transactions are at arms length so that
 the aforesaid legislation will not have any impact on the financial
 statements, particularly on the amount of tax expense and that of
 provision for taxation.
 
 9.  During the current year, as per provision of Income-tax Act, 1961,
 the Company has taken credit of corporate dividend tax aggregating
 Rs.13,281,619 on account of dividend received from one of its
 subsidiaries.
 
 10.  Revenue recognised up to the reporting date in respect of
 contracts in progress at the reporting date aggregates Rs.1,002,148,730
 (Rs.754,921,708).
 
 11.  During the current year, Nucleus Software (Australia) Pty Ltd, one
 of the wholly owned subsidiaries of the Company, has been wound up with
 effect from 5 April 2010.
 
 12.  Previous year figures have been regrouped/ reclassified wherever
 necessary to make them comparable with the current year figures.