A.  Accounting Conventions:
 
 The Company follows mercantile system of accounting and recognises
 Income and Expenditure on accrual basis. The accounts have been
 prepared under the historical cost convention and conform to the
 statutory provisions and practices prevailing in the industry.
 Accounting policies not referred to otherwise are consistent with
 generally accepted Accounting Principles.
 
 B.  Fixed Assets:
 
 Fixed Assets are stated at cost less depredation.
 
 C.  Depreciation:
 
 Depreciation on assets is provided on Written Down Value method at the
 rates and in the manner specified in Schedule XIV to the Companies Act
 1956.
 
 D.  Long term investments are carried at cost with provision for
 diminution bang made to recognise a decline, other than temporary, in
 their value. Such diminution is determined for each investment
 individually on the basis of the expected benefits to the company.
 However the exact quantum of benefits is dependent upon a number of
 future events, hence the provision for decrease in value of the
 investments is made on the basis of management''s best estimates.
 
 E.  Preliminary, Shares Issue and Other Expenditure on raising Capital
 are amortised equally over a period of ten years.
 
 F.  Income:
 
 (a) Income from Information Technology Services & Software Development
 is accounted for on the basis of services rendered, software developed
 and billed to clients on acceptance.
 
 (b) In respect of other heads of income the Company follows the
 practice of accounting of such income on accrual basis.
 
 G.  Employee Benefits
 
 Contributions to defined contribution schemes such as Provident Fund
 and Family Pension Fund are charged to the profit and loss account as
 incurred. The Company also provides retirement/ post retirement
 benefits in the form of gratuity. Gratuity liability is determined on
 the basis of an actuarial valuation.
 
 H.  Taxation
 
 Provision for Incomes tax Is made, after considering exemptions and
 deductions available, at the rates applicable under the Income-Tax Act,
 1961. The deferred tax charge or credit (reflecting the tax effects of
 timing differences between accounting income and taxable income for the
 year) is recognised using current tax rates. Deferred tax assets are
 recognised only to the extent there is virtual certainty of
 realisation. Such assets are reviewed as at each Balance Sheet date to
 reassess realisation.