a.  Basis of preparation of Financial Statements
 
 i. The financial statements have been prepared under historical cost
 convention on the accrual basis of accounting in accordance with the
 accounting principles generally accepted in India (GAAP) and in
 compliance with the Accounting Standards issued by The Institute of
 Chartered Accountants of India and the provisions of the Companies Act,
 1956 as adopted consistently by the company.
 
 ii. Accounting policies not specifically referred to otherwise are
 consistent with the generally accepted accounting principles followed
 by the Company.
 
 iii. The preparation of financial statements in conformity with the
 generally accepted accounting principles requires estimates and
 assumptions to be made, that affect the reported amounts of assets and
 liabilities on the date of financial statements and the reported
 amounts of revenues and expenses during the reported year. Differences
 between the actual results and estimates are recognized in the year in
 which the results are known / materialized.
 
 b.  Revenue recognition
 
 i. Revenue from sales in respect of hardware is recognized when they
 are completed with passing of the title and are exclusive of sales tax,
 octroi and other incidental expenses.
 
 ii. Revenue from software development is recognized in accordance with
 the percentage of completion method and revenue from sale of licenses
 of software products and other products is recognized on delivery /
 installation, as the case may be.
 
 iii. Revenue from IT infrastructure networking, annual service
 contracts and facilities management services is deferred and recognized
 ratably over the period of the underlying maintenance agreement.
 
 iv. Interest Income is recognized on a time proportion basis taking
 into account the amount outstanding and the rate applicable.
 
 v. Dividend Income is recognized when the shareholders'' right to
 receive payment is established by the Balance Sheet Date.
 
 c.  Expenditure
 
 Expenses are accounted on accrual basis and the provisions are made for
 all known losses and liabilities. No provisions are made towards likely
 expenses on providing post-sales client support for fixed priced
 contracts as well as in respect of annual technical service contracts
 in so far as it pertains to the period beyond the current accounting
 year.
 
 d.  Fixed Assets and Depreciation
 
 A.  Fixed Assets
 
 a) Fixed assets are stated at their original cost of acquisition
 including incidental expenses related to acquisition & installation of
 the concerned assets less accumulated depreciation and impairment
 losses, if any,.
 
 b) Costs that are directly associated with identifiable and unique
 software products controlled by the Company, whether developed in-house
 or acquired, and have probable economic benefits exceeding the cost are
 recognized as product development.
 
 c) Assets acquired under lease are at cost of acquisition including
 incidental expenses related to acquisition & installation of such
 assets.
 
 d) Advances paid towards acquisition of fixed assets and the cost of
 assets not ready for use as at the Balance Sheet date are disclosed
 under capital work-in-progress.
 
 B.  Depreciation /Amortization
 
 a) Depreciation on Software and Computer Systems is provided based on
 Management''s estimate of useful life of Software/System however subject
 to maximum period of 6 years. Depreciation on Fixed Assets other than
 Land and those mentioned above has been provided on Straight Line
 Method at the following rates:
 
 Asset Group                             Rates (SLM)
 
 Furniture & Fixtures                     6.33%
 
 Vehicles                                 9.50%
 
 Office Equipments                        4.75%
 
 Office Premises                          1.63%
 
 b) Product Development Expenses capitalized are amortized over its
 useful life for a period not exceeding ten years.
 
 c) Leasehold assets are amortized over the period of lease.
 
 d) Miscellaneous expenditure is amortized over a period of 5 years from
 the year in which it has been incurred.
 
 e.  Impairment of Assets
 
 Fixed assets are reviewed for impairment whenever events or changes in
 circumstances indicate that the carrying amount of an asset may not be
 recoverable. Whenever the carrying amount of an asset exceeds its
 recoverable amount, an impairment loss is recognized in the income
 statement for items of fixed assets carried at cost. The recoverable
 amount is higher of an assets net selling price and value in use. The
 net selling price is the amount obtained from the sale of an asset in
 an arm''s length transaction while value in use is the present value of
 estimated future cash flows expected to arise from the continuing use
 of an asset, from its disposal at the end of its useful life.
 
 f.  Inventories
 
 Inventories have been valued on the following basis:
 
 i).  Raw Materials, - At cost.  packing material, stores and spares
 ii). Work-in-progress - At cost plus appropriate allocation of
 overheads.  iii). Finished Goods - At cost plus appropriate allocation
 of overheads or net realizable value, which- ever is lower
 
 g.  Investments
 
 Investments are classified into current investment and long term
 investments. Current investments are stated at lower of cost or fair
 market value. Long Term Investments are stated at cost less provision
 for permanent diminution in value if any, of investments.
 
 h.  Foreign Exchange Transactions
 
 Transactions denominated in foreign currencies are normally recorded at
 the exchange rate prevailing at the time of the transaction. Realized
 gains and losses on settlement of foreign currency transactions are
 recognized in the Profit and Loss account. Foreign currency assets and
 liabilities at the year end are translated at the year end exchange
 rates and the resultant exchange difference is recognized in the Profit
 and Loss Account. Exchange differences relating to fixed assets are
 adjusted in the cost of the respective assets.
 
 i.  Research & Development
 
 A.  Revenue expenditure on R&D is charged of to profit & loss account
 in the year in which it is incurred where the Company is not certain of
 realizing future economic benefits from such activities.
 
 B.  Capital expenditure on R&D is included under the relevant fixed
 assets.
 
 j.  Employee Benefts
 
 (a) Short Term Employee Benefts
 
 All short term employee benefits such as salaries, wages, bonus,
 medical benefits which fall due within 12 months of the period in which
 the employee renders the related services are charged to the profit and
 loss account.
 
 (b) Long Term & Post- Employment Benefts
 
 (i) Defined Contribution Plan
 
 Company''s contribution paid/payable during the year towards Provident
 Fund Scheme, ESIC is recognized in the Profit & Loss Account.
 
 (ii) Defined Benefit Plan
 
 The Company''s Gratuity Benefit Scheme is a defined benefit plan. The
 Company''s liability for gratuity is determined by actuarial valuation
 made at the end of each financial year using the projected unit credit
 method. Actuarial gains and Losses are immediately recognized in Profit
 & Loss Account as income and expense.
 
 k.  Borrowing Costs
 
 Borrowing costs directly attributable to acquisition, construction and
 production of qualifying assets are capitalized as a part of the cost
 of such asset up to the date of completion. Other borrowing costs are
 charged to the Profit & Loss Account.
 
 l.  Deferred tax
 
 Deferred Income taxes reflects the impact of current year timing
 differences between taxable income and accounting income for the year
 and reversal of timing differences of earlier years. The differences
 that result between the profit considered for income taxes and the
 profit as per the financial statements are identified, and thereafter a
 deferred tax asset or deferred tax liability is recorded for timing
 differences, namely the differences that originate in one accounting
 period and reverse in another, based on the tax effect of the aggregate
 amount being considered.  The tax effect is calculated on the
 accumulated timing differences at the end of an accounting period based
 on prevailing enacted or substantially enacted regulations.  Deferred
 tax assets are recognized only if there is reasonable certainty of
 their realization and are reviewed for the appropriateness of their
 respective carrying values at each balance sheet date.
 
 m.  Provision for Tax
 
 Provision for current tax is determined on the basis of estimated
 taxable income for the period as per the provisions of Section 115JB
 Income Tax Act, 1961.
 
 n.  Earnings per Share (EPS)
 
 The earnings considered in ascertaining the Company''s EPS are computed
 as per Accounting Standard 20 on Earning per Share, issued by the
 Institute of Chartered Accountants of India. The number of shares used
 in computing basic EPS is the weighted average number of shares
 outstanding during the period. The diluted EPS is calculated on the
 same basis as basic EPS, after adjusting for the effects of potential
 dilutive equity shares unless the effect of the potential dilutive
 equity shares is anti-dilutive.
 
 o.  Provision and Contingent Liabilities
 
 Provisions are recognized and computed in accordance with Accounting
 Standard 29 on Provisions, Contingent Liabilities and Contingent
 Assets issued by the Institute of Chartered Accountants of India i.e.
 they are recognized if the following conditions are satisfied:
 
 (a) The Company has a present obligation as a result of past event;
 
 (b) It is probable that an outflow of resources embodying economic
 benefits will be required to settle the obligation; and
 
 (c) A reliable estimate can be made of the amount of the obligation.
 
 Similarly, the Contingent liabilities are disclosed in Accordance with
 the Accounting Standard 29 i.e.  they are disclosed when the Company
 has a possible obligation or a present obligation and it is probable
 that a Cash Outflow will not be required to settle the obligation
 
 p.  Leases
 
 Lease arrangements where the risks and rewards incident to ownership of
 an asset substantially vest with the lessor, are recognised as
 operating leases. Lease rentals under operating leases are recognised
 in the profit and loss account on a straight-line basis over the period
 of lease.