1.  Corporate Information
 
 Polaris Financial Technology Limited (formerly known as Polaris
 Software Lab Limited), a public limited company domiciled in India and
 incorporated under the provisions of the Companies Act, 1956, was
 founded in 1993 and is headquartered in Chennai. The Company''s shares
 are listed on Madras Stock Exchange, The National Stock Exchange and
 The Bombay Stock Exchange in India. The Company, with its comprehensive
 portfolio of products, smart legacy modernization services and
 consulting offers state-of-the-art solutions for Core Banking,
 Corporate Banking, Wealth & Asset Management and Insurance.
 
 2.  Basis of preparation of financial statements
 
 The financial statements of the company have been prepared in
 accordance with generally accepted accounting principles in India
 (Indian GAAP). The company has prepared these financial statements to
 comply in all material respects with the accounting standards notified
 under the Companies (Accounting Standards) Rules, 2006, (as amended)
 and the relevant provisions of the Companies Act, 1956. The financial
 statements have been prepared on an accrual basis and under the
 historical cost convention. The accounting policies adopted in the
 preparation of financial statements are consistent with those used in
 the previous year.
 
 With effect from the current year, the revised Schedule VI notified
 under the Companies Act 1956, has become applicable to the company, for
 preparation and presentation of its financial statements. The adoption
 of revised Schedule VI does not impact recognition and measurement
 principles followed for preparation of financial statements. However,
 it has significant impact on presentation and disclosures made in the
 financial statements. The company has also reclassified the previous
 year figures in accordance with the requirements applicable in the
 current year.
 
 The Company had filed a petition before The Hon''ble High Court of
 Madras (High Court) on 23/04/2012 for the demerger of the BPO
 division, of its subsidiary Company Optimus Global Services Limited
 into the Company, subsequent to the shareholders consent obtained at a
 meeting convened on 09/04/2012 under the direction of the High Court.
 The High Court has sanctioned the Scheme of Arrangement (demerger) with
 effect from October 1, 2011.  Accordingly, the financial statements for
 the current year reflect the effect of the demerger.  The Scheme and
 its effect on the financial statements have been discussed in Note
 12.III (a) below.
 
 Of the total authorized capital of the company referred above, the
 company has issued only one class of equity shares having a face value
 of Rs.5 per share. Each holder of such equity share is entitled to one
 vote per share. In the event of liquidation of the company, the holders
 of equity shares will be entitled to receive remaining assets of the
 company. The distribution will be in proportion to the number of equity
 shares held by the shareholders.
 
 Share capital suspense
 
 The company has issued total 277 (31st March 2011 - Nil) equity shares
 of Rs. 5/- each fully paid-up for consideration other than cash
 pursuant to the Scheme of Arrangement (demerger) of the BPO division of
 Optimus Global Service Ltd into the Company (As more fully discussed in
 Note 12.III (a)). The Company is yet to complete the allotment and
 issue of share certificates with respect to these shares, accordingly
 these have been shown under share capital suspense account.
 
 Share application money pending allotment
 
 The company has received share application money during the month of
 March 2012 for issue of 2000 Equity shares at Rs.140.90 each (face
 value of Rs.5/- each with a premium of Rs.135.90) (31st March 2011 -
 Nil) under the scheme of ASOP 2003. These have been subsequently
 allotted during the month of April 2012.
 
 Stock option plans
 
 The Company has four stock option plans that provide for the granting
 of stock options to employees including directors of the Company (not
 being promoter directors and not holding more than 10% of the equity
 shares of the Company).
 
 The objectives of these plans include attracting and retaining the best
 personnel, providing for additional performance incentives and
 promoting the success of the Company by providing employees the
 opportunity to acquire equity shares. The option plans are summarized
 below:
 
 Associate Stock Option Plan 2003
 
 The Shareholders of the Company at the EGM held on March 12, 2004
 approved an Associate Stock Option Plan (the 2003 Plan). The 2003 Plan
 provides for issuance of 3,895,500 options, convertible to equivalent
 number of equity shares of Rs 5 each, to the employees including
 Directors. The options are granted at the market price on the date of
 the grant. The market price, in accordance with the SEBI (Employee
 Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999
 as amended from time to time, shall be the latest available closing
 price prior to the date of the meeting of the Board of Directors in
 which options are granted, on the stock exchange on which the shares of
 the Company are listed.
 
 If the Shares are listed on more than one stock exchange then the stock
 exchange where there is highest trading volume on the said date shall
 be considered. The option vests over a period of 5 years from the date
 of grant in a graded manner, with 20% of the options vesting each year.
 The exercise period shall commence from the date of vesting and expires
 within 36 months from the last vesting date.
 
 No compensation cost has been recorded as the scheme terms are fixed
 and the exercise price equals the market price of the underlying stock
 on the grant date. A summary of the status of the options granted under
 2003 plan as at March 31, 2012 is presented below.
 
 Associate Stock Option Plan 2004
 
 The Shareholders of the Company in the AGM held on the 22 July 2005
 approved an Associate Stock Option Plan (the 2004 plan). The 2004 plan
 provides for issuance of 1,084,745 options, convertible to equivalent
 number of equity shares of Rs 5 each, to the associates including
 Directors. The options are granted at the market price on the date of
 the grant. The market price, in accordance with the SEBI (Employee
 Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999
 as amended from time to time, shall be the latest available closing
 price prior to the date of the meeting of the Board of Directors in
 which options are granted, on the stock exchange on which the shares of
 the Company are listed. If the Shares are listed on more than one stock
 exchange then the stock exchange where there is highest trading volume
 on the said date shall be considered. The option vests over a period of
 5 years from the date of grant in a graded manner, with 20% of the
 options vesting each year. The exercise period shall commence from the
 date of vesting and expires within 36 months from the last vesting
 date.
 
 No compensation cost has been recorded as the scheme terms are fixed
 and the exercise price equals the market price of the underlying stock
 on the grant date. A summary of the status of the options granted under
 2004 plan at March 31, 2012 is presented on below
 
 Associate Stock Option Plan 2011
 
 The Shareholders of the Company in the Extraordinary General Meeting
 held on the 28th October 2011 approved an Associate Stock Option Plan
 (the 2011 plan). The 2011 plan provides for issuance of 4,960,000
 options convertible into equivalent number of equity shares of Rs 5
 each. The plan shall be administered under 4 different schemes based on
 the following terms:
 
 The market price, in accordance with the SEBI (Employee Stock Option
 Scheme and Employee Stock Purchase Scheme) Guidelines 1999 as amended
 from time to time, shall be the latest available closing price prior to
 the date of the meeting of the Board of Directors in which options are
 granted, on the stock exchange on which the shares of the Company are
 listed. If the Shares are listed on more than one stock exchange then
 the stock exchange where there is highest trading volume on the said
 date shall be considered. The options shall be valued using the
 intrinsic value model.
 
 The exercise period shall commence from the date of vesting and expires
 within 60 calendar months from the relevant vesting date.
 
 During the current year the Company has granted options under Swarnam
 11 scheme. As the market price on the date of the grant was less that
 Rs 175, no option discount has been provided as per the scheme terms
 and the options are issued at the market price.  Accordingly no
 compensation cost has been recorded. A summary of the status of the
 options granted under 2011 plan at March 31, 2012 is presented on below
 
 Associate Stock Option Plan (TRUST) 2011
 
 The Shareholders of the Company in the Extraordinary General Meeting
 held on the 28th October 2011 approved an Associate Stock Option Plan
 (TRUST) 2011 [the 2011(Trust) plan].  The 2011(Trust) plan provides for
 issuance of 1,984,000 options, convertible to equivalent number of
 equity shares of Rs 5 each. The options shall be granted at the market
 price if the market price is below Rs. 175 or at discount of 10% on
 market price if the market price is Rs.  175 or above. The market
 price, in accordance with the SEBI (Employee Stock Option Scheme and
 Employee Stock Purchase Scheme) Guidelines 1999 as amended from time to
 time, shall be the latest available closing price prior to the date of
 the meeting of the Board of Directors in which options are granted, on
 the stock exchange on which the shares of the Company are listed. If
 the Shares are listed on more than one stock exchange then the stock
 exchange where there is highest trading volume on the said date shall
 be considered. The option vests over a period of 5 years from the date
 of grant in a graded manner, with 20% of the options vesting each year.
 The exercise period shall commence from the date of vesting and expires
 within 60 calendar months from the relevant vesting date. The Company
 has not granted any options under the plan as on March 31, 2012.
 
 Pro forma Disclosure
 
 The Company follows the intrinsic value model for valuation of its
 options under the various plans. In accordance with SEBI (Employee
 Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
 1999, had the compensation cost for associate stock option plans been
 recognized based on the fair value at the date of grant in accordance
 with Black- Scholes model, the pro forma amounts of the Company''s net
 profit and earnings per share would have been as follows:
 
 The expected life of stock is based on historical data and current
 expectation and is not necessarily indicative of exercise patterns that
 may occur. The expected volatility reflects the assumption that the
 historical volatility over a period similar to the life of the options
 is indicative of future trends, which may also not necessarily be the
 actual outcome.
 
 I. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES
 
 a.  Scheme of Arrangement between Optimus Global Service Limited and
 the Company
 
 Optimus Global Services Limited (Demerged Company or Optimus)
 was incorporated on September 25, 2002 and is a subsidiary of the
 Company (99.94% holding). Optimus has two undertakings; Undertaking 1
 is engaged in the business of facilitating procurement and sale of
 equipments and software products and Undertaking 2 (demerged
 undertaking or BPO division) is engaged in the activity of
 Business Process Outsourcing (BPO).
 
 The Company had entered into a Scheme of Arrangement with Optimus for
 the demerger of its BPO division into the Company with effect from
 October 1, 2011.  The Scheme was approved by the Hon''ble High Court of
 Judicature of Madras on 20/07/2012. The Company has filed the order
 approved by High court order with the Registrar of Companies, Chennai
 (ROC) on October 5, 2012. The ROC has approved the said registration on
 October 9, 2012 and as of that date; the BPO division of Optimus has
 been demerged with the Company. The scheme has accordingly been given
 effect to in these financial statements with retrospective effect from
 October 1, 2011.
 
 In accordance with the scheme the Company has accounted for the
 demerger as follows:
 
 (I) The Company has taken over net assets aggregating to Rs. 1,652.33
 Lacs and accumulated losses of Rs.3,032.72 Lacs as on October 1, 2011.
 These have been transferred to and vested in the Company at the
 carrying values as appearing in the financial statements of the
 demerged undertaking.
 
 (ii) The Company has allotted to shareholders comprising 0.06% of the
 paid up equity share capital of the demerged Company on the record
 date, 1 equity share of Rs 5 each in the Company in respect of every
 200 shares of Rs 2 each held by them in the demerged Company.
 Accordingly the company has issued 277 equity shares of Rs 5/- each,
 fully paid up to the shareholders of the demerged Company. These shares
 have not yet been allotted, accordingly the same has been disclosed as
 capital suspense account.
 
 (iii) The book value of net assets and accumulated losses taken over as
 per (i) above, after adjusting the aggregate value of the shares issued
 to the minority as per (ii) above, has been credited to the Company''s
 investment in equity and preference capital of Optimus.
 
 Further, consequent to the demerger scheme, there has been a
 reorganization of the share capital of Optimus. As per the reorganized
 capital structure, the Company holds 8,50,500 equity shares and
 14,92,030 preference shares of Optimus on March 31, 2012.
 
 b.  The Company''s equity ownership interest in Adrenalin e-systems
 Limited is 40.25% as at March 31, 2012. Adrenalin e-Systems Limited
 (ASL) is primarily engaged in the business of providing specific
 solutions relating to Human resource and payroll management. The
 Accumulated losses to the extent of Rs 2,861.31 Lacs on March 31, 2012,
 (Rs.2,936.33 Lacs - March 31, 2011) have eroded the Companies share of
 investment in the associate. The Company has started showing marginal
 profits over the last two years. The management is positive about the
 future outlook, see growing acceptance of the product among top players
 in the market, and is confident of recouping its losses and breaking
 even in the coming years. Accordingly, the management believes that
 there is no other than temporary diminution in the value of its
 investments in ASL and hence, it is stated at cost.
 
 c.  The Company''s equity ownership interest in NMS Works Software
 Private Limited (NMS) is 36.54% as at March 31, 2012. NMS is
 primarily engaged in the business of designing network management in
 Telecommunication and Internet Services. NMS had been incurring losses
 since its inception accordingly the Company has determined and recorded
 a provision of Rs 415 Lacs in the earlier year for other than temporary
 diminution in the value of its equity investment in NMS. The Company
 has made significant profits in the current year and its accumulated
 losses as on March 31, 2012 have reduced to Rs 56.29 Lacs (Rs.267.42
 Lacs - March 31, 2011)
 
 d.  The Company has acquired 85.30% equity stake in IdenTrust Inc, a US
 based Global leader in trusted Identity solutions and one of the
 premier providers of digital identity authentication services with
 effect from April 27, 2011. The total consideration for the acquisition
 is Rs 8,813 Lacs.
 
 e.  The Company has acquired the balance 49% equity stake in Indigo TX
 Software Private Limited, a SAAS Software developer on November 22,
 2011 for a consideration of Rs.  902.22 Lacs. Consequently, Indigo TX
 became a 100% subsidiary of the company.
 
 f.  During the current year, the Company has entered into a JV
 agreement with Sonali Bank to implement online real time core banking
 solution for Sonali bank and Bangladesh commerce bank, and offer
 services to other banks and financial institutions in Bangladesh.
 Accordingly, the Company has incorporated a subsidiary company with 51%
 holding, named Sonali Polaris FT limited in terms of the JV agreement.
 
 *Has been pledged as a security by the Company for availing non-fund
 based facilities from the banker. The deposit carries interest rate at
 7.25% per Annum.
 
 3.  Commitments and contingent Liabilities
 
 i.  The estimated amount of contracts remaining to be executed on
 capital account and not provided for (net of advances) as at March 31,
 2012 is Rs.1,369 Lacs (March 31, 2011 : Rs 3,171 Lacs).
 
 ii.  Claims against the Company, not acknowledged as debts includes:
 
 1.  Demand from Indian income tax authorities as at March 31, 2012 is
 Rs 10,828.42 Lacs (March 31, 2011: Rs. 755 Lacs) The Company is
 contesting these demands at various higher appellate levels and the
 Company believes that the final outcome of the dispute will be in
 favour of the company and will not have any material impact on the
 financial results of the Company.
 
 2.  Sales Tax demand from Commercial Tax Officer Chennai as at March
 31, 2012 is Rs. 520 Lacs (March 31, 2011: Rs.520 Lacs);
 
 3.  Sales Tax demand from Commercial Tax Officer, Hyderabad as at March
 31, 2012 is Rs 98 Lacs (March 31, 2011: Rs 98 Lacs); and
 
 4.  Service tax demand from Commissioner of Central Excise, Chennai as
 at March 31, 2012 is Rs 32 Lacs (March 31, 2011: Rs. 32 Lacs)
 
 The Company is contesting the demands raised by the respective tax
 authorities, and the management, including its tax advisers, believes
 that its position will likely be upheld in the appellate process and
 ultimate outcome of these proceedings will not have a material adverse
 effect on the Company''s financial position and results of operations.
 
 iii. The Company is also involved in other law suit and claims
 including suits filed by former employees, which arise in the ordinary
 course of business. However there are no such matters pending that the
 Company expects to be material in relation to its business.
 
 4.  Hedging of foreign currency exposures
 
 The Company uses foreign currency forward contracts to hedge its risks
 associated with foreign currency fluctuations relating to forecasted
 transactions. The Company does not use forward contracts for
 speculative purposes.
 
 5.  Details of dues to micro and small enterprises as defined under
 the MSMED Act, 2006
 
 As at March 31, 2012, the Company had no outstanding dues to Micro and
 Medium enterprises (for March 31, 2011: Rs Nil). The list of Micro and
 Medium enterprises was determined by the Company on the basis of
 information available with the Company. The Company also had no
 outstanding dues that require to be furnished under Section 22 of the
 Micro, Small and Medium Enterprises Development Act, 2006.
 
 6.  Gratuity
 
 The Company has a defined benefit gratuity plan. Every employee who has
 completed five years or more of service gets a gratuity on departure at
 15 days salary (last drawn salary) for each completed year of service.
 A trust by name Polaris Software Lab group gratuity trust has been
 constituted to administer the gratuity fund.
 
 The amount expected to be contributed to the gratuity fund in the next
 financial year is Rs. 279.53 Lacs.
 
 The funds are invested in the form of a prescribed insurance policy
 with ICICI prudential and Life Insurance Corporation of India (LIC).
 The overall expected rate of return on assets is determined based on
 the market prices prevailing on that date, applicable to the period
 over which the obligation is to be settled.
 
 The estimates of future salary increases, considered in actuarial
 valuation, take account of inflation, seniority, promotion and other
 relevant factors, such as supply and demand in the employment market.
 
 7.  Lease payments
 
 The Company has taken certain offices and residential premises for the
 employees under operating leases, which expires at various dates in
 future years. There are no restrictions imposed by the lease
 arrangements. The minimum lease rental payments to be made in respect
 of these leases are as follows.
 
 8.  Segment reporting
 
 The Company''s operations predominantly relate to providing IT services
 to customers operating in various industry segments globally.
 Accordingly, IT service revenues represented along industry classes
 comprise the primary basis of segmental information set out in these
 financial statements. Secondary segmental reporting is based on the
 geographical location of customers.
 
 The accounting policies consistently used in the preparation of the
 financial statements are also applied to record revenue and expenditure
 in individual segments.
 
 Business (primary) segments of the Company are:
 
 a) Banking and financial services; and
 
 b) Emerging verticals
 
 Revenue and direct expenses in relation to segments are categorised
 based on items that are individually identifiable to that segment,
 while other costs, wherever allocable, are apportioned to the segments
 on an appropriate basis. Certain expenses are not specifically
 allocable to individual segments as the underlying services are used
 interchangeably. The Company believes that it is not practicable to
 provide segment disclosures relating to such expenses, and accordingly
 such expenses are separately disclosed as ''unallocated'' and directly
 charged against total income.
 
 Fixed assets used in the Company''s business or liabilities contracted
 have not been identified to any of the reportable segments, as the
 fixed assets and services are used interchangeably between segments.
 The Company believes that it is currently not practicable to provide
 segment disclosures relating to total assets and liabilities since a
 meaningful segregation of the available data is onerous.
 
 Customer relationships are driven based on the location of the
 respective client. The geographical segments comprise:
 
 a) Americas;
 
 b) Europe;
 
 c) ANZ & Asia Pacific; and
 
 d) India and Middle East
 
 9. Prior year Comparatives
 
 Till the year ended March 31, 2011, the company was using pre-revised
 Schedule VI to the Companies Act 1956, for the preparation and
 presentation of its financial statements.  During the year ended March
 31, 2012, the revised Schedule VI notified under the Companies Act
 1956, has become applicable to the company. The company has
 reclassified previous year figures to conform to this year''s
 classification. As stated in Note 12.III (a), in view of the Scheme of
 Arrangement between the demerged undertaking and the Company with
 effect from October 1, 2011, the figures for the year ended March 31,
 2012 are not comparable with those for the year ended March 31, 2011.