1. Accounting Convention:
The Accounts have been prepared under the historical cost convention,
on the basis of a going concern, with revenue recognized and expenses
accounted on their accrual, including provisions / adjustments for
committed obligations and amounts, determined as payable or receivable
during the year.
2. Fixed Assets:
Fixed assets are capitalized at acquisition cost inclusive of freight,
installation cost and other incidental expenses incurred during the
The Company provides depreciation on the basis of Straight Line Method
as per Section 205(2)(b) of the Companies Act, 1956 at the rates and in
the manner prescribed in Schedule XIV to the Companies Act, 1956.
4. Revenue Recognition:
Revenues from software related services are accounted for on the basis
of services rendered on Cost plus method, as per terms of contract.
Revenues from BPO services are based on the performance of specific
criteria at contracted rates.
Dividend income on investments is accounted for when the right to
receive the payment is established.
Interest income is recognized on time proportion basis.
Investments are classified into current investments and long-term
investments. Current investments are carried at the lower of cost or
fair market value. Any reduction in carrying amount and any reversals
of such reduction are charged or credited to the profit and loss
account. Long-term investments are carried at cost less provision made
to recognize any decline, other than temporary, in the value of such
6. Earnings per share:
The earnings considered in ascertaining the company''s EPS comprises the
net profit / loss after tax (And includes the post tax effect of any
extraordinary items). The number of shares used in computing Basic EPS
is the weighted average number of shares outstanding during the year.
The number of shares used in computing Diluted EPS comprises of
weighted average shares considered for deriving Basic EPS, and also the
weighted average number of equity shares which could have been issued
on the conversion of all dilutive potential equity shares. Dilutive
potential equity shares are deemed converted as of the beginning of the
year, unless they have been issued at a later date.
7. Employee Benefits:
(i) Provident Fund:
Contributions in respect of Employees Provident Fund and Pension Fund
are made to a fund administered and managed by the Government of India
and are charged as incurred on accrual basis.
The Company also provides for other employee benefits in the form of
gratuity. The Company''s Contributions to Gratuity scheme are determined
by actuarial valuation and have been made to an approved Fund and the
same is charged as expenditure to Profit & Loss account. The gratuity
fund is managed by the Life Insurance Corporation of India (LIC).
(Hi) Leave Encashment:
The Company provides for leave encashment based on actual calculations
as at the Balance Sheet date.
8. Foreign Currency Transactions:
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of transaction. Monetary assets and liabilities
denominated in foreign currency are translated at the rates of exchange
at the balance sheet date and resultant gain or loss is recognized in
the Profit and Loss Account. The long term investments of the Company
in the subsidiary in the USA and in the Joint venture in the UK, are
recorded at the foreign exchange prevailing on the date of investments.