1 (i) BASIS FOR PREPARATION OF FINANCIAL STATEMENTS
 
 The financial statements are prepared in accordance with Indian
 Generally Accepted Accounting Principles (GAAP) under the historical
 cost convention on accrual basis.
 
 (ii) SIGNIFICANT ACCOUNTING POLICIES
 
 a) FIXED ASSETS AND DEPRECIATION
 
 Fixed assets are stated at cost less depreciation. For this purpose
 cost comprises of cost of acquisition and all costs directly
 attributable to bringing the asset to the present condition for its
 intended use.
 
 Depreciation has been provided on Building and Plant and Machinery, on
 straight line basis and on other assets on written down value at the
 rate specified in Schedule XIV of the Companies Act, 1956, (as
 amended), or at the rates as per companys depreciation policy for the
 following items:
 
 Leasehold improvements and Leasehold Land are stated at cost and are
 amortized over the lease period.
 
 b) INVESTMENTS
 
 Long term investments are stated at cost. Provision for diminution in
 long term investments is made, if it is permanent.
 
 Investments that are readily realizable and intended to be held for not
 more than a year are classified as short term investments. Short term
 investments are stated at cost or fair market value, whichever is
 lower. All other investments are classified as long-term investments.
 
 c) INVENTORIES
 
 Software products developed/under development are stated at cost.
 Software development cost incurred on products ready for marketing are
 amortized equally over a period of three years or earlier based on
 Managements evaluation of expected sales volumes and duration of the
 products life cycle.
 
 d) REVENUE RECOGNITION
 
 Revenue from technical Service Contracts/Software Development are
 recognized on the basis of achievement of prescribed milestones as
 relevant to each contract or proportionate completion method as
 applicable.
 
 e) FOREIGN CURRENCY TRANSACTIONS
 
 Purchases and Services revenues are accounted at daily rates.  Exchange
 fluctuations arising on payment or realization are dealt with in the
 Profit and Loss Account. Monetary Assets and Monetary Liabilities are
 restated at the year-end closing rate and any differences arising
 thereof have been dealt within the Profit and Loss Account to the
 extent it pertains to the current year.
 
 f) DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING
 
 The Company has adopted Accounting Standard 30 (AS 30) Financial
 Instruments: Recognition and Measurement for the year. Based on the
 Recognition and Measurement principles set out in the AS 30, changes in
 the fair values of derivative financial instruments designated as
 effective cash
 
 flow hedges are recognized as Hedging Reserve directly in the Balance
 Sheet under Reserves and Surplus and later reclassified into Profit and
 Loss account upon the occurrence of the hedged transaction. Changes in
 the fair value of ineffective cash flow hedges are recognized in the
 Profit and Loss account as they arise.
 
 g) EMPLOYEE BENEFITS
 
 (i) Defined Contribution Plan
 
 Companys contributions paid/payable during the year to Superannuation
 Fund, ESIC, Pension Fund and Labour Welfare Fund are recognized in the
 Profit and Loss Account. There are no other obligations other than the
 contribution payable to the respective trust. Companys contribution
 towards Superannuation and ESIC is based on a percentage of salary
 which is made to an approved fund.
 
 (ii) Defined Benefit Plan
 
 Companys contribution towards Provident Fund is based on a percentage
 of salary which is made to an approved fund.
 
 Companys contribution towards Gratuity is made to an approved fund as
 per actuarial valuation certificate obtained from an actuary which is
 determined using projected unit credit method.
 
 (iii) Short term employee benefit
 
 Short term employee benefits are recognized in the Profit and Loss
 account relating to the year in which the employee has rendered
 service.
 
 (iv) Long term employee benefit
 
 Long term compensated absences are provided as per actuarial valuation
 certificate obtained from an actuary which is determined using
 projected unit credit method.
 
 (v) Actuarial gains/losses are immediately taken to Profit and Loss
 account and are not deferred.