1. Basis of Preparation of financial statements
 
 a. The financial statements have been prepared under the historical
 cost convention in accordance with generally accepted Accounting
 Principles and the provisions of the Companies Act, 1956.
 
 b. Accounting policies not specifically referred to otherwise are
 consistent throughout the year under audit and in consonance with
 generally accepted Accounting Principles followed by the company.
 
 2. Unsecured Loans:
 
 No Interest has been provided for on the Unsecured Loan Rs 8,72,628/-
 taken from the Director, R. Rajasankar.
 
 3. Fixed Assets:
 
 a. Fixed assets are stated at cost of acquisition less depreciation.
 
 b. Depreciation on fixed assets is provided under straight line method
 on pro-rata basis at the rates and in the manner prescribed in schedule
 XIV of the Companies Act, 1956.
 
 4. Investments:
 
 Investments include 3,00,000 equity shares of Rs. 10/- each in Archana
 Software Limited, a company under the same management. (Quoted value as
 on 31.03.2002 Rs. 6/-)
 
 5. Current Assets:
 
 a. Sundry Debtors are stated in book value which represents the money
 to be received from customers.
 
 b. Land for the Project: The land for the projects represents the
 amount advanced as per the agreements.
 
 c. Inventory: The Inventories are valued at cost.
 
 6. Current Liabilities:
 
 a. Unclaimed Dividend Account:
 
 The reconciliation of Unclaimed Dividend account with the corresponding
 Dividend Bank Accounts is in progress.
 
 b. Provision for Taxation:
 
 By taking into account the available deductions under the Income-Tax
 Act, 1961 and the Pre-paid taxes, the provision for taxation is not
 considered necessary.
 
 7. Miscellaneous Expenditure:
 
 The Management has viewed that the benefits of Software development
 shall spread over the subsequent years and has therefore decided to
 defer fully the software development expenses of Rs 13,51,410/- to be
 written off in the subsequent years. The amortization of Share Issue
 Expenses for an amount of Rs. 23,07,580/- is post-poned to the next
 subsequent years due to inadequacy of profits.
 
 8. Retirement Benefits:
 
 a. The Company is yet to comply with provisions of the Employees Provi-
 dent Fund Act and Employees State Insurance Act.
 
 b. Liability in respect of gratuity to employees as on 31.03.2002 has
 not been ascertained and no gratuity Fund has been created by the Com-
 pany.
 
 9. Basis of Accounting:
 
 All the Income and Expenditure items having a material bearing on the
 financial statements are recognized on accrual basis except
 non-provision of interest on the unsecured loans taken from the
 Director, Note No. 8 supra regarding non compliance with the Provisions
 of P. F. Act and E.S.I Act and Non contribution to Gratuity Fund. Had
 Interest been provided for loan from Director and charged during the
 current year, Profit would have come down to the extent of Rs. 1,
 80,688/- worked at 18% market rate of interest.
 
 10. Income From Operations:
 
 Sales include sale of Flats representing the sale value of the flats to
 be received for the completed work certified by the Chartered Engineer.
 Sales also include the sale proceeds of the residential Plots at Sakthi
 Nagar and Nemilicherry.
 
 11. AS - 22 Deferred Taxes
 
 Consequent to Accounting Standard 22 - Accounting for Taxes on Income
 becoming mandatory with effect from 1st April, 2001 the Company
 recorded the deferred tax balance of Rs. 63,13,640/- that has
 accumulated prior to the adoption of this standard upto 31.03.2001.
 However the same has not been shown separately in the Liability side of
 the Balance Sheet due to inadequate free reserves. The deferred tax
 liability for the current year 2001-2002 amounting to Rs. 1,87,868, if
 effected, shall reflect the deferred tax liability of Rs. 61,25,772/-
 as on 31.03 2002 which shall be charged to free reserves in future
 depending on the availability of sufficient free reserves.