1.  Basis of preparation
 
 The financial statements are prepared under the historical cost
 convention in accordance with Generally Accepted Accounting Principles
 (GAAP), and materially comply with the mandatory accounting standards
 issued by the institute of Chartered Accountants of India and the
 Provisions of the Companies Act, 1956. All income and expenditure
 having a material bearing on the financial statements are recognized on
 the accrual basis.
 
 2.  Use of estimates
 
 The preparation of financial statements in conformity with GAAP
 requires management to make estimates and assumptions that affect the
 reported accounts of assets and liabilities, disclosure of contingent
 assets and liabilities at the date of the financial statements and the
 reported amounts of revenues and expenses during the reporting period.
 Examples of such estimates include estimates of expected contract costs
 to be incurred to complete software development, provision for doubtful
 debts, and the useful life of fixed assets.  Actual results could
 differfrom these estimates.
 
 3.  Revenue recognition
 
 Revenue from fixed-price contracts is recognized principally on the
 basis of completed milestones as specified in the contracts, on a
 percentage of completion basis. Where milestones are not representative
 of the percentage of completion method, estimates of work completed to
 the Balance Sheet date are used to recognize revenue on fixed-price
 contracts. Revenue from software developed on a time-and-materials
 basis is recognized as per the terms of specific contracts.
 
 4.  Fixed assets and capital work in progress
 
 Fixed assets are stated at the cost of acquisition or construction,
 less accumulated depreciation. Direct costs are capitalized until the
 assets are ready to be put to use.
 
 5.  Depreciation at the rates specified in schedule XIV of the
 Companies Act, 1956
 
 Depreciation on fixed assets is provided using the straight-line method
 at the rates specified in the schedule XIV of the Companies Act, 1956.
 It is charged on a pro-rata basis for assets purchased/sold during the
 year.  Individual assets costingRs.5,000/- or less are depreciated in
 full in the year of purchase.
 
 6.  Foreign Currency Transactions
 
 Foreign currency transactions during the period are recorded at the
 exchange rates prevailing on the date of the transaction. Foreign
 currency denominated assets and liabilities are translated into rupees
 at the rates of exchange prevailing at the date of the balance sheet.
 All exchange differences are dealt with in the statement of profit and
 loss, except for those relating to the acquisition of fixed assets,
 which are adjusted in the costofthefixed assets.
 
 7.  Borrowing Cost
 
 Borrowing cost attributable to the acquisition of fixed assets is
 included in the cost of asset. The balance borrowing cost is charged to
 revenue.
 
 8.  Income Tax
 
 Income taxes are computed using the tax effect accounting method, where
 taxes are accrued in the same period the related revenue and expenses
 arise and deferred tax asset or liability is recorded for the timing
 differences. The deferred tax asset or liability is recognized using
 the tax rates that have been enacted or substantively enacted by the
 Balance Sheet date.
 
 9.  Export Benefits
 
 The Company accounts for export benefit entitlements under the Duty
 Entitlement Pass Book Scheme of Government oflndia, on accrual basis.
 
 10.  Impairment Loss
 
 As per Accounting Standard AS 28 Impairment of Assets effective from
 April 01, 2004, the Company assesses at each Balance Sheet date whether
 there is any indication that any asset may be impaired and if such
 indication exists, the carrying value of such asset is reduced to its
 recoverable amount and a provision is madeforsuch impairment loss in
 the profit and loss account.
 
 11.  Investments
 
 Long Term investments are stated at cost. Other investments are stated
 at the lower of cost or market value.  Any decline, other than
 temporary in the value of long term investments (including investments
 in subsidiaries) is charged to the Profit & Loss Account.