1.1.  Basis for Preparation of Financial Statements
 
 The financial statements have been prepared under the historical cost
 convention on accrual basis in accordance with the mandatory Accounting
 Standards or as per the Proposal approved by the Honourable High Court
 of Karnataka.
 
 The Company has outstanding foreign currency convertible bonds (FCCBs)
 that are redeemable in March 2012, if not converted earlier. Refer Note
 II.3.A and II.3.B below. The Company is pursuing various options not
 limiting to fund raising in the form of debt or equity, or a mix of
 both, and negotiations with the current lenders, to meet any potential
 FCCB debt obligations that arise in March 2012. The Company firmly
 believes that, with a combination of its internal cash accruals in the
 next financial year and on achieving successful closure on these
 options in the coming months, it would be able to meet all repayment
 obligations that arise during financial year ending March 31, 2012.
 Consequently these financial statements are prepared on a going concern
 basis.
 
 1.2.  Use of Estimates
 
 The preparation of the financial statements in conformity with Indian
 GAAP requires that management makes estimates and assumptions that
 affect the reported amounts of assets and liabilities, disclosure of
 contingent liabilities as at the date of the financial statements, and
 the reported amounts of revenue and expenses during the reported
 period. Actual results could differ from those estimates.
 
 1.3.  Revenue Recognition
 
 Revenue from Contracts for software product license includes fees for
 transfer of licenses, installation and commissioning. This revenue is
 recognized under the percentage completion method based on the extent
 of work determined to have been completed as compared to the work
 involved in the overall scope of the contract. In the event of any
 expected losses on a contract, the entire amount is provided for in the
 accounting period in which such losses are first anticipated.
 
 Revenue from sale of additional software licences are recognized on
 transfer of such licenses.
 
 Revenue from Software development is recognized on the basis of
 chargeable time or achievement of prescribed milestones as relevant to
 each contract.
 
 Sale of hardware under reseller arrangements are recognized on dispatch
 of goods to customers and are recorded net of discounts, rebates for
 price adjustment, projections, shortage in transit, taxes and duties.
 
 Maintenance and service income is recognised on time proportion basis.
 
 Interest on investments and deposits are booked on a time proportion
 basis taking into account the amount invested and the rate of interest.
 
 1.4.  Fixed Assets and Intangibles
 
 Fixed assets are stated at cost of acquisition inclusive of freight,
 duties, taxes and interest on borrowed money allocated to and utilised
 for fixed assets up to the date of capitalisation and other direct
 expenditure incurred on ongoing projects. Assets acquired on hire
 purchase are capitalised at gross value and interest thereon is charged
 to revenue.
 
 Acquired Intangibles are stated at cost inclusive of duties and taxes.
 Costs incurred on self generated intangibles are expensed as incurred.
 
 1.5.  Depreciation & Amortisation
 
 Fixed assets and Intangibles are depreciated/amortised using the
 straight-line method over the useful lives of assets. Depreciation is
 charged on pro-rata basis for assets purchased/sold during the year.
 
 1.6.  Employee Stock Option Plans
 
 Employee Stock Options are accounted in accordance with the guidelines
 stipulated by SEBI. The difference between the market price of the
 shares underlying the options granted on the date of grant of option
 and the exercise price is expensed as Employees Compensation over the
 period of vesting.
 
 1.7.  Employee Benefits
 
 The Companys contribution to provident fund, a defined contribution
 scheme, is charged to the profit and loss account on accrual basis.
 
 Liability for gratuity is funded with Life Insurance Corporation of
 India (LIC) and SBI Life Insurance. Gratuity expense for the year has
 been accounted based on actuarial valuation determined under the
 projected credit unit method, carried out at the end of the financial
 year. Actuarial gains/losses are recognized in full in the profit and
 loss account. The retirement benefit obligation recognized in the
 balance sheet represents the present value of the defined benefit
 obligations adjusted for unrecognized past service cost and as reduced
 by the fair value of scheme assets. Any asset resulting from this
 calculation is limited to past service cost plus the present value of
 available refunds and reduction in future contributions to the scheme.
 
 Liability for encashment of leave considered to be long term liability
 is accounted for on the basis of an actuarial valuation.  Provision for
 outstanding leave credits considered as short term
 
 liability is as estimated by the management. Other short term employee
 benefits like medical, leave travel etc are accrued based on the terms
 of employment on a time proportion basis
 
 The Company has introduced long term employee compensation plans under
 which certain employees are eligible for retention and performance
 linked payouts. These payouts are accrued as the services are rendered
 and/or when the specific criteria are met.
 
 1.8.  Research and Development
 
 Expenses incurred on research and development is charged to revenue in
 the same year. Fixed asset purchased for research and development are
 capitalized and depreciated as per the Companys policy.
 
 1.9.  Foreign Currency Transactions
 
 Transactions denominated in foreign currencies are recorded at the
 exchange rates prevailing on the date of the transaction.  Monetary
 items denominated in foreign currencies at year end are restated at the
 exchange rate on the date of the Balance Sheet. Non-monetary items
 denominated in foreign currencies are carried at cost. Exchange
 differences on settlement or restatement are adjusted in the Profit &
 Loss account. Premium or discount on forward contracts is amortized
 over the life of such contract and is recognized as income or expense,
 in the Profit and Loss account. Any profit or loss arising on
 cancellation or renewal or retirement of forward contract is recognized
 in profit and loss account.
 
 1.10.  Investments
 
 Long term Investments are stated at cost less diminution in the value
 of investments that is other than temporary.
 
 1.11.  Income Taxes
 
 Income Tax comprises the current tax provision under the tax payable
 method and the net change in the deferred tax asset or liability in the
 year. Deferred Tax Assets and liabilities are recognized for the future
 tax consequences of temporary differences between the carrying values
 of the assets and liabilities and their respective tax bases.
 
 Deferred tax assets and liabilities are measured using enacted tax
 rates expected to apply to taxable income in the years in which the
 temporary differences are expected to be received or settled. The
 effect on deferred tax assets and liabilities of a change in tax rates
 is recognized in the income statement in the period of enactment of the
 change.
 
 Deferred tax assets are recognized and carried forward to the extent
 that there is a reasonable/virtual certainty, as applicable, that
 sufficient future taxable income will be available against which such
 deferred tax assets can be realized.
 
 Minimum alternative tax (MAT) paid in accordance to the tax laws, which
 gives rise to future economic benefits in the form of adjustment of
 future income tax liability, is considered as an asset if there is
 convincing evidence that the Company will pay normal income tax after
 the tax holiday period. Accordingly, MAT is recognized as an asset in
 the balance sheet when it is probable that the future economic benefit
 associated with it will flow to the Company and the asset can be
 measured reliably.
 
 1.12.  Cash Flow Statement
 
 Cash flow statement has been prepared in accordance with the indirect
 method prescribed in Accounting Standard 3, issued under the Companies
 (Accounting Standard) Rules 2006.
 
 1.13.  Preliminary and Share Issue Expenses
 
 Expenses incurred during the Initial Public Offer, follow on offer and
 issue of Bonus Shares are amortised over 5 years. Other issue expenses
 are charged to the securities premium account.
 
 1.14.  Provisions and Contingencies
 
 A provision is recognized when an enterprise has a present
 obligation as a result of past event; it is probable that an outflow
 of resources will be required to settle the obligation, in respect
 of which a reliable estimate can be made. Provisions are not
 discounted to its present value and are determined based on
 best estimate required to settle the obligation at the balance
 sheet date. These are reviewed at each balance sheet date
 and adjusted to reflect the current best estimates. Contingent
 liabilities are not provided for but disclosed in the notes to the
 financial statements.
 
 I.15   Impairment of Fixed Assets
 
 At each balance sheet date, the Company reviews the carrying amounts of
 its fixed assets and intangibles to determine whether there is any
 indication that those assets suffered an impairment loss. If any such
 indication exists, the recoverable amount of the asset is estimated in
 order to determine the extent of impairment loss. Recoverable amount is
 the higher of an assets net selling price and value in use. In
 assessing value in use, the estimated future cash flows expected from
 the continuing use of the asset and from its disposal are discounted to
 their present value using a pre-tax discount rate that reflects the
 current market assessments of time value of money and the risks
 specific to the asset.
 
 Reversal of impairment losses recognized in prior years, if any, is
 recorded when there is an indication that the impairment losses
 recognized for the asset no longer exist or have decreased. However,
 the increase in carrying amount of an asset due to reversal of an
 impairment loss is recognized to the extent it does not exceed the
 carrying amount that would have been determined (net of depreciation)
 had no impairment loss been recognized for the asset in prior years.