1.  Basis of preparation of financial statements
 
 The accompanying financial statements are prepared in accordance with
 Indian Generally Accepted Accounting Principles (GAAP) under the
 historical cost convention, on the basis of a going concern basis,
 while revenue, expenses, assets and liabilities are
 accounted/recognized on accrual basis. GAAP comprises mandatory
 accounting standards issued by the Institute of Chartered Accountants
 of India (ICAI), the provisions of the Companies Act, 1956 and
 guidelines issued by the Securities and Exchange Board of India (SEBI).
 Accounting policies are consistently applied except where a newly
 issued accounting standard is initially adopted or a revision to an
 existing accounting standard requires a change in the accounting policy
 hitherto in use.
 
 Management evaluates all recently issued or revised accounting
 standards on an ongoing basis.
 
 2.  Use of Estimates
 
 The preparation of financial statements in conformity with GAAP
 requires Management to make estimates and assumptions that aff ect the
 reported balances of assets and liabilities and disclosures relating to
 contingent assets and liabilities as at the date of the financial
 statements and reported amounts of income and expenses during the
 period.  Examples of such estimates include provisions for doubtful
 debts, future obligations under retirement benefi t plans, income
 taxes, post-sales customer support and the useful lives of fixed
 assets and intangible assets.
 
 Management periodically assessed using external and internal sources
 whether there is an indication that an asset may be impaired.
 Contingencies are recorded when it is probable that a liability will be
 incurred, and the amount can be reasonably estimated.  Actual results
 could diff er from those estimates.
 
 3.  Revenue recognition
 
 Revenue from software development on fixed-price, fixed-time frame
 contracts where there is no uncertainty as to measurement or
 collectability has been recognized. On time-and-material contracts,
 revenue is recognized as the related services are rendered. Provision
 for estimated losses, if any on uncompleted contracts are recorded in
 the period in which such losses become probable based on the current
 contract estimates. Annual Technical Services revenue and revenue from
 fixed-price maintenance contracts are recognized proportionately over
 the period in which services are rendered. Revenue from the sale of
 products for software applications is recognized on transfer of the
 products to the users.
 
 4.  Fixed Assets, intangible assets and capital work-in-progress
 
 Fixed Assets are stated at cost, less accumulated depreciation. All
 direct costs are capitalized until fixed assets are ready for use
 including taxes, duties, freight and other incidental expenses relating
 to acquisition and installation. Capital work-in-progress comprises
 outstanding advances paid to acquire fixed assets, and the cost of fi
 xed assets that are not yet ready for their intended use at the balance
 sheet date. Intangible assets are recorded at the consideration paid
 for acquisition.
 
 5.  Depreciation and amortization
 
 Depreciation on fixed assets is applied on straight-line method,
 pro-rata for the period of usage, in accordance with the rates
 prescribed under schedule XIV of the Companies Act, 1956.
 
 6.  Retirement Benefi ts a.  Gratuity
 
 In accordance with the Payment of Gratuity Act, 1972, Tanla provides
 for gratuity, a defined retirement plan (the Gratuity Plan) covering
 the eligible employees. The Gratuity Plan provides a lump sum payment
 to vested employees at retirement, death, incapacitation or termination
 of employment, of an amount based on the respective employee salary and
 the tenure of employment. Liability with regard to the Gratuity Plan
 are determined by actuarial valuation as of the balance sheet date,
 based upon which, the company contributes the ascertained liabilities
 to the Tanla Solutions Limited Employees Gratuity Scheme Trust (the
 Trust) managed by the Life Insurance Corporation of India.
 
 b.  Provident fund
 
 Eligible employees receive benefi ts from a provident fund, which is a
 defined contribution plan. Aggregate contributions along with interest
 thereon is paid at retirement, death, incapacitation or termination of
 employment.  Both the employee and the company make monthly
 contributions to the Regional Provident Fund Commissioner equal to a
 specified percentage of the covered employee''s salary.
 
 c.  Employee State Insurance Fund:
 
 Eligible employees ( who gross salary is less than Rs.15000/- per
 month) are entitled to receive benefi ts under employee state insurance
 fund scheme. The employer makes contribution to the scheme at a
 predetermined rate (presently 4.75%) of employee''s gross salary. Tanla
 has no further obligations under the plan beyond its monthly
 contributions. These contributions are made to fund administered and
 managed by the Government of India. Tanla''s monthly contributions are
 charges to income in the year it is incurred.
 
 7.  Research and development
 
 Revenue expenditure incurred on research and development is expensed as
 incurred. Capital expenditure incurred on research and development is
 depreciated on straight-line method, pro-rata for the period of usage,
 in accordance with the rates prescribed under schedule XIV of the
 Companies Act, 1956.
 
 8.  Foreign Currency Transactions
 
 The company translates all foreign currency transactions at Exchange
 Rates prevailing on the date of transactions.  Exchange rate diff
 erences resulting from foreign exchange transactions settled during the
 year are recognized as income or expenses in the period in which they
 arise.
 
 Monetary current assets and monetary current liabilities that are
 denominated in foreign currency are translated at the exchange rate
 prevalent at the date of the balance sheet. The resulting diff erence
 is also recorded in the Profit and loss account.
 
 9.  Income tax
 
 Income taxes are computed using the tax effect accounting method, in
 accordance with the Accounting Standard (AS 22) Accounting for Taxes
 on Income which includes current taxes and deferred taxes. Deferred
 income taxes refl ect the impact of current year timing diff erences
 between taxable income and accounting income for the year and the
 relevant timing diff erence of earlier years. Deferred tax asset and
 liabilities are measured at the tax rates that are expected to apply to
 the period when the asset / liability is realized, based on tax rates
 (and tax laws) that have been enacted or substantively enacted at the
 balance sheet date. Deferred Tax assets are recognized and carried
 forward only to the extent that there is a reasonable certainty that
 sufficient future taxable income will be available against which such
 deferred tax assets can be realized.
 
 10.  Earnings per share
 
 In determining earnings per share, the company considers the net profi
 t after tax expense. The number of shares used in computing basic
 earnings per is the weighted average shares outstanding during the
 period.
 
 11.  Investments
 
 Long term trade investments are stated at cost & all other investments
 are carried at lower of cost or fair value.
 
 12.  Cash flow statement
 
 Cash flows are reported using the indirect method, whereby net Profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature and any deferrals or accruals of past or future cash receipts or
 payments. The cash flows from regular revenue generating, investing
 and financing activities of the company are segregated.
 
 13.  Public issue expenses
 
 The expenses incurred for follow on public issue has been written off
 in five equal installments from the year of completion of public
 issue.