1.  Basis of preparation
 
 The financial statements are prepared under historical cost convention
 on the accrual basis of accounting and comply with the mandatory
 accounting standards recommended by The Institute of Chartered
 Accountants of India (ICAI) and prescribed by the Central Government
 and comply with the relevant provisions of the Companies Act, 1956.
 
 Cash flows are reported using the indirect method whereby profit before
 tax is adjusted for the effects of transactions of non-cash nature and
 any deferrals or accruals of past or future cash receipts or payments.
 The cash flows from regular revenue generating, financing and investing
 activities of the company are segregated.
 
 2.  Use of estimates
 
 The preparation of the financial statements in conformity with the
 Generally Accepted Accounting Principles requires the Management to
 make estimates and assumptions that affect the reported balances of
 assets and liabilities and disclosures relating to contingent assets
 and liabilities as at the date of the financial statements and the
 reported amounts of income and expenses during the period. Examples of
 such estimates include provisions for doubtful debts, future
 obligations under employee retirement benefit plans, income taxes,
 post- sales customer support and the useful lives of fixed assets and
 intangible assets.
 
 3.  Revenue recognition
 
 The company derives its revenues primarily from software development
 services, consultancy services, projects and e-governance projects.
 
 Revenue from software services and projects comprise income from
 time-and-material contracts, fixed price/fixed time contracts,
 technical services and annual maintenance contracts. Revenue from
 time-and- material contracts is recognized on the basis of man hours
 spent and materials utilized for the development of software and
 billable in accordance with the terms of the contracts with clients.
 Revenue from fixed price/fixed time contract is recognized as per the
 proportionate completion method. Revenue from technical service for
 software application is recognized on completion of the service.
 
 Cost incurred on unfinished projects that are yet to be billed and
 earnings in excess of billings are classified as unbilled revenue.
 
 Interest on deployment of surplus funds is recognized on the accrual
 basis, based on underlying interest rates.
 
 4.  Fixed assets including intangible assets
 
 Tangible assets are stated at cost, less accumulated depreciation. Cost
 includes cost of acquisition including material cost, freight,
 installation cost, duties and taxes, and other incidental expenses,
 incurred up to the installation stage, related to such acquisition.
 Intangible assets are stated at cost of acquisition less accumulated
 amortization.
 
 5.  Leased Assets
 
 Assets acquired under finance lease are recognised at the lower of the
 fair value of the leased assets at inception and the present value of
 minimum lease payments. Lease payments are apportioned between the
 finance charge and the outstanding liability. The finance charge is
 allocated over the period of lease at a constant periodic rate of
 interest on the remaining balance of the liability.
 
 6.  Borrowing Costs
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets.
 
 7.  Depreciation & Amortization
 
 Depreciation is provided on tangible assets in the written down value
 method, at the rates and in the manner specified by schedule XIV to the
 Companies Act, 1956. Depreciation is charged from the date of
 acquisition/installation and on assets sold, up to the date of sale.
 
 The cost and the accumulated depreciation of assets sold, retired or
 otherwise disposed off is removed from the stated values and the
 resulting gains and losses are included in the profit and loss account.
 
 Leasehold land is amortized over the lease period of 99 years excluding
 any refundable deposit.
 
 In respect of businesses acquired, the excess of purchase consideration
 over the tangible and intangible assets is deemed to have been paid for
 human resources, clientele and other related benefits such as
 non-compete agreements and is being amortised over 5 years.
 
 The other intangible assets are being amortised as follows:
 
 Computer software
 
 Software for own use                       over 5 years
 
 Product Development Cost                   over 5 years
 
 8.  Investments
 
 Investments are either classified as current or long term, based on the
 management''s intention at the time of purchase. Current investments are
 carried at the lower of cost and market value. Long-term investments
 are carried at cost less provisions recorded to recognise any decline
 other than temporary, in the carrying value of investment.
 
 9.  Impairment of assets
 
 The Management periodically assesses using external and internal
 sources whether there is an indication that an asset may be impaired.
 All the fixed assets are assessed for any indication of impairment at
 the end of each financial year. On such indication, the impairment
 (being excess of carrying value or the recoverable value of asset) is
 charged to profit and loss account in the respective financial year.
 The impairment loss recognised in the prior years is reversed where the
 recoverable value exceeds the carrying value of the asset upon
 reassessment in the subsequent years.
 
 10.  Foreign currency transactions
 
 The company has a US based branch which is an integral operation.
 
 The transactions of the Head Office in foreign currency are accounted
 at the rates of exchange prevailing on the date of the transactions.
 The exchange difference between the rates prevailing on the date of
 transaction and the date of settlement are recognized in the profit and
 loss account.
 
 Foreign currency denominated monetary assets and liabilities are
 translated using exchange rate as at Balance sheet date. The gains and
 losses resulting from such translations are included in the profit and
 loss account. Non-monetary assets and liabilities denominated in
 foreign currency are translated at historical rate.
 
 For the purposes of incorporation of the financial statements of the US
 branch into the Head Office financial statements, all income and
 expenditure are translated at the average rate, the monetary assets and
 liabilities translated at the yearend rate and non-monetary assets and
 liabilities translated at the date of transactions the resultant gain
 or loss being recognized in the profit and loss account
 
 11.  Retirement benefits
 
 a) Provident Fund (Defined contribution scheme)
 
 Eligible employees receive benefit from defined benefit plan covered
 under the Provident Fund Act. Both employees and the company make
 monthly contributions. The employer contribution is charged off to
 Profit & Loss Account as an expense.
 
 b) Gratuity (Defined Benefit Scheme)
 
 The company provides for a non-funded gratuity, based on actuarial
 valuation.
 
 c) Leave encashment:
 
 The leave encashment liability upon retirement would not arise as the
 accumulated leave is reimbursed every year and accounted at actual.
 
 12.  Research and development cost
 
 Expenditure incurred on research and development is charged off to
 Profit & Loss Account as incurred till the time the techno-commercial
 viability is established.
 
 13.  Provisions:
 
 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. Contingencies are recorded when it is probable that a
 liability will be incurred and the amount can be reasonably estimated.
 
 14.  Accounting for Taxes:
 
 The company is accounting for taxes in accordance with the Accounting
 Standard (AS) 22 - Accounting for taxes notified under sub section 3
 (c) of section 211 of companies Act 1956. Consequently, the tax
 provision includes the income tax payable on die estimated taxable
 income as well as the tax impact arising on account of timing
 differences, thus ensuring that the income and taxes thereon are
 matched.