Accompanying Notes to the financial statements for the year ended March 31, 2015

Note 1 : Significant Accounting Policies: A Company Profile

Starcom Information Technology Limited ("the Company") is a public listed company, domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India (Bombay Stock Exchange and Ahmedabad Stock Exchange). The Company's principal business is to be a global IP driven solution provider in the Business Intelligence, Analytics and Big Data space, focussed on innovative products and services.

B Basis of Accounting:

The financial statements of the Company have been brpared in accordance, with generally accepted accounting principles in India (Indian GAAP). The Company has brpared these Financial Statements to comply in all material aspects with the accounting standard brscribed under section 133 of Companies Act, 2013 ("Act"); read with rule (7) of Companies (Accounts) Rules, 2014 and other provisions of the Act. The financial statements have been brpared on an accrual basis (unless otherwise stated) and under historical cost convention.

C Use of Estimates:

The brparation of financial statements in conformity with Indian GAAP requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between actual results and estimates are recognized in the periods in which the results are known/ materialize.

D Fixed Assets:

i) Tangible Assets

Fixed Assets are stated at actual cost less accumulated debrciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

ii) Intangible Assets

Intangible Assets that are acquired by the Company are measured initially at cost. Cost comprises the purchase price and any attributable cost of bringing these asset to its working condition for its intended use.

E Debrciation and Amortisation:

i) Debrciation on all fixed assets, except Leasehold Improvements and intangible assets, is provided on Written Down value method over the useful life of Asset and in the manner as brscribed by Schedule II of the Act.

ii) Debrciation on Leasehold Improvements is amortized equally over the lease term.

iii) Softwares Modules are amortised over a period of 10 years on systematic basis.

F Impairment of Fixed Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

G Revenue Recognition:

i) Revenue is recognized when all significant risks and rewards of ownership of the goods are passed on to the buyer and no significant uncertainty exists as to its realization or collection.

ii) Revenue from sale of products is recognised, in accordance with the sales contract, on delivery of goods to the customer.

iii) Business facility income is recognised on accrual basis as per the terms of contract.

iv) Income from Annual Maintenance Contract (AMC) is recognised on accrual basis as per the period of the contract.

v) Interest is recognised on a time proportion basis taking in to account the amount outstanding and the rate applicable.

H Foreign Currency Transactions:

i) The transactions in foreign currencies on revenue accounts are stated at the rate of exchange brvailing on the date of transactions.

ii) The difference on account of fluctuation in the rate of exchange, brvailing on the date of transaction and the date of realisation is charged to the Statement of Profit & Loss.

iii) Differences on translation of Current Assets and Current Liabilities remaining unsettled at the year-end are recognised in the Statement of Profit and Loss.

I Inventories

i) Finished Goods are valued at lower of cost or net realisable value.

J Investments:

Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long term investment and are carried at cost less any provision for diminution other than temporary in value. Investments other than long term investments being current investments are valued at cost or fair market value whichever is lower.

K Provisions and Contingent Liabilities:

i) Provisions are recognized in terms of Accounting Standard 29- "Provisions, Contingent Liabilities and Contingent Assets, when there is a brsent legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

ii) Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or where reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

iii) Contingent Liabilities are disclosed by way of notes.

L Employee Benefits:-

i) Company's contribution to Provident Fund and other Funds for the year is accounted on accrual basis and charged to the Statement of Profit & Loss for the year.

ii) Gratuity & Leave Encashment are considered as defined benefit obligations and are provided on the basis of the actuarial valuation, using the projected unit credit method as at the date of the Balance Sheet.

M Accounting for Taxes of Income:-

Current Taxes

Provision for current income-tax is recognized in accordance with the provisions of Indian Income- tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions.

Deferred Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the balance sheet date. Deferred tax Assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future.

N Miscellaneous Expenditure:

Preliminary expenses are amortised in the year in which they are incurred.

11) Figures of the brvious year have been regrouped, reclassified and/or rearranged wherever necessary.

In terms of our report of even date

For S G C O & Co

Chartered Accountants

Firm Reg. No.: 112081W

Sd/- Suresh Murarka  

Partner

Mem. No. 044739

For and on behalf of the Board of Directors

Starcom Information Technology Limited

Sd/- Mr. Ziaulla Sheriff

Chairman & Managing Director

(DIN - 00002098)

Sd/- Mr. Maddur Gundurao Mohankumar

Director

(DIN- 00020029)

Place : Mumbai

Date : 30th May, 2015