1. SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON FINANCIAL STATEMENTS 21.

1 Significant Accounting Policies - (AS-1):

a)Basis of Preparation of Financial Statements :

Financial statements have been brpared and brsented under historical cost convention in accordance with the accounting principles generally accepted in India (GAAP). GAAP comprises the mandatory accounting standards as brscribed by Companies (Accounting Standards) Rules 2006 [which continue to apply under Companies Act, 2013("the Act")] and other applicable provisions of the Act. All incomes and expenditures, having a material bearing on the financial statements, are recognized on an accrual basis.

b)Use of Estimates:

The brparation of financial statements in conformity with the GAAP requires that the management make 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 incomes and expenses during the reporting year. Such estimates include, estimate of useful life of fixed assets, provision for doubtful debts etc. Actual results could differ from those estimates. Changes in estimates are reflected in financial statements in the year in which changes are made and, if material, their effects are disclosed in the financial statements.

c)Revenue recognition:

i)Revenue from software services is recognised under proportionate completion method for the services rendered and delivered as per the contracts entered.

ii)Revenue from sale of products is recognised when significant risks and rewards in respect of ownership of products are transferred to customers. Revenue from products is stated exclusive of sales tax.

iii)Interest income on deposits with banks is recognized on time proportion basis taking into account the amount outstanding and the rate applicable and interest on IT refund is recognized on receipt basis.

iv)Rental income is recognised on accrual basis.

v)Insurance Claims are recognised as and when they are settled / admitted.

d)Fixed Assets:

i)Fixed assets are carried at cost of construction or acquisition less accumulated debrciation.

Cost includes non-refundable taxes, duties, freight, borrowing costs and other incidental expenses related to the acquisition and installation of the respective assets.

Assets under installation or under construction as at the Balance sheet date are shown as Capital work-in-progress. Advances paid towards acquisition of assets are included under Capital Advances.

Fixed assets which are found to be not usable or retired from active use or when no further benefits are expected from their use are removed from the books of account and the difference if any, between the cost of such assets and the accumulated debrciation thereon is charged to Statement of Profit & Loss.

ii)Computer software is classified as an "Intangible Asset".

E. Debrciation:

i)Debrciation on Tangible assets is provided under Written down value method over the useful lives of assets estimated by the management. Debrciation on additions/deletions during a period is charged on prorata basis from the date of addition or deletion, as the case may be.

ii)The Management estimated the useful life of fixed assets as follows.

iii)Intangible assets are amortized over their estimated useful life of asset.

iv)Leasehold land is amortised equally over the lease period. The lease rentals are charged to revenue.

v)Consequent to the Schedule II to the Companies Act,2013 came into force, carrying amount of assets whose useful life is expired, has been recognised in the opening balance of retained earnings.

F.Foreign Currency Transactions:

i)Initial Recognition: Transactions in foreign currencies are initially recorded at the exchange rates brvailing on the date of the transaction.

ii)Conversion: Foreign currency monetary items are reported at the closing exchange rates on Balance Sheet date.

iii)Exchange Differences:

a)Exchange differences, arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in brvious financial statements, in so far as they relate to the acquisition of debrciable capital assets, are added to or deducted from the cost of assets and are debrciated over the balance life of the assets.

b)Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items at rates different from those at which they were initially recorded during the year, or reported in brvious financial statements, are recognized as income or expense in the year in which they arise.

G.Investments:

Investments intended to be held for more than one year are treated as long term and others as short-term.

Short-term investments are carried at the lower of cost or quoted / fair value, computed category wise and  long term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

H. Retirement benefits:

i)Defined Contribution Plan: Company's contribution paid/payable during the year to Provident Fund and Employees State Insurance Corporation are recognized in the Statement of Profit and Loss.

ii)Defined Benefit Plan: At each reporting date, company's liability towards gratuity and leave encashment is determined by independent actuarial valuation using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation which is measured at the brsent value of estimated future cash flows using a discount rate. Actuarial gain/ losses are recognized in the Statement of Profit and Loss as income or expense.

I. Earnings per share:

i)Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by weighted average number of equity shares outstanding during the year.

ii)Diluted earnings per share is calculated by dividing the net profit or loss for the financial year attributable to equity shareholders by the weighted average number of equity shares outstanding including equity shares which would have been issued on the conversion of all dilutive potential equity shares unless they are considered anti-dilutive in nature.

J. Taxes on Income:

Tax expense, comprising of current and deferred tax have been determined and charged to statement of Profit & Loss.

i)Current Tax:

Provision is made for income tax liability estimated to arise on profit for the year at the current rate of tax in accordance with the Income tax Act, 1961.

ii)Deferred Tax:

In accordance with the Accounting Standard - 22 (AS 22) "Accounting for Taxes on income, the company recognizes the deferred tax liability in the accounts, Deferred tax resulting from timing difference between book and tax profits is accounted for at the current rate of tax. Deferred tax asset is recognized only when there is virtual certainty, supported by convincing evidence, that such assets will be realised.

iii)Minimum Alternate Tax (MAT) Credit:

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal tax within the specified period and the MAT credit available can be utilised. Such asset is reviewed at each Balance Sheet date and the carrying amount is written down if considered not recoverable within the specified period.

K. Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of profit and loss account. If at the balance sheet date there is an indication that if brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of debrciated historical cost.

L. Business / Geographical Segments:

The Company is engaged in the business of Software development and service. Since the inherent nature of development of software and services all types are integrated and govern by the same set of risks and returns and operating in the same economic environment, these are treated as a single Business and Geographical Segment. The said treatment is in accordance with the Accounting Standard - 17, Segment Reporting.

M. Provisions and Contingent Liabilities:

i) A provision is recognised when the Company has a brsent 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 their brsent 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.

ii) Contingent liabilities are disclosed when there is a probable obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a brsent obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, and such liability that may arise is termed as a contingent liability.

N. Prior Period Expense/Income:

The company follows the practise of making adjustments through "Expenses/Income under/ over provided "in brvious years in respect of material transactions pertaining to in that period prior to the current accounting year.

O. General:

Accounting policies not specifically referred to above are in consistent with the generally accepted accounting principles followed in India.

1.2. Employee benefits (AS-15):

The following tables summarizes the components of expense / benefit recognized in the Statement of Profit and Loss and Balance Sheet for the respective employee benefit plans.

1.3.Segment Reporting (AS-17):

The Company is engaged in the business of Software. Since the inherent nature of all software jobs are integrated and govern by the same set of risks and returns and operating in the same economic environment, these are treated as a single Business and Geographical Segment. The said treatment is in accordance with the Accounting Standard - 17, Segment Reporting.

1.4Trade Receivables include ^1,58,35,786/- (Previous year ^1,32,12,849) due from SoftSol Resources Inc., a wholly owned foreign subsidiary of this company. Maximum amount outstanding at any time during the year is Rs.2,00,27,037/-(Prev. Years ^1,12,17,750/-)

1.5In the opinion of the board, the assets other than fixed assets and non-current investments, have a value on realization in the ordinary course of business of atleast equal to the amount at which they are stated in the balance sheet.

1.6 Previous year's figures have been regrouped wherever necessary to conform to the layout adopted in the current year.

Per our report of even date for J V S L & Associates

Chartered Accountants

For and on behalf of the Board

(Firm Regn.No:015002S)

J. Venkateswarlu

Partner

ICAI Ms.No.022481

Bhaskara Rao Madala

Wholetime Director

Dr. T. Hanuman Chowdary

Director

B.S.Srinivasan

Director

B. Laxman Company Secretary

Srinivas Mandava: Chief Financial Officer

Place: Hyderabad

Date: 26.05.2015