Notes to Accounts of Nexxoft Infotel Ltd.

Mar 31, 2011

1. Capital and other commitments: Estimated amount of contracts on capital account remaining to be executed and not provided for Rs Nil Lakhs (as on 31.03.2010 Rs Nil Lacs).

2. Contingent Liability - Rs Nil (PY 25 Lakhs)

3. Earning & Expenditure in Foreign currency (on receipt basis) Nil Lakhs (PY- Rs. 1765.46Lakhs) & Outgo - Nil Lakh (PY 1691.75)

4. Depreciation: Company has changed its depreciation policy for Computers and software during the year from 100% to 16.21%. This has resulted in excess profit of Rs. 26,32,56,893, if 100% would have charged over 16.21%.

5. Related party disclosures:

(i) As per Accounting Standard 17, issued by the Institute Of Chartered Accountants Of India the disclosures of Related Parties and transactions during the period as deemed in the Accounting Standard are given below:

(A) Subsidiary Companies: Nil

(B) Key Managerial Personnel

6. Quantitative Details

The main activity of the Company is IT Enabled Services and related software services. The production and sale of such services cannot be expressed in any generic unit. Hence, It is not possible to give the quantitative details of sales and certain information as required under paragraphs 3, 4C and 4d of part II of Schedule VI to the Companies Act, 1956.

7. Balance of sundry creditors, sundry debtors, loans and advances are subject to confirmation.

8. As per the information available with the company there are no outstanding dues to small scale undertakings as at 31.03.2011. (PY Nil)

9. There is no person employed by the company who was in receipt of the remuneration which in aggregate was not less than Rs 24 Lakhs, if employed throughout the year or Rs. 2 Lakhs per month if employed for part of the year.

10. Segment Reporting

Since company business cannot be specifically identified with any of the reportable segments as these are used interchangeably amongst segments, therefore segment wise disclosure on could not be furnished.

11. Figures have been rounded off to nearest rupee.

12. Previous year figures have been regrouped / rearranged wherever considered necessary to correspond with current year figures.

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Mar 31, 2009

1. Capital and other commitments: Estimated amount of contracts on capital account remaining to be executed and not provided for Rs Nil Lakhs (as on 31.03.2008 Rs 4.76Lacs).

2. Contingent Liability – Rs 15 Lakhs (PY 15 Lakhs) against due diligence fees for M/s Pragathi Capfin pvt limited.

3. Earning & Expenditure in Foreign currency (on receipt basis) 546.25 Lakhs (PY- Rs. 9 Lakhs) & Outgo – NIL (PY 3.5 Lakhs)

4. Related party disclosures:

(i) As per Accounting Standard 18, issued by the Institute Of Chartered Accountants Of India the disclosures of Related Parties and transactions during the period as deemed in the Accounting Standard are given below:

(A) Subsidiary Companies: Nil

(B) Key Managerial Personnel

Name Company Particulars

Mr. G D Reddy- M/s GDR Media - Purchase of Fixed Director Limited assets software Rs.12,810,000

- Software Development Expenses – Rs. 32,244,440

5. Quantitative Details

The main activity of the Company is IT Enabled Services and related software services. The production and sale of such services cannot be expressed in any generic unit. Hence, It is not possible to give the quantitative details of sales and certain information as required under paragraphs 3, 4C and 4d of part II of Schedule VI to the Companies Act, 1956.

6. Balance of sundry creditors, sundry debtors, loans and advances are subject to confirmation.

7. As per the information available with the company there are no outstanding dues to small scale undertakings as at 31.03.2009. (PY Nil)

8. There are no person employed by the company who was in receipt of the remuneration which in aggregate was not less than Rs 24 Lakhs, if employed through out the year or Rs. 2 Lakhs per month if employed for part of the year.

9. Segment Reporting

Since company business can not be specifically identified with any of the reportable segments as these are used interchangeably amongst segments, therefore segment wise disclosure on could not be furnished.

10. Figures have been rounded off to nearest rupee.

11. Previous year figures have been regrouped / rearranged wherever considered necessary to correspond with current year figures.

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Mar 31, 2003

1. Contingent liabilities not provided on account of - Nil.

2. Depreciation of Fixed Assets :

The Fixed Assets are depreciated on the straight line method at the rates and the manner specified in schedule XIV to the Companies Act, 1956.

3. Foreign Exchange Earnings - 0.42 lakhs

Outgo - Nil.

4. Quantitative Details: The Company is engaged in the business of development of computer software and services. The production and sale of such software is not capable of being expressed in any generic unit. Hence, it is not possible to give quantitative details of such sale and the information required under paragraphs 3,4C, and 4D of part II of the companies Act, 1956.

5. In the absence of confirmation from debtors, creditors, Loans & Advances, the balances has been taken in the balance sheet are as per ledger. The advances made by the old management are doubtful. However, no provision has been made for the doubtful advances since insufficient of the profits.

6. Deferred Tax : The Company has adopted Accounting Standard 22 "Accounting for Taxes on Income". Accordingly

i) The net deferred tax liability amounting to Rs. 2,84,264/- pertaining to the period prior to lst April, 2002 has been charged to profit & Loss account in accordance with transitional provisions of AS-22 "Accounting for taxes on Income" since there is no general reserve available. ii) The company has provided for deferred tax during the year. This change in policy has resulted reversal of deferred tax liability of Rs. 10,538/- for the year and the loss after tax is lower by a like amount.

Major Components of deferred tax arising on account of timing differences are:

As at 31-03-2003 Rs. Deferred tax liability in respect of fixed assets (2,73,726)

Less: Deferred tax assets --

Net Deferred Tax (Liability)/Asset (2,73,726)

7. Disclosure of related parties/ related party transactions:

i) Key Management Personnel:

Mr. V. Damodar Naidu - Managing Director. ii) Transaction with related parties: Remuneration paid to V. Damodar Naidu, Managing Director - Rs. 1,50,000.

8. Preliminary & Pre-operative expenses have not been written off since insufficient of profits.

9. Previous year figures have been regrouped wherever considered necessary.

10. Figures have been rounded off to nearest rupee.

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Mar 31, 2002

1. Contingent Liabilities not provided on account of- NIL.

2. Depreciation has been provided on straight line method as per the rates and manner provided in the Schedule XIV of the Companies Act, 1956.

3. Foreign Exchange Earnings & outgo: NIL

4. Quantitative Details: The Company is engaged in the business of development of Computer Software and services. The production and sale of such software is not capable of being expressed in any generic unit. Hence it is not possible to give the quantitative details of such sale and the information required under paragraphs 3. 4C and 4D of Part II of the Companies Act, 1956.

5. In the absence of confirmation from debtors, creditors. Loans & advances, the balances has been taken in the balance sheet are as per ledger. The advances made by the old management are doubtful. However no provision has been made for the doubtful advances since insufficient of the profits.

6. Preliminary and preoperative expenses have not been written off since insufficient of the profits.

7. Figures are not comparable since present period is nine months while previous period is 15 months.

8. Paise have been rounded off to nearest rupee.