I.  Nature of Operations
 
 Blue Star Limited (The Company) is into the business of central
 airconditioning and commercial refrigeration.  The Company is also into
 distribution and maintenance of imported professional electronics and
 industrial systems.
 
 
 2.  Contingent Liabilities:
 
                                                  (Rs. in lakhs)
 
                                             2010-11        2009-10   
 
 i) Claims against the Company not 
 acknowledged as debts                        66.44         66.44
 
 ii) Sales Tax matters                     5,279.88      5,205.32
 
 iii) Excise Duty matters                     80.30         80.30
 
 iv) Service Tax matters                     483.43        241.21
 
 v) Income Tax matters                     1,684.52      1,726.42
 
 vi) Corporate Guarantee given on behalf of Subsidiary, Associates and
 others                                    8,141.43      3,569.91
 
 Future cash outflows in respect of above matters are determinable only
 on receipt of judgments / decisions pending at various forums /
 authorities.
 
 3.  Estimated amount of Contracts remaining to be executed on Capital
 account and not provided for Rs. 1,381.21 lakhs (Previous year: Rs.
 411.70 lakhs).
 
 4.  During the year, the Company has invested a sum of Rs. 9,765 lakhs
 in the share capital of its wholly owned subsidiary Blue Star
 Electro-Mechanical Ltd (BSEML), for acquiring 16,50,000 equity shares
 of Rs. 10/- each and assigned to BSEML its rights and obligations
 under the Business Purchase Agreement entered into with M/s. D.S.Gupta
 Constructions Pvt Limited (DSGCPL) for acquisition of their plumbing
 and fire fighting business. BSEML has completed the acquisition of the
 plumbing and fire fighting business of DSGCPL on 1st September, 2010.
 
 5.  Exceptional Item represents profit of Rs. 42.93 lakhs on sale of
 15,350 shares in Ravistar Private Limited as part of Share Purchase
 Agreement. The corresponding previous year figure of Rs. 1,396.49 lakhs
 represents profit on sale of 117,600 shares in Rolastar Private Limited
 and 61,440 shares in Ravistar India Private Limited.
 
 6.  In the previous year a sum of Rs. 304.13 lakhs was adjusted from
 the General Reserve in accordance with the Scheme of Arrangement
 approved by the shareholders and the Honble High Court at Bombay in
 respect of the electrical contracting business acquired from Naseer
 Electricals Private Limited.
 
 7.  The Company had given an unsecured loan to its associate company
 Blue Star Design and Engineering Limited (BSDEL).  Considering possible
 non-recovery, as a matter of prudence, a provision of Rs. 85.58
 lakhs(Previous year Rs. 235 lakhs) has been made in respect of the
 amounts receivable from BSDEL.
 
 8.  Cost of Sales & Services and Legal & Professional fees are net of
 Rs. 1,128.48 lakhs (Previous year: Rs. 1,202.26 lakhs) and Rs. 81.33
 lakhs (Previous year: Nil) respectively, on account of reversal of
 provision no longer required.
 
 9. a. Gratuity and other post-employment defined benefit plans:
 
 The Company makes annual contribution to Blue Star Employees Gratuity
 Fund, which is a funded defined benefit plan for qualifying
 employees.The scheme provides for payment of gratuity to employees on
 separation / retirement based on 15 days last drawn salary for each
 completed years of service after continuous service for five years.
 
 The Company provides certain additional employment benefits to
 employees such as leave encashment, additional gratuity and sick leave.
 These benefits are unfunded.
 
 10. Segment Information:
 
 A. Primary Segment Reporting (by Business Segment)
 
 The Companys business segments are organised around product lines as
 under:
 
 a.  Electro Mechanical Projects and Packaged Airconditioning Systems
 includes central airconditioning projects, Electrical Contracting
 business and Packaged airconditioning businesses including
 manufacturing and after sales service.
 
 b.  Cooling Products includes cooling appliances, cold storage
 products, including manufacturing and after sales service.
 
 c.  Professional Electronics and Industrial Systems includes trading
 and services for testing machines, medical, analytical, test &
 measuring, data communications, industrial products and systems.
 
 11. Disclosure for Related Party and Interest in Joint Ventures a
 Related Party Disclosure
 
 Names of Related parties
 
 Name of the Related parties where control exist irrespective of whether
 transactions have occurred or not.
 
 Subsidiary :
 
 Blue Star Electro-Mechanical Limited
 
 Names of other related parties with whom transactions have taken place
 during the year
 
 Associates:
 
 Blue Star Infotech Limited
 
 Ravistar India Private Limited (upto 19.11.2009)
 
 Joint Ventures:
 
 Blue Star Qatar- WLL
 
 Blue Star M & E Engineering (Sdn) Bhd
 
 Blue Star Design and Engineering Limited
 
 Key Management Personnel:
 
 Mr Ashok M Advani
 
 Mr Suneel M Advani
 
 Mr Satish Jamdar
 
 Mr Vir Advani (w.e.f 1.7.2010)
 
 MrTGouri Sankara Babu (upto 31.3.2010)
 
 Relatives of Key Management Personnel:
 
 Ms Nargis Advani
 
 Mr Vir Advani (upto 30.6.2010)
 
 12. Leases:
 
 The Company has entered into operating lease agreements for its office
 premises, storage locations and residential premises for its
 employees.There are no exceptional / restrictive covenants in the lease
 agreements. Lease rental expense debited to Profit and Loss Account is
 Rs. 2,373.10 lakhs (Previous Year - Rs. 1,711.86 lakhs)
 
 13. Previous Year Comparatives
 
 Previous years figures have been regrouped where necessary to conform
 to this years classification.