Blue Star Infotech

1.  Estimated amount of contracts remaining to be executed on capital
 account and not provided for (net of advances) is (Rs.OOO) 312
 {Previous year (Rs.OOO) 270).
 
 2.  Contingent liability not provided for in respect of:
 
 (a) Income-tax demands against which the Company is in appeal:
 
 i) With Income-tax Appellate Tribunal - 41,835
 
 ii) Commissioner of Income-tax (Appeals) 15,256 2,000
 
 Total_15,256_43,835
 
 Appeals on the same grounds for earlier years have been allowed by
 Commissioner of Income-tax (Appeals) in Companys favour.
 
 (b) Notice(s) demanding differential stamp duty of (Rs. 000) 4,699 and
 penalty of (Rs. 000) 3,398 was received during the year 2007-08,
 pursuant to disallowance of stamp duty concession availed by the
 Company in the year 2005. As per the Information Technology (IT) Policy
 issued by the Government of Maharashtra in the year 2003,75% stamp duty
 concession was granted on purchase of property for establishing a new
 unit related to Information Technology in recognized private IT Parks.
 Accordingly, the Company has been legally advised that it is entitled
 to this duty concession. Consequently, the Company has filed writ
 petitions before the Honourable High Court, Bombay. Pursuant to interim
 stay orders of the Honourable High Court, Bombay, the Company has
 deposited a sum of (Rs. 000) 4,699 and provided bank guarantees for a
 sum of (Rs. 000) 3,020 to the Honourable High Court, Bombay, subject
 to further orders and outcome of appeal proceedings.
 
 The Company is of the view that it would get a favourable verdict and
 no demand would be eventually sustained in any of the above matters.
 Accordingly, no provision is made in the books in respect of these
 contingent liabilities.
 
 3.  Guarantees given on behalf of the Company by banks (Rs.OOO) 10,563
 (Previous Year (Rs.OOO) 5,494) and by others (Rs.OOO) 81,500
 (Previous Year (Rs.OOO) 81,500).
 
 4.  The Honourable High Court, Bombay approved a scheme of Amalgamation
 between AshokSunil& Company Private Limited (Ashok Sunil) with Blue
 Star Infotech Limited (BSIL) by its order dated May 2, 2008. The
 Scheme became effective from July 7,2008, the date on which the
 certified copies of the order of the Honourable High Court, Bombay
 sanctioning the Scheme was filed with the Registrar of Companies,
 Mumbai, Maharashtra.
 
 Consequent to the scheme becoming effective, 717,918 fully paid-up
 equity shares (face value of Rs. 10 each) of the Company previously
 held by Ashok Sunil were extinguished. A similar number of shares were
 issued and allotted to the shareholders of Ashok Sunil by the Company,
 on the scheme becoming effective. Post amalgamation, the share capital
 of BSIL remains unchanged. Further, there is no change in the Promoter
 and Public shareholding of the Company. In accordance with the Court
 order, the excess of net asset value of Ashok Sunil transferred to the
 Company over face value of shares issued by BSIL shall be credited to
 General Reserve Account of BSIL. Consequently, the free reserves of the
 Company increased by (Rs. 000) 1,125. All the costs arising out of or
 incurred in carrying out and implementing the Scheme and matters
 incidental thereto, are borne by the Promoters.
 
 5.  (a) Blue Star Infotech (UK) Ltd., the 100 % subsidiary of the
 Company has earned profits during the year ended March 31,2009 and also
 has a positive net worth, as at the year-end.  (b) Blue Star Infotech
 America Inc., the 100% subsidiary of the Company has earned profits
 during the year ended March 31,2009 and also has a positive net worth,
 as at the year-end.
 
 Notes:
 
 a) The Compensation Committee at its meeting held on October 25, 2005
 pursuant to ESOP Scheme 2003 decided to grant 382,000 equity shares to
 senior employees of the Company at the closing market price of Rs. 117
 as at October 31,2005 on the National Stock Exchange with 10,000 equity
 shares vesting on October 31,2006 and rest of the equity shares vesting
 on October 31,2008.The offer price was revised to Rs. 72 per share (the
 closing market price on June 19, 2006 on the National Stock Exchange)
 for 323,000 equity shares vide approval of the members at the Annual
 General Meeting held on August 29,2006.
 
 b) There is one employee who has been granted options equal to or
 exceeding 1 % of the Issued Capital.
 
 c) The diluted Earnings Per Share and Earnings Per Share are the same,
 as the shares covered under vested options are already issued and
 allotted and are held by theTrust.
 
 d) In the event of any further rights or bonus issue of equity shares
 after vesting but prior to exercise of the options, the Company/ Trust
 shall consider the grant of an appropriate number of additional
 options, at such price as may be determined by the Compensation
 Committee.
 
 6.  Loans and Advances include amount due from a director - (Rs.OOO)
 Nil {Previous Year - (Rs.OOO) Nil}, Maximum balance outstanding from a
 director during the year- (Rs.000) 750 {Previous Year- (Rs.OOO) Nil}
 
 7.  Micro,Small And Medium Enterprises
 
 There are no Micro, Small and Medium Enterprises, to whom the Company
 owes dues, which are outstanding for more than 45 days as at March 31,
 2009. This information as required to be disclosed under the Micro,
 Small and Medium Enterprises Development Act, 2006 has been determined
 to the extent such parties have been identified on the basis of
 information available with the Company and has been relied upon by the
 statutory auditors of the Company.
 
 8.  Derivative Instruments:
 
 The Company has entered into the following derivative instruments:
 
 (a) Forward Exchange Contracts and Foreign Exchange Options Contracts
 (being derivative instruments), which are not intended for trading or
 speculative purposes, but for hedging purposes, to establish the amount
 of reporting currency required or available at the settlement date of
 certain payables and receivables.
 
 There are outstanding Forward Exchange Contracts and Foreign Exchange
 Options Contracts entered into by the Company as at March 31,2009 of US
 Dollar $ 19,900,000 (Previous year US Dollar ,500,000) and GBP £
 50,000, Cross Currency- US Dollar (Previous year GBP £ Nil)
 
 9. Operating Lease
 
 (a) The Company has taken office/residential premises and computers
 under cancellable operating lease agreements that are renewable at the
 option of both the lessor and lessee. An amount of (Rs.OOO) 28,515
 {Previous year (Rs.OOO) 24,489} is recognised as lease expenses in the
 Profit and Loss Account for the year ended March 31,2009.
 
 The future guaranteed lease payments under non cancellable portion of
 cancellable leases are:
 
 i) less than oneyear - (Rs.OOO) Nil {Previous year (Rs.OOO) 16,674}
 
 ii) later than one year but not later than 5 years - (Rs.OOO) Nil
 {Previous year (Rs000) 29,335}
 
 (b) The Company has leased out office premises and furniture under
 non-cancellable operating lease agreements that are renewable at the
 option of both the lessor and lessee. An amount of (Rs.OOO) 13,042
 {Previous year (Rs000) 18,927} is recognised as lease income in the
 Profit and Loss Account for the year ended March 31,2009.
 
 The future guaranteed lease payments under non cancellable leases are:
 
 i) less than one year-(Rs.OOO) Nil {Previousyear (Rs.OOO) 13,113}
 
 ii) later than one year but not later than 5 years-(Rs.OOO) Nil
 {Previous year (Rs.OOO) Nil}
 
 10.  The Ministry of Corporate Affairs, Government of India vide its
 Order No. 47/147/2009-CL-lll dated March 16,2009 issued under section
 212(8) of the Companies Act, 1956 has exempted the Company from
 attaching the Balance Sheet and Profit and Loss Account of its
 Subsidiaries under section 212(1) of the Companies Act, 1956.
 
 11.  The previous years figures have been regrouped/rearranged
 wherever considered necessary.