1.  Description of Business
 
 The Company is engaged in the business of providing software,
 application, development, maintenance, re-engineering, consultancy,
 business process outsourcing services and software testing.
 
 2.  Contingent Liabilities
 
                                            (Rupees in Millions)
 
 Particulars                              As at         As at
                                       31-12-2010      31-12-2009
 
 A Claims against the Company not 
 acknowledged as Debts                   99.67           49.95
 
 B Income tax disputed in appeal and 
 pending decision, Company is hopeful 
 of getting                              28.27           30.62
 a favourable decision
 
 3.  Estimated amount of contracts remaining to be executed on capital
 account not provided for (Net of Advances) Rs. 198.94 million (Previous
 year Rs. 154.87million).
 
 4.  Income Taxes
 
 a) Current income tax expense comprises of taxes on income from
 operations in India and foreign jurisdictions. In respect of certain
 entities in the group, where the income tax year is different from the
 accounting year, provision for current tax is made on the basis of
 income for the respective accounting year, which will be adjusted
 considering the total assessable income for the tax year. Tax expense
 relating to overseas operation is determined in accordance with the tax
 laws applicable in countries where such operations are domiciled.
 
 b) Considering the expected future profitability and taxable positions
 in the subsequent years, the Company has recognized the MAT Credit
 entitlement as an asset by crediting the Profit and Loss Account for
 an amount aggregating Rs. 84.71 million (Previous Year Rs.155.30
 million) and disclosed under ‘Loans and advances.
 
 5. The Company takes on lease offices space, accommodation and vehicles
 for its employees under various operating leases.The lease rentals
 towards non cancellable agreement recognised in the Profit and Loss
 Account for the year are Rs. 126.42 million (Previous year Rs. 238.13
 million). Non cancellable sublease rentals recognised in the profit and
 loss account on account of subleasing of the leased premises is Rs
 42.77 million (Previous year Rs 40.89 million).The future minimum lease
 payments and payment profile of the said leases are as follows:
 
 6.  Share Based Compensation (ESOP)
 
 a) 16,538 (18,538) warrants under Employee Stock Option Scheme - 1999
 (ESOP 1999) of Rs. 0.06 each is the balance outstanding as at December
 31, 2010 and 2009 respectively. Each block of 3 warrants, granted at
 Rs. 0.18 entitles the holder to get one equity share of Rs. 2/- each at
 a price of Rs. 9/- per share within a period often years commencing
 from February 1, 2001(exercise period) in accordance with the said
 Scheme. The particulars of warrants granted and lapsed under the Scheme
 are tabulated below under (e).
 
 b) 425,559 (1,103,924) Options is the balance outstanding as at
 December 3 1,2010 and 2009 respectively under Hexaware Technologies
 Limited - Employee Stock Option (ESOP - 2002) (the Plan) at an
 exercise price being the market price on the date of grant of Options
 or average closing price on the primary stock exchanges, whichever is
 higher or such price that may be determined by the Remuneration and
 Compensation Committee (Committee). Each Option entitles the holder
 to exercise the right to apply for and seek allotment of one equity
 share of Rs. II- each.The Options shall vest in four equal instalments
 or as determined at the discretion of the Committee. The particulars of
 options granted and lapsed under the Scheme are tabulated below under
 (e).
 
 d) In 2008, the shareholders of the Company approved the ESOP Scheme
 2008 (ESOP - 2008) under which such number of equity shares and/ or
 other instruments or securities could be granted not exceeding two
 percent of the issued equity shares of the Company as on the date of
 such grant.
 
 7.  Related Parties:
 
 Names of related parties and description of relationship:
 
 Key Management Personnel
 
 Mr. Atul K. Nishar - Chairman
 
 Mr. P. R. Chandrasekar -Vice Chairman and Global Chief Executive
 Officer
 
 Dr. (Mrs.) Alka A Nishar - Director
 
 Mr R V. Ramanan - Executive Director and President Global Delivery
 (Manager w.e.f. 1st January 2010 and appointed as Whole time Director
 w.e.f. 28th October 2010 )
 
 Mr. Sunil Surya - Whole Time Director (Hexaware Technologies UK Ltd)
 upto 7th September 2010
 
 Mr Ramanan Seshadri - Whole Time Director (Hexaware Technologies UK
 Ltd) we.f.1st July 2010
 
 Mr Yogendra Shah -WholeTime Director (Hexaware Technologies Asia Pacific
 Pte Ltd)
 
 Mr. R U Srinivas - President and Executive Director (Caliber Point
 Business Solutions Ltd)
 
 Others (entities in which key management personnel have control and/or
 significant influence)
 
 Hexaware Technologies Employee Stock Option Trust
 
 Ms. Priyanka Atul Nishar - Relative of key management personnel
 
 II.  Employee benefit plans:
 
 (i) Defined contribution plans viz Provident Fund, Superannuation Fund
 and other similar funds.
 
 a) In respect of holding company and its subsidiary Company in India:
 
 Eligible employees receive benefits from a Provident Fund Trust which
 is a defined contribution plan. Both the employees and the Company make
 monthly contributions to the Provident Fund Plan equal to a specified
 percentage of the covered employees salary. The holding Company pays a
 part of the contributions to Hexaware Technologies Limited Employees
 Provided Fund Trust (the ‘Trust). The remaining portion by the holding
 Company and entire contribution by its subsidiary Companies is
 contributed to the Government administered Employees Pension Fund.  The
 interest rate payable by the Trust to the beneficiaries every year is
 being notified by the government. The Company has an obligation to make
 good the short fall, if any, between the return from the investments of
 the trust and the notified interest rate.
 
 The Guidance on Implementing AS 15, Employee benefits (revised 2005)
 issued by Accounting Standards Board (ASB) states that benefit plans
 involving employer established provident funds, which require interest
 shortfalls to be recompensed are to be considered as defined benefit
 plans. Pending the issuance of the guidance note from the Actuarial
 Society of India, the Companys actuary has expressed an inability to
 reliably measure provident fund liabilities. Accordingly, the Company
 is unable to exhibit the related information.
 
 Certain employees of the holding Company and its subsidiary Company in
 India are entitled to benefits under superannuation, a defined
 contribution plan. The Company makes quarterly voluntary contributions
 under the superannuation plan to LIC based on a specified percentage of
 each covered employees salary and recognised such contributions as an
 expense when incurred and have no further obligation to the plan beyond
 their contributions
 
 The amounts recognised as expense towards contributions to provident
 fund , other funds and superannuation fund Rs.126.81 million (Previous
 Year Rs 104.38 million) and Rs 5.35 million (Previous year Rs. 6.24
 million) respectively during the year ended December 31, 2010.
 
 b) The Company contributed Rs. 247.77 million (Previous year Rs 235.86
 million) towards various other defined contributions plans of
 subsidiaries located outside India during year ended December 31, 2010
 as per laws of the respective country.
 
 ii) Defined benefit plans:
 
 In respect of holding Company and its subsidiaries in India:
 
 Gratuity Plan: The Company makes annual contribution to the Employees
 Group Gratuity Assurance Scheme, administered by the Life Insurance
 Corporation of India (LIC), a funded defined benefit plan for
 qualifying employees.  The scheme provides for lump sum payment to
 vested employees at retirement, death while in employment or on
 termination of employment based on completed year of service or part
 thereof in excess of six months. Vesting occurs on completion of five
 years of service.
 
 8.  Derivative Instruments:
 
 a) The Company has following outstanding derivatives instruments:
 
 (i) Forward exchange contracts to Sell US Dollar 129.98 Million, Sell
 Euro 15.84 Million and Sell JPY 262 Million (Previous Year Sell US
 Dollar 137.11 Million, Sell Euro 16.935 Million and Sell JPY 366.80
 Million) are outstanding as of December 31,2010. Fair value (net gain)
 of the derivative instruments identified as cash flow hedges is Rs.
 212.53 million (previous year net loss of Rs. 451.07 million) as at
 December 31, 2010.
 
 9.  Exceptional item represents
 
 a) Profit on sale of surplus assets Rs 636.94 million
 
 b) The Company has entered into large IT service contract over a period
 of five years, this contract includes absorbing certain identified
 employees of the customer, along with related employee obligations. The
 Company has accounted obligations of employee amounting to Rs 412.86
 million based on crystallized restructuring plan.
 
 10.  Figures for the previous year have been regrouped / rearranged
 wherever necessary to correspond with the figures of current year and
 are disclosed in brackets. Amounts and other disclosures for the
 preceding year are included as an integral part of the current years
 financial statements and are to be read in relation to the amounts and
 other disclosures relating to the current year.