1.  The Companys software development centres in India are 100%
 Export Oriented (EOU) / Special Economic Zone (SEZ) under Special
 Economic Zone Ordinance and Software Technology Park (STP) Units
 under the Software Technology Park guidelines issued by the Government
 of India. They are exempted from customs and central excise duties and
 levies on imported and indigenous capital goods and stores and spares.
 The Company has executed legal undertakings to pay customs duty,
 central excise duty, levies and liquidated damages, if any, in respect
 of imported and indigenous capital goods and stores and spares consumed
 duty free, in the event that certain terms and conditions are not
 fulfilled. Bank guarantees aggregating to Rs. 108,855,940 as at 31
 October 2010 (31 October 2009: Rs. 111,582,340) have been furnished to
 the Customs authorities in this regard.
 
 2.  Until 31 October 2009, the Company used the spot discounted method
 wherein the changes in the spot rate of derivative financial
 instruments designated as cash flow hedges were recognized directly in
 Hedging Reserve and reclassified into the profit and loss account upon
 the occurrence of the hedged transaction. Changes in fair value
 relating to the premia/ discount on the derivative financial
 instruments were recognized in the profit and loss account.
 
 For the new cash flow hedges taken from 01 November 2009, the Company
 adopted the forward discounted method in accordance with its revised
 hedge accounting methodology, wherein the forward rate is used to
 record changes in fair value of derivative financial instruments and
 such changes are recognised directly in Hedging Reserve and
 reclassified into the profit and loss account upon the occurrence of
 the hedged transaction. As a result of this change, net profit for the
 year ended 31 October 2010 is higher by Rs. 163,422,267.
 
 3.  Contingent liabilities and commitments
 
 (a) Claims against the Company not acknowledged as debts amount to Rs.
 830,200,152 (31 October 2009: Rs. 822,338,829);
 
 (b) Estimated amount of contracts remaining to be executed on capital
 account (net of advances) and not provided for as at 31 October 2010: Rs.
 31,902,663 (31 October 2009: Rs. 240,249,348);
 
 (c) Guarantees outstanding including those furnished to Customs
 Authorities as at 31 October 2010: Rs. 306,335,852 (31 October 2009: Rs.
 222,022,340);
 
 (d) Forward contracts outstanding as at 31 October 2010 are as below:
 
 Currency                     Amount        Amount in INR
 
 USD                       536,075,000      23,815,131,875
 
 GBP                        37,100,000       2,623,712,000
 
 AUD                        42,994,167       1,854,983,343
 
 EUR                         4,100,807         251,861,317
 
 SGD                        17,039,555         582,284,193
 
 Forward contracts outstanding as at 31 October 2009 are as below:
 
 Currency                     Amount           Amount in INR
 
 USD                       637,900,000         31,377,326,500
 
 GBP                        54,654,683          4,405,112,949
 
 SGD                         6,889,857            234,842,330
 
 The foreign exchange exposure of the Company has been hedged by forward
 contracts disclosed above.
 
 Unamortised premium as at 31 October 2010 on forward exchange contracts
 to hedge the foreign currency risk of the underlying outstanding at the
 balance sheet date is Rs. 67,916,086 (31 October 2009: Rs. 32,347,958). Net
 foreign currency exposure of the Company that is not hedged by a
 derivative instrument or otherwise as at 31 October 2010: Rs.
 3,745,390,029 (31 October 2009: Rs. 3,678,793,348).
 
 (e) The Company has issued performance guarantees on behalf of its
 subsidiaries for any future liabilities which may arise out of
 contracts.
 
 4.  Operating Leases
 
 The Company is obligated under non-cancellable leases for computer
 equipments, office and residential space that are renewable on a
 periodic basis at the option of both the lessor and lessee. The total
 rental expenses under non-cancellable operating leases amounted to Rs.
 790,768,173 for the year ended 31 October 2010. (31 October 2009: Rs.
 887,569,700).
 
 The Company leases office facilities and residential facilities under
 cancellable operating lease agreements. The Company intends to renew
 such leases in the normal course of its business. Total rental expense
 under cancellable operating leases was Rs. 329,510,696 for the year ended
 31 October 2010. (31 October 2009: Rs. 392,281,266).
 
 Office premises are obtained on operating lease for terms ranging from
 1-7 years and are renewable at the option of the Company/lessor. There
 are no sub leases.
 
 5.  Related Party Transactions
 
 (a) Entities where control exists:
 
 - Hewlett-Packard Company, USA (ultimate holding company)
 
 - Hewlett Packard Eagle Corporation, USA (100% subsidiary of Hewlett
 Packard Company, USA)
 
 - Electronic Data Systems LLC, USA (formerly Electronic Data Systems
 Corporation, USA), (100% subsidiary of Hewlett Packard Eagle
 Corporation, USA)*
 
 * EDS Asia Pacific Holdings, Mauritius (formerly TH Holding,
 Mauritius), EDS World Corporation (Far East) and EDS World Corporation
 (Netherlands), the subsidiaries of Electronic Data Systems LLC, USA
 (formerly Electronic Data Systems Corporation, USA) hold 60.55% (31
 October 2009: 60.65%) of the equity capital of the Company.
 
 The related parties where control exists also include subsidiaries as
 referred in Note 2, BFL Employees Equity Reward Trust, Kshema Employees
 Welfare Trust and MphasiS Employee Benefit Trust.
 
 (b) Key management personnel:
 
 The key management personnel of the Company are as mentioned below:
 Executive key management personnel represented on the Board of the
 Company
 
 - Balu Ganesh Ayyar Chief Executive Officer - Appointed w.e.f. 29
 January 2009
 
 - Jeya Kumar Chief Executive Officer - Resigned w.e.f. 28 January 2009
 Non-executive / independent directors on the Board of the Company
 
 - Friedrich Froeschl Director - Appointed as non executive Chairman of
 the Board w.e.f. 15 July 2010
 
 - Andreas W Mattes Director - Appointed as non executive Chairman of
 the Board w.e.f. 06 February 2009 and Resigned w.e.f 15 July 2010
 
 - Michael Coomer Non-executive Chairman - Resigned w.e.f. 6 February
 2009
 
 - Francesco Serafini Additional Director - Appointed w.e.f. 15 July
 2010
 
 - Balu Doraisamy Additional Director-Appointed w.e.f. 15 July 2010
 
 - Nawshir H Mirza Director
 
 - Davinder Singh Brar Director
 
 - Gerard Brossard Additional Director-Appointed w.e.f. 15 July 2010
 
 - Juergen Reiners Additional Director - Appointed w.e.f. 15 July 2010
 
 - Prakash Jothee Director - Appointed w.e.f. 6 February 2009
 
 - Jim Bridges Director - Vacated office in terms of Section 283(l)(g)
 w.e.f. 24 November 2009
 
 - Joseph Eazor Director - Resigned w.e.f. 6 February 2009
 
 - Anthony Glasby Director - Resigned w.e.f. 30 March 2009
 
 - KM Suresh Director - Appointed on 24 November 2009 and Resigned w.e.f
 15 July 2010
 
 - Vinita Bali Director - Resigned w.e.f 15 July 2010
 
 - Jose de la Torre Director - Resigned w.e.f 15 July 2010
 
 - Craig Wilson Director - Resigned w.e.f 15 July 2010
 
 (c) Direct or indirect subsidiaries of ultimate holding company with
 which transactions have taken place:
 
 - EDS Poland Sp.Z.O.O
 
 - EDS (Operations) Pty Limited
 
 - EDS Itellium GmbH
 
 - Electronic Data Systems (EDS) International B.V.
 
 - EDS Information Services LLC
 
 - EDS Canada Inc.
 
 - EDS (Australia) Pty Limited
 
 - EDS Gulf States, WLL
 
 - EDS Sweden AB
 
 - EDS (Thailand) Co. Limited
 
 - Hewlett-Packard Inter-Americas United States (California)
 
 - EDS International Limited
 
 - Hewlett Packard Ireland Limited
 
 - RelQ Software Private Limited
 
 - Electronic Data Systems Limited, UK
 
 - Electronic Data Systems Italia SPA
 
 - Hewlett Packard Europe Finance Limited, Israel Branch
 
 - UAB Hewlett Packard
 
 - Hewlett Packard Financial Services (India) Private Limited
 
 - EDS MSC (M) Sdn Bhd
 
 - EDS Japan LLC
 
 - Hewlett-Packard Software, LLC
 
 - Hewlett-Packard Asia Pacific Pte Limited
 
 - BPO Hewlett Packard Finance Operations
 
 - Hewlett Packard (M) Sdn.Bhd.
 
 - Hewlett Packard New Zealand
 
 - Hewlett Packard GmbH
 
 - EDS Omega S.L
 
 - EDS (Queensland) Pty Limited
 
 - HP Asia Pacific (HK) Limited
 
 - Hewlett Packard (Schweiz) GmbH
 
 - Hewlett Packard (Canada) Co.
 
 - EDS Brazil Elimination
 
 - Hewlett Packard Australia Pty Limited
 
 - Hewlett Packard International Trade B.V. Saudi Arabia Branch
 
 - EDS World Services Corp
 
 - EDS Operations Services GmbH
 
 - Hewlett Packard Norge AS
 
 - EDS (New Zealand) Limited
 
 - Electronic Data System Belgium N.V
 
 - EDS Information Business GmbH
 
 - EDS Business Services Pty Limited
 
 - EDS (China) Co. Limited
 
 - HP Services (Singapore) Pte Limited
 
 - Electronic Data Systems Espana S.A.
 
 - EDS (Schweiz) AG
 
 - Electronic Data Systems (Hong Kong) Limited
 
 - EDS Application Services GmbH
 
 - EDS Malaysia (Shell EPO AP)
 
 - Electronic Data Systems Hungary Limited
 
 - Electronic Data Systems France SAS
 
 - EDS Columbia
 
 - EDS de Mexico S deRLdeCV
 
 - EDS Denmark A/S
 
 - Hewlett Packard Development Company, L.P.
 
 - Hewlett Packard India Sales Private Limited
 
 - HP India Software Operation Private Limited
 
 - EDS Africa (Pty) Limited
 
 - EDS Austria GmbH
 
 - Hewlett Packard Singapore (Sales) Pte Limited
 
 - Saber Software, Inc.
 
 - EDS Finland Oy
 
 - Hewlett Packard Limited (UK)
 
 - EDS Holding GmbH
 
 - Electronic Data Systems(lreland) Limited
 
 - Hewlett Packard (Thailand) Limited
 
 - ExcellerateHROJV
 
 - HP Enterprise Services BPA Pty Limited
 
 - Hewlett Packard Company
 
 - Electronic Data Systems Taiwan Corp
 
 6.  Segment reporting
 
 The Companys operations predominantly relate to providing application
 development and maintenance (Application) services, infrastructure
 outsourcing (ITO) services and business process outsourcing (BPO)
 services delivered to clients operating globally. Secondary segmental
 reporting is done on the basis of the geographical location of clients.
 
 Application services cover consulting, application development, testing
 and application maintenance services. ITO covers a range of
 infrastructure management services and service/ technical help desks.
 BPO services provide voice, transaction based services and knowledge
 based processes.
 
 The accounting policies consistently used in the preparation of the
 financial statements are also applied to record revenue and expenditure
 in individual segments.
 
 Assets, liabilities, revenues and direct expenses in relation to
 segments are categorised based on items that are individually
 identifiable to that segment, while other items, wherever allocable,
 are apportioned to the segments on an appropriate basis. Certain items
 are not specifically allocable to individual segments as the underlying
 services are used interchangeably. The Company therefore believes that
 it is not practical to provide segment disclosures relating to such
 items, and accordingly such items are separately disclosed as
 unallocated.
 
 Client relationships are driven based on client domicile. The
 geographical segments include United States of America (USA), The India
 & Asia Pacific (APAC) and Europe, Middle East & Africa (EMEA).
 Secondary segment information for previous year has been re grouped
 based on geographical segments of current year.
 
 7.  Stock Based Compensation
 
 The Company uses the intrinsic value method of accounting for its
 employee stock options. The Company has therefore adopted the pro-forma
 disclosure provisions as required by the Guidance Note on Accounting
 for Employee Share- based Payments issued by the ICAI with effect from
 1 April 2005.
 
 8. The Company is engaged in the business of software development
 services, projects and professional services. Such services are not
 capable of being expressed in any generic unit and hence, it is not
 possible to give the quantitative details required under paragraphs 3,
 4C and 4D of Part II of Schedule VI to the Companies Act, 1956.
 
 9.  The figures of the previous year have been regrouped/
 reclassified, wherever necessary, to conform with the current year
 classification.