Mphasis

1.  The Companys software development centres in India are 100%
 Export Oriented (EOU) / 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 134,217,540 as at 31
 October 2008 (31 March 2008: Rs 156,748,305) have been furnished to the
 Customs authorities in this regard.
 
 2.  Contingent liabilities and commitments
 
 (a) Claims against the Company not acknowledged as debts amounting to
 Rs 194,532,433 (31 March 2008: Rs 669,616,564);
 
 (b) Estimated amount of contracts remaining to be executed on capital
 account (net of advances) and not provided for as at 31 October 2008:
 Rs 831,778,309 (31 March 2008: Rs 621,637,810);
 
 (c) Guarantees outstanding including those furnished to Customs
 Authorities as at 31 October 2008: Rs 154,217,540 (31 March 2008: Rs
 156,748,305);
 
 (d) Forward contracts outstanding as at 31 October 2008 are as below:
 
 Currency                        Amount    Amount in INR
 
 USD                           222,650,000 11,011,155,750
 
 GBP                             1,677,037    134,079,104
 
 EUR                             1,602,777    100,958,912
 
 SGD                             7,143,405    238,357,566
 
 3. OPERATING LEASES
 
 The Company is obligated under non-cancellable lease for 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 321,065,073 for the
 period from 1 April 2008 to 31 October 2008 and Rs 343,151,295 for the
 year ended 31 March 2008.
 
 4. RELATED PARTY TRANSACTIONS
 
 (a) Entities where control exists:
 
 - Hewlett Packard Company, USA (ultimate holding company)
 
 - Hewlett PackardEagle 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)
 and EDS World Corporation (Far East), the subsidiaries of Electronic
 Data Systems LLC, USA (formerly Electronic Data Systems Corporation,
 USA) hold 39.73% and 21.11% of the equity capital of the Company
 respectively.
 
 The related parties where control exists also include subsidiaries as
 referred in Note 2, BFL Employees Equity Reward Trust and Kshema
 Employees Welfare Trust.
 
 5.  The Company has short term working capital facility of USD
 5,000,000 or equivalent from a bank. This facility is usable
 interchangeably by the Company and its subsidiaries in India. The
 facility has not been utilised as at 31 October 2008.
 
 6.  These financial statements have been prepared for the seven month
 period ended 31 October 2008 due to change in the accounting year-end
 from 31 March to 31 October. The new accounting year shall be 1
 November to 31 October which is aligned to the accounting year of HP,
 which is the ultimate holding company (refer note 2). The comparatives
 presented are for the year ended 31 March 2008 and hence, not
 comparable to the current seven month period ended 31 October 2008.
 Previous periods figures have been regrouped/ reclassified, wherever
 necessary, to conform to the current period presentation.