Company's Philosophy On Code Of Governance

Board Of Directors

Name	Category	Category
Suneel M Advani	Promoter-Executive Director	Chairman & Managing Director
Ashok M Advani	Promoter-Non Executive Director	Vice Chairman
Sanjay N Vaswani *	Promoter-Non Executive Director	Director
Suresh N Talwar	Independent Director	Director
Dr. Prakash G Hebalkar	Independent Director	Director
Naresh K Malhotra	Independent Director	Director

*Mr. Sanjay N Vaswani is a resident of USA.

Details of Directors' attendance and other particulars are given below:
Four Board meetings were held during the financial year 2010-11.

Director	Number of Board Meetings attended	Last AGM Attendance (Yes/No)	Number of Directorships on the Board of other Public Companies	Number of Committee positions in all Public Companies
				Chairman	Member
Suneel M Advani	4	Yes	3	-	2
Ashok M Advani	4	Yes	2	1	2
Sanjay N Vaswani	1	No	-	-	-
Suresh N Talwar	4	Yes	13	2	5
Dr. Prakash G Hebalkar	4	Yes	1	-	3
Naresh K Malhotra	3	Yes	3	3	2

• Leave of Absence was granted to the Directors who could not attend meetings.  
• Alternate Directorships, Directorships in private companies, foreign companies, companies under section 25 of the Companies Act, 1956 and Memberships in governing councils, chambers and other bodies are excluded. Membershipsin public companies, listed and unlisted, alone have been considered.
• None of the Directors holds directorships in more than 15 companies.
• None of the Directors is a member of more than 10 committees, or is Chairman of more than five committees across all companies in which he is acting as a Director. For the purpose of reckoning the aforesaid limit, Chairmanships/ Memberships of the Audit Committee and the Shareholders’ Grievances Committee alone are considered.

Audit Committee

• Review of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements reflect a true and fair position and that sufficient and credible information is disclosed.
• Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services.
• Reviewing the financial statements and draft audit report, including quarterly / half yearly financial information.
• Reviewing with management, the annual financial statements before submission to the Board.
• Reviewing the Company's financial and risk management policies.
• Reviewing with the management, external and internal auditors, the adequacy of internal control systems.
• Reviewing statement of significant related party transactions, management letter / letters of internal control weakness and appointment, removal and terms of remuneration of the Internal Auditor.

Composition

The constitution, powers, duties and responsibilities of the Audit Committee are in line with Clause 49 of the Listing Agreements with the stock exchanges in India.

Naresh K Malhotra	Chairman
Suresh N Talwar	Member
Dr. Prakash G Hebalkar	Member

Secretary

V Sudarshan

Company Secretary

Meetings and attendance during the year

During the financial year, Audit Committee Meetings were held on May 13, 2010, July 30, 2010, October 27, 2010 and January 25, 2011.The necessary quorum was present at the meetings.

Members	Meetings Held	Meetings Attended
Naresh K Malhotra	4	3
Suresh N Talwar	4	4
Dr. Prakash G Hebalkar	4	4

Remuneration Committee

Dr. Prakash G Hebalkar	Chairman
Suresh N Talwar	Member
Naresh K Malhotra	Member

Secretary

V Sudarshan

Company Secretary

Meetings and Attendance during the year

During the financial year, the Remuneration Committee met on January 25, 2011. The necessary quorum was present for the meeting.

Members	Meetings Held	Meetings Attended
Dr. Prakash G Hebalkar	1	1
Suresh N Talwar	1	1
Naresh K Malhotra	1	1

Remuneration To Directors

Details of remuneration paid/payable to Directors for financial year 2010-11 are as follows:

(Rs. In 000)

Name	Salary & Perquisites	Commission	Sitting fees	Total
Suneel M Advani * (CMD)	4440	--	--	4440
Ashok M Advani	Nil	262	80	360
Sanjay N Vaswani	Nil	181	20-	120
Suresh N Talwar	Nil	314	160	560
Dr. Prakash G Hebalkar	Nil	314	16	340
Naresh K Malhotra	Nil	274	160	560

Name of the Director	Shareholding (No. of Shares)
Ashok M Advani	488,799
Suresh N Talwar	15,075
Sanjay N Vaswani	14,750
Naresh K Malhotra	250
Dr. Prakash G Hebalkar	Nil

Shareholders' Grievance Committee

The Committee facilitates effective redressal of investor complaints and oversees share transfers.

Composition

Ashok M Advani	Chairman
Suneel M Advani	Member
Dr. Prakash G Hebalkar	Member

Secretary

V Sudarshan

Company Secretary

Meetings and attendance during the year

Members	Meetings Held	Meetings Attended
Ashok M Advani	1	1
Suneel M Advani	1	1
Dr. Prakash G Hebalkar	1	1

Financial year ended 31 March
Nature of Complaints	2011		2010
	Received	Attended	Received	Attended
Non-receipt of Dividend	42	42	20	20
Issues with share certificates/ Demat account/ share transfers	16	16	14	14
Non-receipt of annual report	14	14	1	1
Total of the year	72	72	35	35

Quarter-wise Comparative Break-up of Investor Grievances

Financial year ended 31 March
Quarter ended	2010		2009
	Received	Attended	Received	Attended
June 30	21	21	10	10
September 30	25	25	8	8
December 31	14	14	6	6
March 31	12	12	11	11
Total of the year	72	72	35	35

General Body Meetings

Details of the last three Annual General Meetings (AGMs) and Extra-ordinary General Meeting (EGM) of the Company are given below:

Year	Date	Venue	Time
March 31, 2008	July 31, 2008 at 2:30 p.m..	Jai Hind College Hall, 23-24, Backbay Reclamation, 'A' Road, Churchgate, Mumbai 400 020.	None
March 31, 2009	July 30, 2009 at 2:30 p.m..	Jai Hind College Hall, 23-24, Backbay Reclamation, 'A' Road, Churchgate, Mumbai 400 020.	None
March 31, 2010	July 30, 2010 at 2:30 p.m.	Jai Hind College Hall, 23-24, Backbay Reclamation,  'A' Road, Churchgate, Mumbai 400 020.	Increase in commission to Non-Executive Directors upto 3% of Net Profit

Disclosures

A	In respect of related party transactions, the Company does not have any transactions which may have potential conflict with the interest of the Company at large.
B	No penalties/strictures were imposed on the Company by the stock exchanges or SEBI or any statutory authority in any matters related to the capital markets during the last three years.
C	The Company remains committed to the cause of maintaining fair dealing in all its transactions. In furtherance of this philosophy, the Company has constantly ensured that any immoral or unethical activity could be reported by any of its employees directly to the members of the senior management or the Audit Committee, with adequate safeguards against victimising the whistle-blower. The Company affirms that no employee has been denied direct access to the Audit Committee.
D	Your Company recognises the role of prompt reporting of crimes - technological or otherwise - for moving towards transparent governance. The intent to commit a crime should be reported promptly no matter how remote or minimal the damage. Towards this end, the Company declares that it has adequate technological fraud detection safeguards imbibed within its system, which are a combination of process controls and technological controls. The Company also declares that there have not been any known instances of technological frauds detected in the Company.
E	Your Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement, as applicable. Of the non-mandatory requirements of Clause 49, the Company has adopted the requirement of a Remuneration Committee (constituted on October 30, 2008) for reviewing and recommending Executive Directors’ remuneration. Your Company is committed towards complying with Clause 49 as a whole and will take suitable measures as and when possible.
F	Risks are an imminent part of business and the industry. Recognising this fact, your Company has in place a Risk Management Policy to deal with the uncertainties of the times, where risks have been categorised based on the following criteria: Nature of Risk: External, Operational and Financial  Severity of Risk: Low, Medium and High Probability of Risk: Low, Medium and High The Policy describes each risk in detail and analyses the risk mitigation strategy to counter every risk. The Policy is reviewed at regular intervals by the Risk Management Committee comprising of senior management personnel of the Company. The reviewed draft is in turn reviewed by the Audit Committee.
G	Your Company also has several other policies in place, the scope and content of which is reviewed by the Board and Audit Committee at regular intervals: Policy on insurance of assets Policy on inter-company transactions Policy on electronic communication and asset usage Policy on prevention of sexual harassment Policy on verification of fixed assets Every policy has a defined implementation mechanism.
H	Business is done with a measure of social accountability and the concept of giving back in fair measure to society. Your Company has always been conscious of the developments in its environment and is taking small but sure steps towards fulfilling its Corporate Social Responsibility (CSR) initiatives such as cutting down wasteful expenditure, promoting green IT initiatives, an environmentally friendly working environment and encouraging innovation in all areas of operation.
I	Your Company has consistently maintained a regime of unqualified financial statements.

Means Of Communication

Shareholder's Information

Annual General Meeting

Date:	July 22, 2010
Time:	2.30 p.m.
Venue:	Jai Hind College Hall, 23-24, Backbay Reclamation,  Sitaram Deora Marg ('A' Road), Churchgate, Mumbai - 400 020.

Financial Calendar for FY 2009 – 10

Declaration of results for the quarter ending on	Tentative date
June 30, 2010	Last week of July 2010
September 30, 2010	Last week of October 2010
December 31, 2010	Last week of January 2011
March 31, 2011	Third week of May 2011
15th Annual General Meeting	Second fortnight of August 2011

Dates of Book Closure: July 12, 2010 to July 22, 2010 (both days inclusive)

Recommended Dividend: Rs. 3/- per share of face value Rs. 10/- (Previous year Rs. 5/- per share of face value Rs. 10/-).

Dividend Payment Date: If declared, dividend shall be paid / credited on or after August 05, 2010.

Listing on Stock Exchanges

• The Bombay Stock Exchange Limited (BSE) - Scrip Code: 532346
• The National Stock Exchange of India Limited (NSE) - Stock Code: BLUESTINFO
• ISIN No. for NSDL/CDSL: INE 504B01011

Dividend Payment History

Financial Year	Dividend (Rs.) per share of face value Rs. 10	Dividend as a % of the face value of each equity share
2000-2001	3.00	30%
2001-2002	6.00	60%
2002-2003	7.50	75%
2003-2004	9.00	90%
2004-2005	5.00	50%
2005-2006	2.00	20%
2006-2007*	4.00	40%
2007-2008	2.50	25%
2008-2009	5.00	50%
2009-2010	5.00	50%
2010-2011	3.00	30%

* Includes interim and Final Dividend of Rs. 2 each share

Unclaimed Dividend

Shareholders who have not yet encashed their dividend warrants or in cases where the accounts could not be credited have been individually informed about the money due to them and the procedure to claim the same from the Company.
Unclaimed / Unpaid dividend till the financial year 2002-03 has been transferred to the Investors Education and Protection Fund (IEPF) on August 26, 2010 on the completion of the mandatory 7 (seven) year period. Shareholders are advised that no claims will lie against the Company or the IEPF in respect of the unclaimed amounts so transferred.
The Unclaimed / Unpaid Dividend in respect of the year 2003-04 is due for transfer to the IEPF on August 23, 2011, after which no claims shall lie against the Company for the same. Shareholders who have not yet encashed their dividend warrants are requested to forward their claims to the Company or Share Transfer Agents.

Nomination Facility Shareholders who wish to avail of the facility of direct credit of dividend amounts to their bank accounts, are requested to submit the ECS mandate form available on the Company's website www.bsil.com as per the instructions mentioned on it to the Company or its Share Transfer Agent, Link Intime India Pvt. Ltd.

MARKET PRICE DATA

Market Price Data (Rs. per share)

Annual High-Low Price History	BSE		NSE
Fiscal Year	High (Rs.)	Low (Rs.)	High (Rs.)	Low (Rs.)
2005-06	188.80	98.60	189.40	98.10
2006-07	144.50	59.00	145.00	57.00
2007-08	128.20	54.00	136.10	50.60
2008-09	86.60	32.60	88.60	31.95
2009-10	155.80	47.10	156.40	47.15
2010-11	139.90	90.15	139.00	92.60

Market Price Data (Rs. per share)

Month	BSE		NSE
	High (Rs.)	Low (Rs.)	High (Rs.)	Low (Rs.)
April 2010	127.00	112.10	127.50	112.55
May 2010	124.00	101.05	122.00	100.00
June 2010	111.00	101.15	111.00	101.70
July 2010	126.55	107.00	126.00	107.40
August 2010	128.90	112.15	128.40	109.00
September 2010	127.60	111.50	122.40	111.40
October 2010	133.00	112.35	127.00	112.20
November 2010	116.90	97.45	117.50	97.00
December 2010	111.00	98.00	110.90	97.15
January 2011	139.90	103.55	139.00	104.00
February 2011	121.40	99.10	122.50	99.75
March 2011	109.40	90.15	111.00	92.60

The performance comparison of Blue Star Infotech Limited's closing share prices in each month with BSE Sensex is presented as follows:

Performance Comparison With BSE Sensex

The performance comparison of Blue Star Infotech Limited's closing share prices at the end of each month with NSE Nifty is presented as follows:

Performance comparison with NSE Nifty

Share Transfer System

The transfer of shares in physical form is processed and approved on a weekly basis and the certificates are returned to the shareholders within 30 days from the date of receipt (subject to the documents being valid and complete in all respects.)

Distribution of Shareholding as at March 31, 2011

No. of Equity Shares held	No. of Shareholders	% of Shareholders	Total no. of Shares held	% of Shares held
1 - 250	11,926	82.42	851,643	8.52
251 - 500	1,374	9.52	524,062	5.24
501 - 1000	620	4.28	478,783	4.79
1001 - 2000	257	1.78	378,953	3.79
2001 - 3000	90	0.62	231,287	2.31
3001 - 4000	37	0.25	174,302	1.74
4001 - 5000	32	0.21	153,203	1.53
5001 - 10000	63	0.44	467,964	4.68
10001 and above	69	0.48	6,777,335	67.77
Total	14,470	100.00	10,000,000	100.00

Categories of Shareholders as at March 31, 2011

Category	No. of Shares	%
Indian Public	3,498,873	34.99
Blue Star Limited	3,098,025	30.98
Directors, their Relatives and other Promoter Group Companies	2,455,020	24.55
Insurance Companies (GIC and its Subsidiaries)	355,897	3.56
BSIL - Key Employees Stock Options Trust	74,563	0.75
Other Corporates	421,380	4.21
Foreign Holdings	96,242	0.96
Total	10,000,000	100.00

Shareholding Distribution

Blue Star Infotech Shareholders

As at March 31, 2011, the Company had 14,470 registered shareholders 34.99% of the Company’s shares were held by
the public. The promoters, including Blue Star Limited, hold 55.53% of shares; the ESOP Trust holds 0.75% and 8.73 % is held by insurance companies, other corporate and foreign holdings.

Dematerialisation Of Shares And Liquidity

96.51% of the Company’s equity shares were dematerialised as at March 31, 2011. 34.99% of the equity shares are held by the public and the shares are traded daily on the BSE and NSE.

Office Locations

Registered Office:

The Great Oasis,
8th Floor, Plot No. D -13
MIDC, Marol, Andheri (East)
Mumbai 400 093
Development Centres:

• The Great Oasis,

• SDF III/V/VI SEEPZ,
  Andheri (East), Mumbai-400 096.
• #7, 18th Main Road, 7th Block, Koramangala,
  Bangalore-560 095.

Shareholder Inquiries

Questions concerning folio, share certificates, dividend, address changes, consolidation of certificates and related matters should be addressed to Blue Star Infotech Limited, at its Registered Office or its share transfer agents at the below mentioned addresses:

Registered Office	Registrar and Transfer Agents	Share Transfer Documents will  also be accepted at: Link Intime India Pvt. Ltd.
The Great Oasis, 3rd and 8th Floor, Plot No. D -13 MIDC, Marol, Andheri (East) Mumbai, Pin - 400 093 www.bsil.com E-mail : Share Department:shares@bsil.com Company Secretary:cosec@bsil.com	Link Intime India Pvt. Ltd.  (formerly Intime Spectrum Registry Ltd.) Unit: Blue Star Infotech Limited C-13, Pannalal Silk Mills Compound,  LBS Marg, Bhandup (West), Mumbai - 400 078. Tel : 91-22-2596 3838 Fax : 91- 22-2594 6969	203, Davar House,  197/199 D. N. Road,  Mumbai - 400 001. Tel : 91-22-2269 4127

Code of Conduct Declaration

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT

To
The Members of Blue Star Infotech Limited
Pursuant to Clause 49 I (D) of the Listing Agreement entered into with the Stock Exchanges, I hereby declare that the Company has obtained affirmative compliance with the Code of Conduct from all the Board members and Senior Management personnel of the Company..

Suneel M Advani
Chairman and Managing Director
Mumbai, May 19, 2011

AUDITORS’ CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To
The Members of Blue Star Infotech Limited 

We have examined the compliance of the conditions of Corporate Governance by Blue Star Infotech Limited for the year ended March 31, 2011, as stipulated in clause 49 of the Listing Agreements of the said Company with stock exchanges in India.

The compliance of the conditions of Corporate Governance is the responsibility of the Company’s management. Our examination was carried out in accordance with Guidance Note on Certification of Corporate Governance (As stipulated in Clause 49 of the Listing Agreement), issued by the Institute of Chartered Accountants of India and was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of an opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreements.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Walker, Chandiok and Co
Chartered Accountants
Firm Registration No. 001076N

Khushroo B Panthaky
Partner
Membership No. F-42423
Mumbai, May 19, 2011

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