a) Bank Guarantees given in respect of projects undertaken by the Company TRs. 330,039 (Previous Year TRs. 393,817)

b) Interest and Penal Charges on Bank Borrowings TRs. 102,840 (Previous year TRs. Nil)

c) Disputed Demands in respect of :

i. Income Tax Matters - TRs. 95,925 (Previous year TRs. 86,721)

ii. VAT/ Sales Tax Matters - TRs. 37,057 (Previous Year TRs. 37,057)

d) Claims against the Company not acknowledged as debts:

i. Other Matters (including interest charged by vendors) - TRs. 114,197 (Previous Year TRs. 114,197)

ii. Liquidated Damages / penalties (including amounts provisionally withheld by customers) - TRs. 448,736 (Previous Year TRs. 448,736)

2. a) There are several cases which have been filed by parties/vendors against the Company and some of its past and present officials under sections 138 and 143 of The Negotiable Instruments Act, 1881 on account of dishonor of PDCs issued to them. Further the parties have claimed interest and other legal charges for which provision has not been created as the same remains to be quantified.

b) The Madhya Pradesh State Electronic Development Corporation Ltd. (MPSEDC) had wrongfully invoked guarantee of TRs. 25,000 (Previous year TRs.

25,000) which was submitted towards Earnest Money pertaining to the Company's bid for an upcoming project on the plea that there had been a withdrawal by one of the consortium members. This withdrawal was considered as an alteration to the bid conditions as prescribed by MPSEDC. The Company had filed a case against MPSEDC in Madhya Pradesh High Court and obtained a stay, besides an order against such appropriation, directing the Madhya Pradesh govt. to keep the money in a separate account, till further orders. Pending finality in the matter, no provision has been made for this invocation and the amount paid is carried under advances (considered good).

c) In the case of a major contract with Telecommunications Consultants India Limited (TCIL), one of the vendors, to whom a corporate guarantee for TRs. 32,000 (Previous year TRs. 32,000) had been given, had obtained the stay order from the Delhi High Court, directing TCIL not to make any payment to the Company till such time the vendor's liability has been settled in full. The matter is pending.

> The Company follows the intrinsic value method of accounting as per Guidance Note issued by The Institute of Chartered Accountants of India on Employee Share-based Payments. As per the said method, the fair value of the share is worked out by an independent valuer on the date of grant. Accordingly, the difference between the fair value and the exercise price has been treated as Deferred Stock Compensation expenses to be amortized over the period of vesting.

> The estimated fair value (measured independently by a valuer) of each of the stock options granted viz.

Employee Stock Option Scheme -II and III is Rs. 150.70 and 111.95 respectively, per share on the date of grant. The model inputs were:

4. a) The Company had issued and allotted 160, 2.5% unsecured Foreign Currency Convertible Bonds (FCCB's) of the face value of US $ 100,000 each aggregating to US $ 16 Million. As per the terms of the issue the holder has an option to convert the FCCB's into equity shares at an initial conversion price of Rs. 130.00 per share with a fixed rate of exchange on conversion of Rs. 39.33 to US $ 1 from the issue date until October 14, 2012. The conversion price is subject to certain adjustments. Further under certain conditions the bondholder has the option for early redemption in whole but not in part unless previously converted, redeemed or purchased and cancelled, The Bonds are due for redemption on November 14, 2012. There is a dispute between the company and Bond Trustee (Bank of New York, Bony) regarding early redemption of Bonds for which, on the request of bondholders holding more than 25% of outstanding bonds, the Trustee has served the acceleration notice on the company.

c) During the year, the Company has transferred TRs. 634 to Bond Redemption Reserve as per Section 117c of the Companies Act, 1956 to the extent of available profit.

5. The Company had vide Agreement dated October 30, 2008 with Belgium Satellite Service Company (BSS) 100% subsidiary of the Company converted the amount of TRs. 5,88,256 kept in Share Application Money as Convertible long term loan carrying interest @ 9 % from October 01, 2008.

After conversion of part of said long term to the tune of TRs. 325,607 into equity shares in BSS leaving the balance of 5,230,381 Euro outstanding as Loan.

6. a) Loans from banks include TRs. 81,862 (Previous year TRs. Nil) for which bank statements and certificate of conformations are not available.

The Company has submitted restructuring proposals to the Bank and is negotiating with Banks for the restructuring of its dues and settlement thereof. The Company has received in-principle approval of restructuring proposal submitted to one of the Bankers which includes inter alia with other conditions, the waiver of all unpaid interest. The Company is hopeful of getting through with its restructuring proposals with other Bankers also. In view of above, provision for Interest and Penal Charges on loans from banks has not been made in the books of account. However, the Company has shown such interest amounting to TRs. 102,840 (Previous year TRs. Nil) as Contingent Liability.

b) Balance with banks includes TRs. 9,501 (Previous year TRs. 9,584) and TRs. 9,565 (Previous year TRs. 12,197) for which bank statements and certificate of confirmation respectively from the bankers remained to be received. Consequently the accounts could not be reconciled.

7. Inventories include slow moving / non- moving stores and spares having an aggregate value of TRs. 50,286 (Previous Year TRs. 50,286). No provision for the fall in value has been considered necessary by the management keeping in view the nature and type of items and the needs of the customer.

8. a) The Company was awarded a large order in respect of Convergent Billing Project of MTNL by Bharat Electronics Ltd. (BEL) in March 2006 comprising Supplies and Services which, inter - alia, included Installation and Commissioning, Facility Management, Print Bureau and AMC.

The Company had, during 2006-07, completed the entire Supply portion of the said order. However, there were certain delays in execution of the Order due to reasons beyond the control of the Company, primarily on account of delays in inspection of the goods at the OEM sites by the end customer as per the terms of the agreement, without which, the supplies could not have been shipped. In terms of the purchase order, in the event of any delay in the supply of material to MTNL, liquidated damages (LD) to the extent of 12% could be imposed by BEL on the Company, on the total supply value, if MTNL imposes LD on BEL.

As at the year end the Company has a balance of receivables from BEL amounting to TRs. 384,065 (Previous year TRs. 383,617) BEL has however not confirmed such balance. Out of the above balance, the Company has shown TRs. 266,758 (Previous year TRs. 266,758) under "Contingent Liability" on account of LD provisionally withheld by BEL.

During the year, the Company has continued and executed the work and recognized the revenue to the tune of TRs. 132,069 as per percentage completion method. As per the agreement with BEL, the dues will be collected only after achievement of certain milestones.

Considering the circumstances under which the supplies got delayed, the Company is confident of (a) obtaining a waiver of the said provisional liquidated damages from BEL and (b) certainty of recoverability of its dues. Consequently, the said dues along with other outstanding amounts are considered good and recoverable.

b) The Company is to receive sum of TRs. 47,146 (Previous year TRs. 48,673) from Alberio Telematics Pvt Ltd. (formerly known as Global IP Technologies Pvt Ltd) for supplies made to the tune of TRs. 26,827 and advances given to the tune of TRs. 20,319 in the earlier years which had become overdue. In response to the Company's claim, the party has in turn raised several issues pertaining to debits raised by them aggregating TRs. 18,319 on account of rent charges, service charges and others, which have not been responded to by the Company. The matter is under resolution and reconciliation for effecting necessary recoveries/rectification/adjustment. Effect on the accounts on due resolution / reconciliation / adjustment thereof can not be indicated at this stage.

c) Sundry Debtors (other than those mentioned in (a) & (b) above) of TRs. 1,926,132 (Previous year TRs. 1,936,721) are still outstanding. These amounts will be realized in due course of time as steps in this direction have already been taken. Accordingly no provision for non recovery of these amounts, if any, is considered necessary at this stage.

9. (a) Advances recoverable in cash or kind or for value to be received include TRs. 28,455 (Previous Year TRs. 25,557) pertaining to CENVAT (Service tax) recoverable not adjusted during the financial year 2010-11. Since the amount of service tax payable exceeds this credit available to the Company, management is confident of availing the same at the time of payment of Service Tax dues.

(b) Loans and Advances recoverable include TRs. 625,403 (Previous year TRs. 578,469) due from Subsidiary and Associate Companies. Besides the Company have investments in these companies aggregating to TRs. 724,312 (Previous Year TRs. 724,312). These subsidiaries (other than BSS) have significant accumulated losses and in some of the cases the companies are either not operating in the same segment or having negative net worth. The Company has, provided for TRs. 190,810 (Previous Year TRs. 190,810) towards likely erosion in the value of Investments. However, no such provision has been considered against the above receivables. In the management's opinion, the provision made is adequate keeping in view the long term relationship and their potential in the long run.

10. Impairment of Fixed Assets:

In accordance with the Accounting Standard (AS -28) on 'Impairment of Assets' notified by Companies (Accounting Standards) Rules, 2006, the Company has reassessed its fixed assets and is of the view that no impairment is considered to be necessary in view of its expected realisable value.

11. In compliance with Accounting Standard 22 - Accounting for Taxes on Income, the Company has recognized deferred tax assets. The breakup of deferred tax asset into major components as at March 31:

13. (a) Operating Leases

The Company has entered into cancelable lease transactions during the current financial year mainly for leasing of office premises. Terms of lease includes terms of renewal, increase in rents in future periods and terms of cancellation. The Operating lease payments recognized in the Profit and Loss account amounts to TRs. 3,541 (Previous Year TRs. 3,122).

(b) Finance Leases:

The Company has taken Vehicles under Finance Lease during the earlier years.

Reconciliation of Minimum Lease Payments and their Present Value as at Balance Sheet date in accordance with Accounting Standard 19 on Leases notified by Companies (Accounting Standard) Rules, 2006:

(c) The Company's primary business segment is reflected based on principal business activities carried on by the Company. The Company's primary business activity comprises Systems integration & Services, and Telecommunications business.

(d) Segment revenue, results, assets and liabilities include amounts identifiable to each segment and amounts allocated on a reasonable basis.

16. Information pursuant to Part II of Schedule VI of the Companies Act, 1956: Particulars in respect of goods manufactured:

17. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures regarding:

a) Amount due and outstanding to suppliers as at the end of accounting year;

b) Interest paid during the year;

c) Interest payable at the end of the accounting year; and

d) Interest accrued and unpaid at the end of the accounting year .

have not been given.

The Company is making efforts to get the confirmations from the suppliers as regards their status under the Act.

18. In respect of amounts as mentioned under Section 205C of the Companies Act, 1956, there were no dues required to be credited to the Investor Education and Protection Fund as on March 31, 2011.

19. Balances in parties' accounts either debit or credit are subject to confirmation. Besides, in some of the cases, balances in parties' accounts are stated to be under reconciliation. Effect on the accounts on due confirmation, reconciliations and adjustments thereof can not be indicated at this stage. Debit and Credit balances in regard to recoverable and payable has been taken as reflected in Books of Account. In the opinion of the Company Management, Loans and Advances and Current Assets if realized in ordinary course of business, have the value at which they are stated in the balance sheet.

* Net of Notice pay recovery TRs. 616. (Previous Year NIL.)

Note : Remuneration paid to the Whole time Director and Managing Director during the year exceeded the maximum permissible limit laid down by Schedule XIII of the Companies Act, 1956. Approval of the Central Government is yet to be obtained.

21. Employee Benefits

Consequent to the adoption of Accounting Standard on Employee Benefits (AS 15 Revised 2005) notified by Companies (Accounting Standards) Rules, 2006, the following disclosures have been made as required by the Standard:

(a) Leave Encashment/Compensated Absences

Leave encashment liability is on the basis of Defined Benefit Plan which is unfunded. A provision of TRs. 856 (TRs. 216) has been made in the accounts as on 31st March 2010 based on actuarial valuation.

22. Previous year's figures have been regrouped / rearranged, wherever necessary, to conform to current year's classification.