1. Pursuant to share holders approval in the Extra-Ordinary General
 Meeting held on 24.02.2000, in accordance with the company's revival
 plan contemplating new technologies and products namely Telecom racks,
 switch mode power systems, switching products, allied value added
 Telecom products, the company had with a view to enlarging the product
 line and achieving operational synergy has placed Earnest Money Deposit
 with M/s. Enclotek Ready Panels Limited Rs.350 lakhs, M/s. Harman
 Innovative Technologies (P) Ltd., Rs. 80 lakhs , M/s.Sonsie
 Technologies Ltd., Rs. 33.50 lakhs and M/s.Towler Enterprises Solutions
 (P) Ltd., Rs. 24 lakhs to acquire the business and facilities of these
 companies pending completion of statutory and legal formalities.
 Further an amount of Rs. 316.58 lakhs paid as trade advance against
 supply of products, use of infrastructural support and for availing
 services to Enclotek Ready Panels Limited.
 
 2. The company has recognized interest payable on the loan from various
 financial institutions at simple interest on the outstanding amount on
 account of the proposal for one time settlement of the principle and
 interest. The interest not provided in the Profit and Loss Account is
 Rs. 30.93 lakhs on this account.
 
 3. Short term fluctuations in the value of the investments are in the
 temporary nature which are not considered.
 
 4. The company has capitalized PMRTS base station (Under Plant &
 Machinery) on 01-10-2000 after satisfactory trial run. Accordingly the
 provision for depreciation in the books is made.
 
 5. The working capital facility with State Bank of India has been
 recalled with the matter being referred to Debt Recovery Tribunal.
 Owing to non payment of term loan dues. M/s. Industrial Development
 Bank of India has referred the matter with Debt Recovery Tribunal and
 filed winding up petition with Honourable Karnataka High Court .The
 Company has initiated steps to resolve the issue with Bankers &
 Industrial Development Bank of India. Till date an amount of Rs. 99.60
 lakhs has been paid to State Bank of India.
 
 6. Pursuant to the approval of members of the company in EGM held on
 24.02.2000, the company has issued 1.60 crores equity shares of Rs.10
 each for cash at a premium of Rs. 20 per share aggregating Rs. 48
 crores on preferential basis. The company has received Rs. 5 per equity
 share and with a premium of Re. 1 per equity share aggregating Rs. 9.60
 crores on application and allotment out of which only 75,000 equity
 shares have been fully paid as on 31-10-2000.
 
 The amount received against the preferential issue aggregate to Rs.
 9.78 crores. The monies have been utilised towards working capital
 including margin for bank guarantees, earnest money deposit and trade
 advance.
 
 7. Contingent Liabilities not provided for:
 
                                                      2000        1999
                                                       Rs.         Rs.
 
 i. Guarantees given by Banks on behalf 
 of the Company for which the Company 
 has given Counter Guarantees.                   94,14,091   70,34,744
 
 ii. Customs authorities have issued a 
 notice and raised a demand which is 
 pending in appeal before the authorities, 
 not acknowledged as debt by the Company.         7,14,984    7,14,984
 
 8. The Sundry debtors, sundry creditors, other debit and credit
 balances are subject to confirmations and reconciliation.
 
 9.  Current year figures are for 13 months as against previous year
 figures for 18 months and hence same are not comparable.
 
 10. Figures have been rounded off to the nearest rupee
 
 11. Figures have been re-grouped/re-cast wherever necessary to confirm
 to current year's classifications.