The Directors have pleasure in presenting the Seventeenth Annual Report
 and Audited Accounts of the Company, for the year ended 31st March
 1998.
 
 FINANCIAL RESULTS
 
                                                         (Rs. in crores)
                                           Year ended        Six month's
                                             31.03.98             period 
                                                         1.10.96-31.3.97
 
 Service and other Income                        0.72               0.84
 
 Gross Profit/(Loss) before depreciation, 
 Interest & Finance Charges                   (23.79)               0.50
 
 Depreciation                                    0.02                  -
  
 Interest and finance charges                   16.36               0.01
 
 Profit/(Loss) before tax                     (40.17)               0.49
 
 Provision for Income Tax                         NIL               0.03
 
 Profit/(Loss) after Tax                      (40.17)               0.46
 
 OPERATIONS
 
 The Company earned service and other income Rs. 0.72 crores during the
 year.
 
 Loss during the current year is on account of interest payments and
 exchange fluctuations on loans taken by the company for holding investments in Sterling Cellular Limited,
company's subsidiary.  The
 Company's subsidiary, being in the telecom infrastructure sector, is in
 the initial stages of operations and the cash flow is expected to become positive only after 4-5 years.
 
 Events subsequent of Balance Sheet date :
 
 Sterling Cellular Limited, company's subsidiary has allotted equity shares to the Company for the entire
amount of advance of Rs. 237.97
 crores paid by the company towards share application money.  The company continues to hold 51% share capital
in the subsidiary company. 
 
 SUBSIDIARY COMPANIES
 
 Sterling Cellular Limited, subsidiary of the company has established
 commercial operations at Delhi during the previous year and has been
 providing cellular mobile telephone services.  Aircel Digilink India
 Limited, subsidiary of Sterling Cellular Limited has established
 commercial operations at Haryana, Rajashtan and Uttar Pradesh (East)
 Circles.  Subsidiary companies have been able to increase subscriber
 base during the current year.
 
 As required under section 212 of the Companies Act, 1956, the audited
 statement of Accounts along with the report of the Board of Directors
 of subsidiary companies and the respective Auditors report thereon are
 annexed.
 
 FIXED DEPOSITS
 
 The total amount of deposits held as on 31st March 1998 was Rs. 0.92
 lakhs which include deposits amounting to Rs. 0.42 lakhs remaining
 unclaimed as on 31st March 1998.  Out of unclaimed deposit, Rs. 0.09
 lakhs have been refunded after 31st March 1998.
 
 DIVIDEND
 
 Since the company has not earned profits during the year, dividend
 could not be considered for the year.
 
 DIRECTORS
 
 In terms of Article 118 of the Articles of Association of the company,
 Shri. C. Sivasankaran and Shri. V. Srinivasan Directors of the Company
 retire by rotation and are eligible for reappointment.
 
 Shri. John Michael Lind was appointed as Additional Director who retires on the date of forthcoming Annual
General Meeting, being eligible offers himself for reappointment.  The Company has already received a notice
under Section 257 of the Companies Act, 1956.
 
 Shri Pramod Saxena resigned during the year.
 
 AUDITORS
 
 M/s Love Lock & Lewes, Chartered Accountants, Auditors of the Company
 hold office until the conclusion of the annual general meeting and are
 recommended for reappointment.  The company has received the requisite
 certificate form the Auditors that if appointed, their appointment will
 be within the prescribed limits under Section 224(1B) of the companies
 Act, 1956.
 
 There are no qualifications or adverse remarks contained in the Auditors report.
 
 PARTICULARS UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE
 REPORT OF THE BOARD OF DIRECTORS) RULES, 1988.
 
 i. Part A pertaining to Conservation of Energy is not applicable to the
 company since no manufacturing activity is carried on by the company.
 
 ii. Part B pertaining to the particulars about Technology absorption
 and Research & Development is not applicable to the Company since no
 import of technology is envisaged by the company.  Expenditure on
 Research and Development is Nil.
 
 iii. Part C pertaining to Foreign Exchange Earnings and outflows are
 furnished under Schedule 17 - Notes forming part of Accounts - Item 3.