1.  a.  Amalgamation with Megasonic Telecoms Private
 
 Limited: - The Company got amalgamated with erstwhile Megasonic
 Telecoms Private Limited in the year 2003-04 and as per the scheme of
 amalgamation 4,935,000 equity shares were issued as consideration.
 
 b. Paid up capital includes 8,180 Equity shares of Ks.  10 each fully
 paid up allotted to the employees during the year on account of the
 ESOP Scheme.
 
 2.  The Capital Reserve of Rs. 73,25,779/- represents the excess of net
 fair value of assets over the purchase consideration in terms of scheme
 of amalgamation taken place during the year 2003-04, which was duly
 approved by the Hon''ble High Courts of Karnataka and Bombay.
 
 3.  Secured Loans:
 
 a.  Corporate Loan and Term Loan (I & II) from State Bank of India:
 Secured by first charge on the present and future assets of the Company
 
 b.  Term Loan III from State Bank of India:
 
 Secured by equitable mortgage of land and building where the factory
 building is located and by first charge on the fixed assets purchased
 out of the term loan.
 
 c.  Working Capital Facilities (Cash Credit Account from State Bank of
 India: Secured against the first charge on the entire and future
 current as sets,all stocks/debtors and other current assets of the
 company.
 
 d.  All the above loans are collaterally secured by pledge of 500,00
 shares of Kaweri Telecom Products Limited owned by promoters and also
 by pledge of 29,200 shares of Kaweri Technologies Inc. (Canada being
 the 100% stake held by the Kaweri Telecom Products Ltd. and by
 properties owned by Directors and their family members
 
 e.  The letter of credit facilities and bank guarantee facilities are
 secured against the first charge on the entire present and future
 current assets of the company.
 
 f.  The Car Loans are secured by hypothecation of the relevant
 vehicles.
 
 g.  All the secured loans excepting Car loans have been personally
 guaranteed by two directors.
 
 4.  Investments:
 
 a.  Pursuant to the Scheme of Amalgamation as referred to in Note I
 above, Eaicom India Private Limited (EIPL, erstwhile 100% subsidiary
 company of Megasonic Telecoms Private Limited has become a wholly owned
 subsidiary of the Company.
 
 b.  The Company incorporated a 100% subsidiary in the name of KAWERI
 TECHNOLOGIES INC at Canada during the financial year 2005-06 with an
 initial investment of 292 Thousand CAD Dollars.Additional investment of
 CAD 2,015,000/-was made during the year 2007-08 in the aforesaid
 subsidiary by partial conversion of the loan granted to the subsidiary.
 
 c.  The Company incorporated a 100% subsidiary in the name of KAWERI
 TELECOM PRODUCTS UK Limited at UK during the financial year 2009-10
 with no initial cost of investment.
 
 5. (a) Contingent Liabilities not provided for-
 
                                                       (In Rs.)
 
 Particulars                                        2011         2010
 
 i Estimated amount of Contracts remaining
 to be executed on Capital Account.                  NIL  4,48,50,000
 
 ii Claims against the Company not 
 acknowledged as a debt                      3,10,33,073  2,45,40,216
 
 iii On account of Excise Matters           48,80,49,175 29,89,60,660
 
 iv On account of Sales tax                    63,22,513    63,22,513
 
 v Guarantees issued by bankers on behalf      96,82,133  4,79,34,939
 
 vi Corporate guarantee given on behalf 
 of a subsidiary Company                    47,45,40,855 11,70,79,188
 
 (i) M/s. MahanagarTelephone Nigam Ltd and M/s Bharat Sanchar Nigam Ltd.
 had invoked bank guarantees totaling to Rs. 4,41,000 and Rs.7,55,081
 respectively against which the company has filed cases against such
 invoking of bank guarantees and is advised that the matter will be
 resolved in favour of the company in respect of the said amount and
 hence no provision is made in the books of account
 
 (ii) In the Matter of dispute with M/s Bharat Sanchar Nigam Limited
 (BSNL), the Honourable High Court of Karnataka at Bangalore have
 referred the matter to the arbitrator to be appointed by M/s
 BSNL,against invoking of Bankguarantee of a sum of Rs.22,70,000.
 
 6 (b) There is a claim against one of the Company''s properties located
 at Bangalore which is presently owned by the Company.
 
 7. Margin Money deposits with the bank amounting to Rs. 1,43,93,385(Rs.
 4,24,58,504) has been given as margin money for the guarantees issued
 By the bankers.
 
 8. (a) Information regarding Capacity, Stock, Production and Sale
 
 a) Licensed Capacity Not Applicable.
 
 b) Installed Capacity * Company has an installed capacity of 200000
 nos. of Microwave components.
 
 Since the company has manufactured components, systems during the year,
 quantification of capacity is not feasible.  (*As certified by the
 Management, relied upon as it is by the Auditors. Being Technical in
 Nature)
 
 (f) Details of Raw Material Consumed during the year:
 
 (As individual items of consumption of raw materials do not contribute
 more than 10% of total consumption details of consumption of other raw
 materials have not been furnished)
 
 9.  Expenditure incurred in Foreign Currency on foreign travel is
 Rs.7,73,645 (14,23,218)
 
 10. Segment Results:
 
 The company''s predominant risks and returns are from the segment of
 Wireless sub-systems represented by Antenna, Duplexer, RF Products
 and RF accessories, which constitute the major revenue of the company
 for the reporting period. Since this being a single business segment,
 the segment information as per Accounting Standard 17,Segment
 Reporting, is not disclosed.
 
 11. In the opinion of Board of Directors, all current assets, loans and
 advances, Investments have atleast the value as stated in the Balance
 Sheet, if realized in the ordinary course of business.
 
 12.  Pursuant to Accounting Standard AS-28- Impairment of assets issued
 by the Companies Accounting Standards Rules, 2006, the Company assessed
 its fixed assets for impairment as at 31 st March 2011 and concluded
 that there has been no significant impaired fixed asset that needs to
 be recognized in the books of account.
 
 13.The employees'' Gratuity Fund Scheme is a defined benefit Plan.The
 present value of the obligation is determined based on actuarial
 valuation using the Projected Unit Credit Method, which recognizes each
 period of service as giving rise to additional unit of employee benefit
 entitlement and measures each unit separately to build up the final
 obligation. The obligation for Leave encashment is recognized in the
 same manner as gratuity.
 
 The following table sets out the Gratuity Plan and compensated absences
 as required under AS 15. Reconciliation of opening and closing balances
 of the Present Value of the defined benefit obligation.
 
 14. Foreign currency exposure that are not hedged by derivative or
 forward contracts as on 31 st March 2011 amounts to 21,59,80,902(
 Rs.26,95,73,011)
 
 15. Confirmation of balances in respect of debtors and creditors has
 not been obtained in a few cases.
 
 16. Unclaimed Dividend:
 
 The unclaimed dividend of Rs. 10,49,755 represents those relating to
 the years 2004 to 2010 and the number of years of these unclaimed
 dividends has not exceeded 7 years.
 
 17. The Provision for income tax has been calculated taking into
 consideration investments in Capital expenditure made under Research
 and development eligible for a weighted deduction of 200% under section
 35(2AB) of the Income Tax Act 1961.
 
 18. The figures as on 31st March 2011 have been regrouped/reclassified,
 wherever necessary, to conform with the current period classification.