Company Overview:
 
 Kernex Microsystems (India) Limited is engaged in the Manufacture and
 sale of Safety Systems and Software Services for Railways.
 
 1.  All Amounts in the financial statements are presented in Rupees.
 
 The Previous Year''s figures have been regrouped/reclassified, wherever
 necessary to confirm to the current year''s presentation.
 
 Figures are rounded off to the nearest rupee.
 
 2.  Sundry Debtors, Creditors and Capital Advances are Subject to
 Reconcilation and Confirmation..
 
 3.  Contingent Liabilities in respect of :- a) Claims against the
 Company not acknowledged as debt Rs. 8 Lakhs in respect of Income Tax
 for the Assessment Year 1998-99 for which the companies appeal is
 Pending before the High Court of Andhra Pradesh and Rs.4.13 Lakhs in
 respect of Sales Tax for the year 2002-03 for which the company appeal
 is pending before STAT
 
 b) Bank guarantees outstanding Rs.1720.75 as on 31st March, 2011 (2010:
 Rs.1209.79 Lakhs)
 
 c) Estimated amount of contracts remaining to be executed on capital
 account and not accounted are Rs.4.60 crores (Previous Year:Rs.5.60
 crores)
 
 4.  Term Loans and Cash Credits:
 
 a) Cash credit facility from SBH is primarily secured by hypothecation
 of current assets of the company and collaterally secured by first
 charge on fixed assets of the company and equitable mortgage of land &
 buildings situated at Madhapur.
 
 b) Vehicle Loans are secured by Hypothecation of Vehicles.
 
 c) Export Packing Credit facility is primarily secured by Hypothecation
 of Raw materials, stock in process, Finished goods in transit,stores
 spares, ranking paripassu with other banks under multiple banking
 agreement and collaterally secured by all Fixed Assets Land & Buildings
 under construction.
 
 5.  The Company is in the process of obtaining information with respect
 to parties covered, if any, under the Micro, Small and Medium
 Enterprises Development Act, 2006 (or the Act).
 
 The Company would account for significant interest obligations in this
 regard, If any, subsequently.
 
 Accordingly required disclosures in this regard have not been given in
 the current year.
 
 6.  Loans and Advances :
 
 Loans and advances include Rs. 2,31,98,656/- (Previous year
 Rs.2,07,06,495/-) including interest on working capital loan to
 Avant-Garde Infosystems Inc, a 100% subsidiary in USA.
 
 7.  Earning Per Share :
 
 Earning / Diluted Earning Per Share of the Company has been calculated
 as per the Accounting Standard 20  Earning Per Share  Issued by ICAI.