Notes to Accounts of Kavveri Defence & Wireless Technologies Ltd.

Mar 31, 2025

XII. Provisions, Contingent Liabilities and Contingent Assets
Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation.

Provisions are measured at the present value of management''s best estimate of the expenditure required
to settle the present obligation at the end of the reporting period. The discount rate used to determine the
present value is a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. The increase in the provision due to the passage of time is recognised as
interest expense and is recorded over the estimated time period until settlement of the obligation.
Provisions are reviewed and adjusted, when required, to reflect the current best estimate at the end of
each reporting period.

The Company recognizes decommissioning provisions in the period in which a legal or constructive
obligation arises. A corresponding decommissioning cost is added to the carrying amount of the
associated property, plant and equipment, and it is depreciated over the estimated useful life of the asset.
A provision for onerous contracts is recognized when the expected benefits to be derived by the company
from a contract are lower than the unavoidable cost of meeting its obligations under contract. The
provision is measured at the present value of the lower of expected cost of terminating the contract and
the expected net cost of continuing with the contract. Before a provision is established, the company
recognizes any impairment loss on the assets associated with that contract.

Liquidated Damages / Penalty as per the contracts / Additional Contract Claims / Counter Claims under
the contract entered into with Vendors and Contractors are recognized at the end of the contract or as
agreed upon.

Contingent Liabilities

Contingent liability is disclosed in case of a present obligation arising from past events, when it is not
probable that an outflow of resources will be required to settle the obligation;

A present obligation arising from past events, when no reliable estimate is possible;

A possible obligation arising from past events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the control of the company where the
probability of outflow of resources is not remote.

Contingent Assets

Contingent assets are not recognized but disclosed in the financial statements when as inflow of economic
benefits is probable.

XIII. Fair Value Measurements

Company uses the following hierarchy when determining fair values:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (prices) or indirectly (derived from prices); and,

Level 3 - Inputs for the asset or liability that are not based on observable market data.

The fair value of financial instruments traded in active markets is based on quoted market prices at the
reporting dates. A market is regarded as active if quoted prices are readily and regularly available from
an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an arm''s length basis. The fair value for
these instruments is determined using Level 1 inputs.

The fair value of financial instruments that are not traded in an active market (for example, over the
counter derivatives) is determined by using valuation techniques. These valuation techniques maximize
the use of observable market data where it is available and rely as little as possible on entity specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
fair valued using level 2 inputs.

If one or more of the significant inputs is not based on observable market data, the instrument is fair
valued using Level 3 inputs. Specific valuation techniques used to value financial instruments include:
Quoted market prices or dealer quotes for similar instruments;

The fair value of interest rate swaps is calculated as the present value of the estimated future cashflows
based on observable yield curves;

The fair value of forward foreign exchange contracts is determined using forward exchange rates at the
reporting dates, with the resulting value discounted back to present value;

Other techniques, such as discounted cash flow analysis, are used to determine fair value for the
remaining financial instruments

XIV. Revenue Recognition

Revenue is recognized and measured at the fair value of the consideration received or receivable, to the
extent that it is probable that the economic benefits will flow to the Company and the revenue can be
reliably measured.

The company collects GST, service tax, sales taxes and value added taxes (VAT) on behalf of the
government and, therefore, these are not economic benefits flowing to the company. Hence, they are
excluded from revenue. The following specific recognition criteria must also be met before revenue is
recognized:

Insurance Claims

Insurance claims are recognized on acceptance / receipt of the claim.

Interest

Revenue is recognized as the interest accrues, using the effective interest method. This is the method of
calculating the amortized cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Dividends

Dividends are recognised in profit or loss only when the right to receive payment is established.

XV. Foreign Currency Transactions

Transactions in foreign currencies are translated to the functional currency of the company, at exchange
rates in effect at the transaction date.

At each reporting date monetary assets and liabilities denominated in foreign currencies are translated at
the exchange rate in effect at the date of the statement of financial position.

The translation for other non-monetary assets is not updated from historical exchange rates unless they
are carried at fair value.

XVI. Minimum Alternative Tax (MAT)

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the
company will pay normal income tax during the specified period. In the year in which the MAT credit
becomes eligible to be recognized as an asset in accordance with the recommendations contained in
Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way
of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The company reviews
the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to
the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax
during the specified period.

XVII. Earnings per Share

Basic earnings per share are calculated by dividing:

The profits attributable to owners of the company

By the weighted average number of equity shares outstanding during the financial year, adjusted for
bonus elements in equity shares issued during the year and excluding treasury shares.

Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take
into account:

The after income tax effect of interest and other financing costs associated with dilutive potential equity
shares

The weighted average number of additional equity shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares.

XVIII. Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as
per the requirement of Schedule III of the Companies Act, 2013, unless otherwise stated.

31. AMALGAMATION:

Amalgamation with Mega sonic Telecoms Private Limited: - The Company got amalgamated with
erstwhile Mega sonic Telecoms Private Limited in the year 2003-04 and as per the scheme of
amalgamation 4,935,000 equity shares were issued as consideration.

32. CAPITAL RESERVES:

The Capital Reserve of Rs. 73.26 Lakhs 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.

38. Additional Regulatory information

i. The company does not own any immovable property. It has two acres under lease cum sale
agreement with KIADB .

ii. The Company has not revalued any of its Property, Plant and Equipment during the year.

iii. The Company has granted loans or advances in the nature of loans to promoters, directors,
KMPs and other related parties.

iv. There are no proceedings initiated or pending against the company for holding any Benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made
there under.

v. The Company has no borrowings from banks or financial institutions on the basis of security
of current assets and the quarterly returns or statements filed by the company with such
banks or financial institutions are in agreement with the books of account of the Company.

vi The Company is not declared as wilful defaulter by any bank or financial Institution or other
lenders.

vi. The Company did not have any transactions with Companies struck off under Section 248 of
Companies Act, 2013 or Section 560 of Companies Act, 1956 considering the information
available with the Company.

viii. The Company does not have any charges or satisfaction of charges which are yet to be
registered with the Registrar of Companies beyond the statutory period and

ix. The Company has complied with the number of layers prescribed under clause (87) of section
2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017, and there
are no companies beyond the specified layers.

39. i)Financial risk management objectives and policies

The Company''s principal financial liabilities comprise of trade and other payables. The main
purpose of these financial liabilities is to finance the Company''s operations. The Company''s
principal financial assets include cash and cash equivalents that derive directly from its
operations and FVTPL investments.

The Company is exposed to market risk and liquidity risk. The Company''s senior management
oversees management of these risks. The Company''s financial risk activities are governed by
appropriate policies and procedures so that financial risks are identified, measured and managed
in accordance with the Company''s policies and risk objectives. The Board of Directors reviews
and agrees policies for managing each of these risks, which are summarised below.

(ii) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. Market risk comprises of currency rate risk,
interest rate risk and other price risk. Financial instruments affected by market risk include
FVTPL financial instruments.

The sensitivity analysis in the following sections relate to the position as at 31 March 2025 and
31 March 2024.

(iii) Equity price risk

The Company''s listed equity instruments are susceptible to market price risk arising from
uncertainties about future values of the investment securities. The Company manages the equity
price risk through diversification. The Company''s Board of Directors reviews and approves all
equity investment decisions.

(iv) Liquidity Risk:

The Company''s objective is to maintain a balance between continuity of funding and flexibility.
The Company has sufficient working capital funds available to honour the debt maturing within
12 months.

43. The Company does not have any transactions which are not recorded in the books of accounts
that has been surrendered or disclosed as income in the tax assessments under the Income Tax
Act, 1961 during the year.

44. The Company has not traded or invested in Crypto currency or Virtual Currency during the
financial year.

45. There are no significant events that occurred after the balance sheet date.

46. The company has not advanced/loans/invested or received funds (either borrowed funds or
share premium or any other sources or kind of funds to any other persons or entities, including
foreign entities (Intermediaries) with the understanding (whether recorded in writing or
otherwise) that the Intermediary shall directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the company (Ultimate
Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries.

47. The company has also not received any fund from any person(s) or entity(ies), including foreign
entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that
the company shall (i) directly or indirectly lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii)
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

48. In the opinion of the management, the assets As shown in the financial Statements, have a value
on realization in the ordinary course of business of atleast equal to the amount at which they are
stated in the balance sheet.

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 Bank guarantee of a sum of Rs. 22.80 Lakhs.

(iii) Margin Money deposits with the bank amounting to Rs. 11.77 Lakhs (Rs. 10.62 Lakhs) has been
given as margin money for the guarantees issued by the bankers.

(iv) (A) Deposit paid against Order in Original No. 94/2012 dt 31.12.2012 under Protest of Rs. 26.78
Lakhs.

(B) Rs. 2.57 Lakhs Cenvat deposit against O/O no.42/2013 dt: 21.02.2013 stay order
no.119/2013 dt: 25.06.2013.

(C) Rs. 1.28 Lakhs deposit against CESTAT Appeal No.E/2210/2012 Stay/Misc/26402/2013 dt:
13.06.2013

(D) .Rs. 5.00 Lakhs Cenvat deposit against OIO No.37/2011 dt: 31.03.2011 passed by the
Additional Commissioner of Central Excise and CESTAT Miscellaneous Order No.26586/2013
dt: 16.07.2013

(E) .Rs. 42.00 Lakhs Income tax deposit have been deposited against DIN :
ITBA/COM/F/17/2024-25/1074674423(1), stay petition in the case of the Company for
various Assessment Years with a condition that the company deposits Rs.2 Lakhs every month
till the time the 20% of the Appeal deposit amount is not discharged or the appeal is closed,
which every is earlier.

(F) .Rs. 61.13 Lakhs worth of Income tax refunded of various years has been adjusted against the
demand due under the Income Tax Act for various assessment year.

51. The Company (KTPL) has defaulted in repayment of cash credit and term loan which were availed
from State Bank of India. The Bank has issued notice U/s. 13(2) of Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002 to recover the amount which
includes outstanding interest towards cash credit and term loan availed by the Company. Later on
the bank has transferred the outstanding due to Edelweiss Asset Reconstruction Company (EARC)
for the purpose of recovery of dues from the Company on 27th June, 2014. Also all securities
provided by the company to Bank against Term loan and cash credit are also transferred to the Asset
Reconstruction Company as informed by Bank to the Company. The Company has approached
Edelweiss ARC Ltd for One Time Settlement (OTS) Proposal in 21st November, 2021 for settlement
of loans availed by the company, the settlement proposal had been accepted by the EARC vide it''s
letter dated 8th December, 2021. As per terms of aforesaid settlement, KTPL was required to pay
EARC a sum of Rs. 2.5 Crores on or before 25th March, 2022. The company has paid the Rs. 2.5
Crores to EARC in consonance with the timeline detailed under the acceptance letter. Later, the

53. Previous year''s numbers have been regrouped, rearranged, recasted, wherever necessary to
conform to Current Year Classification.

54. All the figures are rounded off to the nearest rupees in Lakhs.

As per our report of even date

For J K Chopra & Associates, For and on behalf of the Board of Directors of

Chartered Accountants Kavveri Defence & Wireless Technologies Limited

ICAI Firm Registration No. 016071S

Sd/- Sd/- Sd/-

Jitendra Kumar Chopra C. Shivakumar Reddy R.H.Kasturi

Proprietor Managing Director Whole Time Director & CFO

Membership No. 237068 DIN: 01189348 DIN: 0029185

UDIN: 25237068BMKQRX4003

Place: Bangalore
Date: 31^st May 2025

---

Mar 31, 2024

XII. Provisions, Contingent Liabilities and Contingent Assets

Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Provisions are measured at the present value of management’s best estimate of the expenditure required

to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense and is recorded over the estimated time period until settlement of the obligation. Provisions are reviewed and adjusted, when required, to reflect the current best estimate at the end of each reporting period.

The Company recognizes decommissioning provisions in the period in which a legal or constructive obligation arises. A corresponding decommissioning cost is added to the carrying amount of the associated property, plant and equipment, and it is depreciated over the estimated useful life of the asset.

A provision for onerous contracts is recognized when the expected benefits to be derived by the company from a contract are lower than the unavoidable cost of meeting its obligations under contract. The provision is measured at the present value of the lower of expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the company recognizes any impairment loss on the assets associated with that contract.

Liquidated Damages / Penalty as per the contracts / Additional Contract Claims / Counter Claims under the contract entered into with Vendors and Contractors are recognized at the end of the contract or as agreed upon.

Contingent Liabilities

Contingent liability is disclosed in case of a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

A present obligation arising from past events, when no reliable estimate is possible;

A possible obligation arising from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company where the probability of outflow of resources is not remote.

Contingent Assets

Contingent assets are not recognized but disclosed in the financial statements when as inflow of economic benefits is probable.

XIII. Fair Value Measurements

Company uses the following hierarchy when determining fair values:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and,

Level 3 - Inputs for the asset or liability that are not based on observable market data.

The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting dates. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The fair value for these instruments is determined using Level 1 inputs.

The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is fair valued using level 2 inputs.

If one or more of the significant inputs is not based on observable market data, the instrument is fair valued using Level 3 inputs. Specific valuation techniques used to value financial instruments include: Quoted market prices or dealer quotes for similar instruments;

The fair value of interest rate swaps is calculated as the present value of the estimated future cashflows based on observable yield curves;

The fair value of forward foreign exchange contracts is determined using forward exchange rates at the reporting dates, with the resulting value discounted back to present value;

Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments

XIV. Revenue Recognition

Revenue is recognized and measured at the fair value of the consideration received or receivable, to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

The company collects GST, service tax, sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. The following specific recognition criteria must also be met before revenue is recognized:

Insurance Claims

Insurance claims are recognized on acceptance / receipt of the claim.

Interest

Revenue is recognized as the interest accrues, using the effective interest method. This is the method of calculating the amortized cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Dividends

Dividends are recognised in profit or loss only when the right to receive payment is established.

XV. Foreign Currency Transactions

Transactions in foreign currencies are translated to the functional currency of the company, at exchange rates in effect at the transaction date.

At each reporting date monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate in effect at the date of the statement of financial position.

The translation for other non-monetary assets is not updated from historical exchange rates unless they are carried at fair value.

XVI. Minimum Alternative Tax (MAT)

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

XVII. Earnings per Share

Basic earnings per share are calculated by dividing:

The profits attributable to owners of the company

By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.

Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account:

The after income tax effect of interest and other financing costs associated with dilutive potential equity shares

The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

mnb

XVIII. Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III of the Companies Act, 2013, unless otherwise stated.

30. AMALGAMATION:

Amalgamation with Mega sonic Telecoms Private Limited: - The Company got amalgamated with erstwhile Mega sonic Telecoms Private Limited in the year 2003-04 and as per the scheme of amalgamation 4,935,000 equity shares were issued as consideration.

31. CAPITAL RESERVES:

The Capital Reserve of Rs. 73.26 Lakhs represents the excess of net fair value of assets over the purchase consideration in terms of scheme of amalgamation taken place during the year 200304, which was duly approved by the Hon''ble High Courts of Karnataka and Bombay.

v. The Company has no borrowings from banks or financial institutions on the basis of security of current assets and the quarterly returns or statements filed by the company with such banks or financial institutions are in agreement with the books of account of the Company.

vi. The Company is not declared as wilful defaulter by any bank or financial Institution or other lenders.

vii. The Company did not have any transactions with Companies struck off under Section 248 of Companies Act, 2013 or Section 560 of Companies Act, 1956 considering the information available with the Company.

38. i)Financial risk management objectives and policies

The Company’s principal financial liabilities comprise of trade and other payables. The main

purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include cash and cash equivalents that derive directly from its operations and FVTPL investments.

The Company is exposed to market risk and liquidity risk. The Company’s senior management

oversees management of these risks. The Company''s financial risk activities are governed by appropriate policies and procedures so that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(ii) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency rate risk, interest rate risk and other price risk. Financial instruments affected by market risk include FVTPL financial instruments.

The sensitivity analysis in the following sections relate to the position as at 31 March 2024 and 31 March 2023.

(iii) Equity price risk

The Company''s listed equity instruments are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification. The Company''s Board of Directors reviews and approves all equity investment decisions.

(iv) Liquidity Risk:

The Company''s objective is to maintain a balance between continuity of funding and flexibility. The Company has sufficient working capital funds available to honour the debt maturing within 12 months.

42. The Company does not have any transactions which are not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during the year.

43. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

44. There are no significant events that occurred after the balance sheet date.

45. The company has not advanced/loans/invested or received funds (either borrowed funds or share premium or any other sources or kind of funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

46. The company has also not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

47. In the opinion of the management, the assets As shown in the financial Statements, have a value on realization in the ordinary course of business of atleast equal to the amount at which they are stated in the balance sheet.

48. The Company has not declared any dividend during the year.

(i) M/s. Mahanagar Telephone Nigam Ltd and M/s Bharat Sanchar Nigam Ltd. had invoked bank guarantees totalling to Rs 4.41 Lakhs and Rs. 7.55 Lakhs 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 Bank guarantee of a sum of Rs. 22.70 Lakhs.

(iii) Margin Money deposits with the bank amounting to Rs. 11.77 Lakhs (Rs. 10.62 Lakhs) has been given as margin money for the guarantees issued by the bankers.

(iv) (A) Deposit paid against Order in Original No. 94/2012 dt. 31.12.2012 under Protest of Rs. 26.78 Lakhs.

(B) Rs. 2.57 Lakhs Cenvat deposit against O/O no.42/2013 dt: 21.02.2013 stay order no.119/2013 dt: 25.06.2013.

(C) Rs. 1.28 Lakhs deposit against CESTAT Appeal No.E/2210/2012 Stay/Misc/26402/2013 dt: 13.06.2013

(D) .Rs. 5.00 Lakhs Cenvat deposit against OIO No.37/2011 dt: 31.03.2011 passed by the Additional Commissioner of Central Excise and CESTAT Miscellaneous Order No.26586/2013 dt: 16.07.2013

50. The Company (KTPL) has defaulted in repayment of cash credit and term loan which were availed from State Bank of India. The Bank has issued notice U/s. 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to recover the amount which includes outstanding interest towards cash credit and term loan availed by the Company. Later on the bank has transferred the outstanding due to Edelweiss Asset Reconstruction Company (EARC) for the purpose of recovery of dues from the Company on 27th June, 2014. Also all securities provided by the company to Bank against Term loan and cash credit are also transferred to the Asset Reconstruction Company as informed by Bank to the Company. The Company has approached Edelweiss ARC Ltd for One Time Settlement (OTS) Proposal in 21st November, 2021 for settlement of loans availed by the company, the settlement proposal had been accepted by the EARC vide it’s letter dated 8th December, 2021. As per terms of aforesaid settlement, KTPL was required to pay EARC a sum of Rs. 2.5 Crores on or before 25th March, 2022. The company has paid the Rs. 2.5 Crores to EARC in consonance with the timeline detailed under the acceptance letter. Later, the EARC has issued No Dues Certificate to KTPL on 24th March, 2022 and released the personal guarantees of Mr. C Shivakumar Reddy and Mrs. R.H. Kasturi.

52. Previous year’s numbers have been regrouped, rearranged, recasted, wherever necessary to conform to Current Year Classification.

53. All the figures are rounded off to the nearest rupees in Lakhs.

As per our report of even date

For J K Chopra & Associates, For and on behalf of the Board of Directors of

Chartered Accountants Kavveri Telecom Products Limited

ICAI Firm''s Registration No. 016071S

JITENDRA Digitally signed CHENNAREDD “r KASTLJRI

KUMAR CHOPRA ^£_A=="

KUMAR CHOPRA REDDY 221201-^530 rv\jurEiH_{22:14:20 05},₃₀,

Jitendra Kumar Chopra C. Shivakumar Reddy R.H.Kasturi

Proprietor Managing Director Director

Membership No. 237068 DIN: 01189348 DIN: 0029185

UDIN: 24237068BKCULD2358

Place: Bangalore Date: 30^th May 2024

---

Mar 31, 2014

The Company has only one class of shares referred to as equity shares having a par value of Rs.10/-. Each holder of equity shares is entitled to one vote per share held. -

Paid-up capital includes 4,935,000 shares issued as consideration as per the Scheme of amalgamation with erstwhile Megasonic Telecoms Private Limtied in the year 2003-04. -

The Company declares and pays dividend in Indian rupees.. The Board of Directors have not proposed any dividend during the year. Dividend declared if any, if proposed by the share holders, is payable to the share holders in proportion to their shareholding.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders.

Stock Option Plan (2008)

In the''financial year 2008-09, the company instituted the 2008 Plan. The shareholders and Board of Directors approved the plan in April 2008 which provides for the issue of 5,00,000 equity shares to the employees. The compensation committee administers the 2008 Plan. Options were issued to employees at an exercise price at par value of the share, .

Vesting of employee stock options granted occurs in tranches as under;

a) Term Loan Account with State Bank of. India is secured by first charge on the entire present and future fixed assets of the company and equitable mortgage of the land and building at Suragajakkanahalli, Anekal Taluk where the factory is located and further secured by the securities offered in respect of Cash Credit facilities as referred to in Column No. 2.6.

Terms of Repayment: Repayable in 38 monthly instalments from the date of the Loan (February 2010) alongwith interest of 13.15% p.a.

b) Vehicle loan from the respective banks are secured by the respective vehicles against which the loans are granted. ''

(i) Vehicle Loan from Axis Bank is repayable in 36 monthly instalments commencing from October 2011 with an interest rate of 10%

(ii) Vehicle Loan from Axis Bank is repayable in 60 monthly instalments commencing.from April 2012 with an interest rate of 11.34%

(iii) Vehicle Loan from Axis Bank is repayable in 36 monthly instalments commencing from August 2012 with an interest rate of 9.71%

(iv) Vehicle Loan from Axis Bank is repayable in 36 monthly instalments commencing from July 2012 with an interest rate of 10.88% * .

(v) Vehicle Loan from Axis Bank is repayable in 36 monthly instalments commencing from July 2012 with an interest rate of 10.89%

(vi) Vehicle Loan from Axis Bank is repayable in 36 monthly instalments commencing from July 2012 with an interest rate of 10.89%

1. There are no amounts due for payment to the Investor Education and Protection Fund under Section 205 C of the Companies Act, 1956 as at the year end. .

2. The Group of share holders of the Company has accepted to forgive the didived declared by the Company for the financial year 2011-2012 amounting to R: 1,02,70,603/-..The Company did not deposited the same outstanding dividend into separate Bank account.

2.19 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

Particulars As at 31.3.2014 As at 31.3.2013

Claims against the Company not acknowledged as debts '' - 8,080,428 8,080,428

Statutory claims under appeals/disputes:

(a) Income tax matters 1,037,912,510 407,895,506

(b) Excise Matters (Refer Note (v) below) - 547,167,022 542,426,022

(c) Sales Tax matter 55,512,266 - 4,437,266

Guarantees by Bank 7,991,851 7,991,851

Corporate Guarantee 614,087,997 734,100,865 .

(i) M/s. Mahanagar Telephone 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 Bank guarantee of a sum of Rs.22,70,000.

(iii) There are claims against one of the Company''s properties located at Bangalore, which is presently owned by the Company.

(iv) Margin Money deposits with the bank amounting to Rs. 61,30,562(Rs. 60,57,542) has been given as margin money for the guarantees issued i

by the bankers. ''

(v) (A)Customs, Excise an Service Tax Appellate Tribunal, South Zone, Bangalore, however had stayed the aforesaid demand subject to payment of Rs.2 Crores (B) Deposit paid against Order in Original No, 94/2012 dt. 31.12.2012 under Protest.of Rs.26,77,854/- (C).Rs.127523/- deposit against CESTAT Appeal No.E/2210/2012 Stay/Misc/ROM.E/MISC/26402/2013 dt.13.06.2013. (D) Rs.257088/- Cenvat deposit against O/O nO;42/2013 dt:21.02.2013 stay order no.119/2013 dt:25.06.2013. (E).Rs.500000/- Cenvat deposit against OIO No.37/2011 dt:31.03.2011 passed by the Additional Commissioner of Central Excise and CESTAT Miscellaneous Order No.26586/2013 dt: 16.07.2013

(vi) There are claims against one of the Company''s in sales tax (A) Ref Assignment order no.14188330 dt: 12/8/2011 against order received from assistant commissioner of commercial taxes (Audit)4.2,DVO-4 bangalore. Dispute it is assessed under CST Act''56 by rejecting the concessional rate of tax claimed in the return of turnovers and levied tax at the rate of 12.5% in the absence of declarations such as Form C and also levied the penalty and interest of Rs.4,97,46,550/-. (B) Ref Assignment order no.13687538 dt: 08/12/2011 and case order

no.212049893 dt: 29/03/2014 against order received from Deputy commissioner of commercial taxes (Audit)4.7,DVO-4 bangalore. It is assessed by rejecting the concessional rate of tax claimed in the return of turnovers and assessed to tax , the direct export not covered by bill of lading, sales return not covered by the relevant documents at the rate of 4% in the absence of declarations such as Form C and along with-levied the penalty and interest of Rs.13,29,696/-.

2.30 AMALGAMATION

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.

2.31 CAPITAL RESERVES

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.

2.32 INVESTMENTS

Pursuant to the Scheme of Amalgamation as referred to in Note-2.30 above, Eaicom India Private Limited (EIPL, erstwhile 100% subsidiary company of Megasonic Telecoms Private Limited has become a wholly owned subsidiary of the Company.

The Company incorporated a 100% subsidiary in the name of KAVVERI TECHNOLOGIES INC at Canada during the financial year 2005-06 with an initial investment of 292,000 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.

The Company has-incorporated a 100% subsidiary in the name of Kaweri Telecom Espana at Spain during the current financial year 2011-12 with one million and three thousand Euros as cost of investment.

The present value of the obligation is determined based on actuarial valuation using the-projected unit credit method, which recognises each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to build up the final obligation.

The obligation for Compensated absence is recognised in the same manner as gratuity. The Company has not funded the Gratuity and Compensated absence liability.

LIST OF RELATED Direct Indirect Other Associates/ PARTIES Subsidiaries Subsidiaries Key Management Other related Personnel party

SMR Telecom aicom India DCI Digital Private Communications Holdings

Mr.C.Shivakumar Reddy Limited Inc Private Limited -

Kayveri Spotwave Wireless Technologies Inc. Ltd Ms.C.Uma Reddy

Kaweri Telecom Kavveri Realty S

Ms. R .H Kasturi Infrastructure Inc. Ltd

Kavveri Telecom Trackcom Systems

Products UK Limited International Inc

Kaweri Telecom Til-Tek Antennae

Espana Inc.

Rymsa De Mexico

. Kavveri Technologies Quality Communications

Americas Inc Systems

New England Communication Systems

As the future liability of Gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the Directors is not ascertainable and therefore not included in above.

2.43 SEGMENT RESULTS

The company''s predominant risks and returns are from the segment of "Wireless sub-systems Products" 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.

The aforesaid expenses have been debited under various heads of expenses account in the Statement of Profit and Loss.

(Auditors have relied on the certificate of the management regarding the apportionment of the expenses incurred in connection with the Company''s Research and Development Activity)

(The management has ascertained the Warranty liability that will accrue in the future periods as on 31st March 2014 and has reversed such excess liability, if any, to the Profit and Loss Account as at the year end. The auditors have relied on the certificate of the management in this regard.)

2.46 OPERATING LEASE OBLIGATIONS ,

The company has taken office, other facilities under cancelable and non-cancelable operating leases, which are renewable on a periodic basis.

2.47 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.

2.48 IMPAIRMENT OF ASSETS

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 31st March 2014 and concluded that there has been no significant impaired fixed asset that needs to be recognized in the books of account.

2.49 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE

a. Particulars of unhegded foreign currency exposure as at the reporting date.

2.50 Confirmation of balances in respect of debtors and creditors has not been obtained ih a few cases.

2.51 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. .

2.52 The Company has defaulted in repayment of cash credit and term loan which were availed from Bank. The Bank has issued notice U/s. 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to recover an amount of Rs. 96.85 crores which includes outstanding interest towards cash credit and term loan availed by the Company.

2.53 The Company has not appointed the Company secretary ( Compliance Officer) in the financial year 2013-2014.

1. On June 03, 2011, Karnataka Industrial Areas Development Board ("KIADB") alloted land to the company on a lease cum sale basis until June 2021, to be sold to the company at the end of lease period upon fulfillment of certain conditions. The Lease has been registered in favour of the Company. The Company is confident of fulfilling the conditions.

Accordinglythe initial and subsequent lease payments in this regard have been capitalised as Leasehold Land.

---

Mar 31, 2013

1.1 AMALGAMATION

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.

1.2 CAPITAL RESERVES

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.

1.3 INVESTMENTS

Pursuant to the Scheme of Amalgamation as referred to in Note 2.30 above, Eaicom India Private Limited (EIPL, erstwhile 100% subsidiary company of Megasonic Telecoms Private Limited has become a wholly owned subsidiary of the Company.

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 292,000 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.

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.

The Company has incorporated a 100% subsidiary in the name of Kaweri Telecom Espana at Spain during the current financial year 2011-12 with one million and three thousand Euros as cost of investment.

The Company incorporated a 100% subsidiary in the name of KAWERI TECHNOLOGIES ASIA PTE LTD at Singapore during the financial year 2012-13 with an investment of US$1/-.

1.4 EMPLOYEE BENEFITS

The details required under !S 15 - Employee Benefits is as follow

The present value of the obligation is determined based on actuarial valuation using the projected unit credit method, which recognises each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Compensated absence is recognised in the same manner as gratuity. The Company has not funded the Gratuity and Compensated absence liability.

---

Mar 31, 2012

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation.

The Company has only one class of shares referred to as equity shares having a par value of Rs.10/-. Each holder of equity shares is entitled to one vote per share held.

Paid-up capital includes 4,935,000 shares issued as consideration as per the Scheme of amalgamation with erstwhile Megasonic Telecoms Private Limtied in the year 2003-04.

The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting.

The Board of Directors in their meeting held on 30th May 2012, proposed a final dividend of Rs. 4 per share. The proposal is subject to the approval of the shareholders at the Annual General Meeting to be held. The total dividend appropriation for the year ended 31st March 2012, amounted to Rs. 93,555,672 including Corporate dividend Tax of Rs. 13,058,632.

Dividend, if approved, is payable to the shareholders in proportion to their shareholding.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders.

Stock Option Plan (2008)

In the financial year 2008-09, the company instituted the 2008 Plan. The shareholders and Board of Directors approved the plan in April 2008 which provides for the issue of 5,00,000 equity shares to the employees. The compensation committee administers the 2008 Plan. Options were issued to employees at an exercise price at par value of the share.

a) Term Loan Account with State Bank of India is secured by first charge on the entire present and future fixed assets of the company and equitable mortgage of the land and building at Suragajakkanahalli, Anekal Taluk where the factory is located and further secured by the securities offered in respect of Cash Credit facilities as referred to in Column No. 2.6.

Terms of Repayment: Repayable in 38 monthly instalments from the date of the Loan (February 2010) along with interest of 13.15% p.a.

b) Vehicle loan from the respective banks are secured by the respective vehicles against which the loans are granted

(I) Vehicle Loan from Tata Capital Limited is repayable in 36 monthly instalments commencing from November 2010 with an interest rate of 9.50% p.a.

(ii) Vehicle Loan from HDFC Bank is repayable in 36 monthly instalments commencing from June 2010 with an interest rate of 8.5%

(iii) Vehicle Loan from Axis Bank is repayable in 36 monthly instalments commencing from June 2009 with an interest rate of 11%

(iv) Vehicle Loan from HDFC Bank is repayable in 36 monthly instalments commencing from October 2011 with an interest rate of 10%

(v) Vehicle Loan from Axis Bank is repayable in 60 monthly instalments commencing from April 2012 with an interest rate of 11.34%

a) Cash Credit facility with State Bank of India is secured by first charge on the entire present and future current assets of the company and collaterally secured by pledge of 5 Lakhs shares of the company owned by two directors and 29,200 shares of M/s Kavveri Technologies Inc. being the 100% stake held by M/s Kavveri Telecom Products Ltd and equitable mortgage of the residential building owned by a Directors and their family members)

b) Corporate loan is secured by pledge of 7,00,000 shares of the Company held by two directors of the Company

1.1 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

As at 31.03.2012 As at 31.03.2011 Particulars (in Rs.) (in Rs.)

Claims against the Company not acknowledged as debts 8,080,428 31,033,073

Statutory claims under appeals/disputes:

a) Income tax matters 51,413,876 2,229,133

b) Excise Matters (Refer Note (V) below) 503,582,590 488,049,175

c) Sales Tax matter 6,322,513 6,322,513

Guarantees by Bank 6,798,570 9,682,133

Corporate Guarantee 814,950,191 474,540,855

(I) M/s. Mahanagar Telephone 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 Bank guarantee of a sum of Rs.22,70,000.

(iii) There are claims against one of the Company's properties located at Bangalore, which is presently owned by the Company.

(iv) Margin Money deposits with the bank amounting to Rs. 5,22,98,272 (Rs. 1,43,93,385) has been given as margin money for the guarantees issued by the bankers.

(v) Customs, Excise and Service Tax Appellate Tribunal, South Zone, Bangalore, however had stayed the aforesaid demand subject to payment of Rs. 2 Crores within six weeks from 07.03.2012 and Rs 15 Lakhs within a period of six weeks from 31.01.2012

1.2 AMALGAMATION

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.

1.3 CAPITAL RESERVES

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.

1.4 INVESTMENTS

Pursuant to the Scheme of Amalgamation as referred to in Note 2.30 above, Eaicom India Private Limited (EIPL, erstwhile 100% subsidiary company of Megasonic Telecoms Private Limited has become a wholly owned subsidiary of the Company.

The Company incorporated a 100% subsidiary in the name of KAVVERI TECHNOLOGIES INC at Canada during the financial year 2005-06 with an initial investment of 292,000 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.

The Company incorporated a 100% subsidiary in the name of KAVVERI TELECOM PRODUCTS UK Limited at UK during the financial year 2009-10 with no initial cost of investment.

The Company has incorporated a 100% subsidiary in the name of Kavveri Telecom Espana at Spain during the current financial year 2011-12 with one million and three thousand Euros as cost of investment.

1.5 EMPLOYEE BENEFITS

The details required under AS 15 - Employee Benefits is as follow

The present value of the obligation is determined based on actuarial valuation using the projected unit credit method, which recognises each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to build up the final obligation.

The obligation for Compensated absence is recognised in the same manner as gratuity. The Company has not funded the Gratuity and Compensated absence liability.

As the future liability of Gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the Directors is not ascertainable and therefore not included in above.

1.6 SEGMENT RESULTS

The company's predominant risks and returns are from the segment of "Wireless sub-systems Products" 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.

The aforesaid expenses have been debited under various heads of expenses account in the Statement of Profit and Loss. (Auditors have relied on the certificate of the management regarding the apportionment of the expenses incurred in connection with the Company's Research and Development Activity)

(The management has ascertained the Warranty liability that will accrue in the future periods as on 31st March 2012 and has reversed such excess liability, if any, to the Profit and Loss Account as at the year end. The auditors have relied on the certificate of the management in this regard.)

1.7 OPERATING LEASE OBLIGATIONS

The company has taken office, other facilities under cancelable and non-cancelable operating leases, which are renewable on a periodic basis.

1.8 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.

1.9 IMPAIRMENT OF ASSETS

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 31st March 2012 and concluded that there has been no significant impaired fixed asset that needs to be recognized in the books of account.

1.10 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE

Foreign currency exposure that are not hedged by derivative or forward contracts as on 31st March 2012 amounts to Rs.121,87,38,421 ( Rs. 21,59,80,902)

1.11 Confirmation of balances in respect of debtors and creditors has not been obtained in a few cases.

1.12 Expenses incurred in connection with QIP include a sum of Rs.330,900 paid to Statutory Auditors, over and above the fees disclosed under note No. 2.28

1.13 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.

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Mar 31, 2011

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.

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Mar 31, 2010

I. 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.

All the members of the erstwhile Megasonic Telecoms Private Limited were allotted as per the scheme of arrangement except to the extent of 2,37,350 equity shares, which could not be allotted in the absence of allotment details till the accounts for the year ended 31 st March 2009. The consideration in respect of the unallotted shares to the extent of 2,37,350 shares were shown under "Share Capital Suspense" and the corresponding premium under "Securities Premium suspense", pending allotment in the earlier year accounts. However, the company has allotted such shares as stated above, to the respective members, after ascertaining the details during the year and as such, suspense account balances have been transferred to the Share Capital account and Securities Premium account respectively.

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 Honble High Courts ofKarnatakaand Bombay.

3. Secured Loans:

a) Term Loan and Corporate loan are secured by present future fixed assets of the company

b) Working Capital facilities are secured against the first charge on the entire and future current assets of the company.

c) The above loans are further collaterally secured by properties owned by relatives of directors and by pledge of 5 lakh shares of Kaweri Telecom Products Ltd owned by the promoter directors and by pledge of 29,200 shares of Kaveri Technologies Inc. (Canada) being the 100% stake held by the Kaweri Telecom Products Ltd.

c) Cash credit account is secured by all stock/debtors and other current assets of the Company.

d) 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.

e) The Car Loans are secured by hypothecation of the relevant vehicles.

f) 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. The figures as on 31st March 2009 have been regrouped/reclassified, wherever necessary, to conform with the current Period classification.

6. Contingent Liabilities not provided for -

Particulars 2010 2009

Estimated amount of Contracts remaining to be executed on Capital Account. 4,48,50,000 NIL

Claims against the Company not acknowledged as a debt 245,40,216 32,32,200

On account of Excise Matters 29,89,60,660 Nil

On account of Sales tax 63,22,513 Nil

Guarantees issued by bankers on behalf 47,934,939 4,49,09,466

Note: The M/s. Mahanagar Telephone Nigam Ltd and M/s Bharat Sanchar Nigam Ltd. had invoked bank guarantees totaling to Rs. 32.32 lakhs (32.32 Lakhs) against which the company has obtained stay order in the High court of Karnataka. The Company is advised that the matter will be resolved in favor of the company in respect of the said amount and hence no provision is made in the books of accounts.

Supplementary Statutory information

7. 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.

8. Segment Results

The companys predominant risks and returns are from the segment of "Telecommunication Accessories" 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.

9. In the opinion of Board of Directors, all current assets, loans and advances have atleast the value as stated in the Balance Sheet, if realized in the ordinary course of business.

10. Pursuant to Accounting Standard AS-28- Impairment of assets issued by the Institute of Chartered Accountants of India, the Company assessed its fixed assets for impairment as at 31st March 2010 and concluded that there has been no significant impaired fixed asset that needs to be recognized in the books of account.

11. 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 as required under AS 15. Reconciliation of opening and closing balances of the Present Value of the defined benefit obligation.

12. Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below:

i. Principal amount remaining unpaid as on 31 th M arch 2010 Rs. -

ii. Interest due thereon as on 3 Ith M arch 2010 Rs. -

iii Interest Paid by the company in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006 along with the amount of the payment made to the supplier beyond the appointed day during the year ended Rs. -

iv Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the quarter) but without adding the interest specified under Micro, Small and Medium Enterprises Development Act, 2006. Rs. -

v. Interest accrued and remaining unpaid as at the year ended Rs. -

vi. Further interest remaining due and payable even in the succeeding years until such date when the interest dues as above are actually paid to the Small Enterprise. Rs. -

13. Foreign currency exposure that are not hedged by derivative or forward contracts as on 31 st march 2010 amounts to Rs.269,573,011 (Rs. 20,656,421)

14. Confirmation of balances in respect of debtors and creditors has not been obtained in all the cases. Cases wherein the same has been received the balances were duly reconciled.

15. The amount of borrowing cost capitalized as fixed asset as per the requirements of AS 16 during the year Rs. Nil(Previous year Rs. 1,205,890/-)

16. Unclaimed Dividend:

The unclaimed dividend of Rs 1,095,189 represents those relating to the years 2003 to 2009 and since the number of years of these unclaimed dividends has not exceeded 7 years as at the end of this year no amounts have been transferred to Investors protection fund during the year.

17. Dividend has been provided on 10,068,980 shares, which includes 8,180 shares which have been allotted to the eligible employees under the Kaweri ESOS 2008 Scheme, subsequent to the date of the balance sheet, but before the adoption of accounts.

18. 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 150% under section 35(2AB) of the Income Tax Act 1961.

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Jun 30, 2000

1. Debtors , Creditors , Loans & Advances are subject to adjustment / reconciliation and the balances are unconfirmed.

2. In the opinion of the Management, Rs.181.33 lakhs of debtors and Rs.11.14 lakhs of advances outstanding for more than one year are considered recoverable. Hence no provision is made .

3. Contingent Liabilities not provided for :

Current Year Previous Year

On account of Bank Guarantee Rs.57,40,870/- Rs.90,20,451/-

On account of Letter of Credit Rs.50,71,831/- Rs. 6,63,818/-

On account of Sales Tax Rs. 3,13,479/- Nil

( Claims against the Company not recognised as debts )

4. In the absence of records / information , it is not possible to identify dues outstanding to Small Scale Industries.

5. License and Installed Capacities :

Licensed Capacity : N.A.

Installed Capacity

Company has installed capacity of 20000 nos. of Microwave components. Since the company has manufactured components, systems during the year, quantification of capacity is not feasible.

6 Acual production System

5156 nos ( Systems means DPG , BSS , Model I & II, HDSL) Components 5952 nos (Components includes Duplexers, power combiners, Hybrid tranformers, Yagi Antennas , Tunable Band Pass Filters and others)

7 Research & Development

Revenue expenses towards Research and Development of Rs. 3.50 lakhs ( Previous year 2.411akhs ) has been charged to Profit & Loss account under various heads of accounts.

Capital expenditure of Rs. 10.88 lakhs ( Previous year Rs .31.04 lakhs ) has been shown under fixed assets.

8 Expenditure in Foreign Currency

a) Raw Materials : Rs.1,50,64,911/-

b) Capital Goods : Rs. 6,63,790/-

c) Foreign Travel : Rs. 4,87,415/-

9. The company has provided Rs.77000/- as provision for taxation U/s 115JA of the Income Tax Act, 1961.

10. Information as per Part IV of Schedule to Companys Act ,1956 is enclosed herewith.

11. Previous Years figures have been recast /regrouped wherever necessary .

12. Current Periods figures relates to 15 months and they are not comparable with previous year figures which relates to 12 months .