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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 590041ISIN: INE641C01019INDUSTRY: Telecom Equipments & Accessories

BSE   ` 11.63   Open: 11.63   Today's Range 11.63
12.10
-0.61 ( -5.25 %) Prev Close: 12.24 52 Week Range 4.43
17.81
Year End :2014-03 
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.