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