Kaynes Technology Clarifies Kotak Report on Financial Disclosures
Filing Summary
Kaynes Technology India Ltd has issued a clarification regarding a report by Kotak Institutional Equities dated December 3, 2025. The company addressed concerns about goodwill recognition, contingent liabilities, related-party transactions, and borrowing costs. Key points include Rs. 520 crore in contingent liabilities, Rs. 1.8 billion purchases from Kaynes Electronics, and a 17.7% average borrowing cost for FY 2025. The company rectified disclosure issues in standalone financial statements. This clarification aims to provide transparency and ensure compliance with regulatory standards.
Kaynes Technology India Ltd has released a clarification concerning a report by Kotak Institutional Equities dated December 3, 2025. The company addressed several observations made in the report, focusing on financial disclosures and accounting practices. This clarification is issued pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to ensure transparency and compliance.
The report highlighted issues regarding goodwill recognition and reserve adjustments in acquisitions. Kaynes Technology clarified that under Ind AS 103 – Business Combinations, previously unrecognized intangible assets can be recognized as part of acquisition accounting. The company stated that customer contracts related to Iskraemeco were recognized as intangible assets and amortized over the contract term. These intangible assets were netted off with goodwill and are evaluated annually.
Regarding contingent liabilities, the report noted an increase to Rs. 520 crore, representing 18% of the company’s net worth. Kaynes Technology explained that major additions included a performance bank guarantee for Iskraemeco projects amounting to Rs. 96.8 crore and corporate guarantees issued to subsidiary companies totaling Rs. 132.5 crore. These guarantees were necessitated by funding requirements following the acquisition of Iskraemeco.
The report also pointed out discrepancies in related-party transactions. Purchases of Rs. 1.8 billion from Kaynes Electronics Manufacturing in FY 2025 were not reflected in related-party disclosures. Kaynes Technology acknowledged that these transactions were eliminated in the consolidated financial statements but were inadvertently omitted in the standalone financial statements. The company has since rectified this issue and noted it for future compliance.
Additionally, the report highlighted year-end payables and receivables involving Kaynes Technology and Kaynes Electronics Manufacturing, which were not disclosed in related-party disclosures. Similar to the previous issue, these transactions were eliminated in consolidated financial statements but not disclosed in standalone statements. This has been corrected and noted for future compliance.
The report mentioned an average borrowing cost of 17.7% for FY 2025. Kaynes Technology clarified that when considering bill discounting, the interest cost works out to 10%. The company noted that a similar observation would result in an average borrowing cost of 25.3% for FY 2024.
Kaynes Technology capitalized Rs. 1.8 billion, or 6.5% of revenue, as additions in technical know-how, including designs and prototypes in FY 2025. This included Rs. 115 crore in intangible assets related to large customer contracts, Rs. 26 crore in development costs from the Iskraemeco acquisition, and Rs. 39 crore generated from in-house R&D activities.
Kaynes Technology India Ltd is focused on providing comprehensive electronic system design and manufacturing services. The company prioritizes transparency and compliance with regulatory standards to maintain investor confidence and ensure accurate financial reporting.