1.  Background
 
 M/s Kavveri Telecom Products Limited (''Company'' or ''Kavveri'') was
 incorporated in 1996 and is engaged in the design, development and
 manufacture of Radio Frequency products and antennae for telecom,
 defense and space applications in India and abroad. Kavveri enjoys the
 status of being the largest manufacturer of Wireless subsystem Products
 like, Radio Frequency products and antenna and Radio Frequency products
 in India. Kavveri also provides total turnkey solutions for coverage
 and capacity enhancement requirements for GSM 3G and CDMA carriers in
 India.
 
 2.  Basis of Preparation of Financial Statements:
 
 The financial statements have been prepared to comply in all material
 respects with the notified Accounting Standards by Companies Accounting
 Standards Rules, 2006 and the relevant provisions of the Companies Act,
 1956.  The financial statements have been prepared under the historical
 cost convention on an accrual basis in accordance with accounting
 principles generally accepted in India. The accounting policies have
 been consistently applied by the Company and are consistent with those
 used in the previous year and in case of any such variation in the
 accounting policy as compared to the previous year; such variations are
 disclosed separately as a part of notes to accounts.
 
 3.  Change in Accounting Policy
 
 During the year ended March 31,2012, the revised Schedule VI notified
 under the Companies Act, 1956, has become applicable to the Company,
 for preparation and presentation of its financials. The adaptation of
 revised Schedule VI does not impact recognition and measurement
 principles followed by the Company for preparation of financial
 statements. However, it has significant impact on presentation and
 disclosures made in the financial statements. The Company has also
 reclassified the previous year figures in accordance with the
 requirements applicable in the current year.
 
 4.  Use of estimates:
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements and the results of the operations during the
 reporting period. Although these estimates are based upon management''s
 best knowledge of current events and actions, actual results could
 differ from these estimates.
 
 5.  Tangigble and Intangible Fixed Assets:
 
 Tangible Fixed Assets
 
 - Fixed Assets are stated at cost of acquisition (Net of Cenvat and
 VAT) plus subsequent improvements thereto including taxes, duties,
 freight and other incidental expenses related to acquisition and
 installation including finance charges which are directly attributable
 to the Fixed assets less accumulated depreciation and impairment loss.
 
 - Capital Work in Progress comprises of the cost of fixed assets that
 are not put to use as at the Balance Sheet date and relevant financial
 charges incurred thereon.
 
 Intangible Fixed Assets:
 
 - Technical knowhow acquired to be used to upgrade and develop new
 products and used for enhancement of features & functionalities of the
 products are capitalized under Fixed asset as Technical Knowhow.
 
 - Software which are not integral part of the hardware are classified
 as Intangibles and is stated at cost less accumulated amortization.
 Software''s are being amortized over the estimated useful life which is
 estimated as 3 Years.
 
 6.  Depreciation:
 
 - Depreciation on tangible Fixed Assets is provided using
 Straight-line method at the rates prescribed under Schedule XIV of the
 companies Act, 1956 on proportionate basis.
 
 - Cost of Technical knowhow is being written off over a period of 10
 years.
 
 - Cost of assets wherever less than Rs. 5000 is written off fully in
 the year of purchase.
 
 - Temporary structures installed at the leased out premises is being
 written off over the tenure of the lease agreement.
 
 7.  Impairment of tangible and intangible Fixed Assets:
 
 The Company assesses at each Balance Sheet date, whether there is any
 indication that an asset may be impaired based on internal/external
 factors. If any such indication exists, the Company estimates the
 recoverable amount of the asset. An impairment loss is recognized
 wherever the carrying amount of an asset exceeds its recoverable
 amount. The recoverable amount is the greater of the asset''s net
 selling price and value in use. In assessing value in use, the
 estimated future cash flows are discounted to their present value at
 the weighted average cost of capital.
 
 8.  Leases:
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased term, are classified as
 operating leases. Operating lease payments are recognized as an expense
 in the Profit and Loss Account on a straight-line basis over the lease
 term.
 
 9.  Inventory Valuation:
 
 Raw Materials, Stores and spares and Stock in Trade are stated at lower
 of cost and net realizable value. Cost is determined based on first in
 first out basis and are net of provisions.
 
 Work in Progress and Finished Goods are valued at lower of cost and net
 realizable value. Cost includes Direct Materials and labour and a
 proportion of manufacturing overheads based on normal operating
 capacity.
 
 Net realizable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion and selling
 expenses.
 
 10.  Investments:
 
 Investments that are readily realizable and intended to be held for not
 more than a year are classified as current investments. All other
 investments are classified as long term investments. Long term
 investments are carried at cost. However, provision for diminution in
 value is made to recognize a diminution other than temporary in the
 value of investments.
 
 11.  Research and Development:
 
 Expenditure on Research and Development other than capital items is
 charged to revenue. Cost incurred on any generation of
 intangible/tangible asset out of the Research and development activity
 is amortized/written off over the estimated life of the asset.
 
 12.  Revenue Recognition:
 
 - Sales are recognized when the significant risks attached to the
 goods are passed on to the buyer and are recorded net of duties, trade
 discounts, and rebates.
 
 - Sales Returns are recognized as and when ascertained and are
 reduced from the sales turnover of the year.
 
 - Interest income is recognized on a time proportion basis taking
 into account the amount outstanding and the rate applicable.
 
 - Export benefits are accounted on accrual basis.
 
 13.  Warranty Expenses:
 
 Estimated amount of warranty expenses evaluated on a technical basis on
 sale of Radio Products wherever it is obligated to cover under
 warranty, is provided in the year of sale and the expired portion of
 the Warranty expenses relating to the period/year are transferred to
 the Statement of Profit and Loss. Unexpired portion of the Warranty
 expenses is carried over as a liability in the books of account and is
 written back over the number of years of the coverage of warranty on
 the basis of estimated warranty expenses for such products.
 
 14.  Exchange Fluctuation:
 
 a.  Foreign currency transactions are accounted at exchange rates
 prevailing on the date of the transaction.
 
 b.  Gains and losses resulting from the settlement of foreign currency
 transaction and from the translation of monetary assets and liabilities
 denominated in foreign currencies at the yearend rates are recognized
 in the Statement of Profit and Loss.
 
 c.  In case the monetary assets and liabilities are covered by forward
 contract, the premium or discount arising at the inception of such a
 forward contract is amortized as expense or income over the life of the
 contract.
 
 15.  Employee Benefits:
 
 - Provident Fund: Eligible employees receive benefits from a
 Provident Fund, which is a defined contribution plan.  Aggregate
 contributions along with interest thereon, are paid at retirement,
 death, incapacitation or termination of employment. Both the employee
 and the Company make monthly contributions to the Government
 administered Provident Fund. The Company has no obligation beyond its
 contribution.
 
 - Gratuity: A defined benefit retirement plan (''the Gratuity Plan)
 is provided to all employees. In accordance with the Payment of
 Gratuity Act, 1972, the Gratuity Plan provides a lump sum amount to
 vested employees at retirement, death, incapacitation or termination of
 employment, of an amount based on the respective employee''s salary and
 the tenure of employment. Liabilities with regard to the Gratuity plan
 are determined by actuarial valuation using the projected unit credit
 method, as of the balance sheet date.
 
 - Expenses on ex-gratia payment to employees, a defined contribution
 plan, are accounted as and when accepted by the management.
 
 - Provision in respect of Leave encashment is made, based on
 actuarial valuation.
 
 16.  Borrowing Cost:
 
 Borrowing costs relating to acquisition of qualifying assets are
 capitalized until the time all substantial activities necessary to
 prepare the qualifying assets for their intended use are complete. A
 qualifying asset is one that necessarily takes substantial period of
 time to get ready for its intended use. All other borrowing costs not
 eligible for capitalization are charged to revenue.
 
 17.  Taxes:
 
 - Tax expense comprises of current and deferred tax. Current Income
 Tax is measured based on the tax liability computed after considering
 tax allowances and exemptions.
 
 - Deferred tax is recognized, subject to the consideration of
 prudence in respect of deferred tax assets, on timing differences,
 being the difference between taxable income and accounting income that
 originate in one period and are capable of reversal in one or more
 subsequent periods.
 
 - Deferred Tax assets are recognized only to the extent that there is
 reasonable certainty that sufficient future taxable income will be
 available against which such deferred tax assets can be realized.
 
 18.  Cash Flow Statement:
 
 Cash flows are reported using the indirect method, whereby profit
 before tax is adjusted for the effects of transactions of a non cash
 nature, any deferrals or accruals of past or future operating cash
 receipts or payments and items income or expense associated with
 investing or financing cash flows. Cash and Cash Equivalents include
 Cash on hand and balance with banks in current and deposit accounts,
 with necessary disclosure of cash and cash equivalent balances that are
 not available for use by the company.
 
 Cash and Cash Equivalents for the purpose of Cash Flow Statement
 comprise of cash at Bank and in hand and Short Term investments with
 original maturity of 3 months or less.
 
 19.  Stock Option Plan (2008):
 
 The Company instituted the Kavveri ESOS 2008 Plan for all eligible
 employees in pursuance of the special resolution approved by the
 shareholders by Postal ballot on 23rd April 2008. The Kavveri ESOS 2008
 Plan covers all employees of the company and its subsidiaries and
 Directors (excluding Promoter Directors) of the Company and its
 subsidiaries (collectively, eligible employees). Under the Scheme,
 the Compensation Committee of the Board (''the Committee'') shall
 administer the Scheme and grant stock options to eligible directors and
 employees of the Company and its Subsidiaries. The Committee shall
 determine the employees eligible for receiving the options, the number
 of options to be granted, the exercise price, the vesting period and
 exercise period. Vesting of employee stock options granted occurs in
 tranches as under:
 
 The exercise price for the purpose of exercise of options will be at
 Rs.10/- per share i.e. at par.
 
 The employee stock options granted shall be capable of being exercised
 within a period of 5 years from the date of vesting options or such
 lesser period as may be decided by the Compensation Committee from time
 to time.
 
 Under the Scheme 388570(139125) stock options out of the total of
 5,00,000 stock options reserved for grant of options having an exercise
 price equal to the par value of the underlying equity shares on the
 date of grant (i.e.  Rs. 10 per option) are outstanding as at the
 balance sheet date.
 
 As the number of shares that an individual employee is entitled to
 receive and the price of the options are known at the grant date, the
 scheme is considered as a fixed grant.
 
 In the case of termination of employment, all non-vested options would
 stand cancelled. Options that have been vested but have not been
 exercised can be exercised within the time prescribed under each option
 agreement by the Committee or if no time limit is prescribed, within 30
 days of the date of employment termination, failing which they would
 stand cancelled.
 
 The Company follows intrinsic method of accounting based on which the
 compensation cost is recognized in the Profit and Loss account.
 
 During the current year, the company under the Kavveri 2008 Plan has
 granted 384,000 (Nil) options to eligible employees and 23,595 options
 lapsed till 31st March 2012.
 
 20.  Earnings per share:
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the year attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the year. The
 weighted average number of shares outstanding during the year is
 adjusted for events of bonus issue.
 
 For the purpose of calculating diluted earnings per share, the net
 profit or loss for the year attributable to equity shareholders and the
 weighted average number of shares outstanding during the year are
 adjusted for the effects of all dilutive potential equity shares.
 
 21.  Investments in Subsidiary Companies:
 
 a.  Pursuant to the Scheme of Amalgamation as referred to in Note 1
 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 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.
 
 c.  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.
 
 d.  The Company has incorporated a 100% subsidiary in the name of
 KAVVERI TELECOM ESPANA during the financial year 2011-12 with 1,003,000
 Euros as cost of investment.
 
 22.  Contingent Liability:
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities are not recognized but are disclosed in the
 Notes. Contingent assets are neither recognized nor disclosed in the
 financial statements.