Kaynes Technology clarifies financials, addresses business outlook

Kaynes Technology India Limited addressed observations regarding its financial disclosures and accounting presentations, acknowledging "a few disclosures required clearer clarification and articulation" but affirming "no governance concerns and no underlying deterioration in business." The company highlighted errors in reporting disclosure notes, not lapses in intent, and is implementing measures to strengthen internal compliances and audit review processes. The H1 FY '25 loss was attributed to significantly lower revenue ($85 crore), provisions from due diligence including inventory write-offs, and corporate clean-up.

Regarding the Iskraemeco acquisition, the company stated that a reported 28% net margin in H2 FY '25 was incorrect, with the actual H2 FY '25 net margin being 9% (revenues of $5,327 million and PAT of $489 million). It also clarified goodwill recognition and reserve adjustments, detailing the acquisition of Iskraemeco and Sensonic and the resulting capital reserve and goodwill.

The company stated that related party transactions were appropriately eliminated in consolidated financial statements, with the oversight pertaining to notes in a subsidiary's standalone financials which has since been rectified. Working capital improvements are underway, including collaborating with large customers on supply chain finance programs and leveraging factoring. Capex requirements for OSAT ($10.3 billion) and PCB ($14 billion) will be funded through QIP, internal accruals, debt, and central government subsidies.