Kaynes Tech Management Denies Kotak Allegations; Admits ‘Error’ in Disclosure

In the wake of Kotak Institutional Equities' critical report, Kaynes Tech's Executive Vice Chairman Ramesh Kunhikannan has spoken to NDTV Profit, where he defended the company's financial reporting practices.

Responding to the Kotak report that flagged several account inconsistencies and rising contingent liabilities, Kunhikannan pushed back against the broader allegations.

"As far as we are concerned, there is no inconsistency," he told NDTV Profit.

Among its many allegations, the Kotak report had highlighted a sharp rise in contingent liabilities, estimated at 18% of net worth.

Kunhikannan attributed this to bill discounting and working capital requirements specific to the metering business, where government receivables often face delays.

"If you see the 18%, this includes the bill discounting and the working capital. If you treat it, it's coming to only 20%, but if you apply the same logic for the previous year, it was 25%," he explained. "We fully understand as an organisation we are committed to giving transparent feedback."

Kunhikannan did, however, admit to specific lapses regarding disclosures of the Iskraemeco transaction. He went on to admit that during the merger year, a disclosure was 'inadvertently missed' in the notes to account, though he did state that the financial impact was already captured in primary statements.

"It is already in the balance sheet and everywhere... it is only in notes to account is missing so it's an error we agree we will correct," he said.

Addressing the sharp drop in stock sentiment following the report, Kunhikannan conceded the company could have managed the narrative better.

"I think somewhere we would have a lack of communication which we could have clarified better," he said, describing the downturn as a "passing phase" and reiterating that "business numbers are looking very promising."