You should read the following discussion and analysis of financial condition and
results of operations together with
our financial statements included in this Red Herring Prospectus. The following discussion
relates to our Company
and is based on our restated financial statements. Our financial statements have been
prepared in accordance with
Indian GAAP, the accounting standards and other applicable provisions of the Companies
Act.
Note: Statement in the Management Discussion and Analysis Report describing our
objectives, outlook, estimates,
expectations or prediction may be "Forward looking statement" within the meaning
of applicable securities laws
and regulations. Actual results could differ materially from those expressed or implied.
Important factors that could
make a difference to our operations include, among others, economic conditions affecting
demand/supply and price
conditions in domestic and overseas market in which we operate, changes in Government
Regulations, Tax Laws
and other Statutes and incidental factors.
Our Company was originally incorporated as a private limited company under the
Companies Act, 1956 in the
name and style of Classic Electrodes (India) Private Limited vide
certificate of incorporation dated
September, 30, 1997, bearing Corporate Identification
NumberU70100WB1997PTC085600issued by the
Registrar of Companies, Kolkata ("RoC") West Bengal. Thereafter, our company was
converted into a public
limited company pursuant to a special resolution passed by the shareholders of our Company
on April 18, 2009
and consequently the name of the company was changed to Classic Electrodes
(India) Limited and a fresh
certificate of incorporation consequent to change of name was issued by the Registrar of
Companies, Kolkata
dated June 13, 2009 bearing Corporate Identity Number U70100WB1997PLC085600.
We have consistently grown in terms of our revenues over the past years. In the recent
periods our revenues from
operation were Rs. 13,384.12 lakhs in F.Y. 2021-22, Rs. 15,087.12 lakhs
in F.Y. 2022-23 and Rs. 19,382.12 lakhs
in F.Y. 2023-24. Our Net Profit after tax for the above-mentioned periods were Rs. 145.37
lakhs, Rs. 208.48 lakhs,
and Rs. 1228.40 lakhs respectively.
Factors contributing to the growth of our Revenue:
1. For FY 2021-22 the following were the factors that contributed to growth of our revenue:
Significant Surge in Revenue from Operations:
Our revenue from operations saw substantial expansion, increasing from Rs 8,929.76
Lakhs in FY 2020-21 to Rs
13,384.12 Lakhs in FY 2021-22, reflecting an impressive growth of almost 49.88 %. This
growth was primarily
attributed to the successful realization of organic opportunities within our current
product offerings i.e., increase in
sale of powder, scrap, wire rod, MS Wire, Zinc Ingot, SS-MIG Wires and MS-MIG Wires
attributing to the boost
in the revenue from operations.
Cost of Purchase:
As part of our growth strategy, the company focused on promoting their capabilities and
successes stories with
significant changes in cost of Production and Stock Holding period, aligning well with the
companys growth
objectives. Increased visibility and accessibility, played a pivotal role in the overall
revenue surge.
2. For FY 2022-23 the following were the factors that contributed to growth of our revenue:
Steady Revenue Increase:
Our revenue from operations experienced a positive trajectory, escalating from Rs
13,384.12 Lakhs in FY 2021-22
to Rs 15,087.13 lakhs in FY 2022-23, marking a substantial growth of almost 12.72%. This
marginal increase in
Revenue from Operations was primarily a demand driven result of increase in volumes of
sales of SS-MIG Wires,
and MS-MIG Wires & increase in price of products.
Strategic Marketing :
The Company created a track record of positive testimonials and timely product delivery
& after sales service
which clearly built trust and credibility in the market, which is crucial for winning new
orders and maintaining a
competitive edge in the market.
3. For FY 2023-24 the following were the factors that contributed to growth of our revenue:
Steady Revenue Increase:
Our revenue from operations experienced a positive trajectory, escalating from Rs
15,087.13 Lakhs in FY 2022-23
to Rs 19,382.12 lakhs in FY 2023-24, marking a substantial growth of almost 28.47%. This
substantial growth was
due to increase in geographical presence and favourable market giving an ultimate boost to
the growth in sales of
Wire Rods, MS-Wires and organic growth in SS-MIG Wires, MS-MIG Wires and Electrodes.
Strategic expansion:
The Company expanded its Market in Eastern India. Marketing Team is effectively
involved in approaching New
Customers.
(Amount in Lakhs, except EPS, % and ratios)
Key Financial Performance |
Period ended February 28, 2025 |
Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
Revenue from Operations (1) |
18760.18 | 19382.12 | 15087.13 | 13384.12 |
Growth in revenue from operations (%) |
N.A. | 28.47% | 12.72% | 48.94% |
Total Income (2) |
18,789.56 | 19,440.73 | 15,112.69 | 13,436.80 |
EBITDA (3) |
1,924.17 | 2,303.64 | 854.12 | 607.85 |
EBITDA Margin (%) (4) |
10.24% | 11.85% | 5.65% | 4.52% |
Restated profit for the period/year (5) |
957.31 | 1229.79 | 208.48 | 149.31 |
Restated profit for the period/year (PAT Margin) |
5.10% | 6.34% | 1.38% | 1.12% |
Return on Net Worth (7) |
21.95% | 36.14% | 9.59% | 7.60% |
Return on Average Equity ("RoAE") (%) (8) |
24.66% | 44.11% | 10.08% | 7.80% |
Return on Capital Employed("RoCE") (%) (9) |
17.68% | 25.78% | 9.38% | 7.95% |
Debt- Equity Ratio (10) |
1.23 | 1.37 | 2.03 | 2.05 |
Notes:
(1)
Revenue from operations represents the revenue from sale of service & product & other operating revenue ofour Company as recognized in the Restated financial information.
(2)
Total income includes revenue from operations and other income.(3)
EBITDA means Earnings before interest, taxes, depreciation and amortization expense, which has been arrived(4)
EBITDA margin is calculated as EBITDA as a percentage of total income.(5)
Restated profit for the period / year margin is calculated as restated profit for the period / year divided by revenue(6)
PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations.(7)
Return on net worth is calculated as Net profit after tax, as restated, attributable to the owners of the Company(8)
RoAE is calculated as Net profit after tax divided by Average Equity.(9)
Return on capital employed calculated as Earnings before interest and taxes divided by capital employed as at(10)
Debt- equity ratio is calculated by dividing total debt by total equity. Total debt represents long-term and short-Except as otherwise stated in this Red Herring Prospectus and the Risk Factors given in
the Red Herring
Prospectus, the following important factors could cause actual results to differ
materially from the expectations
include, among others:
We do not have long-term agreements with our suppliers for raw materials
Our purchases of raw materials are concentrated from a few suppliers with our top 10
suppliers contributing
of the total purchases of raw materials on restated financial statement are as follows:
Period |
Amt (Rs in Lakhs) | % of total Purchase |
2024 |
13958.22 | 89.71 |
2023 |
12600.26 | 96.91 |
2022 |
11,266.41 | 96.06 |
Our ability to remain competitive, maintain costs and profitability depend, in part, on
our ability to source and
maintain a stable and sufficient supply of raw materials at acceptable prices. Our major
raw materials include
metals including Iron and Steel, Nickel, Titanium Wires and Titanium Oxide, Quartz,
Chemicals such as
Carbonates, Sodium, Hydrogen Bicarbonate etc. We depend on external suppliers for all the
raw materials
required and typically purchase raw materials on a purchase order basis and place such
orders with them in
advance based on our requirements. As a result, the success of our business is
significantly dependent on
maintaining good relationships with our raw material suppliers. The absence of long-term
supply contracts
subjects us to risks such as price volatility caused by various factors viz. commodity
market fluctuations, currency
fluctuations, climatic and environmental conditions, transportation cost, changes in
domestic as well as
international government policies, regulatory changes and trade sanctions. Some portions
of the raw materials
were imported during the last two Fiscal years from Australia. As a result, we continue to
remain susceptible to
the risks arising out of foreign exchange rate fluctuations as well as import duties,
which could result in decline
in our operating margins. If we cannot fully offset the increase in raw material prices
with increase in the prices
for our products, we will experience lower profit margins, which in turn may have a
material adverse effect on
our results of operations, financial condition and ultimately lead to a liquidity crunch.
In the absence of such
contracts, we are also exposed to the risk of unavailability of raw materials in desired
quantities and qualities, in
a timely manner.
Our inability to collect receivables and default in payment from our customers could
result in the reduction of
our profits and affect our cash flows.
We sell at our standard terms with payment due before dispatch and conduct our business
on the basis of various
milestone payments. A small percentage of our sales are to customers on an open credit
basis, with standard
payment terms of generally between 30 to 90 days. While we generally monitor the ability
of our customers to
pay these open credit arrangements and limit the credit we extend to what we believe is
reasonable based on an
evaluation of each customers financial condition and payment history, we may still
experience losses because of
a customer being unable to pay. As a result, while we maintain what we believe to be a
reasonable allowance for
doubtful receivables for potential credit losses based upon our historical trends and
other available information,
there is a risk that our estimates may not be accurate.
Particulars |
As at February 28, |
Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
Amt (Rs in Lakhs) |
Amt (Rs in Lakhs) |
Amt (Rs in Lakhs) |
Amt (Rs in Lakhs) |
|
Unsecured, Considered Good |
||||
Trade Receivable more than six |
628.12 | 585.38 | 574.73 | 740.23 |
Trade Receivable less than six months |
4283.72 | 2,835.79 | 2,712.19 | 2,001.77 |
Unsecured, Considered Doubtful |
||||
Trade Receivable more than six |
- | - | - | |
Total |
4911.84 | 3,421.17 | 3286.92 | 2742.00 |
Any increase in our receivable turnover days will negatively affect our business. If we
are unable to collect
customer receivables or if the provisions for doubtful receivables are inadequate, it
could have a material adverse
effect on our business, results of operations and financial condition.
Macroeconomic conditions could also result in financial difficulties, including
insolvency or bankruptcy, for our
customers, and as a result could cause customers to delay payments to us, request
modifications to their payment
arrangements, that could increase our receivables or affect our working capital
requirements, or default on their
payment obligations to us. An increase in bad debts or in defaults by our customer, may
compel us to utilize
greater amounts of our operating working capital and result in increased interest costs,
thereby adversely affecting
our results of operations and cashflows.
Regulatory Framework
We have obtained all regulatory permissions which are necessary to run our business,
Further, some of the
approvals are granted for fixed periods of time and need renewals, which are obtained in
the course of business,
however, there may be change in statutory regulations at any time which cannot be
predicted by us. There can be
no assurance that the change in regulations will not impact our operations in the future.
Our business and profitability is substantially dependent on the availability and cost
of our raw materials and
any disruption to the timely and adequate supply or volatility in the prices of raw
materials may adversely
impact our business, results of operations, cash flows and financial condition
We are engaged in the manufacturing of complex and high precision engineered
components, requiring raw
materials having certain technical specifications. The tables below provide cost of raw
materials and components
consumed as a percentage of our total revenue in the years/ periods indicated:
in Lakhs)
Particulars |
February 28, 2025 |
Fiscal 2024 |
Fiscal 2023 |
Fiscal 2022 |
||||
Amt (Rs in Lakhs) |
% of total Revenues |
Amt (Rs in Lakhs) |
% of total Revenues |
Amt (Rs in Lakhs) |
% of total Revenue s |
Amt (Rs in Lakhs) |
% of total Revenue s |
|
Cost of Raw |
8851.23 | 47.18% | 8657.32 | 44.67% | 7,634.89 | 50.61% | 6,298.28 | 47.06% |
We may experience volatility in the cost or availability of raw materials. A major
portion of raw materials
comprises of metals including iron and steel, nickel, Titanium Wires and Titanium Oxide,
Quartz, Chemicals such
as Carbonates, Sodium, Hydrogen Bicarbonate etc. The prices of such raw materials are
volatile and are dependent
on a number of factors, such as, their availability, fluctuations in domestic and
international demand and supply,
international production and capacity, fluctuation in the volume of metal imports,
transportation costs, protective
trade measures and various social and political factors, in the economies in which the
metal producers sell their
products. For instance, in Fiscal 2023 proved to be a tumultuous year for the steel sector
as the Russia-Ukraine
conflict that started in the last quarter of fiscal 2022 pushed up the prices of coking
coal, iron ore, pig iron and
steel. Prices of all these commodities hit new all-time highs, hurting the domestic
demand. The prices directly
impacted the procurement decisions of the players in the end-use segments in the first
quarter of fiscal 2023.
(Source: CRISIL Report) While our arrangements with customers allow us to seek an upward
revision in pricing,
our cash flows may still be adversely affected because of any gap in time between the date
of procurement of
those primary raw materials and date on which we can reset the prices for our customers,
to account for the
increase in the prices of such raw materials. Our ability to pass through costs or
otherwise mitigate these cost
increases could adversely affect our business. From time to time, commodity prices may
also fall rapidly. If this
happens, suppliers may withdraw capacity from the market until prices improve which may
cause periodic supply
interruptions. If these supply interruptions occur, our costs for procuring our raw
materials could increase, and
our business, cash flows and results of operations could be adversely affected.
Any increase in prices of raw materials could have an impact on our working capital as
we would require
additional funds to procure the necessary steel at the higher prices. As a result, we may
be required to allocate a
larger portion of our working capital towards purchasing raw materials to maintain our
production levels. This
increased allocation towards purchase can potentially strain our working capital
availability.
Ability of Management
Our success depends on the continued services and performance of the members of our
management team and
other key employees. Competition for senior management in the industry is intense, and we
may not be able to
retain our existing senior management or attract and retain new senior management in the
future. The loss of any
member of our senior management or other key personnel may adversely affect our business,
results of operations
and financial condition.
Market & Economic conditions
India is one of the largest economies and is growing at a rapid pace. But in this
globalised economy, all the
businesses face an uncertain level of volatility from unexpected global events which
ranges from global pandemics
to wars, to weather changes to supply chain disruption, which may change the economic
dynamics and the
purchasing capability of the end customers. At the time of market slowdown, the demand
falls which has adverse
impact on our business.
Competition
We operate in a competitive atmosphere. Our competition varies by market, geographic
areas and type of products.
Our Company may face stiff competition from domestic as well as global market as the
dynamic changes. Some
of our competitors may have greater resources than those available to us. While service
quality, technical ability,
performance records, etc. are key factors in client decisions among competitors, however,
price& quality are the
deciding factor in most cases. Further, this industry is fragmented with many small and
medium sized companies
and entities, which manufactures some of these products at various levels, which may
adversely affect our business
operation and financial condition. Further, there are no entry barriers in this industry
and any expansion in capacity
of existing market players would further intensify competition. Moreover, as we seek to
diversify into new
geographical areas, new territories, new emerging markets, we may face competition from
competitors that have
a pan-India presence and also from competitors that have a strong presence in regional
markets. The markets in
which we compete and intend to compete are undergoing, and are expected to continue to
undergo, rapid and
significant change. We expect competition to intensify as technological advances and
consolidations continue.
These competitive factors may force us to reduce rates, and to pursue new market
opportunities. Increased
competition could result in reduced demand for our products, increased expenses, reduced
margins and loss of
market share. Failure to compete successfully against current or future competitors could
harm our business,
operating cash flows and financial condition.
COVID-19 Pandemic
Since the onset of the COVID-19 pandemic in March 2020, our Companys operations have
been affected as our
employees faced the threat of getting infected. In 2020, cases of the novel corona virus
started rapidly increasing
in India, which led the government of India to impose a nationwide lockdown. The spread of
Covid-19 and its
recent developments have had and might continue to have repercussions across local,
national and global
economies. To prevent the spread of Covid-19 and to comply with the restrictions, we had
to temporarily suspend
our operations in order to follow the Governments norms. We continuously monitored the
economic conditions
and have outlined sufficient measures to combat the pandemic situation at our business
premises. Once the
lockdown was lifted, our operations restarted in full swing. Initially we did find a
little hiccup in finding workers
but because of our enterprising organization, we were able to source quality workforce and
we were able to train
them and we restarted our operations. After lifting the lockdown and resuming our
operations the demand in our
industry abruptly increased from the different sectors and we attained the highest
production during the partial
year 2020-21 and FY 2021-22. The demand after pandemic ultimately nullified the impact of
shutdown during
COVID 19 pandemic. The future impact of COVID-19 or any other severe communicable disease
on our business
and results of operations depends on several factors including those discussed in the
chapter "Risk Factors" on
Page No. 57 - Risk Factor No. 42- Unplanned slowdowns or shutdowns of our manufacturing
operations could
have an adverse effect on our business, results of operations, financial condition, cash
flows andfuture prospects.
We are continuing to closely monitor the economic conditions and the effect of
COVID-19 and have outlined
certain measures to combat the pandemic situation and to minimize the impact on our
business.
Significant Developments after February 28, 2025 that may affect our Future Results of Operations
The Directors confirm that there have been no other events or circumstances since the
date of the last financial
statements as disclosed in the Red Herring Prospectus which materially or adversely affect
or is likely to affect
the business or profitability of our Company or the value of our assets, or our ability to
pay liabilities within next
twelve months.
a) BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS
The restated summary statement of assets and liabilities of the Company as at 28
February, 2025, 31 March 2024,
31 March 2023 and 31 March 2022 and the related restated summary statement of profits and
loss and cash flows
for the period/ year ended 28 February 2025, 31 March 2024, 31 March 2023 and 31 March
2022 (herein
collectively referred to as ("Restated Summary Statements") have been compiled
by the management from the
audited Financial Statements of the Company for the period/ year ended on 28 February
2025, 31 March 2024, 31
March 2023 and 31 March 2022 approved by the Board of Directors of the Company. Restated
Summary Statements
have been prepared to comply in all material respects with the provisions of Part I of
Chapter III of the Companies
Act, 2013 (the "Act") read with Companies (Prospectus and Allotment of
Securities) Rules, 2014, Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018
("ICDR Regulations")
issued by SEBI and Guidance note on Reports in Companies Prospectuses (Revised 2019)
("Guidance Note").
Restated Summary Statements have been prepared specifically for inclusion in the offer
document to be filed by
the Company with the NSE in connection with its proposed SME IPO. The Companys management
has recast the
Financial Statements in the form required by Schedule III of the Companies Act, 2013 for
the purpose of restated
Summary Statements.
The financial statements of the Company have been prepared in accordance with the
Generally Accepted
Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards
specified under Section
133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013
("the 2013 Act"), as
applicable. The financial statements have been prepared on accrual basis under the
historical cost convention. The
accounting policies adopted in the preparation of the financial statements are consistent
with those followed in the
previous year.
Accounting policies not specifically referred to otherwise are consistent and in
consonance with generally accepted
accounting principles in India.
All assets and liabilities have been classified as current or non-current as per the
Companys normal operating cycle
and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature
of products and the time
between the acquisition of assets for processing and their realization in cash and cash
equivalents, the Company
has determined its operating cycle as twelve months for the purpose of current -
non-current classification of assets
and liabilities.
b) USE OF ESTIMATES
The preparation of the financial statements in conformity with Indian GAAP requires the
Management to make
estimates and assumptions considered in the reported amounts of assets and liabilities
(including contingent
liabilities) and the reported income and expenses during the year. The Management believes
that the estimates used
in preparation of the financial statements are prudent and reasonable. Future results
could differ due to these
estimates and the differences between the actual results and the estimates are recognised
in the periods in which the
results are known / materialise.
c) PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS
(i) Property, Plant & Equipment
All Property, Plant & Equipment are recorded at cost including taxes, duties,
freight and other incidental expenses
incurred in relation to their acquisition and bringing the asset to its intended use.
d) DEPRECIATION / AMORTISATION
Depreciation on fixed assets is calculated on a Written - Down value method using the
rates arrived at based on the
useful lives estimated by the management, or those prescribed under the Schedule II to the
Companies Act, 2013.
Individual assets cost of which doesnt exceed Rs. 5,000/- each are depreciated in full in
the year of purchase.
e) INVENTORIES
Inventories comprises of Raw Material, Work-in-Progress and Stock-in-Trade.
Inventories are measured at the lower of cost and net realisable value. The cost of
inventories is based on the first-
in, first-out principle.
Net realizable value is the estimated selling price in the ordinary course of business,
less the estimated costs of
completion and the estimated costs necessary to make the sale.
f) IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable
value. Recoverable amount
is the higher of an assets net selling price and its value in use. Value in use is the
present value of estimated future
cash flows expected to arise from the continuing use of the asset and from its disposal at
the end of its useful life.
Net selling price is the amount obtainable from sale of the asset in an arms length
transaction between
knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged
to the Statement of Profit
and Loss in the year in which an asset is identified as impaired. The impairment loss
recognised in prior accounting
periods is reversed if there has been a change in the estimate of the recoverable value.
g) INVESTMENTS:
Non-current investments are carried at cost less any other-than-temporary diminution in
value, determined on the
specific identification basis.
Profit or loss on sale of investments is determined as the difference between the sale
price and carrying value of
investment, determined individually for each investment. Cost of investments sold is
arrived using average
method.
h) FOREIGN CURRENCY TRANSLATIONS
Income and expense in foreign currencies are converted at exchange rates prevailing on
the date of the transaction.
Any income or expense on account of exchange difference either on settlement or on
translation at the balance sheet
date is recognized in Profit & Loss Account in the year in which it arises.
i) BORROWING COSTS
Borrowing costs that are attributable to the acquisition or construction of qualifying
assets are capitalised as part of
the cost of such assets. A qualifying asset is one that necessarily takes substantial
period of time to get ready for
intended use. All other borrowing costs are recognised in Statement of Profit and Loss in
the period in which they
are incurred.
j) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provision involving substantial degree of estimation in measurement is 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.
k) REVENUE RECOGNITION
Revenue is Recognised only when significant risk and rewards of ownership has been
transferred to the buyer and
it can be reliably measured and its reasonable to expect ultimate collection of it. Gross
sales are of net trade discount
and sales returns.
The Company adopts accrual concepts in preparation of accounts. Claims /Refunds not
ascertainable with
reasonable certainty are accounted for on final settlement.
l) OTHER INCOME
Interest Income on fixed deposit is recognized on time proportion basis. Other Income
is accounted for when right
to receive such income is established.
m) EMPLOYEE BENEFITS
Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan
covering eligible employees.
The plan provides for lump sum payment to vested employees at retirement, death while in
employment or on
termination of employment of an amount equivalent to 15 days salary payable for each
completed year of service
without any monetary limit. Vesting occurs upon completion of five years of service.
Provision for gratuity has
been made in the books as per actuarial valuation done as at the end of the year.
n) TAXES ON INCOME
Income taxes are accounted for in accordance with Accounting Standard (AS-22) -
"Accounting for taxes on
income", notified under Companies (Accounting Standard) Rules, 2014. Income tax
comprises of both current
and deferred tax.
Current tax is measured on the basis of estimated taxable income and tax credits
computed in accordance with the
provisions of the Income Tax Act, 1961.
The tax effect of the timing differences that result between taxable income and
accounting income and are capable
of reversal in one or more subsequent periods are recorded as a deferred tax asset or
deferred tax liability. They are
measured using substantially enacted tax rates and tax regulations as of the Balance Sheet
date.
Deferred tax assets arising mainly on account of brought forward losses and unabsorbed
depreciation under tax
laws, are recognized, only if there is virtual certainty of its realization, supported by
convincing evidence. Deferred
tax assets on account of other timing differences are recognized only to the extent there
is a reasonable certainty of
its realization.
o) CASH AND BANK BALANCES
Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed Deposits with
banks. Cash equivalents
are short-term balances (with an original maturity of three months or less from the date
of acquisition), highly liquid
investments that are readily convertible into known amounts of cash and which are subject
to insignificant risk of
changes in value. Other Bank Balances are short-term balance (with original maturity is
more than three months
but less than twelve months).
p) EARNINGS PER SHARE
Basic earnings per share is computed by dividing the profit/ (loss) after tax
(including the post tax effect of
extraordinary items, if any) by the weighted average number of equity share outstanding
during the year. Diluted
earnings per share is computed by dividing the profit/ (loss) after tax (including the
post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to expense or income
(net of any attributable
taxes) relating to the dilutive potential equity shares, by the weighted average number of
equity shares which could
have been issued on the conversion of all dilutive potential equity shares.
q) EMPLOYEE BENEFITS
Defined Contribution Plan:
Contributions payable to the recognised provident fund, which is a defined contribution
scheme, are charged to the
statement of profit and loss.
Defined Benefit Plan:
The Company has an obligation towards gratuity, a defined benefit retirement plan
covering eligible employees.
The plan provides for lump sum payment to vested employees at retirement, death while in
employment or on
termination of employment of an amount equivalent to 15 days salary payable for each
completed year of service
without any monetary limit. Vesting occurs upon completion of five years of service.
Provision for gratuity has
been made in the books as per actuarial valuation done as at the end of the year.
^EsuLtsofouRoPeRAtIONI^^
(Amount Rs in lakhs)
Particulars |
For the period ended February 28, |
% of Total-- |
For the year ended 31st March, 2024 |
% of Total-- |
For the year ended 31st March, 2023 |
% of Total-- |
For the year ended 31st March, 2022 |
% of Total-- |
INCOME |
||||||||
Revenue from Operations |
18,760.18 | 99.84% | 19,382.12 | 99.70% | 15,087.13 | 99.83% | 13,384.12 | 99.61% |
Other Income |
29.38 | 0.16% | 58.61 | 0.30% | 25.56 | 0.17% | 52.68 | 0.39% |
Total Revenue (A) |
18,789.56 | 100.00% | 19,440.73 | 100.00% | 15,112.69 | 100.00% | 13,436.80 | 100.00% |
expenditure |
||||||||
Cost of material consumed |
8,851.23 | 47.11% | 8,657.32 | 44.53% | 7,634.89 | 50.52% | 6,298.28 | 46.87% |
Purchase of Stock-in-Trade |
6,362.75 | 33.86% | 6,903.15 | 35.51% | 5,368.03 | 35.52% | 5,430.02 | 40.41% |
Direct Expenses |
985.67 | 5.25% | 840.92 | 4.33% | 668.79 | 4.43% | 588.88 | 4.38% |
Changes in inventories of work in progress and |
(75.95) | -0.40% | 128.44 | 0.66% | 33.94 | 0.22% | 54.50 | 0.41% |
Employee benefits expense |
241.20 | 1.28% | 241.63 | 1.24% | 207.94 | 1.38% | 186.26 | 1.39% |
Finance costs |
466.61 | 2.48% | 458.08 | 2.36% | 359.36 | 2.38% | 306.36 | 2.28% |
Depreciation and amortization expense |
206.81 | 1.10% | 218.21 | 1.12% | 234.91 | 1.55% | 129.27 | 0.96% |
Other expenses |
461.85 | 2.46% | 347.51 | 1.79% | 326.37 | 2.16% | 245.37 | 1.83% |
Total Expenses (B) |
17,500.17 | 93.14% | 17,795.26 | 91.54% | 14,834.23 | 98.16% | 13,238.94 | 98.53% |
Profit/(Loss) before Tax |
1,289.39 | 6.86% | 1,645.47 | 8.46% | 278.46 | 1.84% | 197.86 | 1.47% |
Tax Expense/ (benefit) |
||||||||
(a) Current Tax Expense |
342.12 | 1.82% | 423.02 | 2.18% | 81.42 | 0.54% | 47.68 | 0.35% |
(b) Deferred Tax |
(10.04) | -0.05% | (7.34) | -0.04% | (11.44) | -0.08% | 0.87 | 0.01% |
Net tax expense / (benefit) |
332.08 | 1.77% | 415.68 | 2.14% | 69.98 | 0.46% | 48.55 | 0.36% |
Profit/(Loss) for the year |
957.31 | 5.09% | 1,229.79 | 6.33% | 208.48 | 1.38% | 149.31 | 1.11% |
Components of our Profit and Loss Account
Income
Our total income comprises of revenue from operations and other income.
Revenue from Operations
Our revenue from operations as a percentage of our total income was 99.84%, 99.70%,
99.83% and 99.61% for period
ended February 28, 2025 and Financial Years ended March 31, 2024, March 31, 2023 and March
31, 2022 respectively.
(Amount f in lakhs)
Particulars |
For the period ended February 28,2025 |
For the year ended March 31, 2024 |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
Sale of Goods |
||||
Domestic |
18,751.86 | 19,174.41 | 15,010.63 | 13,073.30 |
Export |
8.32 | 207.71 | 76.50 | 310.82 |
Total |
18,760.18 | 19,382.12 | 15,087.13 | 13,384.12 |
Other Income
Our other Income consists of Interest Income, Interest on FDR, Interest on IT Refund,
Foreign Exchange Gain,
Discount Received, Rent Received, Rate Difference, Dividend, Profit on sale of Asset, Duty
Drawback, Sundry
balances written off and Profit on sale of Shares.
(Amount f in lakhs)
Particulars |
For the period ended February 28, 2025 |
For the year ended March 31, 2024 |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
Interest Income |
1.74 | 6.56 | 0.18 | 6.75 |
Interest on FDR |
4.96 | 6.43 | 3.93 | 3.78 |
Interest on IT Refund |
- | 0.41 | 1.25 | - |
Foreign Exchange Gain |
3.38 | 1.04 | - | 1.91 |
Rent Income |
17.60 | 19.20 | 19.20 | 19.20 |
Rate Difference |
- | 2.84 | - | - |
Profit on sale of asset |
- | 17.78 | - | 15.66 |
Dividend |
1.02 | 0.86 | 1.00 | 1.15 |
Profit on sale of shares |
- | - | - | 3.66 |
Sundry balances written back |
0.58 | - | - | 0.57 |
Duty Drawback-Customs |
0.10 | 3.49 | - | - |
TOTAL |
29.38 | 58.61 | 25.56 | 52.68 |
Expenditure
Our total expenditure primarily consists of cost of material consumed, purchases of
stock-in-trade, direct expenses,
changes in inventories of work in progress, finished goods and stock-in-trade, employee
benefits expense, finance
costs, depreciation and amortization expense and other expenses.
Direct Expenses
Our direct expenses comprise primarily of Cost of Material consumed, Purchase of
stock-in-trade and Changes in
inventories of work in progress, finished goods and stock-in-trade, Operational &
Manufacturing Expenses and Repair
& Maintenance Charges.
Employee Benefit Expenses
Our employee benefits expense comprises of salaries & bonus, director remuneration,
wages, gratuity, employers
contribution to provident fund, ESI & other funds and staff welfare expenditure.
Finance costs
Our Finance cost expenses comprise of bank charges & commission, borrowing cost,
interest on late payment of taxes
and LC discounting charges.
Other Expenses
Other expenses primarily include auditors remuneration, accounting charges, BIS
expenses, share expenses, carriage
outward, commission on sale, computer expenses, loss on foreign exchange, donation, EPF
& ESI arrear expenses,
general expenses, insurance, legal & professional expenses, license fees, liquidated
damage, provision for diminution
in the value of investments, loss on forfeiture of investments, maintenance charges,
mining expenses, vehicle
expenses, office electricity, office expense, postage & telegram, printing &
stationery, professional tax, rate difference,
rates and taxes, registrations & renewals, rent, roc filling fees, sale promotion
expenses, security & service charges,
survey charges, sundry balances w/off, telephone expenses, tempo running expenses, tender
fees, travelling &
conveyance expenses and water expense.
(Amount Rs in lakhs)
Particulars |
For the period ended February 28,2025 |
For the year ended March 31, 2024 |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
Auditors Remuneration |
||||
- Statutory Audit |
1.25 | 1.20 | 1.20 | 1.04 |
- Tax Audit |
- | 0.80 | 0.80 | 0.69 |
- Others |
- | 1.10 | - | - |
Accounting Charges |
- | 0.17 | 0.17 | 0.17 |
Share Expenses |
- | 0.02 | 0.06 | 0.21 |
Carriage Outward |
122.39 | 121.19 | 83.52 | 71.01 |
Commission on Sale |
1.28 | 3.55 | 2.84 | - |
Computer Expenses |
0.70 | 0.67 | 0.55 | 1.34 |
Loss on Foreign Exchange |
- | - | 15.63 | - |
Loss on sale of Fixed Assets |
1.24 | - | - | - |
Donation |
12.87 | - | 2.50 | 2.50 |
General Expenses |
15.84 | 32.15 | 22.91 | 9.45 |
Insurance |
41.09 | 44.28 | 46.41 | 45.40 |
Internet Expenses |
0.71 | 1.50 | - | - |
Laboratory Expense |
0.79 | - | - | - |
Director Sitting Fees |
3.60 | - | - | - |
Legal & Professional expenses |
15.96 | 7.04 | 11.39 | 4.59 |
License Fees |
0.03 | 0.05 | 0.01 | - |
Liquidated damage |
- | - | 0.49 | 0.70 |
Loss on Forfeiture of investments |
- | - | - | 2.81 |
Maintenance Charges |
- | - | 7.91 | 19.83 |
Membership & Subscription Fee |
4.88 | 0.25 | - | - |
Mining Expenses |
2.20 | 0.21 | 0.10 | 0.10 |
Vehicle Expenses |
1.82 | 4.20 | 3.63 | 0.93 |
Office Expense |
1.56 | 4.91 | 2.40 | 1.52 |
Postage & Courier Charges |
0.27 | 0.11 | 0.13 | 0.09 |
Printing & Stationery |
3.00 | 3.29 | 2.00 | 1.16 |
Rates and Taxes |
38.86 | 12.59 | 15.76 | 17.66 |
Registrations & Renewals |
8.81 | 7.06 | 7.13 | 7.91 |
Rent |
22.10 | 30.45 | 30.75 | 28.45 |
Sale Promotion Expenses |
111.61 | 12.95 | 30.79 | 9.67 |
Security & Service Charges |
14.10 | 7.63 | 9.17 | 5.34 |
Survey Charges |
1.78 | 1.17 | - | 0.98 |
Sundry Balances W/off |
- | 8.28 | 11.91 | - |
Telephone Expenses |
0.54 | 0.58 | 0.86 | 0.48 |
Tempo Running Expenses |
13.24 | 13.97 | 10.87 | 5.35 |
Travelling & Conveyance Expenses |
15.29 | 23.36 | 1.98 | 5.11 |
Water Expense |
4.04 | 2.78 | 2.50 | 0.88 |
Total |
461.85 | 347.51 | 326.37 | 245.37 |
Provision for Tax
Provision of Current tax is determined on the basis of taxable income and tax credits
computed in accordance with the
provision of the income tax act, 1961. Deferred tax assets and liabilities are recognized
by computing the tax effect
on timing difference which arise during the year and reverse in the subsequent periods.
Deferred tax assets are
recognized only to the extent that there is a reasonable certainty that sufficient future
taxable income will be available
against which such deferred tax assets can be realized.
For the period ended February 28, 2025
Revenue from Operations
The revenue from operations of our company for the period ended February 28, 2025 was
Rs 18,760.18 lakhs.
Other Income
The Other Income of our company for the period ended February 28, 2025 was Rs 29.38
lakhs.
Total Income
The Total Income of our company for the period ended February 28, 2025 was Rs 18,789.56
lakhs.
Expenditure
Cost of Material Consumed
For the period ended February 28, 2025 our companys cost of material consumed was Rs
8,851.23 lakhs.
Purchases of Stock-in-Trade
For the period ended February 28, 2025 our companys purchases of stock-in-trade was Rs
6,362.75 lakhs.
Direct Expenses
For the period ended February 28, 2025 our companys direct expenses was Rs 985.67 lakhs.
Changes in inventories of work in progress, finished goods and stock-in-trade
For the period ended February 28, 2025 our companys changes in inventories of work in
progress, finished goods and stock-in-trade was Rs (75.95) lakhs.
Employee benefits expense
For the period ended February 28, 2025 our Company incurred for employee benefits
expense Rs 241.20 lakhs.
Finance costs
The finance costs for the period ended February 28, 2025 was Rs 466.61 lakhs.
Depreciation and amortization expense
The depreciation and amortization expense for the period ended February 28, 2025 was Rs
206.81 lakhs.
Other expenses
For the period ended February 28, 2025 our other expenses were Rs 461.85 lakhs.
Profit/ Loss before Tax
Our Company had reported a profit before tax for the period ended February 28, 2025 of
Rs 1,289.39 lakhs.
Profit/ Loss after Tax
Our Company had reported a profit after tax for the period ended February 28, 2025 was
at Rs 957.31 lakhs.
F iscal 2024 compared with fiscal 2023
Income
Revenue from Operations
The revenue from operations of our company for fiscal year 2024 was Rs 19,382.12 lakhs
against Rs 15,087.13 lakhs
revenue from operations for Fiscal year 2023. An increase of 28.47% in revenue from
operations. This increase was
due to increase in geographical presence in the eastern India and favourable market
resulting in increase in sales of
Wire Rods, MS-Wires and organic growth in SS-MIG Wires, MS-MIG Wires and Electrodes.
Other Income
The other income of our company for fiscal year 2024 was Rs 58.61 lakhs against Rs
25.56 lakhs other income for
Fiscal year 2023. An increase of 129.30% in other income. This increase was primarily due
to profit on sales on
fixed assets accruing to almost Rs 17.78 lacs and along with Interest Income of Rs 6.56
lacs, duty drawback of customs
3.49 lacs etc.
Total Income
The total income of our company for fiscal year 2024 was Rs 19,440.73 lakhs against Rs
15,112.69 lakhs total income
for fiscal year 2023. An increase of 28.64% in total income. This increase was due to
increase in revenue from
operations due to increase in geographical presence in the eastern India and favourable
market resulting in increase
in sales of Wire Rods, MS-Wires and organic growth in SS-MIG Wires, MS-MIG Wires and
Electrodes along with
profits on sale of fixed asset and other incomes.
Expenditure
Cost of Material Consumed
In fiscal 2024, our cost of material consumed were Rs 8,657.32 lakhs against Rs
7,634.89 lakhs cost of material
consumed in fiscal 2023. An increase of 13.39%. This increase was due to increase in
utilisation of the existing
production capacity along with increase in purchase of raw material during the year due to
high volume of orders.
Purchases of Stock-in-Trade
In fiscal 2024, our purchases of stock-in-trade were Rs 6,903.15 lakhs against Rs
5,368.03 lakhs purchases of stock-
in-trade in fiscal March 31, 2023. An increase of 28.60%. This increase of purchase in
stock-in-trade was done in
order to cater to the high order pipeline during the fiscal year.
Direct Expenses
In fiscal 2024, our direct expenses were Rs 683.54 lakhs against Rs 531.39 lakhs direct
expenses in fiscal 2023. An
increase of 28.63%. This increase was due to increase in factory production overheads
primarily Power & Fuel
expenses, Carriage Inward expenses and store consumables.
Changes in inventories of work in progress and finished goods
In fiscal 2024 our changes in inventories of work in progress and finished goods were
Rs 128.44 lakhs against Rs 33.94
lakhs changes in inventories of work in progress and finished goods in fiscal 2023. A
change of 278.43%.
Employee benefits expense
In fiscal 2024, our Company incurred for employee benefits expense Rs 399.01 lakhs
against Rs 345.34 lakhs expenses
in fiscal 2023. An increase of 15.54%. This increase was due to increase in salary and
wages of employees due to
overtime along with appraisals during the year and increase in employee strength.
Finance costs
The finance costs for the Fiscal 2024was Rs458.08 lakhs while it was Rs 359.36 lakhs
for Fiscal 2023. An increase of
27.47% was due to increase in utilization of Bank Limit resulting in higher interest cost
during the year along with
payment on Interest on delayed payment of taxes.
Other expenses
In fiscal 2024, our other expenses were Rs 347.51 lakhs and Rs 326.37 lakhs in fiscal
2023. This increase of 6.48% was
due to increase in audit fees, carriage outward, general expenses, license fees, mining
expenses, office expense,
printing and stationery, professional tax, filing fees, travelling and conveyance
expenses.
Profit/ (Loss) before Tax
Our Company had reported a profit before tax for the Fiscal 2024 of Rs 1,645.47 lakhs
against profit before tax of Rs
278.46 lakhs in Fiscal 2023.An increase of 490.92%. The substantial increase in profit
before taxes was due the
substantial growth in revenue from operations coming from growth in sale of products like
Wire Rods, MS-Wires,
SS-MIG Wires, MS-MIG Wires and Electrodes along with cost optimization.
Profit/ (Loss) after Tax
Profit after tax for the Fiscal 2023 was at Rs 1,228.40 lakhs against profit after tax
of Rs 208.48 lakhs in fiscal 2022.
An increase of 489.22%. This increase was due to increase in growth of profit before taxes
adjusted with taxes..
Fiscal 2023 compared with fiscal 2022
Income
Revenue from Operations
The revenue from operations of our company for fiscal year 2023 was Rs 15,087.13 lakhs
against Rs 13,384.12 lakhs
revenue from operations for Fiscal year 2022. An increase of 12.72% in revenue from
operations. This marginal
increase in Revenue from Operations was primarily a demand driven result of increase in
sales volumes of SS-MIG
Wires, MS-MIG Wires & increase in price of products.
Other Income
The other income of our company for fiscal year 2023 was Rs 25.56 lakhs against Rs
52.68 lakhs other income for
fiscal year 2022. A decrease of 51.48% in other income. This decrease of other income was
due to absence of
Interest Income, sundry balance written off, foreign exchange gains. Along with it, no
sale of assets or shares has
been executed during the year resulting in lower other income.
Total Income
The total income of our company for fiscal year 2023 was Rs 15,112.69 lakhs against Rs
13,436.80 lakhs total income
for fiscal year 2022. An increase of 12.47% in total income. This increase was due to the
marginal growth in revenue
from operations coming from favourable demands of products during the year adjusted with
decrease in other
incomes.
Expenditure
Cost of Material Consumed
In fiscal 2023, our cost of material consumed were Rs 7,634.89 lakhs against Rs
6,298.28 lakhs cost of material
consumed in fiscal 2022. An increase of 21.22%. This increase was due to the increase in
production & capacity
utilisation of goods to cater to the demand of products during the year.
Purchases of Stock-in-Trade
In fiscal 2023, our purchases of stock-in-trade were Rs 5,368.03 lakhs against Rs
5,430.02 lakhs purchases of stock-
in-trade in fiscal March 31, 2022. A decrease of 1.14%. This marginal decrease was due to
maintaining of adequate
level of stock to meet our demand of clients during the year and no material purchase was
made during the end of
the year.
Direct Expenses
In fiscal 2023, our direct expenses were Rs 531.39 lakhs against Rs 486.27 lakhs direct
expenses in fiscal 2022. An
increase of 9.28%. This increase was due to increase in factory production overheads likes
carriage inward,
inspection charges, stores consumables, maintenance cost of plant and machinery &
factory expenses.
Changes in inventories of work in progress and finished goods
In fiscal 2023 our changes in inventories of work in progress and finished goods were
Rs 33.94 lakhs against Rs 54.50
lakhs changes in inventories of work in progress and finished goods in fiscal 2022. A
change of 37.72%.
Employee benefits expense
In fiscal 2023, our Company incurred for employee benefits expense Rs 345.34 lakhs
against Rs 288.87 lakhs expenses
in fiscal 2022. An increase of 19.55%. This increase was due to increase in employee
strength of the workforce
along with annual appraisals and bonuses during the fiscal year.
Finance costs
The finance costs for the Fiscal 2023 was Rs 359.36 lakhs while it was Rs 306.36 lakhs
for Fiscal 2022. An increase
of 17.30% was due to increase in utilization of Cash Credit and Overdraft Limit along with
increase in interest rates
during the fiscal year 2024
Other expenses
In fiscal 2023, our other expenses were Rs 326.37 lakhs and Rs 245.37 lakhs in fiscal
2022. This increase of 33.01%
was due to increase in carriage, sundry balance written off, Legal Expenses & Foreign
Exchange Fluctuations.
Profit/ (Loss) before Tax
Our Company had reported a profit before tax for the Fiscal 2023 of Rs 278.46 lakhs
against profit before tax of Rs
197.86 lakhs in Fiscal 2022.An increase of 40.74%. This increase was due to increase in
the revenue from operations
highlighting the sales of existing product portfolios like SS-MIG Wires, and MS-MIG Wires
adjusted with other
Income and Cost optimizations during the year.
Profit/ (Loss) after Tax
Profit after tax for the Fiscal 2023 was at Rs 208.48 lakhs against profit after tax of
Rs 145.37 lakhs in fiscal 2022. An
increase of 43.41%. This increase was due to increase in profit before taxes resulting
from high sales of existing
products adjusted with cost optimization during the fiscal year.
Cash Flow
(Amount Win lakhs)
Particulars |
For the period ended |
For the year ended March 31, |
||
2024 | 2023 | 2022 | ||
Net Cash flow/(used in) from Operating |
124.22 | 285.95 | 168.25 | 124.51 |
Net Cash flow/(used in) from Investing |
(330.50) | (97.35) | (196.27) | (401.21) |
Net Cash flow/(used in) used in Financing |
216.61 | (196.74) | 31.26 | 275.79 |
Cash Flows from Operating Activities
1. For the Period Ended February 28, 2025, Net cash flow from operating activities was
t 124.22 Lakhs. This
comprised of the net profit before tax of t 1,289.39 Lakhs, which was primarily adjusted
for Finance Cost of t 466.61
Lakhs, Gratuity Provision of t 9.34 Lakhs, Provision for leave encashment of t 1.42 Lakhs,
Dividend Income of t
1.02 Lakhs, Interest Income of t 6.70 Lakhs, Sundry balance written back of t 0.58 Lakhs,
Profit on sale of fixed
assets of t 1.24 Lakhs, and Depreciation and Amortisation Expense of t 206.81 Lakhs. The
resultant Operating Profit
Before Working Capital Changes was t 1,966.51 Lakhs, which was primarily adjusted for an
increase in Trade
Receivables of t 1,490.67 Lakhs, increase in Loans and Advances of t 635.37 Lakhs,
increase i n Other Non-Current
Assets of t 8.83 Lakhs, increase in Inventories of t 511. 31 Lakhs, decreased in Other
Current Assets (Including Other
Bank balances) of t 6.10 Lakhs and Trade Payables increased by t 808.87 Lakhs, decrease in
Provisions of t 1.26
Lakhs and Other Current Liabilities decreased by t 170.72 Lakhs.
Cash Generated from Operations was t 304.76 Lakhs, which was reduced by direct tax paid
for t 180.54 Lakhs,
resulting in net cash flow from operating activities of t 124.22 Lakhs.
2. In F.Y. 2023-24, Net cash flow from operating activities was t 285.95 Lakhs. This
comprised the net profit before
tax of t 1,645.47 Lakhs, which was primarily adjusted for Finance Cost of t 458.08 Lakhs,
Gratuity Provision of t
9.77 Lakhs, Provision for leave encashment of t 1.26 Lakhs, Dividend Income of t 0.86
Lakhs, Interest Income of t
13.40 Lakhs, Sundry balance written off of t 8.28 Lakhs, Profit on sale of fixed assets of
t 17.78 Lakhs, and
Depreciation and Amortisation Expense of t 218.21 Lakhs. The resultant Operating Profit
Before Working Capital
Changes was t 2,309.03 Lakhs, which was primarily adjusted for an increase in Trade
Receivables of t 142.53 Lakhs,
increase in Inventories of t 1,174.15 Lakhs, increase in Other Current Assets (Including
Other Bank balances) of t
59.90 Lakhs, increase in other Non-Current Assets of t 5.61 lakhs, decrease in Trade
Payables of t 11.85 Lakhs, and
decrease in Provisions of t 1.05 Lakhs and Other Current Liabilities decreased by t 268.82
Lakhs.
Cash Generated from Operations was t 748.31 Lakhs, which was reduced by direct tax paid
for t 462.36 Lakhs,
resulting in net cash flow from operating activities of t 285.95 Lakhs.
3. In F.Y. 2022-23, net cash flow from operating activities was t 168.25 Lakhs. This
comprised of the net profit before
tax of t 278.46 Lakhs, which was primarily adjusted for Finance Cost of t 359.36 Lakhs,
Gratuity Provision of t 4.84
Lakhs, Provision for leave encashment of t 1.05 Lakhs, Dividend Income of t 1.00 Lakhs,
Interest Income of t 5.36
Lakhs, Sundry balance written off of t 11.91 Lakhs and Depreciation and Amortisation
Expense of t 234.91 Lakhs.
The resultant operating profit before working capital changes was t 884.17 Lakhs, which
was primarily adjusted for
an increase in Trade Receivables of t 556.83 Lakhs, Other Current Assets (Including Other
Bank balances) of t 4.50
Lakhs, Other Current Liabilities of t 50.42 Lakhs and a decrease in Inventories of t 86.62
Lakhs, Loans and Advances
of Rs 233.12 Lakhs, Other Non-Current Assets of Rs 20.75 Lakhs, Trade Payables of Rs 496.00 Lakhs, Provisions of Rs
0. 80.Lakhs.
Cash Generated from Operations was Rs 216.95 Lakhs which was reduced by direct tax paid
for Rs 48.70 Lakhs resulting
into net cash flow from operating activities of Rs 168.25 Lakhs
4. In F.Y. 2021-22, net cash flow from operating activities was Rs 124.51 Lakhs. This
comprised of the net profit before
tax of Rs 197.86 Lakhs, which was primarily adjusted for Finance Cost of Rs 306.36 Lakhs,
Gratuity Provision of Rs 2.19
Lakhs, Provision for leave encashment of Rs 0.80 Lakhs, Dividend Income of Rs 1.15 Lakhs,
Interest Income of Rs 10.53
Lakhs, Sundry balance written back of Rs 0.57 Lakhs, Profit on sale of equity shares
(investments) of Rs 3.66 Lakhs,
Loss on forfeiture of shares of Rs 2.81 Lakhs, Profit on sale of fixed assets of Rs 15.66
Lakhs and Depreciation and
Amortisation Expense of Rs 129.27 Lakhs. The resultant operating profit before working
capital changes was Rs 607.72
Lakhs, which was primarily adjusted for an increase in Trade Receivable s of Rs 702.08
Lakhs, Inventories of Rs 407.72
Lakhs, Other Current Assets (Including Other Bank balances) of Rs 4.93 Lakhs, Loans and
Advances of Rs 256.22
Lakhs, Trade Payables of Rs 719.70 Lakhs, Other Current Liabilities of Rs 201.45 Lakhs and
decrease in Ot her Non-
Current Assets of Rs 10.54 Lakhs, and Provisions of Rs 0.98 Lakhs.
Cash Generated from Operations was Rs 167.48 Lakhs which was reduced by direct tax paid
for Rs 42.97 Lakhs resulting
into net cash flow from operating activities of Rs 124.51 Lakhs.
Cash Flows from Investment Activities
1. For the Period Ended February 28, 2025, net cash used in investing activities was Rs
330.50 Lakhs, which primarily
comprised of cash used for Purchase of property, plant & equipment and intangible
assets of Rs 347.22 lakhs, Sale of
property, plant & equipment of Rs 9 lakhs, proceeds from Dividend Received of Rs 1.02
lakhs and Interest Income
Received of Rs 6.70 lakhs.
2. In FY 2024, net cash used in investing activities was Rs 97.35 Lakhs, which
primarily comprised of cash used for
Purchase of property, plant & equipment and intangible assets of Rs 140.07 lakhs, Sale
of property, plant & equipment
of Rs 28.46 lakhs, proceeds from Dividend Received of Rs 0.86 lakhs and Interest Income
Received of Rs 13.40 lakhs.
3. In FY 2023, net cash used in investing activities was Rs 196.27 Lakhs, which
primarily comprised of cash used for
Purchase of property, plant & equipment and intangible assets of Rs 202.63 lakhs,
proceeds from Dividend Received
of Rs 1 lakhs, Interest Income Received of Rs 5.36 lakhs.
4. In FY 2022, net cash used in investing activities was Rs 401.21 Lakhs, which
primarily comprised of cash used for
Purchase of property, plant & equipment and intangible assets of Rs 469.66 lakhs,
proceeds from Sale of property, plant
& equipment of Rs 21.25 lakhs, Purchase of Investments worth Rs 12.52 lakhs, proceeds
from sale of investments of Rs
48.04 lakhs, Dividend Received of Rs 1.15 lakhs, Interest Income Received of Rs 10.53
lakhs.
Cash Flows from Financing Activities
1. For the Period Ended February 28, 2025, net cash used in financing activities was Rs
216.61 Lakhs, which primarily
comprised of cash used for Finance Cost Paid of Rs 460.55 lakhs and proceeds from Proceeds
of Borrowings of Rs
677.16 lakhs.
2. In FY 2024, net cash used in financing activities was Rs 196.74 Lakhs, which
primarily comprised of cash used for
Finance Cost Paid of Rs 457.93 lakhs and proceeds from Proceeds of Borrowings of Rs 261.19
lakhs.
3. In FY 2023, net cash flow from financing activities was Rs 31.26 Lakhs, which
primarily comprised of cash used for
Finance Cost Paid of Rs359.35 lakhs and proceeds from Proceeds of Borrowings of Rs 390.61
lakhs.
4. In FY 2022, net cash flow from financing activities was Rs 275.79 Lakhs, which
primarily comprised of cash used
for Finance Cost Paid of Rs 306.09 lakhs, proceeds from Proceeds of Borrowings of Rs
581.88 lakhs.
1. Unusual or infrequent events or transactions
As on date, there have been no unusual or infrequent events or transactions including
unusual trends on account
of business activity, unusual items of income, change of accounting policies and
discretionary reduction of
expenses.
2. Significant economic changes that materially affected or are likely to affect income
from continuing
Operations
Our business has been subject, and we expect it to continue to be subject to
significant economic changes arising
from the trends identified above in Factors Affecting our Results of Operations and
the uncertainties described
in the section entitled "Risk Factors" beginning on page no. 35 of the
Red Herring Prospectus. To our
knowledge, except as we have described in the Red Herring Prospectus, there are no known
factors which we
expect to bring about significant economic changes.
3. Known trends or uncertainties that have/had or are expected to have a material
adverse impact on revenue
or income from continuing operations
Apart from the risks as disclosed under Chapter titled "Risk Factors"
beginning on page no. 35 in this Red
Herring Prospectus, in our opinion there are no other known trends or uncertainties that
have had or are expected
to have a material adverse impact on revenue or income from continuing operations.
4. Future changes in relationship between costs and revenues, in case of events such as
future increase in
labour or material costs or prices that will cause a material change are known
Our Companys future costs and revenues will be determined by demand/supply situation,
both of the end
products as well as the raw materials, government policies and other economic factors.
5. Extent to which material increases in net sales or revenue are due to increased
sales volume, introduction
of new products or increased sales prices.
Our company manufactures all types of welding electrodes and Mig Wires. Our products
are catering to cement,
automobile, textile, oil and gas refinery, defence, infrastructure, chemical, marine etc.
industries. Increases in
revenues are by and large linked to increases in volume of business and also dependent on
the price realization
on our products/services.
6. Total turnover of each major industry segment in which the issuer company operated.
Our company manufactures all types of welding electrodes and Mig Wires. Our products
are catering to cement,
automobile, textile, oil and gas refinery, defence, infrastructure, chemical, marine etc.
industries. Relevant
Industry data as available, has been included in the chapter titled "Industry
Overview" beginning on page no.
122 of this Red Herring Prospectus.
7. Status of any publicly announced new products or business segment.
Our company manufactures all types of welding electrodes and Mig Wires. Our products
are catering to cement,
automobile, textile, oil and gas refinery, defence, infrastructure, chemical, marine etc.
industries. Except as
disclosed elsewhere in the Red Herring Prospectus, we have not announced and do not expect
to announce in the
near future any new products or business segments.
8. The extent to which business is seasonal.
Our company manufactures all types of welding electrodes and Mig Wires. Our products
are catering to cement,
automobile, textile, oil and gas refinery, defence, infrastructure, chemical, marine etc.
industries. Our Companys
business is not seasonal in nature.
9. Any significant dependence on a single or few suppliers or customers.
The percentage of contribution of our Companys top 10 customer vis-a-vis the total
revenue from operations
respectively for the FY 2023-24, FY 2022-23 and FY 2021-22 is as follows:
Our revenue from operations concentrated to a few top 10 customers are aggregating to:
(Amt Rs in Lakhs)
Fiscal |
Amount | % |
2021-22 |
7659.15 | 57.23 |
2022-23 |
9202.76 | 61.00 |
2023-24 |
10,953.77 | 56.52 |
February 28, 2025 |
12,837.68 | 68.43 |
10. Competitive conditions:
We face competition from existing and potential competitors which is common for any
business. We have, over
a period, developed certain competitors who have been discussed in chapter titles " Our
Business" beginning on
page no. 132 of this Red Herring Prospectus.
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