We have included in this section a discussion of our financial statements on a Restated Consolidated basis. You should read the following discussion in conjunction with our Restated Consolidated Financial Statements for Fiscals ended March 31, 2024, 2023 and 2022, including the related notes, schedules and annexures in "Restated Consolidated Financial Statements" on pages 305.
Our Restated Consolidated Financial Statement have been prepared under Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of the Companies Act, 2013 to the extent applicable. Our Restated Consolidated Financial Information has been compiled by the Company from the audited consolidated financial statements of the Company for the respective years. For further information, please see the "Financial Information - Restated Consolidated Financial Information" on page
Pursuant to the Scheme of Amalgamation entered into between our Company and Sanstar Biopolymers Limited ("Transferor Company") under Section 232 of the Companies Act, 2013 and approved vide order dated November 23, 2023 passed by NCLT, Ahmedabad, Sanstar Bio Polymers Limited was merged with our Company with effect from November 23, 2023. Also, our Company has made capital contribution in ECL aggregating to the ratio of 99.99% vide Supplementary Agreement dated December 18, 2023 read with Limited Liability Partnership Agreement dated January 21, 2019. Accordingly, to give effect of the above composite scheme of amalgamation from April 1, 2022 and acquisition of ECL, financial statements / information for Fiscal 2024 and Fiscal 2023 are prepared on a consolidates basis, as applicable, whereas financial statements / information for Fiscal 2022 is on standalone basis.
Industry and market data used in this section have been extracted from the Frost & Sullivan Report dated May 18, 2024. For further details and risks in relation to the Frost & Sullivan Report, see "Risk Factors Certain sections of this Red Herring Prospectus contain information from the report on our industry titled "This Red Herring Prospectus contains information from an industry report which we have paid for and commissioned from Frost & Sullivan, appointed by our Company exclusively for the purpose of the Offer. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate." on page 61 and "Certain Conventions, Presentation of Financial, Industry and Market Data" on page 18.
We have included various operational and financial performance indicators in this Red Herring Prospectus, many of which may not be derived from our Restated Consolidated Financial Information. The manner in which such operational and financial performance indicators are calculated and presented, and the assumptions and estimates used in such calculations, may vary from that used by other companies in India and other jurisdictions. Investors are accordingly cautioned against placing undue reliance on such information in making an investment decision, and should consult their own advisors and evaluate such information in the context of our Restated Consolidated Financial Information and other information relating to our business and operations included in this Red Herring Prospectus
To obtain a complete understanding of our business, please read this section in conjunction with "Risk Factors", "Industry Overview", and "Managements Discussion and Analysis of Financial Position and Results of Operations" on pages 34, 144 and 357, respectively, as well as the financial, statistical and other information contained in this Red Herring Prospectus. For KPIs that have bearing on the basis for the Offer Price and which have been previously shared with investors in the three year period preceding the date of this Red Herring Prospectus, please see "Basis for Offer Price" on page 128.
Our Fiscal Year ends on March 31 of each year. Accordingly, all references to a particular Fiscal Year or Fiscal are to the 12 months ended March 31 of that year.
Overview
We are one of the major manufacturers of plant based speciality products and ingredient solutions in India for food, animal nutrition and other industrial applications (Source: Company Commissioned Frost & Sullivan Report, dated May 18, 2024). Our products include liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches and co-products like germs, gluten, fiber and enriched protein, amongst others. Our speciality products and ingredients solutions add taste, texture, nutrients and increased functionality to (i) foods as ingredients, thickening agents, stabilizers, sweeteners, emulsifiers and additives in food products (bakery products, confectionery, pastas, soups, ketchups, sauces, creams, deserts, amongst others), (ii) animal nutrition products as nutritional ingredients, and (iii) other industrial products as disintegrants, excipients, supplements, coating agents, binders, smoothing & flattering agents, finishing agents, among others.
As per Frost & Sullivan (Company Commissioned Report, dated May 18, 2024), with an installed capacity of 3,63,000 tons per annum (1,100 tons per day), we are the fifth largest manufacturer of maize based speciality products and ingredient solutions in India. We believe that our leading position in the industry, technical knowledge to bring specific functionality and nutrition to end products, more than five decades of presence, state of the art manufacturing facilities, diverse product portfolio and clientele in domestic and global markets, provide us with competitive advantage.
We are a recognised Two Star export house from Director General of Foreign Trade, Government of India (while Sanstar Biopolymers Limited, the erstwhile Company which was merged with our Company vide NCLT order dated November 23, 2023, is a recognised Three Star Export House). During Fiscals 2024,2023 and 2022, our revenue from exports were 3,944.38 million, 3,776.73 million and 187.77 million respectively, representing 35.53% ,29.96% and 3.65% respectively of our Gross Revenue from Operations, on the basis of our Restated Consolidated Financial Statements. We exported our products to 49, 49 and 5 countries across Asia, Africa, Middle East, Americas, Europe and Oceania, during Fiscals 2024, 2023 and 2022, on the basis of our Restated Consolidated Financial Statements. Additionally, our Company has footprints across India, with its products being sold in 22 states on the basis of our Restated Consolidated Financial Statements, as on the date of this Red Herring Prospectus.
Our two manufacturing facilities spread across cumulative area of 10.68 million square feet (approximate 245 Acres) are located at Dhule in the state of Maharashtra and Kutch in the state of Gujarat. Our Dhule Facility is the latest, sustainability focused, state of the art, automated facility and has been designed by our in-house team of 24 engineers. Our manufacturing facilities are strategically located in terms of both proximity to our raw material sources i.e. maize harvesting belts as well as seaports of Mundra, Kandla, Hazira and Nhava Sheva, for exports of our finished products. Our Dhule Unit has been duly certified in accordance with FSSAI, FSSC 22000:2018, Kosher, HALAL, International
Standards for Quality Management Systems as per ISO 9001:2015 and SGSs Certificate for Indias National
Programme for Organic Production Standards, amongst others. Similarly, our Kutch unit is registered with United States Food and Drug Administration (USFDA) and also hold certifications like FSSAI, HACCP, HALAL, ISO 9001:2015.
Diversified Sales Channel Ensuring Global Coverage
Geography wise sales on the basis of Restated Consolidated Financial Statements:
| Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Product | in million | % of Gross Revenue from Operations | in million | % of Gross Revenue from Operations | in million | % of Gross Revenue from Operations |
| Domestic Sales | 7,156.66 | 64.47 | 8,828.71 | 70.04 | 4,962.66 | 96.35 |
| Exports Sales | 3,944.38 | 35.53 | 3,776.73 | 29.96 | 187.77 | 3.65 |
| Gross | 11,101.04 | 100.00 | 12,605.44 | 100.00 | 5,150.43 | 100.00 |
| Revenue from operations | ||||||
| West | 5,041.97 | 70.45 | 6,634.28 | 75.14 | 4,103.37 | 82.69 |
| South | 1,695.20 | 23.69 | 1,597.61 | 18.10 | 492.30 | 9.92 |
| Central | 154.91 | 2.16 | 166.67 | 1.89 | 153.35 | 3.09 |
| East | 124.26 | 1.74 | 256.68 | 2.91 | 147.33 | 2.97 |
| North | 140.31 | 1.96 | 173.47 | 1.96 | 66.30 | 1.34 |
| Total Domestic Sales | 7,156.66 | 100.00 | 8,828.71 | 100.00 | 4,962.66 | 100.00 |
Our customer base can be broadly classified as follows:
Manufacturers of end products: They are manufacturers of end products under their own brand or are contract manufacturers of end product for other organisations. They use our products directly as ingredients/ raw materials in the end product. For e.g. confectionery manufacturers, pharmaceutical formulations manufacturers, edible oil manufacturers, bakery product manufacturers, animal nutrition product manufacturers, adhesive manufacturers, paper products manufacturers, etc.
Manufacturers of ingredients / agents / excipients: They are manufacturer of ingredients / agents / excipients for their clients who ultimately use these products in their end products meant for consumers.
Distributors / Traders / Aggregators / Indenting Agents: They are aggregators / stockists of various ingredients and solutions who supply to end user companies / ingredient manufacturers. We sell our products to distributors in bulk as per the specifications provided by them who in turn supply to their customers.
During the Fiscal Years ended March 31, 2024, March 31, 2023 and March 31, 2022 we had served over 525, 541 and 215 customers respectively, on the basis of our Restated Consolidated Financial Statements.
Principal Factors Affecting Our Results of Operations
Cost and Availability of Raw Materials
Our Company manufactures maize based speciality products and ingredient solutions in India for food, animal nutrition and other industrial applications. The manufacturing quantity and the pricing of our products is significantly dependent on our ability to source our key raw materials i.e, Maize, at acceptable prices and maintain a stable and sufficient supply of the same. Company in its usual course of business meets its raw material requirement by procurement from mandis that are local market places and also directly from farmers harvesting maize. During the months of March to May and September to December, maize harvesting in India is at its peak and purchase of maize usually takes place during such months for stocking purposes (Source: Frost & Sullivan Report May 18, 2024). Though the price of the raw material during the peak season of arrival are lower compared to the price during the other calendar months, in the event we are unable to procure and store maize during the peak arrival season in a timely manner or at all and at a commercially reasonable price, we may have to incur additional procurement costs which may not be commercially favourable for us.
As per the Restated Consolidated Financial Statements, our cost of material consumed were 8,329.30 million, 9,588.56 million and 3,915.23 million constituting 83.97%, 83.07% and 81.10% of our total expenses for the Fiscals 2024, 2023 and 2022 respectively.
The raw material we source are subject to price volatility and unavailability caused by factors beyond the control of our Company, weather conditions, supply and demand dynamics, logistics, our bargaining power with the suppliers, inflation and governmental regulations and policies. Our Company has not entered into any forward contracts or contracts with its suppliers for the procuring maize. Any inability on our part to procure raw materials from alternate suppliers in a timely manner, or on commercially acceptable terms, may adversely affect our operations.
Manufacturing capacities and operating efficiencies
A significant factor that affects and will continue to affect our revenues and results from operations is the capacity and utilisation of our manufacturing facilities. Our two manufacturing facilities spread across cumulative area of 10.68 million square feet (approximate 245 Acres) are located at Dhule in the state of Maharashtra and Kutch in the state of Gujarat. Our Dhule Facility is the latest, sustainability focused, state of the art, automated facility and has been designed by our in-house team of 24 engineers. Our manufacturing facilities are strategically located in terms of both proximity to our raw material sources i.e. maize harvesting belts as well as seaports of Mundra, Kandla, Hazira and Nhava Sheva, for exports of our finished products.
Our business is dependent upon our ability to effectively manage our Manufacturing Units, which are subject to various operating risks, including those beyond our control, such as the breakdown, failure of equipment or industrial accidents, severe weather conditions, fire, power interruption and natural disasters, however our Company maintains comprehensive insurance coverage to mitigate the risk arising out of such event. While there have been no such instances during Fiscals 2024, 2023 and 2022, any significant malfunction or breakdown of our machinery, equipment, automation systems, IT systems or any other part of our manufacturing processes or systems may entail significant repair and maintenance costs and cause delays in our operations. If we are unable to repair or properly maintain manufacturing assets in a timely manner or at all, our operations may need to be suspended until we repair or procure the appropriate manufacturing assets to replace them and there can be no assurance that the new manufacturing assets will be repaired, procured and/or integrated in a timely manner. In addition, we may be required to carry out planned shutdowns of our Manufacturing Units for maintenance, statutory inspections, customer audits and testing if any, or we may shut down one or more of our Manufacturing Units for capacity expansion and equipment upgrades.
Dependencies on demand from end-user industries
Our revenues are dependent on the end-use industries that use our products for their various requirements and usages. The following table sets forth a breakdown of our revenue from operations from various industry segments, in absolute terms and as a percentage of Gross Revenue from Operations, for the periods indicated
On the basis of our Restated Consolidated Financial Statements:
| Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Industry / Sector | in million | % of Gross Revenue from Operations | in million | % of Gross Revenue from Operations | in million | % of Gross Revenue from Operations |
| Food | 6,451.93 | 58.12 | 7,720.83 | 61.25 | 3,044.45 | 59.11 |
| Animal | 1,160.06 | 10.45 | 1,275.67 | 10.12 | 649.74 | 12.62 |
| Nutrition | ||||||
| Other | 3,489.05 | 31.43 | 3,608.94 | 28.63 | 1,456.24 | 28.27 |
| Industrial | ||||||
| Applications | ||||||
| Gross Revenue from Operations | 11,101.04 | 100.00 | 12,605.44 | 100.00 | 5,150.43 | 100.00 |
Any reduction or fall in the demand of products or services of our customers operating in the relevant application industries may ultimately have an impact on our business, profitability and financials. Further, any changes in governmental or regulatory policy and/or any slowdown in our Companys customers industry due to any reasons will also affect the demand. If the end-user demand is low for our customers products, there may be significant changes in the orders from our customers or we may experience greater pricing pressures. Any decrease in demand in those industries may result in increased inventories which may lead to increase in holding costs thereby impacting our results of operations and financial condition.
Foreign Exchange Fluctuation Risk
Our Company exports its products to various geographies across the globe. Revenue from operations for the company consists of domestic sales and export sales. This gives us exposure to foreign currencies for selling while we prepare our financial statements in Indian Rupees. For Fiscals 2024, 2023 and 2022, our Gross Revenue from Operations from exports were 3,944.38 million, 3,776.73 million and 187.77 million respectively, representing 35.53%,
29.96% and 3.65% of our revenue from operations based on our Restated Consolidated Financial Statements.
Our Company hedges the foreign exchange exposure partly through forward foreign currency covers. Accordingly, we are affected by fluctuations in exchange rates among the U.S. Dollar/EURO, Indian Rupees and other foreign currencies. For Fiscals 2024, 2023 and2022, we recorded foreign currency exchange gains due to fluctuations in foreign exchange rates of 48.20 million, 29.60 million and 2.57 million, respectively, based on our Restated
Consolidated Financial Statements. There can be no assurance that we will continue to record exchange gains only from foreign exchange fluctuations or any hedging measures which we may take will enable us to avoid the effect of any adverse fluctuations in the value of the Indian Rupee against the U.S. Dollar/EURO or other foreign currencies.
Significant Accounting Policies
Statement of compliance:
The Restated Consolidated Financial Information comprise the "Restated Consolidated Statement of Assets and Liabilities" as at March 31, 2024 and "Restated standalone Statement of Assets and Liabilities" as at March 31, 2023, and March 31, 2022; the "Restated Consolidated Statement of Profit and Loss Account" (including Other Comprehensive Income) for the year ended March 31, 2024 and the "Restated Standalone Statement of Profit and Loss Account" for the year(s) ended March 31, 2023 and March 31, 2022; the "Restated Consolidated Statement of Changes in equity" for the year March 31, 2024 and the "Restated Standalone Statement of Changes in equity" for the year March 31, 2023 and March 31, 2022; the "Restated Consolidated Statement of Cash Flows" for the year ended March 31, 2024 and the "Restated Standalone Statement of Cash Flows" for the year ended March 31, 2023 and March 31, 2022; the "Notes to Restated Consolidated Financial Information" for the year ended March 31, 2024 and the "Notes to Restated Standalone Financial Information" for the year ended March 31, 2023 and March 31,
2022,
The restated Consolidated financial statements of the Group have been prepared by the management specifically for the purpose of inclusion in the document to be filed by the Company with the Securities and Exchange Board of India
("SEBI"), Registrar of Companies ("RoC") and Stock Exchanges in connection with the proposed Initial Public Offering (IPO) of equity shares of the Company (referred to as the Issue").
The Restated Consolidated Financial Information, which have been approved by the Board of Directors of the Company, have been prepared in accordance with the requirements:
a. Section 26 of Part I of Chapter III of the Companies Act, 2013, as amended (the ‘Act) from time to time;
b. Paragraph(A) of Clause 11 (I) of Part A of Schedule VI of the Securities and Exchange Board o f India(Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended to date (the "SEBI
ICDR Regulations") issued by the Securities and Exchange Board of India (the "SEBI"); and
c. The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India ("ICAI"), as amended from time to time (the "Guidance Note").
These Restated Consolidated Financial Information, expressed in Indian Rupees in million, has been prepared by the
Companys Management from:
(a) The Audited Consolidated Financial Statements of the Company audited by us as at and for the financial year ended 31 March 2024 prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS") as prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India, which have been approved by the Board of Directors at their meeting held on May 16,2024.
(b) Audited Standalone Financial Statements of Expression commercial LLP, a subsidiary for the year ended 31 March, 2024 prepared in accordance with the Ind AS, which have been approved by the Designated Partners of the LLP at their meeting held on May 16, 2024. The company has acquired the 99.99 % stake in Expression Commercial LLP vide agreement dated December 18, 2023.
(c) The Audited Standalone Financial Statements of the Company audited by us for the year ended March 31,2023 prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS") as prescribed under
Section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India, which have been approved by the Board of Directors at their meeting held on December 27, 2023. The Company has given impact of Composite Scheme of Amalgamation between Sanstar Limited and Sanstar Bio Polymers Limited pursuant to order of NCLT dated November 23,2023 to give effect of such amalgamation from April 1, 2022.
(d) Audited Standalone Financial Statements of the Company as at and for the year ended March 31, 2023 and March 31, 2022, which were prepared in accordance with accounting principles generally accepted in India ("Indian GAAP") including the Companies (Accounting Standards) Rules 2006 (as amended) specified under Section 133 of the Act read with Companies (Accounts) Rules 2014 (as amended), which have been audited and reported by erstwhile Statutory Auditor Kamal M Shah & Co. for the year ended March 31, 2023 and by Nahta Jain & Associates, Chartered Accountants for the years ended on March 31, 2022;
(e) The financial information for the year ended March 31, 2023 and March 31, 2022 included in such restated financial information have been prepared by the management by preparing Ind-AS financial statements as at March 31, 2023 wherein Ind-AS transition / restatement adjustments have been made to the financial statements of the Company and prepared in accordance with the Indian accounting standards as notified under Companies Act, 2013.
The Company voluntarily adopted Indian Accounting Standards notified under Section 133 of the Companies Act 2013, read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other accounting principles generally accepted in India (referred "Ind AS") for the financial year ended March 31, 2023 with transition date as April 1, 2020 and prepared its first Consolidated financial statements in accordance with Indian Accounting Standards (Ind AS) for the year ended March 31, 2024.
The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP. Reconciliations and descriptions of the effect of the transition have been given.
The restated Consolidated financial information has been prepared to comply in all material respects with the requirements of Section 26 of Part I of Chapter III of the Companies Act, 2013 ("the Act") and the Securities and Exchange Board of India (Issue of Capital and Disclosure requirements) Regulations, 2018 ("ICDR Regulations").
The Companys presentation and functional currency is Indian Rupees and all values are rounded to the Millions with two decimals.
These Financial Statements have been prepared in accordance with Indian Accounting Standards (referred to as "Ind AS") as prescribed under Section 133 of the Companies Act, 2013 (Act) read with Companies (Indian Accounting
Standards) Rules as amended from time to time. The Financial Statements have been prepared under historical cost convention basis except for certain financial assets and financial liabilities which have been measured at fair value. Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The Restated Consolidated Financial Information:
a) have been prepared after incorporating adjustments in respect of changes in the accounting policies, material errors, and regrouping/reclassifications retrospectively in the years ended March 31, 2023 and March 31, 2022 to reflect the same accounting treatment as per the accounting policies.
b) do not require any adjustment for qualifications as there are no qualifications in the underlying auditors reports which require any adjustments.
These financial statements have been prepared on historical cost basis, except for certain financial instruments which are measured at fair value or amortised cost at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities have been classified as current and non-current as per the Companys normal operating cycle. Based on the nature of services rendered to customers and time elapsed between deployment of resources and the realisation in cash and cash equivalents of the consideration for such services rendered, the Company has considered an operating cycle of 12 months.
I. Use of estimates & Judgments
The preparation of these financial statements is in conformity with the recognition and measurement principles of Ind AS requires management of the Company to make informed judgments, reasonable assumptions and estimates that affect the amounts reported balances of Assets and Liabilities, disclosures of contingent Liabilities as at the date of the financial statements and the reported amounts of income and expense for the periods presented. Uncertainty about these could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the future periods. These assumptions and estimates are reviewed periodically based on the most recently available information. Revisions to accounting estimates are recognized prospectively in the Statement of Profit & Loss in the period in which the estimates are revised and in any future periods affected. In the assessment of the Company, the most significant effects of use of judgments and/or estimates on the amounts recognized in the financial statements are in respect of the following:
Useful lives of property, plant & equipment;
Valuation of inventories;
Measurement of recoverable amounts of assets / cash-generating units;
Assets and obligations relating to employee benefits;
Evaluation of recoverability of deferred tax assets; and
Provisions and Contingencies
II. Functional and presentation currency:
These financial statements are presented in Indian Rupees (INR), which is the Companys functional currency. All financial information presented in INR has been rounded to the nearest Millions, with two decimals except as stated otherwise.
III. Material accounting policies
A. Revenue recognition
Revenue from contract with customers is recognized upon transfer of control of promised goods/ products to customers at an amount that reflects the consideration to which the Company expect to be entitled for those goods/ products. To recognize revenues, the Company applies the following five-step approach:
Identify the contract with a customer,
Identify the performance obligations in the contract,
Determine the transaction price,
Allocate the transaction price to the performance obligations in the contract, and
Recognize revenues when a performance obligation is satisfied.
1. Sale of goods
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, related discounts & incentives and volume rebates. It includes applicable taxes.
2. Interest income
For all financial instruments measured either at amortized cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. Interest income is included in other income in the statement of profit and loss.
3. Dividends
Dividend income is accounted for when the right to receive the same is established, which is generally when shareholders approve the dividend.
B. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that a company incurs in connection with the borrowing of funds.
C. Export Benefits
Duty free imports of raw materials under advance license for imports, as per the Foreign Trade Policy, are matched with the exports made against the said licenses and the net benefits / obligations are accounted by making suitable adjustments in raw material consumption.
D. Taxes
1. Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on the rates and tax laws enacted or substantively enacted, at the reporting date in the country where the entity operates and generates taxable income.
Current tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
2. Deferred tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their corresponding carrying amounts for the financial reporting purposes.
Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of:
i. deductible temporary differences;
ii. the carry forward of unused tax losses; and
iii. the carry forward of unused tax credits.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside profit or loss is (either in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
E. Leases
Company as a lessee
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value.
Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term.
F. Employee Benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex-gratia are recognized during the period in which the employee renders related service.
Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered the service entitling them to the contribution.
1. Long-term employee benefits
Post-employment and other employee benefits are recognized as an expense in the statement of profit and loss for the period in which the employee has rendered services. A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
2. Defined contribution plans
The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligations are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
G. Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at acquisition cost of the items. Acquisition cost includes expenditure that is directly attributable to getting the asset ready for intended use. Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
An item of spare parts that meets the definition of ‘property, plant and equipment is recognized as property, plant and equipment. The depreciation on such an item of spare part will begin when the asset is available for use i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. In case of a spare part, as it may be readily available for use, it may be depreciated from the date of purchase of the spare part.
Capital work in progress is stated at cost and net of accumulated impairment losses, if any. All the direct expenditure related to implementation including incidental expenditure incurred during the period of implementation of a project, till it is commissioned, is accounted as Capital work in progress (CWIP) and after commissioning the same is transferred / allocated to the respective item of property, plant and equipment.
Pre-operating costs, being indirect in nature, are expensed to the statement of profit and loss as and when incurred.
The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
Property, plant and equipment are eliminated from financial statement, either on disposal or when retired from active use. Losses arising in the case of retirement of property, plant and equipment are recognized in the statement of profit and loss in the year of occurrence.
Depreciation methods, estimated useful lives and residual value
Depreciation is calculated to allocate the cost of assets, net of their residual values, over their estimated useful lives. Components having value significant to the total cost of the asset and life different from that of the main asset are depreciated over its useful life. However, land is not depreciated. The useful lives so determined are as follows:
| Assets | Estimated useful life |
| Lease hold land | Lease term (99 years) |
| Buildings | 30 to 60 years |
| Plant and machinery | 10 to 40 years |
| Furniture and fixtures | 10 years |
| Office equipment | 10 years |
| Vehicles | 8 to 10 years |
Depreciation on fixed assets has been provided in the accounts based on useful life of the assets prescribed in Schedule II to the companies Act, 2013 based on Straight Line Method.
Depreciation on additions is calculated on pro rata basis with reference to the date of addition.
Depreciation on assets sold/ discarded, during the period, has been provided up to the preceding month of sale / discarded.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other gains / (losses).
H. Inventories
Inventories are valued at the lower of cost and net realizable value.
1. Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on cost. Cost is determined based on First in First Out Method.
2. Finished goods and work in progress: cost includes cost of direct materials and labor and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on lower of cost or net realizable value. Cost is determined based on First in First Out Method.
3. Stores and spares: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on Cost basis. An item of spare parts that does not meet the definition of ‘property, plant and equipment has to be recognized as a part of inventories.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
I. Financial Instruments
Financial assets i. Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Financial assets are classified, at initial recognition, as financial assets measured at fair value or as financial assets measured at amortized cost.
ii. Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories: (a) Debt instruments at amortized cost (b) Debt instruments at fair value through other comprehensive income (FVTOCI) (c) Financial assets at fair value through profit or loss (FVTPL)
(d) Equity instruments measured at fair value through other comprehensive income (FVTOCI)
iii. Debt instruments at amortized cost
A ‘debt instrument is measured at the amortized cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
iv. Financial instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch). The company has not designated any debt instrument as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
v. Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The company makes such election on an instrument by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
vi. Impairment of financial assets
The company assesses impairment based on expected credit loss (ECL) model to the following: (a) Financial assets measured at amortized cost;
(b) Financial assets measured at fair value through other comprehensive income (FVTOCI);
Expected credit losses are measured through a loss allowance at an amount equal to:
(a) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
(b) Full time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).
The company follows ‘simplified approach for recognition of impairment loss allowance on: (a) Trade receivables or contract revenue receivables; and
Under the simplified approach, the company does not track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
The company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
For recognition of impairment loss on other financial assets and risk exposure, the company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss (P&L). This amount is reflected under the head ‘other expenses in the P&L.
vii. Financial assets measured as at amortized cost, contractual revenue receivables and lease receivables
ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the company does not reduce impairment allowance from the gross carrying amount.
For assessing increase in credit risk and impairment loss, the company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.
The company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/ origination.
Financial liabilities i. Initial recognition and measurement
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The companys financial liabilities include trade and other payables, loans and borrowings including bank overdrafts. ii. Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
(a) Financial liabilities at fair value through profit or loss
(b) Loans and borrowings
(c) Financial guarantee contracts
iii. Financial liabilities at FVTPL
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
Gains or losses on liabilities held for trading are recognized in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk is recognized in OCI. These gains/losses are not subsequently transferred to P&L. However, the company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized in the statement of profit and loss. The company has not designated any financial liability as at fair value through profit and loss.
iv. Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
Off-setting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
J. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the companys cash management.
K. Segment Reporting
The Chief Operational Decision Maker monitors the operating results of its business Segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements.
The Operating segments have been identified on the basis of the nature of products/services.
The accounting policies adopted for segment reporting are in line with the accounting policies of the company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter Segment revenue is accounted on the basis of transactions which are primarily determined based on market/fair value factors. Revenue, expenses, assets and liabilities which relate to the company as a whole and are not allocated to segments on a reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".
The company operates in one business segment i.e. Corn Wet Milling comprising mainly manufacture of starches, its derivatives and by product as single operating segment for the purpose of making decision on allocation of resources and assessing its performance.
These, in the context of Ind AS 108 on Operating Segments Reporting are considered to constitute single business segment.
L. Provisions, Contingent liabilities, Contingent assets and Commitments
General
Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liability is disclosed in the case of:
(a) A present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation; (b) A present obligation arising from the past events, when no reliable estimate is possible; (c) A possible obligation arising from the past events, unless the probability of outflow of resources is remote.
Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.
The company provides for the expenses to reclaim the quarries used for mining. The total estimate of reclamation expenses is apportioned over the estimate of mineral reserves and a provision is made based on the minerals extracted during the year. Mines reclamation expenses are incurred on an ongoing basis and until the closure of the mine. The actual expenses may vary based on the nature of reclamation and the estimate of reclamation expenditure.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
M. Statement of cash flows
Cash flow are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals of accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and finance activities of the company are segregated.
N. Current and non-current classification
The company presents assets and liabilities in the statement of Asset and Liability based on current/ non-current classification. An asset is treated as current when it is:
i. Expected to be realized or intended to be sold or consumed in normal operating cycle;
ii. Held primarily for the purpose of trading;
iii. Expected to be realized within twelve months after the reporting period, or
iv. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
It is expected to be settled in normal operating cycle;
ii. It is held primarily for the purpose of trading;
iii. It is due to be settled within twelve months after the reporting period, or
iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Operating Cycle
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The company has identified twelve months as its operating cycle.
O. Foreign currency translation
Items included in the financial statements of the entity are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency). The financial statements are presented in Indian rupee (INR), which is companys functional and presentation currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the companys entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in OCI or profit or loss are also recognized in OCI or profit or loss, respectively).
P. Earnings Per Share
Basic earnings per share is computed and disclosed by dividing the net profit after tax by using the weighted average number of common shares outstanding during the year. Dilutive earning per share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.
Q. Exceptional items
Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the company is such that its disclosure improves the understanding of the performance of the company, such income or expense is classified as an exceptional item and accordingly, disclosed in the notes accompanying to the financial statements.
R. Rounding off
All amounts disclosed in the financial statements and notes have been rounded off to the nearest Millions as per the requirements of Schedule III, unless otherwise stated.
S. Merger:
Pursuant to the Composite Scheme of Amalgamation between Sanstar Limited and Sanstar Bio Polymers Limited (the Company) and their respective shareholders and creditors under section 230 to 232 read with other applicable provisions of the Companies Act, 2013 ("the Scheme" or "Business Reorganization Scheme"). Sanstar Bio Polymers Limited were merged with the SANSTAR LIMTED with effect from the appointed date, April 01, 2022 vide order of NCLT dated 23 November, 2023. The Scheme was sanctioned by the Ahmedabad bench of the Honble National Company Law Tribunal [NCLT] vide its order dated 23 November,2023 and all the businesses, undertakings, activities, properties, investments and liabilities of the Amalgamating Companies were transferred to and vested in Amalgamated Company as per the Scheme with effect from April 01, 2022, being the appointed date. The certified copy of order and necessary forms was filed with Registrar of Companies, Gujarat [ROC] at Ahmedabad on November 27, 2023 on being the effective date.
T. Acquisition:
Pursuant to the Acquisition of 99% Capital of Expression LLP, Sanstar Limited has acquired 99.99% stake as Partners Capital in Expression Commercial LLP vide agreement dated 18.12.2023.
Key Performance Indicators and Non-GAAP Financial Measures
In addition to our financial results determined in accordance with Ind AS, we consider and use certain non-GAAP financial measures and key performance indicators that are presented below as supplemental measures to review and assess our operating performance. Our management does not consider these non-GAAP financial measures and key performance indicators in isolation or as an alternative or substitutive to the Restated Consolidated Financial Statements. We present these non-GAAP financial measures and key performance indicators because we believe they are useful to our Company in assessing and evaluating our operating performance, and for internal planning and forecasting purposes. We believe these non-GAAP financial measures could help investors as an additional tool to evaluate our ongoing operating results and trends with a more granular view of our financial performance.
As per Restated Consolidated Financial Statements
(Rs in million except per share data or unless otherwise stated)
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Revenue from Operations(1) | 10,672.71 | 12,050.67 | 5,044.02 |
| EBITDA(2) | 981.41 | 724.47 | 397.20 |
| EBITDA Margin (%)(3) | 9.20 | 6.01 | 7.87 |
| PAT(4) | 667.67 | 418.05 | 159.21 |
| PAT Margin (%)(5) | 6.17 | 3.46 | 3.15 |
| EPS - Basic & Diluted(6) | 4.75 | 2.98 | 1.08 |
| Total Borrowings(7) | 1,276.36 | 1,117.00 | 852.24 |
| Net worth(8) | 2,159.12 | 1,492.81 | 489.67 |
| ROE (%)(9) | 30.92 | 28.00 | 32.51 |
| ROCE (%)(10) | 25.43 | 23.82 | 23.19 |
| Debt - Equity Ratio(11) | 0.50 | 0.60 | 1.00 |
| Fixed Assets Turnover Ratio(12) | 5.28 | 6.16 | 3.79 |
| Net Cash from/ (used in) Operating Activities(14) | 285.97 | (60.17) | 297.14 |
| No. of Plants(14) | 2 | 2 | 1 |
| Total installed capacity in metric tonnes per day(15) | 1100 | 1100 | 750 |
| No. of customers(16) | 525 | 541 | 215 |
| Export presence (no. of countries) (17) | 49 | 49 | 5 |
| Revenue CAGR (%)(18) | 45.46 | ||
| EBITDA CAGR (%)(18) | 57.19 | ||
| PAT CAGR (%)(18) | 104.79 |
As certified by M/s S C Bapna & Associates, Chartered Accountants, Statutory Auditors of our Company, vide their certificate dated May 22, 2024.
1) Revenue from operations is calculated as revenue from sale of products as per the Restated Consolidated Financial Statements;
2) EBITDA means Earnings before interest, taxes, depreciation and amortisation expense, which has been arrived at by obtaining the profit before tax/ (loss) for the year and adding back finance costs, depreciation and amortisation and impairment expense and reducing other income;
3) EBITDA Margin is calculated as EBITDA as a percentage of revenue from operations;
4) PAT represents total profit after tax for the year / period;
5) PAT Margin is calculated as PAT divided by total income;
6) Basi and Diluted EPS = PAT divided by weighted average no. of equity shares outstanding during the year/ period, as adjusted for changes in capital due to sub-division of equity shares; For Diluted EPS, the weighted no. of shares shall include the impact of potential convertible securities.
7) Total Borrowings are calculated as total of current and non-current borrowings;
8) "Net worth" means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation as per SEBI ICDR Regulations.
9) ROE is calculated as PAT divided by net worth
10) ROCE is calculated as EBIT divided by capital employed where (i) EBIT means EBITDA minus depreciation and amortisation expense and (ii) Capital employed means Net worth as defined in (8) above + total current & non-current borrowings cash and cash equivalents and other bank balances; 11) Debt Equity Ratio: This is defined as total debt divided by total equity. Total debt is the sum of total current & non-current borrowings; total equity means sum of equity share capital and other equity; 12) Fixed Asset Turnover Ratio: This is defined as revenue from operations divided by total of property, plant & equipment. Figures for property, plant & equipment do not include capital work-in-progress. 13) Net Cash from/ (used in) Operating Activities is calculated as Net Cash from/ (used in) Operating Activities as per the Restated Consolidated Financial Statement. 14) No. of Plants indicates the number of manufacturing facilities operated by the company 15) Total installed capacity is the maize crushing capacity of the Company in metric tonnes per day. 16) No. of customers is the aggregate customers served by the company 17) Export presence is the no. of global countries to which the sales are made by the company 18) CAGR = Compounded Annual Growth Rate
Principle components of Revenue and Expenditure on the basis of our Restated Consolidated Financial Statements
The following descriptions set forth information with respect to key components of our income statement.
Revenue
Revenue from operations
Revenue from operations comprises income from domestic sales and export sales less brokerage/commission, freight, and goods in transit.
Below is the breakdown of our revenue from operations based on the Restated Consolidated Financial Statements-
( in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Sale of products | |||
| Domestic Sales | 7,156.66 | 8,828.71 | 4,962.66 |
| Export Sales | 3,944.38 | 3,776.73 | 187.77 |
| Gross Revenue from Operations | 11,101.04 | 12,605.44 | 5,150.43 |
| Less: | |||
| Brokerage / Commission | 13.70 | 395.05 | 11.73 |
| Freight | 414.63 | 159.71 | 94.69 |
| 428.33 | 554.77 | 106.41 | |
| Revenue from Operations | 10,672.71 | 12,050.67 | 5,044.02 |
Other income
Other income primarily comprises of interest received, insurance claim income, currency fluctuation, sundry balance, written back , profit on sale of plant and machinery, amongst others.
Below is the breakdown of other income based on the Restated Consolidated Financial Statements
(Rs in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Interest Received | 13.35 | 7.64 | 0.39 |
| Insurance Claim Income | 35.88 | 0.92 | 0.69 |
| Dividend Income | 0.00 | - | - |
| Other Misc Income | 0.02 | - | |
| Currency Fluctuation | 48.20 | 29.60 | 2.57 |
| Sundry Balance written back | 36.51 | 3.02 | - |
| Profit on sale of Plant & Machinery | 10.17 | 4.82 | - |
| Profit on sale of Shares | - | - | 0.00 |
| Total | 144.12 | 46.01 | 3.65 |
Expenses
Our expenses comprise of cost of material consumed, Purchase of stock in trade, changes in inventory, employee benefit expenses, finance costs, depreciation and amortization expense and other expenses.
Cost of raw materials consumed
Cost of raw material consumed primarily consists of purchases adjusted with changes in inventory at the beginning and end of the reporting period.
Purchases of Stock-in-Trade
Purchase of Stock-in-Trade primarily consist of Stock in Trade purchased.
Changes in inventories
Changes in inventories of finished goods, work in progress, Stock-in-Trade and goods-in-transit in the increase or decrease in the closing balance of finished goods, work in progress, Stock-in-Trade and goods-in-transit during the reporting period.
Employee benefit expenses
Employee benefit expenses primarily comprises of salaries and wages, contribution to Provident Fund and other fund, staff welfare expenses, gratuity expenses and director/partner remuneration (salary).
Finance costs
Finance costs primarily comprises of interest expense and other borrowing cost.
Depreciation and amortisation expenses
Depreciation and amortisation expenses comprises of depreciation on fixed assets.
Other expenses
Other expenses comprise primarily of power & fuel consumed, packing material consumed, stores & consumable consumed, repair & maintenance Plant & Machinery, professional & consultancy charges, repair & maintenance others, chemical consumed, CSR, other factory expenses, insurance expenses, travelling & conveyance expenses, rates & taxes, administration & other misc. expenses, stationery & printing expenses, telephone, internet, postage, & courier expenses, vehicle expenses, auditors remuneration, advertisement expenses, electricity charges, selling & distribution expenses, rent, GST penalty expenses, donation, expected credit loss, office and other expense among others.
Below is the breakdown of other expenses based on the Restated Consolidated Financial Statements
(Rs in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Power & Fuel consumed | 822.38 | 1,080.13 | 425.10 |
| Packing Material consumed | 134.71 | 129.42 | 69.49 |
| Stores and Consumables consumed | 72.47 | 114.20 | 43.48 |
| Repair & Maintenance Plant & Machinery | 13.67 | 44.60 | 43.17 |
| Professional & Consultancy Charges | 19.88 | 14.03 | 7.13 |
| Repairs & Maintenance Others | 6.58 | 16.51 | 35.66 |
| Chemical Consumed | 40.53 | 27.53 | 11.06 |
| CSR | 7.30 | 3.20 | 3.00 |
| Other Factory Expenditure | 22.84 | 25.02 | 9.08 |
| Insurance Expenses | 9.33 | 6.42 | 3.16 |
| Travelling and Conveyance Expenses | 13.97 | 9.44 | 0.12 |
| Rates & Taxes | 9.88 | 3.49 | 16.41 |
| Administration & Other Misc. Expenses | 9.90 | 18.78 | 0.23 |
| Stationery & Printing Expenses | 3.71 | 2.18 | 0.32 |
| Telephone, Internet, Postage, & Courier Expenses | 3.36 | 2.68 | 0.34 |
| Vehicle Expenses | 1.42 | 1.90 | 0.87 |
| Auditors Remuneration | 1.51 | 0.33 | 0.55 |
| Rent | 9.45 | 6.24 | 0.10 |
| Advertisement Expenses | 1.09 | 0.67 | - |
| Other Expenses | 5.22 | 1.17 | 2.02 |
| Total | 1,209.20 | 1,507.94 | 671.28 |
Results of Operations
The following table sets forth our income statement data, the components of which are expressed as a percentage of total income for the periods indicated below.
Results of Operations as per Restated Consolidated Financial Statements
| Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Particulars | in million | % of Total Income | in million | % of Total Income | in million | % of Total Income |
| Revenue from operations | 10,672.71 | 98.67 | 12,050.67 | 99.62 | 5,044.02 | 99.93 |
| Other income | 144.12 | 1.33 | 46.01 | 0.38 | 3.65 | 0.07 |
| Total Income | 10,816.83 | 100.00 | 12,096.68 | 100.00 | 5,047.67 | 100.00% |
| Expenses | ||||||
| Cost of materials consumed | 8,329.30 | 77.00 | 9,588.56 | 79.27 | 3,915.23 | 77.57% |
| Purchase of stock in trade | - | - | 11.61 | 0.10 | - | - |
| Changes in inventory | (66.78) | (0.62) | 24.84 | 0.21 | (44.44) | (0.88%) |
| Employee benefits expense | 219.58 | 2.03 | 193.25 | 1.60 | 104.75 | 2.08% |
| Finance costs | 107.38 | 0.99 | 98.06 | 0.81 | 90.85 | 1.80% |
| Depreciation and amortisation expense | 120.91 | 1.12 | 118.54 | 0.98 | 90.17 | 1.79% |
| Other expense | 1,209.20 | 11.18 | 1,507.94 | 12.47 | 671.28 | 13.30% |
| Total Expenses | 9,919.59 | 91.71 | 11,542.80 | 95.42 | 4,827.84 | 95.64% |
| Profit before tax | 897.24 | 8.29 | 553.88 | 4.58 | 219.83 | 4.36% |
| Tax Expense | ||||||
| Current tax | 166.87 | 1.54 | 53.76 | 0.44 | 56.84 | 1.13% |
| Deferred tax | 62.70 | 0.58 | 82.07 | 0.68 | 3.78 | 0.07% |
| Total tax expense | 229.57 | 2.12 | 135.83 | 1.12 | 60.62 | 1.20% |
| Profit for the period/ year | 667.67 | 6.17 | 418.05 | 3.46 | 159.21 | 3.15% |
| Other comprehensive income/ (loss) | ||||||
| Items that will not be reclassified to profit or loss | (1.82) | (0.02) | 1.04 | 0.01 | 0.36 | 0.01 |
| Income tax relating to items that will not be reclassified to profit or loss | 0.46 | 0.00 | (0.26) | 0.00 | (0.09) | 0.00 |
| Total other comprehensive income | (1.36) | (0.01) | 0.78 | 0.01 | 0.27 | 0.01 |
| Total comprehensive income for the period/ year | 666.31 | 6.16 | 418.83 | 3.46 | 159.48 | 3.16% |
Results of Operations for Fiscal 2024 compared with Fiscal 2023
(Rs in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Change % |
| Income | |||
| Revenue from Operations | 10,672.71 | 12,050.67 | (11.43) |
| Other Income | 144.12 | 46.01 | 213.22 |
| Total Income | 10,816.83 | 12,096.68 | (10.58) |
| Expenses | |||
| Cost of materials consumed | 8,329.30 | 9,588.56 | (13.13) |
| Purchase of Stock-in-Trade | - | 11.61 | (100) |
| Changes in inventory | (66.78) | 24.84 | (368.83) |
| Employee benefits expense | 219.58 | 193.25 | 13.62 |
| Finance costs | 107.38 | 98.06 | 9.51 |
| Depreciation and amortisation expense | 120.91 | 118.54 | 1.99 |
| Other expense | 1,209.20 | 1,507.94 | (19.81) |
| Total Expenses | 9,919.59 | 11,542.80 | (14.06) |
| Profit before tax | 897.24 | 553.88 | 61.99 |
| Tax Expense | |||
| Current tax | 166.87 | 53.76 | 210.43 |
| Deferred tax | 62.70 | 82.07 | (23.60) |
| Profit after tax | 667.67 | 418.05 | 59.71 |
Total Income
Our total income in Fiscal 2024 decreased by 10.58% to 10,816.83 million in Fiscal 2024 from 12,096.68 million in Fiscal 2023 primarily on account of the following:
Revenue from operations
Below is the breakup of our revenue from operations for Fiscal 2024 and Fiscal 2023
(Rs in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Change % |
| Sale of Products | |||
| Domestic Sales | 7,156.66 | 8,828.71 | (18.94) |
| Export Sales | 3,944.38 | 3,776.73 | 4.44 |
| Gross Revenue from Operations | 11,101.04 | 12,605.44 | (11.93) |
| Less: | |||
| Brokerage / Commission | 13.70 | 395.05 | (96.53) |
| Freight | 414.63 | 159.71 | 159.61 |
| Revenue from Operations | 10,672.71 | 12,050.67 | (11.43) |
Our revenue from operations decreased by 11.43% from 12,050.67 million in Fiscal 2023 to 10,672.71 million in Fiscal 2024, primarily attributed to decrease in domestic sales from 8,828.71 million in Fiscal 2023 to 7,156.66 million in Fiscal 2024 which was partially set off by increase in Export Sales from 3,776.73 million in
Fiscal 2023 to 3,944.38 million in Fiscal 2024. The decrease in sales during the Fiscal 2024 was due to the planned boiler maintenance carried out during the months of January and February 2024 for a period of 20 days which affected capcity utilisation at our Kutch Facility consequently the production quantity and sales volume decreased by 1.91% and 2.20% in Fiscal 2024 compared to Fiscal 2023.
Other Income
Our other income increased by 213.22% from 46.01 million in Fiscal 2023 to 144.12 million in Fiscal 2024, primarily attributed to increase in currency fluctuation by 62.82% from 29.60 million in Fiscal 2023 to 48.20 million in Fiscal 2024, increase in interest received by 74.62% from 7.64 million in Fiscal 2023 to 13.35 million in Fiscal 2024, increase in Insurance claim income by 3805.07% from 0.92 million in Fiscal 2023 to 35.88 million in Fiscal 2024, increase in Sundry Balance written back by 1107.06% from 3.02 million in Fiscal 2023 to 36.51 million in Fiscal 2024 and increase in profit on sale of plant and machinary by 110.90% from 4.82 million in Fiscal 2023 to 10.17 million in Fiscal 2024.
Total Expenses
Our expenses in Fiscal 2024 decreased by 14.06% from 11,542.80 million in Fiscal 2023 to 9,919.59 million in Fiscal 2024 primarily on account of the following reasons:
Cost of materials consumed
Our cost of materials consumed decreased by 13.13% from 9,588.56 million in Fiscal 2023 to 8,329.30 million in Fiscal 2024, in line with decrease in Revenue from Operations by 11.43% in Fiscal 2024. Our cost of materials consumed was 77.00% of the total income in the Fiscal 2024 compared to 79.27% in the Fiscal 2024.
Change in inventories
Change in inventories was (66.78) million in Fiscal 2024 as compared to 24.84 million in Fiscal 2023. Following table explains the Change in inventories of finished goods, work-in-progress and goods-in-transit.
(Rs in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Change % |
| Opening Stock | |||
| Finished Goods | 60.14 | 59.23 | 1.54 |
| Work-in-Progress | 5.81 | 3.15 | 84.04 |
| Goods-in-transit | 67.46 | 90.41 | (25.38) |
| Stock in Trade | - | 5.45 | (100.00) |
| 133.41 | 158.25 | (15.70) | |
| Closing Stock | |||
| Finished Goods | 163.22 | 60.14 | 171.38 |
| Work-in-Progress | 7.64 | 5.81 | 31.62 |
| Goods-in-transit | 29.33 | 67.46 | (56.53) |
| 200.19 | 133.41 | 50.05 | |
| Total | (66.78) | 24.84 | (363.83) |
Employee benefits expense
Our employee benefits expense increased by 13.62% from 193.25 million in Fiscal 2023 to 219.58 million in Fiscal 2024, primarily attributed to increase in salaries and wages from 165.03 million in Fiscal 2023 to 192.82 million in Fiscal 2024 and increase in director remuneration from 21.30 million in Fiscal 2023 to 22.50 million in Fiscal 2024. However, the increase was marginally offset by decrease in staff welfare expense from 3.56 million in Fiscal 2023 to 4.60 million in Fiscal 2024 and decrease in gratuity expenses from 2.25 million in
Fiscal 2023 to 0.63 million in Fiscal 2024
Finance costs
Our finance costs increased by 9.32% from 98.06 million in Fiscal 2023 to 107.38 million in Fiscal 2024, primarily attributed to increase in interest expenses from 86.77 million in Fiscal 2023 to 94.85 million in Fiscal 2024 and increase in borrowing cost from 11.29 million in Fiscal 2023 to 12.53 million in Fiscal 2024.
Depreciation and amortisation expense
Our depreciation and amortization expense increased by 1.99% from 118.54 million in Fiscal 2023 to 120.91 million in Fiscal 2024. Our gross carrying amount of property, plant and equipment increased by 7.80% from 2,297.00 million in Fiscal 2023 to 2,476.27 million in Fiscal 2024.
Other expenses
Our other expenses decreased by 19.81% from 1,507.94 million in Fiscal 2023 to 1,209.20 million in Fiscal 2024, in line with the decrease in business operations.
Below is the breakdown of our other expenses for Fiscal 2024 and Fiscal 2023
(Rs in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Change % |
| Power & Fuel consumed | 822.38 | 1,080.13 | (23.86) |
| Packing Material consumed | 134.71 | 129.42 | 4.09 |
| Stores and Consumables consumed | 72.47 | 114.20 | (36.55) |
| Repair & Maintenance - Plant & Machinery | 13.67 | 44.60 | (69.35) |
| Professional & Consultancy charges | 19.88 | 14.03 | 41.64 |
| Repairs & Maintenance Others | 6.58 | 16.51 | (60.14) |
| Chemical consumed | 40.53 | 27.53 | 47.20 |
| CSR | 7.30 | 3.20 | 128.13 |
| Other Factory expenditure | 22.84 | 25.02 | (8.69) |
| Insurance expenses | 9.33 | 6.42 | 45.26 |
| Travelling and Conveyance expenses | 13.97 | 9.44 | 48.00 |
| Rates & Taxes | 9.88 | 3.49 | 183.30 |
| Administration & Other Misc. expenses | 9.90 | 18.78 | (47.26) |
| Stationery & Printing expenses | 3.71 | 2.18 | 69.99 |
| Telephone, Internet, Postage, & Courier | 3.36 | 2.68 | 25.43 |
| expenses | |||
| Vehicle expenses | 1.42 | 1.90 | (25.33) |
| Auditors Remuneration | 1.51 | 0.33 | 356.56 |
| Rent | 9.45 | 6.24 | 51.50 |
| Advertisement expenses | 1.09 | 0.67 | 62.26 |
| Other expenses | 5.22 | 1.17 | 347.50 |
| Total | 1,209.20 | 1,507.94 | (19.81) |
The decrease in Other Expenses was primarily attributed to the following:
i. Power and fuel expense decreased by 23.86% from 1,080.13 million in Fiscal 2023 to 822.38 million in Fiscal 2024. The decrease was mainly on account of decrease in business activity during the Fiscal 2024 as compared to Fiscal 2023
ii. Stores & Consumable Consumed decreased by 36.55% from 114.20 million in Fiscal 2023 to 72.47 million in Fiscal 2024. The decrease was mainly on account of decrease in business activity during the Fiscal 2024 as compared to Fiscal 2023
iii. Repair & Maintenance plant & machinery decreased by 69.35% from 44.60 million in Fiscal 2023 to 13.67 million in Fiscal 2024
iv. Repair & Maintenance others decreased by 60.14% from 16.51 million in Fiscal 2023 to 6.58 million in Fiscal 2024 v. Other Factory Expenses decreased by 8.69% from 25.02 million in Fiscal 2023 to 22.84 million in Fiscal 2024. The decrease was mainly on account of decrease in business activity during the Fiscal 2024 as compared to Fiscal 2023.
vi. Administration & Other Misc. Expenses decreased by 47.26% from 18.78 million in Fiscal 2023 to 9.90 million in Fiscal 2024
vii. Vehicle Expenses decreased by 25.33% from 1.90 million in Fiscal 2023 to 1.42 million in Fiscal 2024
However, the decrease was partially offset by increase in (i) Professional & Consultancy Charges from 14.03 million in Fiscal 2023 to 19.88 million in Fiscal 2024, (ii) Chemical consumed from 27.53 million in Fiscal 2023 to 40.53 million in Fiscal 2024, (iii) CSR from 3.20 million in Fiscal 2023 to 7.30 million in Fiscal 2024 (iv) Insurance expenses from 6.42 million in Fiscal 2023 to 9.33 million in Fiscal 2024, (v) travelling & conveyance expenses from 9.44 million in Fiscal 2023 to 13.97 million in Fiscal 2024, (vi) rates and taxes from 3.49 million in Fiscal 2023 to 9.88 million in Fiscal 2024, (vii) stationery & printing expenses from 2.18 million in Fiscal 2023 to 3.71 million in Fiscal 2024, (viii) Telephone, Internet, Postage, & Courier Expenses from 2.68 million in Fiscal 2023 to 3.36 million in Fiscal 2024, (ix) Auditor Remuneration from 0.33 million in Fiscal 2023 to 1.51 million in Fiscal 2024, (x) Rent expenses from 6.24 million in Fiscal 2023 to 9.45 million in Fiscal 2024, (xi) Advertisement Expenses from 0.67 million in Fiscal 2023 to 1.09 million in Fiscal 2024 among others
Profit before tax
As a result of the foregoing, our profit before tax increased by 61.99%, from 553.88 million in Fiscal 2023 to 897.24 million in Fiscal 2024.
Tax expenses
Our tax expenses (including current tax and deferred tax) increased by 69.02% from 135.83 million in Fiscal 2023 to 229.57 million in Fiscal 2024. The increase in our tax expenses in Fiscal 2023 was primarily due to an increase in the profit before tax.
Profit for the year
As a result of the foregoing, our profit for the year increased by 59.17% from 418.05 million in Fiscal 2023 to 667.67 million in Fiscal 2024.
Results of Operations for Fiscal 2023 compared with Fiscal 2022
(Rs in million)
| Particulars | Fiscal 2023 | Fiscal 2022 | Change % |
| Income | |||
| Revenue from Operations | 12,050.67 | 5,044.02 | 138.91 |
| Other Income | 46.01 | 3.65 | 1,160.14 |
| Total Income | 12,096.68 | 5,047.67 | 139.65 |
| Expenses | |||
| Cost of materials consumed | 9,588.56 | 3,915.23 | 144.90 |
| Purchase of Stock-in-Trade | 11.61 | - | 100.00 |
| Changes in inventory | 24.84 | (44.44) | (155.89) |
| Employee benefits expense | 193.25 | 104.75 | 84.49 |
| Finance costs | 98.06 | 90.85 | 7.93 |
| Depreciation and amortisation expense | 118.54 | 90.17 | 31.47 |
| Other expense | 1,507.94 | 671.28 | 124.64 |
| Total Expenses | 11,542.80 | 4,827.84 | 139.09 |
| Profit before tax | 553.88 | 219.83 | 151.96 |
| Tax Expense | |||
| Current tax | 53.76 | 56.84 | (5.43) |
| Deferred tax | 82.07 | 3.78 | 2070.49 |
| Profit after tax | 418.05 | 159.21 | 162.58 |
Total Income
Our total income in Fiscal 2023 increased by 139.65% to 12,096.68 million in Fiscal 2023 from 5,047.67 million in Fiscal 2022 primarily on account of the following:
Below is the breakup of our revenue from operations for Fiscal 2023 and Fiscal 2022
(Rs in million)
| Particulars | Fiscal 2023 | Fiscal 2022 | Change % |
| Sale of Products | |||
| Domestic Sales | 8,828.71 | 4,962.66 | 77.90 |
| Export Sales | 3,776.73 | 187.77 | 1911.38 |
| Gross Revenue from Operations | 12,605.44 | 5,150.43 | 144.75 |
| Less: | |||
| Brokerage / Commission | 395.05 | 11.73 | 3268.76 |
| Freight | 159.71 | 94.69 | 68.68 |
| Revenue from Operations | 12,050.67 | 5,044.02 | 138.91 |
Our revenue from operations increased by 138.91% from 5.044.02 million in Fiscal 2022 to 12,050.67 million in Fiscal 2023, primarily attributed to increase in Domestic Sales from 4962.66 million in Fiscal 2022 to 8,828.71 million in Fiscal 2023 and increase in Export Sales from 187.77 million in Fiscal 2022 to 3776.73 million in Fiscal 2023.
Other Income
ur other income increased by 1160.14% from 3.65 million in Fiscal 2022 to 46.01 million in Fiscal 2023, primarily attributed to increase in interest received by 1842.53% from 0.39 million in Fiscal 2022 to 7.64 million in Fiscal 2023, increase in dividend received by 1053.78% from 2.57 million in Fiscal 2022 to 29.60 million in Fiscal 2023 and increase in insurance claim income by 32.92% from 0.69 in Fiscal 2022 to 0.92 million in Fiscal 2023.
Total Expenses
Our expenses in Fiscal 2023 increased by 139.09% from 4,827.84 million in Fiscal 2022 to 11,542.80 million in Fiscal 2023 primarily on account of the following reasons:
Cost of materials consumed
Our cost of materials consumed increased by 144.90% from 3,915.22 million in Fiscal 2022 to 9,588.56 million in Fiscal 2023, in line with increase in Revenue from Operations by 138.91% in Fiscal 2023. Our cost of materials consumed was 77.57% of the total income in the Fiscal 2022 compared to 79.27% in the Fiscal 2023.
Change in inventories
Change in inventories was (44.44) million in Fiscal 2022 as compared to 24.84 million in Fiscal 2023. Following table explains the Change in inventories of finished goods, work-in-progress and goods-in-transit.
(Rs in million)
| Particulars | Fiscal 2023 | Fiscal 2022 | Change % |
| Opening Stock | |||
| Finished Goods | 59.23 | 35.06 | 68.93 |
| Stock in Trade | 5.45 | - | 100.00 |
| Work-in-Progress | 3.15 | 1.44 | 119.86 |
| Goods-in-transit | 90.41 | 18.38 | 391.95 |
| 158.25 | 54.88 | 188.39 | |
| Closing Stock | |||
| Finished Goods | 60.14 | 36.93 | 62.88 |
| Work-in-Progress | 5.81 | 1.46 | 297.68 |
| Goods-in-transit | 67.46 | 60.93 | 10.72 |
| 133.41 | 99.32 | 34.33 | |
| Total | 24.84 | (44.44) | (155.89) |
Employee benefits expense
Our employee benefits expense increased by 84.49% from 104.75 million in Fiscal 2022 to 193.25 million in
Fiscal 2023, primarily attributed to increase in salaries and wages from 81.56 million in Fiscal 2022 to 165.03 million in Fiscal 2023, increase in director remuneration from 16.65 in Fiscal 2022 to 21.30 million in Fiscal 2023, and increase in gratuity expenses from 1.04 in Fiscal 2022 to 2.25 million in Fiscal 2023. However, the increase was marginally offset by decrease in staff welfare expense from 5.50 million in Fiscal 2022 to 4.60 million in Fiscal 2023.
Finance costs
Our finance costs increased by 7.93% from 90.85 million in Fiscal 2022 to 98.06 million in Fiscal 2023, primarily attributed to increase in other borrowing cost from 3.62 million in Fiscal 2022 to 11.29 million in Fiscal 2023. However, the decrease was marginally offset by increase in interest expenses from 87.24 million in Fiscal 2022 to 86.77 million in Fiscal 2023.
Depreciation and amortisation expense
Our depreciation and amortization expense increased by increased by 31.47% from 90.17 million in Fiscal 2022 to 118.54 million in Fiscal 2023. Our gross carrying amount of property, plant and equipment increased by 52.04% from 1,510.79 million in Fiscal 2022 to 2,297.00 million in Fiscal 2023.
Other expenses
Our other expenses increased by 124.64% from 671.28 million in Fiscal 2022 to 1,507.94 million in Fiscal 2023, generally in line with the increase in business operations.
Below is the breakdown of our other expenses for Fiscal 2023 and Fiscal 2022
(Rs in million)
| Particulars | Fiscal 2023 | Fiscal 2022 | Change % |
| Power & Fuel consumed | 1,080.13 | 425.10 | 154.09 |
| Packing Material consumed | 129.42 | 69.49 | 86.25 |
| Stores and Consumables consumed | 114.20 | 43.48 | 162.69 |
| Repair & Maintenance Plant & machinery | 44.60 | 43.17 | 3.32 |
| Professional & Consultancy Charges | 14.03 | 7.13 | 96.87 |
| Repairs & Maintenance Others | 16.51 | 35.66 | (53.71) |
| Chemical Consumed | 27.53 | 11.06 | 148.82 |
| CSR | 3.20 | 3.00 | 6.67 |
| Other Factory Expenditure | 25.02 | 9.08 | 175.50 |
| Insurance Expenses | 6.42 | 3.16 | 103.50 |
| Travelling and Conveyance Expenses | 9.44 | 0.12 | 7746.39 |
| Rates & Taxes | 3.49 | 16.41 | (78.75) |
| Administration & Other Misc. Expenses | 18.78 | 0.23 | 7963.78 |
| Stationery & Printing Expenses | 2.18 | 0.32 | 590.56 |
| Telephone, Internet, Postage, & Courier Expenses | 2.68 | 0.34 | 682.24 |
| Vehicle Expenses | 1.90 | 0.87 | 118.96 |
| Auditors Remuneration | 0.33 | 0.55 | (40.00) |
| Rent | 6.24 | 0.10 | 5871.01 |
| Advertisement Expense | 0.67 | - | 100.00 |
| Other Expenses | 1.17 | 2.02 | (42.20) |
| Total | 1507.94 | 671.28 | 124.64 |
The increase in Other Expenses was primarily attributed to the following:
i. Power and fuel expense increased by 154.09% from 425.10 million in Fiscal 2022 to 1,080.13 million in Fiscal 2023. The increase was mainly on account of increase in business activity during the Fiscal 2023 as compared to Fiscal 2022
ii. Packing material increased by 86.25% from 69.49 million in Fiscal 2022 to 129.42 million in Fiscal 2023. The increase was mainly on account of increase in business activity during the Fiscal 2023 as compared to Fiscal 2022.
iii. Stores & Consumable Consumed increased by 162.69% from 43.48 million in Fiscal 2022 to 114.20 million in Fiscal 2023. The increase was mainly on account of increase in business activity during the Fiscal 2023 as compared to Fiscal 2022
iv. Repair & Maintenance plant & machinery increased by 3.32% from 43.17 million in Fiscal 2022 to 44.60 million in Fiscal 2023.
v. Professional & Consultancy Charges increased by 96.87% from 7.13 million in Fiscal 2022 to 14.03 million in Fiscal 2023
vi. Chemical consumed by 148.82% from 11.06 million in Fiscal 2022 to 27.53 million in Fiscal 2023. The increase was mainly on account of increase in business activity during the Fiscal 2023 as compared to Fiscal 2022
vii. CSR increased by 6.67% from 3.00 million in Fiscal 2022 to 3.20 million in Fiscal 2023
viii. Other Factory Expenses increased by 175.50% from 9.08 million in Fiscal 2022 to 25.02 million in Fiscal 2023
ix. Insurance Expenses increased by 103.50% from 3.16 million in Fiscal 2022 to 6.42 million in Fiscal 2023
x. Travelling & Conveyance Expenses increased by 7746.39% from 0.12 million in Fiscal 2022 to 9.44 million in Fiscal 2023
xi. Administration & Other Misc. Expenses increased by 7963.78% from 0.23 million in Fiscal 2022 to 18.78 million in Fiscal 2023
xii. Stationery & printing expenses increased by 590.56% from 0.32 million in Fiscal 2022 to 2.18 million in Fiscal 2023 xiii. Telephone, Internet, Postage & Courier Expenses increased by 682.24% from 0.34 million in Fiscal 2022 to 2.68 million in Fiscal 2023
xiv. Vehicle Expenses increased by 118.96% from 0.87 million in Fiscal 2022 to 1.90 million in Fiscal 2023
xv. Rent increased by 5871.01% from 0.10 million in Fiscal 2022 to 6.24 million in Fiscal 2023
xvi. Advertisement expenses increased by 100% from NIL in Fiscal 2022 to 0.67 million in Fiscal 2023
However, the increase was partially offset by decrease in
(i) Repairs & Maintenance - Others from 35.66 million in Fiscal 2022 to 16.51 million in Fiscal 2023,
(ii) rates & taxes expenses from 16.41 million in Fiscal 2022 to 3.49 million in Fiscal 2023,
(iii) auditors remuneration from 0.55 million in Fiscal 2022 to 0.33 million in Fiscal 2023 amongst others.
Profit before tax
As a result of the foregoing, profit before tax increased by 151.96% from 219.83 million in Fiscal 2022 to 553.88 million in Fiscal 2023.
Tax expenses
Our tax expenses (including current tax and deferred tax) increased by 124.05% from 60.62 million in Fiscal 2022 to 135.83 million in Fiscal 2023. The increase in our tax expenses in Fiscal 2023 was primarily due to an increase in the profit before tax.
Profit for the year
As a result of the foregoing, our profit for the year increased by 162.58% from 159.21 million in Fiscal 2022 to 418.05 million in Fiscal 2023.
Cash Flows as per Restated Consolidated Financial Statements
The following table summarizes our cash flows for the periods indicated below:
(Rs in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Net cash flow from/ (used in) operating activities (A) | 285.97 | (60.17) | 297.14 |
| Net cash flow from/(used in) investing activities (B) | (368.90) | (713.88) | (44.99) |
| Net cash flow from/ (used in) financing activities (C) | 51.98 | 830.35 | (250.28) |
| Net increase/decrease in cash and cash equivalents (A+B+C) | (30.96) | 56.30 | 1.87 |
| Cash and cash equivalent at the beginning of the period/ year | 62.70 | 6.43 | 4.56 |
| Cash and cash equivalents at the end of the period/ year | 31.75 | 62.70 | 6.43 |
Operating Activities
For Fiscal 2024
Our net cash generated from operating activities was 285.97 million for Fiscal 2024. Our operating profit before working capital changes was 1,116.13 million for Fiscal 2024, which was primarily adjusted by payment of income tax of 166.87 million, increase in inventories by 874.95 million, trade receivables by 267.04 million, bank balance other than cash and cash equivalents by 16.04 million, current assets by 221.28 million, trade payable by 656.96 million, current taxes by 83.33 million, provision by 7.85 million and decrease in other financial assets by 6.17 million, other liabilities by 26.45 million, other financial liabilities by 11.84 million.
For Fiscal 2023
Our net cash used from operating activities was 60.17 million for Fiscal 2024. Our operating profit before working capital changes was 763.04 million for Fiscal 2024, which was primarily adjusted by payment of income tax of 53.76 million, increase in inventories by 138.82 million, trade receivables by 510.00 million, other financial assets by 23.08 million, current assets by 279.32 million, current taxes by 2.95 million, trade payable by 122.34 million, other liabilities by 16.90 million, provision by 12.77 million, other financial liabilities by 24.76 million, and decrease in bank balance other than cash and cash equivalents by 7.95 million
For Fiscal 2022
Our net cash generated from operating activities was 297.14 million for Fiscal 2022. Our operating profit before working capital changes was 396.89 million for Fiscal 2022, which was primarily adjusted by payment of income tax of 56.84 million, increase in trade receivables by 193.45 million, bank balance other than cash and cash equivalents by 11.60 million, trade payable by 85.67 million, other liabilities by 13.97 million, financial assets by 0.09 million, other financial liabilities by 2.00 million, provision by 1.48 million and decrease in inventories by 19.79 million, other financial assets by 0.20 million, current assets by 33.62 million, current taxes by 8.45 million.
Investing Activities
For Fiscal 2024
Net cash used in investing activities was 368.90 million for Fiscal 2024. This was primarily on account of purchase of property, plant, equipment and intangible assets amounting to 408.12 million, purchase of investment amounting to 1.91 million which was partially offset by proceeds from sale of asset of 27.78 million and finance income of 13.35 million.
For Fiscal 2023
Net cash used in investing activities was 713.88 million for Fiscal 2023. This was primarily on account of purchase of property, plant, equipment and intangible assets amounting to 746.51 million, purchase of investment amounting to 0.48 million which was partially offset by capital work in process of 23.56 million, proceeds from sale of asset of 1.88 million and finance income of 7.64 million.
For Fiscal 2022
Net cash used in investing activities was 44.99 million for Fiscal 2022. This was primarily on account of purchase of property, plant, equipment and intangible assets amounting to 17.80 million and repayment of loan of 27.58 million, which was partially offset by finance income of 0.39 million.
Financing Activities
For Fiscal 2024
Net cash generated from financing activities was 51.98 million for Fiscal 2024. This was primarily on account of proceed from short term borrowings of 192.97 million which was partially offset by repayment of long term borrowings of 33.61 million and finance cost of 107.38 million.
For Fiscal 2023
Net cash used in financing activities was 830.35 million for Fiscal 2023. This was primarily on account of increase in General Reserve of 495.71 million, securities premium of 30.05 million, proceed from short term borrowings of 497.35 million, capital reservce of 16.03 million, retained earnings of 130.49 million, OCI of 5.23 million, capital redemption reserve of 0.25 million which was partially offset by repayment of long term borrowings of 232.59 million, issuance of share capital of 14.11 million and finance cost of 98.06 million.
For Fiscal 2022
Net cash used in financing activities was 250.28 million for Fiscal 2022. This was primarily on account of repayment of long term borrowings of 219.25 million and finance cost of 87.24 million, which was partially offset by proceed from short term borrowings of 56.21 million.
Financial Indebtedness
As at March 31, 2024 the total outstanding borrowings of our Company were 1,276.36 million as per Restated Consolidated Financial Statements. For further details, refer chapter titled "Financial Indebtedness" beginning on page 390 of this Red Herring Prospectus.
As per Restated Consolidated Financial Statements
(Rs in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Long Term Borrowings (A) | |||
| - From Banks & Financial Institution | 263.39 | 313.41 | 225.98 |
| - From Directors, their Relatives and Corporate | 45.81 | 29.39 | 349.42 |
| Short Term Borrowings (B) | |||
| - From Banks & Financial Institution | 794.17 | 561.55 | 146.80 |
| Current Maturities of Long Term Borrowings (C) | 172.99 | 212.64 | 130.04 |
| Total (A)+(B)+(C) | 1,276.36 | 1,117.00 | 852.24 |
Contingent Liabilities and Commitments
Contingent liabilities, to the extent not provided for, as of the below mentioned time periods, as determined in accordance with Ind AS 37, are described below
As per Restated Consolidated Financial Statements
(Rs in million)
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| I. Contingent liabilities | |||
| Bank Guarantee given | 45.54 | 48.13 | 21.93 |
| Total | 45.54 | 48.13 | 21.93 |
| II. Capital Commitments | |||
| Estimated amount of contracts remaining to be executed on | 432.00 | 7.43 | 150.61 |
| Capital Account and not provided for | |||
| Less advances paid | 42.13 | 0.91 | 14.81 |
| Total | 389.87 | 6.52 | 135.80 |
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, derivative instruments or other relationships with other entities that would have been established for the purpose of facilitating off-balance sheet arrangements.
Changes in accounting policies in the last three Fiscals
There have been no changes in our accounting policies in Fiscals 2024, 2023 and 2022.
Quantitative and qualitative disclosures about market risk
We are exposed to various types of market risks during the normal course of business. Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk and commodity risk. We are exposed to foreign exchange risk, credit risk and liquidity risk in the normal course of our business.
Currency Risk
Our Company is exposed to currency risk mainly on account of export receivables in foreign currency. The major exposures of our Company are in U.S. dollars and EUR. Our Company hedge the foreign exchange exposure partly through forward foreign currency covers. Our Company does not use derivative financial instruments for trading or speculative purposes. For further information, see "Principal factors affecting our results of operations" on page 359.
Credit Risk
Credit risk refers to the possibility of a customer and other counterparties not meeting their obligations and terms and conditions which would result in a financial loss. We are exposed to credit risk from our operating activities, primarily from trade receivables. As of Fiscal 2024, 2023 and 2022, our restated trade receivables were 1,175.13 million, 912.04 million and 402.23 million respectively. For further information, see "Risk Factors Any delay in the collection of our dues and receivables from our clients may have a material and adverse effect on our results of operations and cash flows." on page 63.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Our approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companys reputation.
Other Qualitative Factors
Significant Economic Changes
Other than as described above, to the best of the knowledge of our management, there are no other significant economic changes that materially affect or are likely to affect income from continuing operations. For further details, please see "Our Business" and "Risk Factors" on pages 228 and 34 respectively.
Unusual or Infrequent Events of Transactions
Except as described in this Red Herring Prospectus, there have been no other events or transactions that, to our knowledge, may be described as "unusual" or "infrequent".
Known Trends or Uncertainties
Our business has been affected and we expect will continue to be affected by the trends identified above in the heading titled " Principal Factors Affecting Our Results of Operations" on page 359 and the uncertainties described in the section titled "Risk Factors" on page 34. To our knowledge, except as described or anticipated in this Red Herring Prospectus, there are no known factors which we expect will have a material adverse impact on our revenues or income from continuing operations.
Future Relationship Between Cost and Income
Other than as described above and in "Our Business" and "Risk Factors" on pages 228 and 34, respectively, to the knowledge of our management, there are no known factors that might affect the future relationship between costs and revenues.
New Products or Business Segments
Other than as disclosed in this section and in "Our Business" on page 228, as on the date of this Red Herring Prospectus, there are no new products or business segments that have had or are expected to have a material impact on our business prospects, results of operations or financial condition.
Extent to which Material Increases in Revenue are due to Increased Sales Volume, Introduction of New Products or Services or Increased Sales Prices
Changes in revenue in the last three Fiscals are as described in "Managements Discussion and Analysis of Financial Position and Results of Operations - Fiscal 2024 compared with Fiscal 2023 Revenue from Operations" and "Managements Discussion and Analysis of Financial Position and Results of Operations - Fiscal 2023 compared with Fiscal 2022 - Revenue from Operations" above on page 357.
Seasonality
Our business is not seasonal in nature. However, during the months of March to May and September to December, maize harvesting in India is at its peak and purchase of maize usually takes place during such months for stocking purposes (Source: Frost & Sullivan Report). Due to this, our purchases are usually high during these months over other months of the year.
Significant dependence on a single or few suppliers or customers
For significant dependence on suppliers or customers of our Company , please refer to "Risk Factors No. 13 Our Company is dependent for its raw material requirement on a few number of raw material suppliers who are local farmers located near our Manufacturing Units and suppliers in ‘mandis which are un-organized marketplaces." on page 48 and "Risk Factor No. 8 - Our Company in the usual course of business does not have any long term contracts with its customers and we rely on purchase orders for delivery of our products and our customers may cancel or modify their orders, change quantities, delay or change their sourcing strategy. Loss of one or more of our top customers or a reduction in their demand for our products or reduction in revenue derived from them may adversely affect our business, results of operations and financial condition." on page 40.
Competitive Conditions
We expect to continue to compete with existing and potential competitors. For details, please refer to the discussions of our competition in the sections "Risk Factors", "Industry Overview" and "Our Business" on pages 34 , 144 and 228 respectively.
Significant Developments after March 31, 2024, that may affect our future results of operations
Except as stated above and elsewhere in this Red Herring Prospectus, no developments have come to our attention since the date of the Restated Consolidated Financial Information as disclosed in this Red Herring Prospectus which materially and adversely affect or are likely to materially and adversely affect our operations or trading or profitability, or the value of our assets or our ability to pay our liabilities within the next twelve months
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