Some of the information in this section, including information with respect to our business plans and strategies, contain forward-looking statements that involve risks and uncertainties. Prospective investors should read "Forward-Looking Statements" beginning on page 20 for a discussion of the risks and uncertainties related to those statements along with "Risk Factors", "Industry Overview", "Financial Information" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" beginning on pages 31, 141, 282 and 350, respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations. Our actual results may differ materially from those expressed in or implied by these forward-looking statements.
Our Companys financial year commences on April 1 and ends on March 31 of the immediately subsequent year, and references to a particular fiscal year are to the 12 months ended March 31 of that particular year. Unless otherwise indicated or the context otherwise requires, the financial information for the three months period ended June 30, 2025, and Financial Year 2025, Financial Year 2024 and Financial Year 2023, included herein is based on or derived from our Restated Consolidated Financial Information included in this Red Herring Prospectus. For further information, please see section titled "Restated Consolidated Financial Information" beginning on page 282. Please also refer to "Definitions and Abbreviations" on page 1 for certain terms used in this section. The Restated Consolidated Financial Information is based on our audited financial statements and is restated in accordance with the Companies Act, 2013, and the SEBIICDR Regulations. Our auditedfinancial statements are prepared in accordance with Indian Accounting Standards, which differs in certain material respects with IFRS and U.S. GAAP. For details, please see "Risk Factors - Significant differences exist between Ind AS and other accounting principles, such as US GAAP and International Financial Reporting Standards ("IFRS"), which investors may be more familiar with and consider material to their assessment of our financial condition. Significant differences exist between Ind AS and other accounting principles, such as US GAAP and International Financial Reporting Standards ("IFRS"), which investors may be more familiar with and consider material to their assessment of our financial condition. " on page 60.
Unless the context otherwise requires, in this section, references to "we", "us", "our" "our Company" or "the Company" refers to Vidya Wires Limited and its Subsidiary on a consolidated basis.
Unless otherwise indicated, industry and market data used in this section has been derived from the industry report titled "Industry Research Report on Winding and Conductivity Products" dated October 6, 2025, which is exclusively prepared for the purpose of the Offer and issued by CARE Analytics and Advisory Private Limited. The data included herein includes excerpts from the CareEdge Report and may have been re-ordered by us for the purposes of presentation. For more information and risks in relation to commissioned reports, see "Risk Factors- Certain sections of this Red Herring Prospectus contain information from CareEdge Report, which has been commissioned and paidfor by our Company and any reliance on such information for making an investment decision in the Offer is subject to inherent risks" on page 53. Also see, "Certain Conventions, Presentation of Financial, Industry and Market Data -Industry and Market Data" on 16.
OVERVIEW
We are manufacturers of winding and conductivity products for a range of critical industries and applications. Our product portfolio includes precision-engineered Enameled Wires, Enameled Copper Rectangular Strips, Paper Insulated Copper Conductors, Copper Busbar and Bare Copper Conductors, Specialised Winding Wires, PV Ribbon and Aluminum Paper Covered Strips, among others. Our products are used in applications such as energy generation & transmission, electrical systems, electric motors, clean energy systems, electric mobility, and railways.
We are the 4th largest manufacturers in our industry with a 5.7% market share of installed capacity in FY25 in India as per the CareEdge Report. With plans to expand manufacturing capabilities and further diversify our product range, the Company seeks to enhance its market position. ss
Since our incorporation in the year 1981, we have expanded our business, scale of operations and delivered variety of products, creating our position in the winding and conductivity products. From time to time, we have made investment, in our manufacturing facilities to expand our installed capacity up to the current level of 19,680 MT per annum. Further, we propose to increase installed capacity to 37,680 MT per annum by installing additional 18,000 MTPA in our new manufacturing unit at Narsanda, Taluka Nadiad- 387 345, Gujarat, India ("Proposed Project") under our wholly owned subsidiary company, ALCU Industries Private Limited, which is 15 kms from our existing operating facilities. Our capacity utilisation has improved from 70.31% in Fiscal 2023 to 94.51% during the three months period ended June 30, 2025. Our production volumes have grown by 29.23% in the last 3 fiscals, from 13,415 MT in Fiscal 2023 to 17,338 MT in Fiscal 2025.
We are pre-approved suppliers with Power Grid Corporation of India Limited. We are a UL approved company which enables us to export enameled copper/aluminium wire (also known as magnet wire) to the United States of America. Our operations are located in Anand, Gujarat, which has logistics convenience through various major seaports of the state like Hazira and Mundra which we use for exporting our products as well as importing our raw materials.
We have integrated and continue to further integrate environmental, social and governance practices into our business with a sustainable and responsible approach to our operations. Under our focus on environment and sustainability initiatives, we have sourced an average of about 25 % of our total power requirements from renewable sources like solar and windmills in the three months period ended June 30, 2025, and the last 3 Fiscals. Our manufacturing facilities are accredited with ISO 9001:2015 (Quality Management System), ISO 45001: 2018 (Occupational Health & Safety Management System), and ISO 14001:2015 (Environment Management System) certifications. Our products are compliant with various quality standards including the Bureau of Indian Standards.
With our customer base of 318, 458, 472, and 453, respectively, in the three months period ended June 30, 2025 and Fiscals 2025, 2024 and 2023, none of our customers singly contributing over 9% of our annual revenues, we have effectively de-risked our business model from dependence on a limited number of customers and insulated our revenue potential due to our broad-based customer base.
We manufacture over 8,000 SKUs of winding and conductivity products, with sizes ranging from as thin as 0.07 mm to as thick as 25 mm. The table below mentions the number of SKUs manufactured in the three months period ended June 30, 2025, and Fiscals 2025, 2024 and 2023:
| Particulars | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Number of SKUs manufactured | 8,512 | 6,780 | 5,202 | 4,680 |
Our product mix and plant specifications enable us to use some of our same machinery to produce multiple alternate products in order to accommodate varied customer demand. Through our Proposed Project, we intend to add new products like Copper Foils, Copper Components, Continuously Transposed Copper Conductors, PV Round Ribbon, Solar Cables, Multi Paper Covered Copper Conductors, Enameled Aluminium Winding Wires, and Enameled Aluminium Rectangular Strips to our current product portfolio.
Owing to our history of over 4 decades in winding and conductivity products manufacturing business, we have served and will continue to serve a diverse customer base across multiple end-user industries. Our sales composition based on end-user industries is as under:
| Industry | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||
| Amount | % of Revenue from Operation s | Amount | % of Revenue from Operations | Amount | % of Revenu e from Operati ons | Amou nt | % of Revenue from Operatio ns | |
| Power & transmission | 2,010.66 | 48.83 | 7,143.27 | 48.06 | 5,105.14 | 43.04 | 4,690. 29 | 46.37 |
| General engineering | 406.17 | 9.86 | 1,516.25 | 10.20 | 2,136.78 | 18.02 | 1,889. 04 | 18.68 |
| Electrical | 922.17 | 22.40 | 4,292.09 | 28.88 | 3,115.27 | 26.27 | 2,477. 14 | 24.49 |
| Renewables, EV and Automotive* | 438.94 | 10.66 | 1,413.73 | 9.51 | 914.99 | 7.71 | 719.08 | 7.11 |
| Consumer durables | 319.09 | 7.75 | 433.73 | 2.92 | 536.90 | 4.53 | 309.80 | 3.06 |
| Industry | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||
| Amount | % of Revenue from Operation s | Amount | % of Revenue from Operations | Amount | % of Revenu e from Operati ons | Amou nt | % of Revenue from Operatio ns | |
| Sub-Total | 4,097.03 | 99.50 | 14,799.07 | 99.56 | 11,809.09 | 99.56 | 10,085 .35 | 99.71 |
| Other operating revenue | 20.55 | 0.50 | 64.84 | 0.44 | 51.64 | 0.44 | 29.00 | 0.29 |
| Total | 4,117.58 | 100.00 | 14,863.91 | 100.00 | 11,860.73 | 100.00 | 10,114 .35 | 100.00 |
*Includes solar and windmill
Our revenue is derived from both the domestic and international markets. Although India remains our largest market, in the three months period ended June 30, 2025, and the last 3 Fiscals, our products were sold to over 318 customers, including over 19 international customers in over 18 countries across 5 continents. The break-up of our revenues is as under:
| Geographic distribution | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Domestic revenues | ||||
| Western Zone | 2,914.03 | 10,569.41 | 8,389.34 | 6,908.78 |
| Northern Zone | 302.53 | 1,239.93 | 540.01 | 398.88 |
| Southern Zone | 226.59 | 418.19 | 549.24 | 401.57 |
| Central Zone | 184.20 | 481.69 | 608.33 | 460.50 |
| Eastern Zone | 8.34 | 72.28 | 104.28 | 48.44 |
| Total Domestic revenues | 3,635.70 | 12,781.50 | 10,191.20 | 8,218.18 |
| Total International revenues | 461.33 | 2,017.57 | 1,617.89 | 1,867.17 |
| Other operating revenue | 20.55 | 64.84 | 51.64 | 29.00 |
| Total revenue from operation | 4,117.58 | 14,863.91 | 11,860.73 | 10,114.35 |
| Domestic Sales as a % of Revenue from Operation | 88.30 | 85.99 | 85.92 | 81.25 |
| Exports as % of Revenue from Operation | 11.20 | 13.57 | 13.64 | 18.46 |
| Other operating revenue % of Revenue from Operation | 0.50 | 0.44 | 0.44 | 0.29 |
While we sell to customers in about 19 states/union territories in India, we generate the majority of our revenue from the states of Gujarat and Maharashtra, which constituted 68.66%, 69.88%, 69.45% 65.54% of our revenue from operations in the three months period ended June 30, 2025, and Fiscals 2025, 2024, and 2023 respectively.
Over the years of our operations, we have developed relationships with our customers including Adani Wilmar Limited, Atlanta Electricals Limited, Schneider Electric Infrastructure Limited, Transformers & Rectifiers (India) Limited, Electrotherm India Limited, Hammond Power Solution Private Limited, Lubi Industries LLP, Suzlon Energy Limited, TMEIC Industrial Systems India Private Limited and Transfix India Private Limited, out of which many have been associated with us for over decades.
Within our diverse customer base, we do have a high level of repeat customers which helps us to reduce dependence and de-risk our revenues. The table below sets out our revenue from our repeat customers -
| Particulars | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| No. of repeat customers | 206 | 341 | 317 | 280 |
| Total no. of customers | 318 | 458 | 476 | 453 |
| Revenue from repeat customers (in f million) | 3,316.56 | 14,013.04 | 10,543.74 | 8,390.89 |
| Particulars | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Revenues from repeat customers as a % of total revenue from operations | 80.55 | 94.28 | 88.90 | 82.96 |
Similarly, we also have relationships with our suppliers, including Vedanta Limited, Marubeni Corporation Union Copper Rod LLC, Hindalco Industries Ltd., Bharat Aluminium Company Ltd., Ducab Metals LLC etc., with whom we have been buying our primary raw material, rods and cathodes of copper and rods of aluminium. We have maintained over ten years of relations with our major suppliers, including Vedanta Limited, Union Copper Rod LLC and Hindalco Industries Ltd to support our operations.
Our key performance indicators for the three months period ended June 30, 2025, and the last 3 fiscals are presented below:
| Particulars | Metrics | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Revenue from Operations(1) | Rs in million | 4,117.58 | 14,863.91 | 11,860.73 | 10,114.35 |
| EBITDA(2) | Rs in million | 186.66 | 642.18 | 455.15 | 358.37 |
| EBITDA Margin (%)(3) | % | 4.53 | 4.32 | 3.84 | 3.54 |
| PAT(4) | Rs in million | 120.55 | 408.72 | 256.93 | 215.04 |
| PAT Margin (%)(5) | % | 2.92 | 2.74 | 2.16 | 2.12 |
| ROE (%)(6) | % | 6.76 | 24.57 | 20.47 | 21.48 |
| ROCE (%)(7) | % | 5.24 | 19.72 | 18.25 | 16.87 |
| Net Worth(8) | Rs in million | 1,783.72 | 1,663.63 | 1,255.38 | 1,001.10 |
| Revenue CAGR (Fiscal 2023 to Fiscal 2025) (%)(9) | % | - | 21.23 | ||
| EBITDA CAGR (Fiscal 2023 to Fiscal 2025) (%)(9) | % | - | 33.86 | ||
| PAT CAGR (Fiscal 2023 to Fiscal 2025) (%)(9) | % | - | 37.86 | ||
| Debt to Equity Ratio(10) | Times | 0.91 | 0.88 | 0.87 | 0.97 |
| Fixed Assets Turnover Ratio(11) | Times | 9.49 | 36.24 | 29.92 | 26.70 |
| Inventory Turnover Ratio(12) | Times | 4.14 | 17.47 | 16.77 | 16.23 |
| Trade Receivable Days(13) | Days | 32 | 36 | 27 | 31 |
| Inventory Days(14) | Days | 22 | 21 | 22 | 22 |
| Trade Payable Days(15) | Days | 5 | 2 | 2 | 2 |
| Number of Manufacturing Facilities(16) | Numbers | 2 | 2 | 2 | 2 |
| Production Capacity(17) | MT | 19,680 | 19,680 | 19,380 | 19,380 |
* As certified by our Statutory Auditors by way of their certificate dated November 27, 2025.
1. Revenue from operation means revenue from operating activities
2. EBITDA means Earnings before interest, taxes, depreciation and amortisation expense, 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 and exceptional items.
3. EBITDA Margin is calculated as EBITDA as a percentage of revenue from operations.
4. PAT represents total net profit after tax for the year.
5. PAT Margin is calculated as PAT divided by total income.
6. ROE is calculated as PAT divided by Net worth;
7. 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) below + total current & non-current borrowings- cash and cash equivalents and other bank balances;
8. Net worth has been defined under Regulation 2(1)(hh)of the SEBIICDR Regulations as 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 the profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation ;
9. CAGR = Compounded Annual Growth Rate
10. Debt Equity Ratio: This is defined as total debt divided by total equity. Total debt is the sum of total current & noncurrent borrowings; total equity means the sum of equity share capital and other equity;
11. Fixed Asset Turnover Ratio: This is defined as revenue from operations divided by the total of property, plant & equipment. Figures for property, plant & equipment do not include capital work-in-progress.
12. Inventory Turnover Ratio is calculated by dividing the cost of goods sold during the period with average inventory.
13. Trade Receivable Days is calculated as Trade Receivable as at the year-end or three months ended/Revenue from Operations*(365 or 91). Rounded off to the nearest integer.
14. Inventory Days is calculated as average inventory for the year or three months period ended ((opening + closing) /2)/cost of goods sold*(365 or 91). Rounded off to the nearest integer.
15. Trade Payable Days is calculated as Trade payable as at the year-end or three months ended /Cost of goods sold*(365 or 91). Rounded off to the nearest integer.
16. Number of manufacturing facilities indicates the number of manufacturing units of the company.
17. Production capacity refers to maximum total production volume that can be produced in ideal conditions.
* As certified by our Statutory Auditors by way of their certificate dated November 27, 2025.
SIGNIFICANT FACTORS AFFECTING OUR RESULT OF OPERATIONS
The results of our operations and our financial conditions are affected by numerous factors and uncertainties, many of which may be beyond our control, including as discussed in "Our Business" and "Risk Factors", beginning on pages 214 and 31. Set forth below is a discussion of certain factors that we believe may be expected to have a significant effect on our financial condition and results of operations:
Raw materials consumed
Our cost of materials consumed are generally impacted by our manufacturing volumes, mix of products, the prices paid for raw materials and manufacturing efficiency. We primarily procure copper and aluminium as our raw material from various domestic and global entities. Our primary raw materials are copper, aluminium, insulating materials including wire enamel, insulating paper etc. We primarily procure copper and aluminium as our raw material from various domestic and global entities. The price of procuring copper is arrived at on the basis of the price of copper being traded on the London Metal Exchange ("LME") on daily basis. As & when we book the order, the LME rate is fixed on that day. The terms and production volumes of our raw materials supplies are negotiated at the time of issuance of purchase order. Raw material is booked based upon order we received from customer.
The table below sets out the cost of raw materials incurred together with such cost as percentage of our total expenses for the three months period ended June 30, 2025, and Fiscal 2025, Fiscal 2024 and Fiscal 2023:
| Particulars | Three months period ended June 30, 2025 | Financial Years | ||||||
| 2025 | 2024 | 2023 | ||||||
| Amount | % of total expenses | Amount | % of total expenses | Amount | % of total expenses | Amount | % of total expenses | |
| Cost of raw material consumed | 4,027.35 | 101.41 | 13,888.90 | 96.70 | 11,023.09 | 95.51 | 9,401.98 | 95.29 |
We usually do not have long-term agreements for the supply of our key raw materials, and procure our raw materials based on purchase orders, from third parties, and generally do not have firm commitments from our suppliers for quantity or price under our arrangements with our suppliers. The absence of continuing contracts at fixed prices and the need to maintain a continued supply of raw materials may make it difficult to resist price increases imposed by our suppliers or we may be required to pay prevailing market prices for such raw materials and inputs. While in case of price fluctuations, we endeavour to re-negotiate our purchase orders with our vendors for price amendment and scheduling, we may not always succeed in passing on the effects of such price fluctuations to our customers. Furthermore, with strict quality requirements specified by customers, the risk of being unable to make alternative arrangements is exacerbated.
The prices for our raw materials can be volatile and depend on commodity prices in the international markets, which in turn depend on changes in global economic conditions, industry cycles, supply-and-demand including
other market dynamics. An increase in raw material prices may result in increased prices for our customers products, which may in turn result in decreased demand for their products and, consequently, decreased demand for the products that we supply for their products. While our Company maintains inventory of raw materials, a failure to maintain its adequate stock or a continuous supply of stock at stable prices may result in our inability to manufacture and supply products to our customers in accordance with the respective contract and on a timely basis which could have a material and adverse effect on our business, results of operations and financial condition. Also, please see "Risk Factors - Significant increases or fluctuations in prices of, or shortages of, or delay or disruption in supply of primary raw materials could affect our estimated costs, expenditures and timelines which may have a material adverse effect on our business, financial condition, results of operations and cash flows." and "Risk Factors - We do not have long term definitive agreements for supply ofproducts or raw material with most of our customers or suppliers. Failure to successfully leverage our supplier/customer relationships and network could adversely affect us." on pages 32 and 39.
Our customers, terms of our arrangements, their purchasing patterns and pricing our products
Our financial performance has largely been driven by, and a key factor to our future success will be, our ability to continue to deliver value for our customers, increase our customer base, and deepen our relationships with our existing customers. Owing to our legacy of over four decades in manufacturing businesses, we benefit from our experience in catering to a wide array of customers and we have built a relationship with customers across end- user industries in the power & transmission, electricals, automotive, general engineering, solar, windmill (renewable sector), EV and consumer durables sectors. Over the last three years and the three months period ended June 30, 2025, we marketed and sold our products to over 300 domestic customers, including over 20 global customers in more than 18 countries. The table below, demonstrates the percentage of our sales to the various end-use industries we cater to:
| Industry | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||
| Amount | % of Revenue from Operatio ns | Amount | % of Revenue from Operatio ns | Amount | % of Revenue from Operatio ns | Amount | % of Revenue from Operatio ns | |
| Power & transmission | 2,010.66 | 48.83 | 7,143.27 | 48.06 | 5,105.14 | 43.04 | 4,690.29 | 46.37 |
| General engineering | 406.17 | 9.86 | 1,516.25 | 10.20 | 2,136.78 | 18.02 | 1,889.04 | 18.68 |
| Electrical | 922.17 | 22.40 | 4,292.09 | 28.88 | 3,115.27 | 26.27 | 2,477.14 | 24.49 |
| Renewables, EV and Automotive* | 438.94 | 10.66 | 1,413.73 | 9.51 | 914.99 | 7.71 | 719.08 | 7.11 |
| Consumer durables | 319.09 | 7.75 | 433.73 | 2.92 | 536.90 | 4.53 | 309.80 | 3.06 |
| Sub-Total | 4,097.03 | 99.50 | 14,799.07 | 99.56 | 11,809.09 | 99.56 | 10,085.35 | 99.71 |
| Other operating revenue | 20.55 | 0.50 | 64.84 | 0.44 | 51.64 | 0.44 | 29.00 | 0.29 |
| Total | 4,117.58 | 100.00 | 14,863.91 | 100.00 | 11,860.73 | 100.00 | 10,114.35 | 100.00 |
* Includes solar and windmill
As part of our de-risking strategy, no single customer accounts for more than 9% of our sales during Fiscal 2025, 2024 and Fiscal 2023 and no individual product constitutes more than 44% of our sales, ensuring a balanced and resilient business model. The following table enumerates the details of geographic sales for the three months period ended June 30, 2025, and Fiscal 2025, Fiscal 2024 and Fiscal 2023:
| Geographic distribution | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Domestic revenues | ||||
| Western Zone | 2,914.03 | 10,569.41 | 8,389.34 | 6,908.78 |
| Northern Zone | 302.53 | 1,239.93 | 540.01 | 398.88 |
| Southern Zone | 226.59 | 418.19 | 549.24 | 401.57 |
| Geographic distribution | Three months period ended June 30, 2025 | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Central Zone | 184.20 | 481.69 | 608.33 | 460.50 |
| Eastern Zone | 8.34 | 72.28 | 104.28 | 48.44 |
| Total Domestic revenues | 3,635.70 | 12,781.50 | 10,191.20 | 8,218.18 |
| Total International revenues | 461.33 | 2,017.57 | 1,617.89 | 1,867.17 |
| Other operating revenue | 20.55 | 64.84 | 51.64 | 29.00 |
| Total revenue from operation | 4,117.58 | 14,863.91 | 11,860.73 | 10,114.35 |
| Domestic Sales as a % of Revenue from Operation | 88.30 | 85.99 | 85.92 | 81.25 |
| Exports as % of Revenue from Operation | 11.20 | 13.57 | 13.64 | 18.46 |
| Other operating revenue % of Revenue from Operation | 0.50 | 0.44 | 0.44 | 0.29 |
The demand of our customers products significantly influences our revenue from operations as our sales are directly impacted by the production and inventory levels of our customers products. Increased sales of our customers products tend to increase our revenue from operations, while a slow-down in the demand for our customers products tends to lead to a lower revenue from operations. Furthermore, there is no assurance that our customers will continue to source products from us at volumes or rates consistent with, and commensurate to, the amount of business received from them historically, or at all. We typically do not enter into continuing agreements with our customers and we rely on open purchase orders and delivery schedules issued by our customers from time to time. Due to committed delivery schedules at a pre-agreed price as set out in the purchase orders, in the event of an unanticipated change or cancellation in orders from our customers we may incur additional costs that we are unable to pass through to our customers or be required to write off certain expenses. Any changes in the levels of inventory and activity by our customers, in turn, are likely to affect our revenues and results of operations.
While we have remained profitable in the last three Fiscals and during the three months period ended June 30, 2025, despite offering discounts and absorbing costs to the extent not passed on to our customers, if we are unable to generate sufficient revenue to offset such high production costs and discounts offered in the future, our profitability, margins and return ratios may be materially adversely affected.
Competition
We operate in an increasingly competitive market. We face competition from other manufacturers of copper winding wires and strips in relation to our offerings, in the organized and unorganized sectors. Suppliers in the winding and conductivity products industry compete based on key attributes including technical specifications, product quality, strength of sales and distribution network, pricing and timely delivery. Further, many of our competitors may have significant competitive advantages, including greater brand recognition and greater access to financial, research and development, marketing, distribution and other resources, larger product offerings and greater specialization than us. Additionally, certain of our competitors may specialise in manufacturing copper winding wires and strips within particular product verticals and hence, may be able to dedicate significantly larger resources towards developing and manufacturing technologically superior equipment than us and their brands may gain greater visibility within those product verticals. Our competitors may further, enter into business combinations or alliances that strengthen their competitive positions or prevent us from taking advantage by entering into such business combinations or alliances. Increasing competition may result in pricing pressures or decreasing profit margins or lost market share or failure to improve our market position, any of which could substantially harm our business and results of operations. We will be required to compete effectively with our existing and potential competitors, to maintain and grow our market share and in turn, our results of operations. For further details in relation to the competition we face and our significant competitors, see "Industry Overview and "Our Business - Competition" on pages 141 and 235, respectively.
Non-generally accepted accounting policies financial measures
Certain measures included in this Red Herring Prospectus, for instance, EBITDA, EBITDA Margin, PAT Margin, ROE, ROCE, Revenue CAGR, EBITDA CAGR, pAt CAGR, Debt to Equity Ratio, Fixed Assets Turnover Ratio,
Inventory Turnover Ratio, Trade Receivable Days, Inventory Days, Trade Payable Days, etc. ("Non-GAAP Measures"), presented in this Red Herring Prospectus are supplemental measures of our performance and liquidity that are not required by, or presented in accordance with Ind AS, IFRS or U.S. GAAP. Furthermore, these Non-GAAP Measures, are not a measurement of our financial performance or liquidity under Indian GAAP, IFRS or U.S. GAAP and should not be considered as an alternative to net profit/loss, revenue from operations or any other performance measures derived in accordance with Ind AS, IFRS or U.S. GAAP or as an alternative to cash flow from operations or as a measure of our liquidity. These Non-GAAP Measures and other statistical and other information relating to operations and financial performance should not be considered in isolation or construed as an alternative to cash flows, profit/(loss) for the years/period or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS or U.S. GAAP. In addition, these Non-GAAP Measures and other statistical and other information relating to operations and financial performance, are not standardised terms and may not be computed on the basis of any standard methodology that is applicable across the industry and therefore, may not be comparable to financial measures of similar nomenclature that may be computed and presented by other companies and are not measures of operating performance or liquidity defined by Ind AS and may not be comparable to similarly titled measures presented by other companies. Further, they may have limited utility as a comparative measure. Although such Non-GAAP financial measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance. See "Risk Factors -We have in this Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to our operations and financial performance that may vary from any standard methodology that is applicable across the winding and conductivity products industry" on page 59. Further, for a reconciliation of the above Non- GAAP Measures used by us to the most directly comparable financial measure prepared in accordance with Ind AS, see "Other Financial Information -Non-Generally Accepted Accounting Principles Financial Measures- Reconciliation of Non-GAAP Measures" on page 347.
SIGNIFICANT ACCOUNTING POLICIES
1. Revenue
Revenue from contracts with customers is recognised when control of the goods and services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company assesses promises in the contract that there are separate performance obligations to which a portion of the transaction price is allocated.
Revenue is measured based on the transaction price as specified in the contract with the customer. It excludes taxes or other amounts collected from customers in its capacity as an agent. In determining the transaction price, the Company considers below, if any:
Variable Consideration: This includes trade discounts, rebates and returns. It is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. It is reassessed at the end of each reporting period.
Consideration payable to a customer: Such Amounts are accounted for a reduction of transaction price and therefore, of revenue unless the payment to the customer is in exchange for a distinct good or service that the customer transfers to the Company.
Trade Receivable: A receivable represents the Companys right to an amount of consideration that is unconditional i.e., only the passage of time is required before payment of consideration is due.
2. Property, Plant and Equipment
An item of property, plant and equipment is recognised as an asset if it is probable that the future economic benefits associated with the item will flow to the Company and its cost can be measured reliably. This recognition principle is applied to the costs incurred initially to acquire an item of property, plant and equipment and also to the costs incurred subsequently to add to, replace part of, or service it. All other repair and maintenance costs, including regular servicing, are recognised in the statement of profit and loss as incurred. When a replacement
occurs, the carrying value of the replaced part is de-recognised. Where an item of property, plant and equipment comprises major components having different useful lives, these components are accounted for as separate items.
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. The cost of an item of property, plant and equipment comprises of its purchase price including import duties and other non-refundable purchase taxes or levies, directly attributable cost of bringing the asset to its working condition for its intended use and the initial estimate of decommissioning, restoration and similar liabilities, if any. Any trade discount or rebate is deducted in arriving at the purchase price. Cost includes cost of replacing a part of a plant and equipment if the recognition criteria are met.
Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of property, plant and equipment are capitalized at cost and depreciated over their useful life.
The cost and related accumulated depreciation are eliminated from the Restated Consolidated Financial Statement upon sale or retirement of the property, plant and equipment and the resultant gains or losses are recognized in the statement of profit and loss. Property, plant and equipment to be disposed of is reported at the lower of the carrying value or the fair value less cost of sale.
3. Other Intangible Assets
Other Intangible assets acquired are initially measured at cost. Other intangible assets arising on acquisition of business are measured at fair value as at date of acquisition. Following initial recognition, other intangible assets with defined useful lives are carried at cost less accumulated amortization and accumulated impairment loss, if any. Internally generated intangibles are not capitalized, and the related expenditure is reflected in Consolidated Statement of profit and loss in the period in which the expenditure is incurred.
Computer Software, an intangible asset, is measured on initial recognition at cost. Costs comprise of license fees and cost of system integration services and development.
The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. On de-recognition the intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the Consolidated Financial statement of profit and loss.
4. Depreciation on property, plant and equipment and amortization of other intangible assets
Depreciation on property, plant and equipment is calculated in the Restated Consolidated statement of Profit and Loss on a straight-line method using the management assessed useful lives of the assets which is in line with the manner prescribed in Schedule II to the Companies Act, 2013.
Other Intangible Assets with finite lives are amortized on a straight-line basis over the estimated useful economic life. The amortization expense on other intangible assets with finite lives is recognized in the statement of profit and loss.
The estimated useful lives and residual values are reviewed at the end of each financial year. If any of these expectations differ from previous estimates, such change is accounted for as a change in an accounting estimate and adjusted prospectively, if any.
The estimated useful life of items of property, plant and equipment and other intangible assets are:
| Particulars | Years |
| Factory Building | 30 |
| Plant & Equipment | 15 |
| Computer | 03 |
| Furniture & Fixtures | 10 |
| Vehicles | 10 |
| Office & Other Equipment | 10 |
| Intangible Asset | 10 |
5. Shares in Co-operative Banks
Shares in co-operative banks, being subject to restrictions on transfer and often without an active market quotation, are carried at cost less impairment, if any, as permitted under Ind AS 109 where fair value cannot be measured reliably without undue cost or effort.
Dividend income from such investments is recognized in profit or loss when the Groups right to receive is established
6. Impairment of Assets Impairment of financial assets
The Company applies loss allowance using the expected credit loss (ECL) model for the financial assets which are measured at amortized cost. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL.
Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. For all other financial assets, ECLs are measured at an amount equal to 12-month ECL, unless there has been a significant increase in credit risk for initial recognition in which case those are measured at lifetime ECL.
12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
Impairment of non-financial assets
At each reporting date, the Company reviews the carrying values of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication that the carrying value of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss (if any).
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (CGU).
The recoverable amount of an individual asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
A previously recognised impairment loss is further provided or reversed depending on changes in the circumstances and to the extent that carrying amount of the assets does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognized
7. Inventories
Raw Materials, Work-in-progress, Stock in trade and Finished goods are valued at the lower of cost or net realizable value. The cost is determined using First in first out (FIFO) method.
The cost of Inventories comprises the cost of purchases, the cost of conversion and the cost of packing materials in case of Finished Goods.
The cost of purchase comprises of the purchase price including duties and taxes (other than those subsequently recoverable by the Company from the taxing authorities), freight inward and other expenditure directly attributable to the acquisition but net of trade discount, rebates, duties for import under advance licenses and other similar items.
The cost of conversion comprises of depreciation on factory buildings and plant and machineries, power and fuel, factory management and administration expenses, repairs and maintenance and consumable stores and spares.
Packing Materials, Consumable Stores and Spares and Fuel are valued at lower of cost or net realizable value. The cost is determined using FIFO method.
Scrap is valued at net realizable value.
8. Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added to / deducted from the fair value on initial recognition.
9. Financial Assets Cash & Bank Balances
Cash and bank balances consist of:
Cash and cash equivalents - which includes cash on hand, deposits held at call with banks and other short-term deposits which are readily convertible into known amounts of cash, are subject to an insignificant risk of change in value and have original maturities of 3 months or less from the date of such deposits. These balances with banks are unrestricted for withdrawal and usage.
Other bank balances - which includes balances and deposits with banks that are restricted for withdrawal and usage.
Financial assets carried at amortized Cost
A financial asset are subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, using the Effective Interest Rate (EIR) method less impairment, if any, the amortization of EIR and loss arising from impairment, if any is recognized in the Restated Consolidated statement of profit and loss.
Financial assets measured at fair value
A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Fair value movements are recognised in the other comprehensive income.
The Company in respect of equity instruments which are not held for trading has made an irrevocable election to present the subsequent changes in fair value of such equity instruments in other comprehensive income. Such an election is made by the Company on an instrument-by-instrument basis at the time of initial recognition of such equity investments. On de-recognition, cumulative gain or loss previously recognised in other comprehensive income is reclassified from the equity to retained earnings in the statement of changes in equity.
A financial asset not classified as either amortized cost or at fair value through other comprehensive income is carried at fair value through the Restated Consolidated statement of profit and loss.
De-Recognition of Financial Assets
A financial asset is de-recognised only when
• The contractual rights to cash flows from the financial asset expires
• The Company has transferred the contractual rights to receive cash flows from the financial asset or
• Retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is de-recognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognised. Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is de-recognised if the Company has not retained control of the financial asset. Where the Company retain control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
10. Financial Liabilities
a. Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
b. Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
c. Financial Liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost using the effective interest rate method. Financial liabilities carried at fair value through profit or losses are measured at fair value with all changes in fair value recognized in the Restated Consolidated Financial Statement of Profit and Loss.
Interest bearing loans and overdrafts are initially measured at fair value, and are subsequently measured at amortized cost using effective interest rate method. Any difference between proceeds (net of transaction cost) and the settlement amount of borrowing is recognised over the terms of the borrowings in the Restated Consolidated Financial Statement of Profit and Loss.
d. De-Recognition
A financial liability is de-recognised when the obligation specified in the contract is discharged, cancelled or has expired.
11. Financial Guarantee Contracts
Financial guarantee contracts are those contracts that require specific payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value adjusted for transaction cost that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative amortization.
12. Derivative Financial Contracts
The Company enter into derivative financial contracts in the nature of forward currency contracts with banks to reduce business risks which arise from its exposures to foreign exchange. The instruments are employed as hedges of transactions included in Restated Consolidated Financial Statement or for highly probable forecast transactions / firm contractual commitments.
Derivatives are initially accounted for and measured at fair value from the date the derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. Any change therein is generally recognized in the Restated Consolidated Financial Statement of profit and loss. Derivatives are carried as financial assets when fair value is positive and as financial liabilities when fair value is negative.
13. Offsetting Financial Instruments
Financial assets and liabilities are off-set and the net amount is reported in the Restated Consolidated Financial Statement where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company.
14. Fair Value Measurement
The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability.
All assets and liabilities for which fair value is measured or disclosed in the Restated Consolidated Financial Statement are categorized within the fair value hierarchy that categorizes into three levels, described as follows:
Level 1 — quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
Level 3 — inputs that are unobservable for the asset or liability.
For assets and liabilities that are recognized in the Restated Consolidated Financial Statement at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization at the end of each reporting period and discloses the same.
15. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. These are reviewed at each period/year end and reflect the best current estimate. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of Managements best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as an interest expense.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
Contingent assets are neither recognized nor disclosed in the Restated Consolidated Financial Statement.
16. Employee Benefits
a. Short Term Obligations
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
b. Post-Employment Benefits
• Defined benefit plans
The Companys net obligation in respect of an approved gratuity plan, which is a defined benefit plan, is calculated using the projected unit credit method and the same is carried out by qualified actuary. The current service cost and interest on the net defined benefit liability/(asset) is recognized in the Restated Consolidated Financial Statement of Profit and Loss. Past service cost is immediately recognized in the Restated Consolidated Financial Statement of Profit and Loss. Actuarial gains and losses net of deferred taxes arising from experience adjustment and changes in actuarial assumptions are recognized in other comprehensive income in the period in which they arise.
• Defined contribution plan
A Defined Contribution Plan is a plan under which the Company makes contribution to the Employees Provident Fund and Employees State Insurance Contribution Fund administrated by the Central Government. The Companys contribution is charged to the Consolidated Financials Statement of Profit and Loss.
• Other Long-Term Employee Benefits - Compensated absence and earned leave
The liability towards leave salary which is not expected to be settled wholly within 12 months after the end of the period in which the employees render the related services is recognized based on actuarial valuation carried out using the projected unit credit method.
17. Borrowing Cost
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs that are directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized, if any. All other borrowing costs are expensed in the period in which they occur.
18. Income Taxes
Tax expenses for the period/year comprise of current tax and deferred tax
a. Current Tax
Current tax is the amount of income tax payable in respect of taxable profit for the period/year. Taxable profit differs from net profit as reported in the Restated Consolidated Statement of Profit and Loss because taxable profit is adjusted for items of income or expenses which are taxable or deductible in other years and also for items which are never taxable or deductible under the Income Tax Act, 1961("the IT Act").
The Companys liability for current tax is calculated using tax rates and tax laws that have been enacted by the end of the reporting period.
b. Deferred Tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the
Restated Consolidated Financial Statement and the corresponding tax bases used in the computation of taxable profit under the I T Act.
Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affects neither the taxable profit nor the accounting profit, deferred tax liabilities are not recognized.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized. The carrying value of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on the tax rates and tax laws that have been enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to cover or settle the carrying value of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognized in Restated Consolidated Financial Statement of Profit and Loss, except to the extent that it relates to items recognized in Other Comprehensive Income or directly in equity. In this case, the tax is also recognised in Other Comprehensive Income or directly in equity, respectively.
19. Restated Consolidated Financial Statement of Cash Flow
Cash flows are reported using the indirect method, whereby profit for the period/year is adjusted for the effect of transactions of non - cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cashflows.
The cash flows from operating, investing and financing activities of the Company are segregated.
Cash and cash equivalents for the purposes of Restated Consolidated Financial Statement of Cash Flows comprise cash at bank and in hand and short- term deposits with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
For the purposes of Restated Consolidated Financial Statement of Cash Flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
20. Events occurring after Balance Sheet Date
Where events occurring after the reporting date provide evidence of conditions which existed at the end of the reporting period, the impact of such events is adjusted within the Restated Consolidated Financial Statement. Otherwise, events after the reporting date of material size or nature are only disclosed.
21. Earnings per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the period.
For the purpose calculating Diluted Earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
22. Other Income
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition.
Dividend income is recognized when the Companys right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividend can be measured reliably.
23. Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
The following descriptions set forth information with respect to the key components of our profit and loss statements.
Income
Our total income consists of: (a)revenue from operations; and (b) other income.
Revenue from operations
Our revenue from operations comprises revenue from sale of our products locally and through exports to various sectors like power & transmission, electrical, automotive, general engineering, solar, windmill (renewable sector), EV and consumer durables sectors. Further, our revenue from operations also included other operating revenue such as income from generation of electricity from renewable source and export incentives. Income from generation of electricity from renewable source is from sale of power generated from our windmill in district of Rajkot, Gujarat.
Other income
Our other income comprises interest income on deposits and on income tax, gain on sale of property, plant and equipment, foreign exchange gain, gain on derivative financial instruments FVTPL, liabilities no longer payable written back, bad debts previously written off, now recovered/ advance written back, insurance claims and miscellaneous income.
Expenses
Expenses consist of cost of materials consumed, change in inventories of finished goods and work-in-progress, manufacturing expense and erection charges, employee benefit expenses, finance costs, depreciation and amortisation expenses and other expenses.
Cost of materials consumed.
Cost of material consumed comprises the raw materials at the beginning of the year, addition on account of business combination, increased by the purchases and the closing stock of such raw materials at the end of the year. Our raw materials primarily comprise of copper cathode/rods, aluminium rods, insulating materials including wire enamel, insulating paper etc.
Changes in inventories of finished goods and work-in-progress
Changes in inventories of finished goods and work-in-progress comprise net increases or decreases in stock of finished goods and work in progress.
Manufacturing expenses and Direct expenses
Manufacturing expenses and direct expenses comprises of stores, tools and spares consumed, sub-contracting charges, power and fuel and other manufacturing expenses.
Employee benefits expense
Employee benefits expenses comprise salaries, wages and bonus, contribution to provident and other funds and employee welfare expenses.
Finance costs
Finance costs comprise interest expense on (i) term loans, (ii) working capital, (iii) others including interest on bill discounting, and (iv) loans from directors and other borrowing costs including bank charges levied in relation to our borrowings.
Depreciation and amortization expense
Depreciation and amortization expense relates to depreciation on property, plant and equipment. Property, plant and equipment comprise land, buildings, plant and equipments, furniture and fixtures, vehicles, office equipments, computers and data processing units and renewable power equipments.
Other expenses
Our other expenses include rates and taxes, duties and fees, insurance expense, repairs and maintenance of building, machinery and others, computer software maintenance charges, payments to auditors of their statutory audit fee, legal and professional fees, travelling, communication and conveyance expenses, packing, forwarding and distribution expenses (net of recoveries), commission and brokerage, advertisements and sales promoter expenses, subscription and membership fees, security charges, stationary and printing expenses, bad debts written off, allowance for expected credit loss recognised/ (reversed), donations, expenditure on corporate social responsibility and miscellaneous expenses.
Tax expense
Total tax expense consists of current tax and taxation related to deferred tax.
Profit after tax
Profit after tax is calculated after reducing the total tax expense from the profit before tax.
OUR RESULTS OF OPERATIONS
The following tables set forth our selected financial data from our Restated Consolidated Financial Information of profit and loss for the three months period ended June 30, 2025, and Financial Years 2025, 2024 and 2023, the components of which are also expressed as a percentage of total income for such years:
| Particulars | Three months ended June 30, 2025 | Financial Year | ||||||
| 2025 | 2024 | 2023 | ||||||
| Amounts | % of Total Income | Amounts | % of Total Income | Amounts | % of Total Income | Amounts | % of Total Income | |
| Income | ||||||||
| Revenue from operations | 4,117.58 | 99.68 | 14,863.91 | 99.66 | 11,860.73 | 99.80 | 10,114.35 | 99.58 |
| Other income | 13.32 | 0.32 | 50.58 | 0.34 | 24.16 | 0.20 | 42.83 | 0.42 |
| Total Income (I) | 4,130.90 | 100.00 | 14,914.49 | 100.00 | 11,884.89 | 100.00 | 10,157.18 | 100.00 |
| Expenses | ||||||||
| Cost of materials consumed | 4,027.35 | 97.49 | 13,888.90 | 93.12 | 11,023.09 | 92.75 | 9,401.98 | 92.56 |
| Change in inventories of finished goods and work-in-progress | (226.28) | (5.48) | (100.50) | (0.67) | 37.32 | 0.31 | 30.61 | 0.30 |
| Manufacturing expense and erection charges | 69.29 | 1.68 | 256.06 | 1.72 | 203.86 | 1.72 | 168.28 | 1.66 |
| Employee benefit expenses | 28.35 | 0.69 | 89.00 | 0.60 | 60.34 | 0.51 | 58.13 | 0.57 |
| Finance costs | 31.86 | 0.77 | 113.51 | 0.76 | 109.15 | 0.92 | 83.39 | 0.82 |
| Depreciation and amortisation expense | 8.67 | 0.21 | 28.30 | 0.19 | 26.96 | 0.23 | 27.29 | 0.27 |
| Other expenses | 32.21 | 0.78 | 88.27 | 0.59 | 80.97 | 0.68 | 96.98 | 0.96 |
| Total expenses (II) | 3,971.45 | 96.14 | 14,363.54 | 96.31 | 11,541.69 | 97.11 | 9,866.66 | 97.14 |
| Profit/ (loss) before exceptional items and tax (III) | 159.45 | 3.86 | 550.95 | 3.69 | 343.20 | 2.89 | 290.52 | 2.86 |
| Exceptional items | - | - | - | - | - | - | - | - |
| Profit before tax (I-II) | 159.45 | 3.86 | 550.95 | 3.69 | 343.20 | 2.89 | 290.52 | 2.86 |
| Tax expense | ||||||||
| Current tax | 39.07 | 0.95 | 139.66 | 0.94 | 86.50 | 0.73 | 66.28 | 0.65 |
| Deferred tax | (0.17) | - | 2.57 | 0.02 | (0.23) | 0.00 | 9.20 | 0.09 |
| Total tax expense | 38.90 | 0.94 | 142.23 | 0.95 | 86.27 | 0.73 | 75.48 | 0.74 |
| Profit for the year | 120.55 | 2.92 | 408.72 | 2.74 | 256.93 | 2.16 | 214.99 | 2.12 |
Three months period ended June 30, 2025 Income
Our total income was t 4,130.90 million during the three months period ended June 30, 2025.
Revenue from Operations
Our revenue from operations was t 4,117.58 million during the three months period ended June 30, 2025. As a percentage of total income, revenue from operations was 99.68% during the three months period ended June 30, 2025. Our revenue from operations primarily comprised of revenue pursuant to (i) sale of products locally of t 3,635.70 million and through exports of t461.33 million; and (ii) other operating revenue which comprises of income from generation of electricity from renewable sources of t9.98 million and export incentives of t10.57 million.
Other Income
Our other income was t13.32 million during the three months period ended June 30, 2025. As a percentage of total income, our other income was 0.32% during the three months period ended June 30, 2025. Our other income primarily consists of interest income on deposits of t0.05 million, foreign exchange gain (net) of t2.30 million, gain on derivative financial instruments FVTPL (net) of t2.99 million, insurance claims of t0.02 million and miscellaneous income of t7.96 million.
Expenses
Our total expense was t 3,971.45 million during the three months period ended June 30, 2025. As a percentage to total income, total expenses was 96.14% during the three months period ended June 30, 2025. Our total expenses comprise of the following
Cost of materials consumed
Our cost of materials consumed was t 4,027.35 million during the three months period ended June 30, 2025. As a percentage of total income, cost of materials consumed was 97.49% during the three months period ended June 30, 2025.
Changes in inventory of finished goods and work-in-progress
Changes in inventories of finished goods and work-in-progress amounted to t (226.28) million during the three months period ended June 30, 2025.
Manufacturing expenses and direct expenses
Manufacturing expenses and direct expenses was t69.29 million during the three months period ended June 30, 2025. As a percentage of total income, manufacturing expenses and direct expense was 1.68% during the three months period ended June 30, 2025. Our manufacturing expenses and direct expenses primarily included stores, tools and spares consumed of t12.89 million, sub-contracting charges of t20.73 million, power and fuel of t35.21 million and other manufacturing expenses of t0.46 million.
Employee benefits expense
Employee benefit expenses was t28.35 million during the three months period ended June 30, 2025. As a percentage of total income, employee benefits expense was 0.69% during the three months period ended June 30, 2025. Our employee benefit expenses primarily included salaries, wages and bonus of t25.84 million, contribution to provident fund and other funds of t1.50 million and employee welfare expenses of t1.01 million.
Finance cost
Our finance cost was t31.86 million during the three months period ended June 30, 2025. As a percentage of total income, finance cost was 0.77% during the three months period ended June 30, 2025. Our finance cost primarily included interest expenses on (i) term loans of t0.08 million, (ii) working capital of t26.00 million, (iii) others
(including interest on bill discounting - net) of Rs1.88 million, and (iv) loans from directors of Rs3.37 million and other borrowing costs (including bank charges) of Rs0.53 million.
Depreciation and amortization expense
Our depreciation and amortization expense were Rs8.67 million during the three months period ended June 30, 2025. As a percentage of total income, depreciation and amortisation expense was 0.21% during the three months period ended June 30, 2025.
Other expenses
Our other expense was Rs32.21 million during the three months period ended June 30, 2025. As a percentage of total income, other expense was 0.78% during the three months period ended June 30, 2025. Our other expenses primarily included expenses towards rates and taxes of Rs0.18 million, insurance expense of Rs1.07 million, repairs and maintenance of building of Rs0.55 million, machinery of Rs0.65 million and other of Rs0.70 million, computer and software maintenance charges of Rs0.90 million, payment to auditors of the statutory audit fee of Rs0.21 million, legal and professional fees of Rs5.07 million, travelling, communication and conveyance expenses of Rs0.72 million, packing, forwarding and distribution expenses (net of recoveries) of Rs12.97 million, commission a nd brokerage of Rs0.97 million, advertisement and sales promotion expenses of Rs0.60 million, subscription and membership fees of Rs0.18 million, security charges of Rs0.67 million, stationary and printing expenses of Rs0.22 million, allowance for expected credit loss recognised/ (reversed) of Rs0.44 million, expenditure on corporate social responsibility of Rs0.04 million and miscellaneous expenses of Rs6.07 million.
Profit before tax
Our profit before tax was Rs159.45 million during the three months period ended June 30, 2025.
Tax expense
Our total tax expense amounted Rs38.90 million during the three months period ended June 30, 2025. Our current tax expense was Rs39.07 million and our deferred tax expense was Rs(0.17) million.
Profit for the period
For the various reasons discussed above, we recorded profit for the period of Rs120.55 million during the three months period ended June 30, 2025, representing 2.92% of total income.
Financial Year 2025 compared to Financial Year 2024
Income
Our total income increased by Rs3,029.60 million i.e. 25.49% to Rs14,914.49 million in Financial Year 2025 from Rs11,884.89 million in Financial Year 2024. This increase was primarily attributable to the following:
Revenue from Operations
Our revenue from operations increased by Rs3,003.18 million i.e. 25.32% to Rs14,863.91 million in Financial Year 2025 from Rs11,860.73 million in Financial Year 2024. The increase was mainly driven by higher demand and improved supply of goods, further supported by the overall expansion of the Indian industry. This is also reflected from our capacity utilization, which rose from 15,426 MT in Financial Year 2024 to 17,338 MT in Financial Year 2025.
Other income
Our other income increased by 26.42 million i.e. 109.35% to Rs50.58 million in Financial Year 2025 from Rs24.16 million in Financial Year 2024. The increase was primarily attributable to increase in miscellaneous income by Rs38.29 million which includes interest income from customs on realization of refunds amounting to Rs24.59 million.
Expenses
Our total expenses increased by Rs2,821.85 million i.e. 24.45% to Rs14,363.54 million in Financial Year 2025 from ^11,541.69 million in Financial Year 2024. The increase in our total expenses was primarily attributable to the following:
Cost of raw materials
Our cost of raw materials increased by Rs2,865.81 million i.e. 26.00% to Rs13,888.90 million in Financial Year 2025 from Rs11,023.09 million in Financial Year 2024. The increase was primarily attributable to increase in scale of operations during the year, in line with the growth in revenue. Consequently, costs have increased proportionately with the increase in business volumes.
Change in inventories of finished goods and work-in-progress
Our change in inventories of finished goods and work-in-progress decreased by Rs137.82 million i.e. 369.29% to Rs(100.50) million in Financial Year 2025 from Rs37.32 million in Financial Year 2024. The increase was primarily attributable to higher accumulation of work-in-progress at year-end, which rose to Rs265.64 million in Financial Year 2025 from Rs179.06 million in Financial Year 2024. This was driven by increased demand, a higher scale of operations, and changes in the finished goods movement cycle (goods in transit), resulting in an overall adjustment of (Rs100.50) million in Financial Year 2025 as compared to Rs37.32 million in Financial Year 2024.
Manufacturing expense and erection charges
Our manufacturing expense and erection charges increased by Rs52.20 million i.e. 25.61% to Rs256.06 million in Financial Year 2025 from Rs203.86 million in Financial Year 2024. The increase was primarily attributable to increase in scale of operations during the year, in line with the growth in revenue. Consequently, manufacturing expenses i.e. electricity, stores etc have increased proportionately with the increase in business volume.
Employee benefit expenses
Our employee benefit expenses increased by Rs28.66 million i.e. 47.50% to Rs89.00 million in Financial Year 2025 from Rs60.34 million in Financial Year 2024. The increase was primarily attributable to increase in scale of operations during the year, in line with the growth in revenue. In addition, the Company has strategically recruited experienced professionals and specialized talent to support its future growth initiatives and long-term business plans.
Financial costs
Our finance costs increased by Rs4.36 million i.e. 3.99% to ^113.51 million in Financial Year 2025 from Rs109.15 million in Financial Year 2024. The increase was primarily attributable to increase in working capital borrowings on account of the expansion in the scale of operations of the Company.
Depreciation and amortisation expenses
Our depreciation and amortisation expenses increased by Rs1.34 million i.e. 4.97% to Rs28.30 million in Financial Year 2025 from Rs26.96 million in Financial Year 2024. The increase was primarily attributable to incremental depreciation on addition of new fix assets.
Other expenses
Our other expenses increased by Rs7.30 million i.e. 9.02% to Rs88.27 million in Financial Year 2025 from Rs80.97 million in Financial Year 2024. The increase was primarily attributable to increase in expenses towards packing, forwarding and distribution expenses, repairs and maintenance, stationary & printing expenses etc. on account of the higher scale of operations during the year, in line with the growth in revenue.
Profit Before Tax
For the reasons discussed above, profit before tax was Rs550.95 million in Financial Year 2025 compared to profit before tax of Rs 343.20 million in Financial Year 2024.
Tax Expenses
Current tax increased to Rs139.66 million in Financial Year 2025 compared to Rs86.50 million in Financial Year 2025 due to the increase in profit before tax. Deferred tax also increased to Rs2.57 million in Financial Year 2025 compared to Rs(0.23) million in Financial Year 2025 mainly on account of timing differences arising from depreciation and other temporary differences between accounting and tax treatments.
Profit After Tax
For the various reasons discussed above, we recorded a profit for the year of Rs408.72 million in Financial Year 2025 compared to profit for the year of Rs256.93 million in Financial Year 2024.
Financial Year 2024 compared to Financial Year 2023
Income
Our total income increased by Rs1,727.71 million i.e. 17.01% to Rs11,884.89 million in Financial Year 2024 from Rs10,157.18 million in Financial Year 2023. This increase was primarily attributable to the following:
Revenue from Operations
Our revenue from operations increased by Rs1,727.71 million i.e. 17.01% to Rs11,884.89 million in Financial Year 2024 from Rs 10,157.18 million in Financial Year 2023. The increase was primarily attributable to increase in demand across key sectors such as infrastructure, automotive and renewable energy which has resulted to increase in sales volume and improved realisations and favourable commodity prices.
Other income
Our other income decreased by Rs18.67 million i.e. 43.59% to Rs24.16 million in Financial Year 2024 from Rs42.83 million in Financial Year 2023. The decrease was primarily attributable to decrease in the foreign exchange gains and miscellaneous income.
Expenses
Our total expenses increased by Rs1,675.03 million i.e. 16.98% to ^11,541.69 million in Financial Year 2024 from Rs9,866.66 million in Financial Year 2023. The increase in our total expenses was primarily attributable to the following:
Cost of raw materials
Our cost of raw materials increased by Rs1,621.11 million i.e. 17.24% to Rs11,023.09 million in Financial Year 2024 from Rs9,401.98 million in Financial Year 2023. The increase was primarily attributable to increase in the prices of raw materials due to price fluctuations in the global commodity market and increase in production volumes leading to increase in consumption of raw materials.
Change in inventories of finished goods and work-in-progress
Our change in inventories of finished goods and work-in-progress increased by Rs6.71 million i.e. 21.92% to Rs37.32 million in Financial Year 2024 from Rs30.61 million in Financial Year 2023. The increase was primarily attributable to increase in work-in-progress inventory due to increase in production activity.
Manufacturing expense and erection charges
Our manufacturing expense and erection charges increased by Rs35.58 million i.e. 21.14% to Rs203.86 million in Financial Year 2024 from Rs168.28 million in Financial Year 2023. The increase was primarily attributable to increase in operational activities and capacity expansion projects leading to increase in erection and fabrication costs and utility expenses, such as electricity or fuel.
Employee benefit expenses
Our employee benefit expenses increased by t2.21 million i.e. 3.80% to t60.34 million in Financial Year 2024 from t58.13 million in Financial Year 2023. The increase was primarily attributable to increase in salary and performance-linked incentives and recruitment of new employees for the new projects or expansion activities of our Company.
Financial costs
Our finance costs increased by t25.76 million i.e. 30.89% to t109.15 million in Financial Year 2024 from t83.39 million in Financial Year 2023. The increase was primarily attributable to increase in borrowing costs due to increase in the interest rates and fully utilisation of working capital limits due to increase in business.
Depreciation and amortisation expenses
Our depreciation and amortisation expenses decreased by t0.33 million i.e. 1.21% to t26.96 million in Financial Year 2024 from t27.29 million in Financial Year 2023. The decrease was primarily attributable to as the depreciation is calculated on WDV method.
Other expenses
Our other expenses decreased by t16.01 million i.e. 16.51% to t80.97 million in Financial Year 2024 from t96.98 million in Financial Year 2023. The decrease was primarily attributable to decrease in expenses towards rates and taxes, insurance expenses, and repairs and maintenance of building.
Profit Before Tax
For the reasons discussed above, profit before tax was t343.20 million in Financial Year 2024 compared to profit before tax of t 290.52 million in Financial Year 2023.
Tax Expenses
Current tax increased to t 86.50 million in Financial Year 2024 compared to t 66.28 million in Financial Year
2023 due to the increase in profit before tax. Deferred tax also decreased to t (0.23) million in Financial Year
2024 compared to t9.20 million in Financial Year 2023 due to decrease in deferred tax during the period primarily due to a reduction in certain provisions and adjustments. A lower liability for gratuity, driven by changes in actuarial assumptions, contributed to the decrease. Additionally, the reversal of sales previously recognized, along with adjustments related to revenue recognition, led to a reduction in the timing differences that give rise to deferred tax. Furthermore, reduction in the Expected Credit Loss (ECL) provisions and a better recovery rate on receivables resulted in a reduced deferred tax liability. These factors collectively contributed to the overall decrease in deferred tax.
Profit After Tax
For the various reasons discussed above, we recorded a profit for the year of U256.93 million in Financial Year 2024 compared to profit for the year of U215.04 million in Financial Year 2023.
LIQUIDITY AND CAPITAL RESOURCES
Historically, our primary liquidity and capital requirements have been to finance our capital expenditure and working capital needs for our operations. We have met these requirements through internal accruals, equity infusions from shareholders and borrowings. As of three months period ended June 30, 2025, we had t11.10 million in cash and cash equivalents, t3.16 million in other bank balances other than cash and cash equivalents and t1,442.85 million in trade receivables. We believe that after taking into account the expected cash to be generated from operations, our borrowings and the proceeds from the Offer, we will have sufficient liquidity for our present requirements and anticipated requirements for capital expenditure and working capital for the next 12 months.
CASH FLOWS
The following table summarise our cash flows data for the years indicated:
| Particulars | Financial Year | |||
| For the three months period ended June 30, 2025 | 2025 | 2024 | 2023 | |
| Cash flow (used in)/ generated from Operating Activities | (37.06) | (168.36) | 21.63 | 375.35 |
| Cash flow (used in)/ generated from Investing Activities | (95.65) | (75.39) | (36.79) | (56.49) |
| Cash flow (used in)/ generated from financing activities | 139.33 | 245.67 | 16.88 | (318.42) |
| Net increase/ (decrease) in cash and cash equivalents | 6.62 | 1.92 | 1.72 | 0.43 |
Operating Activities
Three months period ended June 30, 2025
Net cash used in operating activities for the three months period ended was Rs (37.06) million. Though our profit before tax was Rs159.45 million, we had operating profit before working capital changes of Rs197.38 million, primarily due to adjustments for depreciation and amortisation expense of Rs8.67 million, finance costs of ^31.86 million, interest income of Rs0.05 million, allowances for expected credit loss (including bad debts and advanced written off) of Rs0.44 million and unrealised exchange loss of Rs2.99 million.
This was further adjusted for working capital adjustments, which primarily consisted decrease in trade receivables of Rs36.06 million, increase in inventories of Rs163.97 million, increase in financial assets of Rs2.87 million, increase in other current and non-current assets of Rs232.00 million, increase in trade payables of Rs136.05 million and increase in provisions, current and non-current liabilities of Rs14.03 million. As a result, cash generated from operations for the three months period ended June 30, 2025 was Rs14.89 million before adjusting for tax paid (net of refunds) of Rs22.17 million.
Financial Year 2025
Net cash generated used operating activities for the Financial Year 2025 was Rs(168.36) million. Though our profit before tax was Rs550.95 million, we had operating profit before working capital changes of Rs689.26 million, primarily due to adjustments for depreciation and amortisation expense of Rs28.30 million, finance costs of ^113.51 million, interest income of Rs0.93 million, allowances for expected credit loss (including bad debts and advanced written off) of Rs0.55 million and liabilities written back of Rs2.04 million.
This was further adjusted for working capital adjustments, which primarily consisted increase in trade receivables of Rs598.24 million, increase in inventories of Rs98.71 million, increase in financial assets of Rs4.12 million, increase in other current and non-current assets of ^8 3.91 million, increase in trade payables of Rs18.29 million and increase in provisions, current and non-current liabilities of Rs29.02 million. As a result, cash generated from operations for the Financial Year 2025 was Rs(48.41) million before adjusting for tax paid (net of refunds) of ^119.95 million.
Financial Year 2024
Net cash generated from operating activities for the Financial Year 2024 was Rs21.63 million. Though our profit before tax was Rs343.20 million, we had operating profit before working capital changes of Rs482.58 million, primarily due to adjustments for depreciation and amortisation expense of Rs26.96 million, finance costs of Rs109.15 million, gain on sale of/ discarded property plant and equipment (net) of Rs0.20 million, interest income of Rs1.60 million, allowances for expected credit loss (including bad debts and advanced written off) of Rs4.18 million and liabilities written back of Rs0.39 million.
This was further adjusted for working capital adjustments, which primarily consisted increase in trade receivables of Rs9.46 million, increase in inventories of Rs166.13 million, decrease in financial assets of Rs0.38 million, increase in other current and non-current assets of Rs208.37 million, increase in trade payables of Rs8.16 million and decrease in provisions, current and non-current liabilities of Rs1.72 million. As a result, cash generated from operations for the Financial Year 2024 was Rs105.44 million before adjusting for tax paid (net of refunds) of Rs83.81 million.
Financial Year 2023
Net cash generated from operating activities for the Financial Year 2023 was Rs375.35 million. Though our profit before tax was Rs290.52 million, we had operating profit before working capital changes of Rs392.48 million, primarily due to adjustments for depreciation and amortisation expense of Rs27.29 million, finance costs of Rs83.39 million, interest income of Rs1.51 million, allowances for expected credit loss (including bad debts and advanced written off) of Rs6.15 million and unrealised exchange loss of Rs1.01 million.
This was further adjusted for working capital adjustments, which primarily consisted decrease in trade receivables of Rs57.08 million, decrease in inventories of Rs5.95 million, decrease in financial assets of Rs0.99 million, increase in other current and non-current assets of Rs13.98 million, decrease in trade payables of Rs19.58 million and increase in provisions, current and non-current liabilities of Rs10.93 million. As a result, cash generated from operations for the Financial Year 2023 was Rs433.92 million before adjusting for tax paid (net of refunds) of Rs58.52 million.
Investing Activities
Three months period ended June 30, 2025
Net cash used in investing activities during the three months period ended June 30, 2025 was Rs (95.65) million primarily on account of payments for purchase of property, plant and equipment of Rs95.54 million, decrease in bank deposits of Rs0.16 million and interest received of Rs0.05 million.
Financial Year 2025
Net cash used in investing activities during the Financial Year 2025 was Rs (75.39) million primarily on account of payments for purchase of property, plant and equipment of Rs (76.57) million, decrease in bank deposits of Rs0.25 million and interest received of Rs0.93 million.
Financial Year 2024
Net cash used in investing activities during the Financial Year 2024 was Rs (36.79) million primarily on account of payments for purchase of property, plant and equipment of Rs44.57 million, proceeds from sale of property, plant and equipment of Rs0.42 million, decrease in bank deposits of Rs5.88 million and interest received of Rs1.4 8 million.
Financial Year 2023
Net cash used in investing activities during the Financial Year 2023 was Rs(56.49) million primarily on account of payments for purchase of property, plant and equipment of Rs83.25 million, decrease in bank deposits of Rs25.25 million and interest received of Rs1.51 million.
Financing Activities
Three months period ended June 30, 2025
Net cash generated from financing activities during the three months period ended June 30, 2025 was Rs139.3 3 million primarily on account of proceeds of non-current borrowings of Rs47.03 million, proceeds of current borrowings (net) of Rs124.16 and finance cost paid of ^31.86 million.
Financial Year 2025
Net cash generated from financing activities during the Financial Year 2025 was Rs245.67 million primarily on account of proceeds of non-current borrowings of Rs28.40 million, proceeds of current borrowings (net) of Rs330.78 and finance cost paid of ^113.51 million.
Financial Year 2024
Net cash generated from financing activities during the Financial Year 2024 was Rs16.88 million primarily on account of proceeds of non-current borrowings of Rs49.25 million, proceeds of current borrowings (net) of Rs76.78 and finance cost paid of Rs109.15 million.
Financial Year 2023
Net cash generated from financing activities during the Financial Year 2023 was Rs (318.42) million primarily on account of repayment of non-current borrowings of Rs24.29 million, repayment of current borrowings (net) of U210.74 and finance cost paid of Rs83.39 million.
CAPITAL EXPENDITURE
The details of capital expenditure incurred by us during the three months period ended June 30, 2025 and Financial Years ended 2025, 2024 and 2023:
| Capital Expense | Three months period ended June 30, 2025 | Financial Year | ||
| 2025 | 2024 | 2023 | ||
| Addition to property, plant and equipment | 32.53 | 41.85 | 44.57 | 83.25 |
FINANCIAL INDEBTEDNESS
As of June 30, 2025, we had total borrowings of Rs1,627.48 million. Our total borrowing to equity ratio was 0.91 as of June 30, 2025. For further information on our indebtedness, see "Financial Indebtedness" on page 379.
The following table sets forth certain information relating to our outstanding indebtedness as of three months period ended June 30, 2025, and Financial Years ended 2025, 2024 and 2023:
| Particulars | Three months period ended June 30, 2025 | Financial Year | ||
| 2025 | 2024 | 2023 | ||
| Total borrowings | 1,627.48 | 1,456.29 | 1,097.11 | 971.08 |
CONTINGENT LIABILITIES
The following table sets forth the principal components of our contingent liabilities as per the Restated Consolidated Financial Information:
| Particulars | Three months period ended June 30, 2025 | As of March 31, | ||
| 2025 | 2024 | 2023 | ||
| I. Contingent Liabilities: Vidya Wires Limited | ||||
| Claims against the Company not acknowledged as debts* | ||||
| (i) Disputed with excise and service tax authority | 34.80 | 34.80 | 35.00 | 35.00 |
| (ii) Disputed with GST tax authority | 0.90 | 0.90 | 0.94 | 0.94 |
| II. Contingent Liabilities: ALCU Industries Private Limited | ||||
| LC | ||||
| Letter of credit in normal course of business | 9.17 | 9.17 | 9.17 | - |
| Guarantees | ||||
| Bank guarantees given in normal course of business | 30.07 | 30.07 | 36.81 | 24.76 |
* Future cash outflows are determinable only on receipt of judgements/ decisions pending with various forums/ authorities. It is not practical to disclose possibility of any reimbursement.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships
with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.
QUANTITATIVE AND QUALITATIVE ANALYSIS OF MARKET RISKS
We are exposed to various types of risks during the normal course of business. The risks we are exposed to include credit risk, liquidity risk, interest rate risk, foreign currency risk and commodity price risk:
Credit Risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Our Company is exposed to credit risk primarily trade receivables and other financial assets including deposits with banks. Our Companys exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties. Security deposits mainly includes rental deposits, earnest money deposits which are given as per contractual agreement. Unbilled revenue mainly pertains to contracts where there has been no delay or default in the past periods.
Deposits with banks, investments in mutual funds, market linked debentures, other quoted instruments and other group receivables. Credit risk arising from these financial assets is limited because the counterparties are group companies, banks and recognised financial institutions and other corporates with high ratings, assigned by recognised credit rating agencies. In case of mutual fund investments, since majority of the investments are in overnight or liquid funds, having limited risk.
Customer credit risk is managed by each business unit subject to our Companys established policy and procedures. Trade receivables are non-interest bearing and generally have a credit period not exceeding 90 days. Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit. Our Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.
Liquidity Risk
Liquidity risk is the risk that our Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. Our Companys objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. Our Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including bilateral loans, debt and overdraft from both banks and financial institutions at an optimised cost.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our Company mitigates such risk by maintaining an adequate proportion of floating and fixed interest rate borrowings. As at March 31, 2024, approximately 100% of the Companys borrowings which consist of cash credits for working capital are at fixed rate.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Our Company transacts business in foreign currencies (primarily USD, EUR and GBP). Consequently, our Company has foreign currency trade payables and receivables and is therefore exposed to foreign exchange risk. The Company manages its foreign currency risk by following policies approved by board as per established risk management policy.
RECENT ACCOUNTING PRONOUNCEMENTS
As of the date of this Red Herring Prospectus, there are no recent accounting pronouncements, which would have a material effect on our financial condition or results of operations.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in our accounting policies during the three months period ended June 30, 2025 and Fiscal 2025, 2024 and 2023.
SUMMARY OF RESERVATIONS OR QUALIFICATION OR ADVERSE REMARKS OR MATTERS OF EMPHASIS BY THE AUDITORS
There are no reservations, qualifications and adverse remarks included by the auditors in the Restated Consolidated Financial Information of our Company.
RELATED PARTY TRANSACTIONS
We have engaged in the past, and may engage in the future, in transactions with related parties. For details of our related party transactions, see "Related Party Transactions" on page 338.
UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS
Except as disclosed in this Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
SIGNIFICANT ECONOMIC CHANGES
Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations. See "Risk Factors" and Significant Factors Affecting our Results of Operations on pages 31 and 354, respectively.
KNOWN TRENDS OR UNCERTAINTIES
Our business has been subject, and we expect it to continue to be subject, to the trends identified above in " - Significant Factors Affecting our Results of Operations" and the uncertainties described in "Risk Factors", beginning on pages 354 and 31, respectively. Further, except as disclosed in this Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on our revenues.
FUTURE RELATIONSHIP BETWEEN COST AND REVENUE
Other than as described in "Risk Factors", "Our Business" and above in "-Significant Factors Affecting our Results of Operations" beginning on pages 31, 214 and 354, respectively, to our knowledge, there are no known factors that may adversely affect our business prospects, results of operations and financial condition
EXTENT TO WHICH MATERIAL INCREASES IN NET SALES OR REVENUE FROM OPERATIONS ARE DUE TO INCREASED SALES VOLUME, INTRODUCTION OF NEW PRODUCTS OR SERVICES OR INCREASED SALE PRICES
Changes in revenue from operations are as described in "Three months period ended June 30, 2025" on page 368, "-Financial Year 2025 compared to Financial Year 2024" on page 369 and "-Financial Year 2024 compared to Financial Year 2023" on page 371.
NEW PRODUCTS OR BUSINESS SEGMENTS
Except as set out in this section and in "Our Business" beginning on page 214, there are no new products or business segments, categories or sectors in which we operate that have or are expected to have a material impact on our business prospects, results of operations or financial condition.
SEASONALITY OF BUSINESS
We believe that our business is not subject to any seasonal variations.
SIGNIFICANT DEPENDENCE ON CUSTOMERS AND SUPPLIERS
Except as disclosed in this Red Herring Prospectus, we do not have any concentration of suppliers or customers in our business.
SIGNIFICANT DEVELOPMENTS AFTER JUNE 30, 2025, THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS
Except as set out in this RHP, there are no developments since the date of the Restated Consolidated Financial Information that could materially and adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
Download The App Now
Follow us on
2026, IIFL Capital Services Ltd. All Rights Reserved
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016, BSE Enlistment Number (RA): 5016
ARN NO : 47791 (AMFI Registered Mutual Fund & Specialized Investment Fund Distributor), PFRDA Reg. No. PoP 20092018
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
