You should read the following discussion of our financial condition and results of operations together with our Restated Financial Information which is included in this Draft Red Herring Prospectus. Our Restated Financial Information differs in certain material respects from IFRS, U.S. GAAP and GAAP in other countries, and our assessment of the factors that may affect our prospects and performance in future periods. Accordingly, the degree to which our Restated Financial Information will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Ind AS.
Some of the information in the following discussion, including information with respect to our plans and strategies, contain forward-looking statements that involve risks and uncertainties. You should read the section "Forward-Looking Statements" on page 24 for a discussion of the risks and uncertainties related to those statements. Our actual results may differ materially from those expressed in or implied by these forward-looking statements as a result of various factors, including those described below and elsewhere in this Draft Red Herring Prospectus. Also read "Risk Factors" and " Significant Factors Affecting our Results of Operations and Financial Condition" on pages 34 and 319, respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations.
Unless otherwise indicated or the context otherwise requires, the financial information as of and for the Fiscals ended March 31, 2023, March 31, 2022 and March 31, 2021, included herein is derived from our Restated Financial Information, included in this Draft Red Herring Prospectus. For further information, see "Restated Financial Information" on page 236. Further, unless otherwise indicated or the context otherwise requires, all operational information included herein for the Fiscals ended March 31, 2023, March 31, 2022, and March 31, 2021, is on a consolidated basis. Our Fiscal ends on March 31 of each year. Accordingly, all references to a particular Fiscal are to the 12 months ended March 31 of that year.
Our Company acquired EPACK Components Private Limited, our wholly-owned Subsidiary, with effect from August 1, 2021. Accordingly, EPACK Components Private Limited became a Subsidiary of our Company on August 1, 2021, and it is included in the Restated Financial Information from that date for Fiscal 2022 and for the entirety of Fiscal 2023. Further, Epavo Electricals Private Limited, has become our Associate on July 22, 2022, and has accordingly been accounted for in the Restated Financial Information for Fiscal 2023. Our Restated Financial Information does not include financial information of EPACK Components Private Limited prior to it becoming a Subsidiary of our Company. Accordingly, our results of operations and financial condition as set forth in the Restated Financial Information may not be comparable on a period-to-period basis.
Further, industry and market data used in this section has been derived from the report "Industry report for IPO
ODM opportunities in Indian Room Air Conditioner and Small Domestic Appliance segments" dated August
1, 2023 (the "F&S Report") prepared and released by F&S and commissioned and paid for by our Company in connection with the Offer. Unless otherwise indicated, all financial, operational, industry and other related information derived from F&S Report and included herein with respect to any particular year refers to such information for the relevant calendar year. Also see, "Certain Conventions, Use of Financial Information and
Market Data and Currency of Presentation Industry and Market Data" on page 21.
Unless the context otherwise requires, references to our "customer" or "customers" shall be deemed to include affiliates or group companies of our customers, as applicable.
OVERVIEW
We are the fastest growing room air conditioner original design manufacturers ("ODM") based on growth in volume manufactured between Fiscals 2020 and 2023 in India (Source: F&S Report). Further, we are the second largest ODM manufacturer in the Indian room air conditioner manufacturing market, with a market share of 29% in terms of volume manufactured in Fiscal 2023 (this does not include the units which are imported as kits and gas filling is done in India). (Source: F&S Report)
We are a customer-centric business driven by a focus on continuing innovation and operational efficiency. Since 2003, we have been on a journey of evolution, where we initially started as an OEM for RAC brands. Driven by our focus on product development and innovation, we evolved into an ODM partner for RACs for our customers. We also identified the opportunity to increase our value addition in our offerings to customers, and accordingly, started manufacturing of various components such as sheet metal, injection moulded, cross flow fans and PCBA components which are actively used in the manufacturing of RACs. In parallel, we capitalised on our existing manufacturing infrastructure to strategically expand our operations in the small domestic appliances ("SDA") market, particularly considering the seasonality of the demand for RACs, and currently design and manufacture induction cooktops, mixer-grinders, and water dispensers. This evidences our continued focus on the backward integration of our operations and diversification of our revenue streams.
Set forth below are some of the major milestones in the history of our business:
Our product portfolio currently comprises the following:
- Room air conditioners: We design and manufacture complete RACs, comprising (i) window air conditioners
(" WACs"), including window inverter air conditioners, (ii) indoor units ("IDUs") and (iii) outdoor units
("ODUs", which combined with IDUs form split air conditioners ("SACs")) with specifications ranging from 0.75 ton to 2 ton, across a range of energy ratings and types of refrigerants. We also manufacture split inverter air conditioners.
- Small domestic appliances: We currently design and manufacture induction cooktops, mixer-grinders, and water dispensers.
- Components: We manufacture heat exchangers, cross flow fans, axial fans, sheet metal press parts, injection moulded components, copper fabricated products, PCBAs, universal motors and induction coils for captive consumption as well as part of our product offerings to our customers.
Our offerings showcase our ability to provide a wide range of product solutions and components across the RAC value chain.
We have dedicated R&D centres in Greater Noida, Bhiwadi and Dehradun, which are equipped with various equipment such as endurance test labs for RACs and SDAs, induction coil - automatic voltage tester, induction coil breakdown tester, needle flame tester, customized glow wire tester. Our R&D centre in Dehradun has received its ISO/ IEC 17025:2017 accreditation from NABL for the ‘general requirements for the competence of testing & calibration laboratories in the field of testing. From Fiscal 2021 to Fiscal 2023, the number of employees in our R&D department has grown from 30 employees at a CAGR of 25.17% to 47 employees as of March 31, 2023. Our R&D activities focus on basic research, the development of new products and manufacturing methods, the optimisation of existing products and manufacturing methods and process improvements, as well as environmental protection and energy efficiency.
We commenced our operations with a single manufacturing unit in Dehradun, Uttarakhand in 2003, and have since expanded our manufacturing operations with Dehradun Unit II, Dehradun Unit III and Dehradun Unit IV, and our manufacturing facility at Bhiwadi, Rajasthan. We have an aggregate installed annual manufacturing capacity as on March 31, 2023 to manufacture (i) 0.90 million IDUs, 0.66 million ODUs, 0.36 million ODU Kits and 0.42 million WACs, and (ii) 0.11 million water dispensers, 1.2 million induction cook-tops and 0.30 million mixer grinders, and components thereof. For details of our manufacturing capacity and capacity utilisation in the last three Fiscals, see "Our Business Our Manufacturing Facilities" on page 179. We are also in the process of setting up a third facility at Sri City, Andhra Pradesh.
Our two vertically integrated manufacturing facilities, enable us to maintain our operational costs and logistics management. We benefit from our single site manufacturing capabilities, where the manufacturing of components and product assembly takes place in one location. We have the highest amount of backward integration for RACs under a single company / single site, that has been grown within the same company organically in India. (Source: F&S Report) Moreover, given the manufacturing infrastructure that we had in place for manufacturing of RACs, we were in a position to leverage our extant manufacturing capabilities for our SDA products as well, thus saving us from incurring potentially high capital expenditure that is typically associated with product portfolio diversification strategies.
We have established long-standing relationships with various established customers. The table below sets out some of our key customers:
| Customers | |
| Room air conditioners | Blue Star Limited, Daikin Airconditioning India Private Limited, Carrier Midea India Private |
| Limited, Voltas Limited, Havells India Limited, Haier Appliances (India) Private Limited, | |
| Infiniti Retail Limited, and Godrej and Boyce Manufacturing Company Limited, among others | |
| Small domestic appliances | Bajaj Electricals Limited, BSH Household Appliances Manufacturing Private Limited, and Usha International Limited, among others |
Our customers include four of the top six RAC brands in the Indian market (in terms of RAC sales in Fiscal 2023 in India) (Source: F&S Report).
We have demonstrated consistent growth in recent years. Set forth below are certain key performance indicators of our business:
| Particulars | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Revenue growth (year on year) (%)(1) | 66.51 | 25.52 | (4.61) |
| Revenue contribution from top 10 customers (%)(2) | 93.17 | 88.72 | 93.08 |
| EBITDA (in million)(3) | 1,025.25 | 688.03 | 420.33 |
| EBITDA Margin (%)(4) | 6.66 | 7.44 | 5.71 |
| ROE (%)(5) | 14.68 | 18.28 | 12.00 |
| ROCE (%)(6) | 11.85 | 13.68 | 11.72 |
| Debt to Equity Ratio(7) | 1.58 | 3.15 | 3.47 |
| Gross Asset Turnover (in times)(8) | 3.59 | 3.61 | 5.37 |
| Gross Profit (in million)(9) | 2,147.50 | 1,298.21 | 871.54 |
| Gross Profit Margin (%)(10) | 13.96 | 14.05 | 11.84 |
(1) Revenue growth (year on year) means the annual growth in Revenue from Operations.
(2) Revenue contribution from top 10 customers is the revenue generated from our top 10 customers for a particular Fiscal as a percentage of the revenue from operations for that Fiscal.
(3) EBITDA is calculated as restated profit before tax plus share of profit/(loss) of associate, exceptional items, finance costs, depreciation and amortisation expense minus other income.
(4) EBITDA Margin is calculated as EBITDA divided by Revenue from Operations.
(5) ROE is calculated as restated profit for the year divided by average total equity (net worth).
(6) ROCE is calculated as EBIT divided by average capital employed. Where EBIT is sum of restated profit before tax, share of profit/(loss) of associate, exceptional items, and finance costs. Capital employed is calculated as the sum of Total Equity, Current Borrowings, Non-Current Borrowings, Interest accrued but not due on borrowings.
(7) Debt to Equity Ratio is calculated as total debt divided by total equity, where total debt is the sum of current borrowings and non-current borrowings (including current maturities) and interest accrued but not due on borrowings.
(8) Gross Asset Turnover is calculated as Revenue from Operations divided by average Gross block of assets
(9) Gross Profit is calculated as Revenue from Operations minus Cost of Goods Sold.
(10) Gross Profit Margin is calculated as Gross Profit divided by Revenue from Operations.
Our financial and operational position as set out above, can be attributed to not only the growth of our operations over the years, but also the effectiveness of the cost and operational efficiency of our operations. Our financial stability and positive cash flow from operations enable us to meet the present and future requirement of our customers. This also helps strengthen trust and engagement with our customers, thereby increasing customer stickiness.
Our Promoters have over 100 years of cumulative experience in the electronics manufacturing industry, and a demonstrated ability to successfully create, build and grow businesses. We rely on the experience and leadership of our Promoters for our growth and development. We are supported by our experienced and diversified Board and our well-qualified senior management team, which enables us to capture market opportunities, formulate and execute business strategies, manage client expectations as well as proactively manage changes in market conditions.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION
We believe that the following factors have significantly affected our results of operations and financial condition during the periods under review, and may continue to affect our results of operations and financial condition in the future:
Maintaining our customer relationships
We have over the course of our business operations established long-standing relationships with several Indian and global customers. We attribute our growth and expansion of our market share to date to our relationships with our customer base, and intend to continue to leverage such relationships for our future growth as well. However, we depend on certain key customers for a substantial portion of our net revenues and our business depends on the continuity of our relationship with them. As key customers typically have specific requirements, we believe that our continued relationships with our customers plays a significant role in determining our continued success and results of operations. A majority of our revenue is derived from our top five customers. Sales to our top five customers contributed 12,720.25 million, 7,099.85 million and 5,243.56 million, amounting to 82.66%, 76.82% and 71.22% of our revenue from operations in Fiscals 2023, 2022 and 2021, respectively. Maintaining our relationships with our key customers is essential to our strategy and to the ongoing growth of our business.
There are a limited number of brands in the Indian room air conditioner ("RAC") industry and small domestic appliances ("SDA") industry to whom we supply our products. Our reliance on a select set of customers may constrain our ability to negotiate our commercial arrangements, which may have an impact on our profit margins and financial performance. The deterioration of the financial condition or business prospects of these customers could reduce their requirement of our products and result in a significant decrease in the revenues we derive from these customers.
Our manufacturing facilities and its utilisation
Our results of operations are directly affected by our sales volume, which in turn is a function of several factors, including levels of utilisation of our manufacturing facilities. We conduct our operations through our manufacturing facilities situated at Dehradun, Uttarakhand and Bhiwadi, Rajasthan. Over the years, we have grown our manufacturing capabilities and we will continue to look to add capacity in a phased manner to ensure that we utilize our capacity at optimal levels. Further, we are in the process of setting up a new integrated manufacturing facility at Sri City, Andhra Pradesh dedicated to manufacturing ODUs, IDUs, WACs, water dispensers, induction cookers, mixer grinders, in addition to the manufacturing of various components.
Our business is dependent upon our ability to manage our manufacturing facilities and run them at certain utilization levels, which are subject to various operating risks, including those beyond our control, such as the breakdown and failure of equipment, industrial accidents, labour disputes or shortage of labour, severe weather conditions and natural disasters. In addition, we also may face protests from local citizens at our existing facilities or while setting up new facilities, which may delay or halt our operations. Further, we may be subject to manufacturing disruptions due to contraventions by us of any of the conditions of our regulatory approvals, which may require our manufacturing facilities to cease, or limit, production until the disputes concerning such approvals are resolved. Our inability to effectively respond to such events and rectify any disruption, in a timely manner and at an acceptable cost, could lead to the slowdown or shutdown of our operations or the under-utilization of our manufacturing facilities, which in turn may have an adverse effect on our business, results of operations and financial condition. Our results of operations have been, and will continue to be, affected by our ability to fulfil, on a timely basis, the product requirements of our customers, and our ability to achieve greater efficiencies in cost, time, quality and scale in our manufacturing processes.
Availability and cost of raw materials
Our business, financial condition, results of operations and prospects are impacted by the prices of raw materials purchased by us as well as any changes in domestic and global price indices. We are dependent on third party suppliers for our raw materials. Our total cost of goods sold (which includes cost of materials consumed, purchase of stock in trade and change in inventories of finished goods and work in progress) for the sale of products for Fiscal 2023, 2022 and 2021 was 13,240.82 million, 7,943.41 million and 6,490.91 million, which constituted 86.04%, 85.95% and 88.16%, respectively, of our revenue from operations. If we were to experience a significant or prolonged shortage of raw materials from any of our suppliers, and we are unable procure the raw materials from other sources, we would be unable to meet our manufacturing schedules and to deliver to our customers in timely fashion, which would adversely affect our sales, profit margins and customer relations. We also source some of the material through imports. In the Fiscals 2023, 2022 and 2021, we imported materials amounting to 5,268.81 million, 3,457.98 million and 2,754.84 million which accounted for 39.31%, 37.83% and 40.47% of our cost of materials and purchased (including purchase of stock-in-trade). Any restrictions, either from the Central or state governments of India, or from countries which we import from, on such imports may adversely affect our business, prospects, financial condition and results of operations. Any restriction on import of raw materials could have an adverse effect on our ability to deliver products to our customers, business and results of operations. Further, any increase in import tariff will increase expenses which in turn may impact our business and results of operations.
We use third parties for the supply of our raw materials and for delivery of finished and unfinished products to our domestic and overseas customers, as well as between manufacturing facilities. An increase in freight costs or the unavailability of adequate port and shipping infrastructure for transportation of our products to our markets may have an adverse effect on our business and results of operations. However, our cash flows may still be adversely affected because of any unanticipated delay between the date of procurement of those primary raw materials and date on which we can reset the component prices for our customers, to account for the increase in the prices of such raw materials. Our need to maintain a continued supply of raw materials may make it difficult to resist price increases and surcharges.
Additionally, we have long standing relationships with our suppliers, although we do not enter into any long-term contracts with such suppliers. We procure all of our raw materials by way of purchase orders on an ongoing basis and therefore, are required to pay the market price of such products. Any variation in the agreed terms of such contracts would create an adverse impact on our business. The loss of any of our existing supplier because of termination of existing contracts and increased competition may adversely affect our flow of operations.
Market conditions and economic trends
The Indian economy is witnessing an upswing due to increased economic activity and rising household income. Enhanced purchasing power have moved products from the earlier luxury category to being essential today. RACs, an erstwhile luxury product, are now becoming an essential product in the middle-class segment. Indias domestic manufacturing of RACs has grown at 22% CAGR, from 3.0 million units in Fiscal 2018 to 8.2 million units in Fiscal 2023. Domestic manufacturing is expected to grow further at 13% CAGR and is expected to reach 14.9 million units by Fiscal 2028. (Source: F&S Report) Our ability to take advantage of this market opportunity, as well as our key customers growth in the Indian market, will determine our future growth and our results of operations and financial condition.
The demand for our products is affected by the level of business activity of our customers, which is influenced by the level of economic activity in the industries and geographies we cater to. Any decline in the economic fortunes of the industries or countries we operate in, can adversely affect the performance of our customers and the demand of our products in turn. We believe that economic growth, increasing urbanization, sustained availability of electricity, higher disposable incomes and lower running costs of RACs in India will continue to drive our revenue growth. Conversely, slower economic growth may lead to slower growth or even decline in our revenue. During periods of economic uncertainty, particularly where the disposable income of consumers is affected, consumers may choose other cheaper alternatives. Any such event may adversely affect our results of operations and financial condition.
Government regulations and policies
The manufacturing sector of India is going through a major transformation. Government of India has undertaken several schemes/initiatives to promote India as a global manufacturing hub including the make in India initiative and the production linked incentive scheme. The production linked incentive scheme for white goods (air conditioner and LED lights) is designed, inter alia, to develop complete component ecosystem for the air conditioners industry in India and make India an essential part of the global supply chains. Over the next 5 years, the scheme is estimated to lead to a total production of about 2,710 billion of components of these white goods. (Source: F&S Report) We have also been selected as beneficiaries for grant of incentives under the ‘PLI for White Goods (Air Conditioners & LED Lights) notified by the Ministry of Commerce & Industry on April 16, 2021.
The reduction or termination of our tax incentives, or non-compliance with the conditions under which such tax incentives are made available, will increase our tax liability and adversely affect our business results of operations, cash flows and financial condition. Further, there are various government initiatives such as the ban by DGFT on import of gas filled air conditioners, and the ban on import on import of refrigerants that have helped drive the growth of the Indian RAC manufacturing industry. Any change or withdrawal of such government policies may adversely affect our business results of operations, cash flows and financial condition.
Seasonality
Our RAC segment is subject to seasonality and the air conditioner industry in general may be affected by seasonal trends in the Indian climate. Generally, we witness an increase in sales in the first half of the calendar year. The sale of our RACs is generally significantly higher in the summer months due to the heat and warm weather, and considerably lower during the monsoon and winter months.Erratic weather conditions impacting the warm weather during the peak sales season of summer, may adversely affect our sales volumes, results of operations and financial condition, and could therefore have a disproportionate impact on our results of operations in the relevant year. In addition, most of our revenue is from customers whose businesses are similarly cyclical in nature and subject to changes in general economic conditions. As a result, any adverse developments in such industries could adversely affect our business and results of operations. For details, see "Risk Factors Our RAC business is subject to seasonal variations and cyclicality that could result in fluctuations in our results of operations" on page 39.
Competition
We operate in a competitive environment, and we expect to face greater competition from existing competitors. We compete with different companies depending on the market and type of product, and on the basis of our ability to fulfil our contractual obligations including the timely delivery of products manufactured by us and the price and quality of such products. We also compete with large multinational companies and smaller regionally based competitors. Further, we may face price pressures from our customers who aim to produce their products at competitive costs. While we strive to maintain fair prices and gain customer loyalty through performance, we will at times be compelled to reduce prices to satisfy the customer. Such reduction in prices has the potential to impact our profitability. Failure to meet customer price reduction targets could result in the customer moving the business to the competition.
We primarily face competition in our RAC business from other manufacturers who supply products to RAC brands on an OEM/ODM basis. We may further face a reduction in the supply for our products in the event that any major RAC brands that we currently supply to decide to manufacture any or all of their products in-house. We may also face competition from imports of RACs from other low-cost countries such as China.
We believe that our ability to compete as well as offer competitive prices of our manufactured products is highly dependent on our ability to optimize our product portfolio. As we continue to expand our operations into new geographies, we are exposed to competition from newer players. For details in relation to competition faced by us in various of our product categories, see "Our Business Competition" on page 189.
SIGNIFICANT ACCOUNTING POLICIES
The notes to the Restated Financial Information included in this Draft Red Herring Prospectus contain a summary of our significant accounting policies. Set forth below is a summary of our most significant accounting policies adopted in preparation of the Restated Financial Information.
Significant accounting policies
Current versus non-current classification
All assets and liabilities have been classified as current or non-current as per the Groups normal operating cycle of 12 months as per terms of agreements wherever applicable. The Group has considered a normal operating cycle of 12 months. Deferred tax assets and liabilities are classified as non-current assets and non-current liabilities, as the case may be.
Revenue recognition
a. Sale of goods Sales are recognized, at transaction price as per terms of agreements with the customers, net of returns and other variable consideration on account of discounts, if any, on satisfaction of performance obligation by transfer of effective control of the promised goods to the customers, which generally coincides with dispatch/ delivery to customers, as applicable. Sales excludes goods and services tax. The Group recognises revenue when the amount of revenue and its related cost can be reliably measured, and it is probable that future economic benefits will flow to the entity and degree of managerial involvement associated with ownership or effective control have been met for each of the
Groups activities. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transactions and the specifics of each arrangement.
Revenue is recognized for domestic and export sales of goods on satisfaction of performance obligation by transfer of effective control of the promised goods to the customers as per terms of agreements with the customers.
b. Contract modification - Contract modification is a change in the scope or price (or both) of a contract that is approved by the parties to the contract. Contract modification are accounted based on the prospective accounting and cumulative catch up. The Group accounts for a modification as a separate contract, if both the scope increases due to the addition of ‘distinct goods or services and the price increase reflects the goods or services stand-alone selling prices under the circumstances of the modified contract.
c. Interest income Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. Government grants relating to income are deferred and recognised in restated profit or loss over the period necessary to match them with costs that they are intended to compensate and presented with other income/ other operating revenue. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to restated profit or loss over the periods and in the proportions necessary to match then with the depreciation expense on the related assets and presented within other income.
Inventories
Inventories of raw materials, components, stores and spares are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and conditions are accounted for as follows:
a. Raw materials and components: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition such as non-refundable duties, freight etc. Costs of Raw materials and components are computed using the weighted average cost formula. b. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs.
Costs of finished goods and work in progress are computed using the weighted average cost formula.
Provision for obsolescence and slow-moving inventory is made based on managements best estimates of net realisable value of such inventories. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Income taxes
Tax expense recognized in the restated statement of profit and loss comprises the sum of deferred tax and current tax not recognized in Other Comprehensive Income (OCI) or directly in equity. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Current tax relating to items recognized outside restated statement of profit and loss is recognized outside restated statement of profit and loss (i.e., in OCI or equity depending upon the treatment of underlying item). Deferred tax liabilities are generally recognized in full for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that the deductible temporary difference will be utilized against future taxable income.
This is assessed based on the Groups forecast of future operating results, adjusted for significant non-taxable income and expenses. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside the restated statement of profit and loss is recognized outside restated statement of profit and loss (in OCI or equity depending upon the treatment of underlying item).
Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the restated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the
Groups cash management.
Foreign currency transactions
Functional and Presentation currencies The Groups restated financial statements are presented in Indian Rupees (INR) which is also the Groups functional currency.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in restated statement of profit or loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the restated statement of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the restated statement of profit and loss on a net basis within other income/expenses, as the case maybe.
Financial instruments
Initial recognition and measurement 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.
Financial Assets:
Initial recognition and measurement All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement For the purpose of subsequent measurement, financial assets are classified into the following categories upon initial recognition:
a. Financial assets carried at amortised cost a financial instrument is measured at amortised cost if both the following conditions are met: (i) the asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and (ii) contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest ("SPPI") on the principal amount outstanding. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest method.
b. Financial assets at fair value Investments in equity instruments (other than subsidiary): All equity investments in scope of Ind AS 109, financial instruments are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination, if any to which Ind AS 103, Business combinations applies are classified as at fair value through profit or loss. Further, there is no such equity investments measured at fair value through profit or loss or fair value through other comprehensive income in the Group.
If the Group decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the other comprehensive income (OCI). There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Group may transfer the cumulative gain or loss within equity. Dividends on such investments are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.
Equity instruments included within the fair value through profit or loss ("FVTPL") category are measured at fair value with all changes recognised in the restated profit and loss.
De-recognition of financial assets:
A financial asset is primarily de-recognised when the rights to receive cash flows from the asset have expired or the Group has transferred its rights to receive cash flows from the asset.
Financial liabilities and equity:
Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Initial recognition and measurement:
All financial liabilities are recognised initially at fair value plus, in the case of financial liabilities not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial liabilities. Transaction costs directly attributable to the acquisition of financial liabilities at fair value through profit or loss are recognised immediately in finance costs in the restated statement of profit and loss.
Subsequent measurement:
All financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVTPL. Amortised cost is calculated after considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The effect of EIR amortisation is included as finance costs in the restated statement of profit and loss.
De-recognition of financial liabilities:
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the restated statement of profit and loss.
Derivative financial instruments
Initial and subsequent measurement Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period.
Offsetting of financial instruments Financial assets and financial liabilities are offset, and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Impairment of financial assets All financial assets except for those at FVTPL are subject to review for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets.
In accordance with Ind-AS 109, the Group applies expected credit loss ("ECL") model for measurement and recognition of impairment loss for financial assets carried at amortised cost. ECL is the weighted average of difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Group is required to consider (i) all contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets; and (ii) cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
Trade receivables
The Group applies approach permitted by Ind AS 109 financial instruments, which requires lifetime expected credit losses to be recognised upon initial recognition of receivables. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument.
Other financial assets
For recognition of impairment loss on other financial assets and risk exposure, the Group determines whether there has been a significant increase in the credit risk since initial recognition. If the credit risk has not increased significantly since initial recognition, the Group measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit losses. When making this assessment, the Group uses the change in the risk of a default occurring over the expected life of the financial asset. To make that assessment, the Group compares the risk of a default occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Group assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.
Impairment of non-financial assets
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash generating units). As a result, some assets are tested individually for impairment, and some are tested at cash-generating unit level.
At each reporting date, the Group assesses whether there is any indication based on internal/ external factors, that an asset may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the restated statement of profit and loss. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed which is the higher of fair value less costs of disposal and value-in-use and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. Impairment losses previously recognised are accordingly reversed in the restated statement of profit and loss.
To determine value-in-use, management estimates expected future cash flows from each cash generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Groups latest approved budget, adjusted as necessary to exclude the effects of future re-organisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect current market assessment of the time value of money and asset-specific risk factors.
Fair value measurement
The Group measures financial instruments such as derivatives at fair value at each balance sheet date. 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: (i) in the principal market for the asset or liability, and (ii) in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the restated financial information are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
a. Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities; b. Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; c. Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognised in the restated consolidated financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Property, plant and equipment ("PPE")
The Group has elected to continue with the carrying value for all its property, plant and equipment as recognized in the Restated financial information as at the date of transition to Ind-AS and use the same as its deemed cost as at the date of transition.
Recognition and initial measurement Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and definition of asset is met. All other repair and maintenance costs are recognized in the restated statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives) Depreciation on property, plant and equipment is provided on straight line method based on life prescribed as per Schedule II of the Companies Act, 2013.
| Asset category | Useful lives |
| Plant and machinery | 15 years |
| Plant and machinery (Laboratory equipment) | 10 years |
| Factory Buildings | 30 years |
| Office equipment | 5 years |
| Computers including servers | 3-6 years |
| Electrical installations | 10 years |
| Furniture and Fixtures | 10 years |
| Vehicle | 8 years |
| Intangible Assets (Software) | 2-6 years |
De-recognition An item of property, plant and equipment and any significant part initially recognized is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the restated statement of profit and loss when the asset is derecognized.
Intangible assets
Recognition, initial measurement and subsequent measurement Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in restated profit or loss in the period in which the expenditure is incurred.
Capital work in progress
Cost of material consumed and erection charges thereon along with other direct cost incurred by the Group for the projects are shown as capital work in-progress until capitalisation.
Leases
The Group as a lessee Classification of leases The Group enters into leasing arrangements for various assets. The assessment of the lease is based on several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessees option to extend/purchase etc.
Recognition and initial measurement At lease commencement date, the Group recognizes a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease (if any), and any lease payments made in advance of the lease commencement date (net of any incentives received).
Subsequent measurement The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist. At lease commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Groups incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed payments) and variable payments based on an index or rate. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in standalone statement of profit and loss on a straight-line basis over the lease term.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Provisions, contingent liabilities and contingent assets
Provisions are recognized when present obligations as a result of a past event will probably lead to an outflow of economic resources and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises when there is a presence of a legal or constructive commitment that has resulted from past events, for example, legal disputes or onerous contracts. Provisions are not recognized for future operating losses. Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Provisions are discounted to their present values, where the time value of money is material. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. In those cases where the outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognized.
Contingent liability is disclosed for:
a. Possible obligations which will be confirmed only by future events not wholly within the control of the
Group. b. Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made; or c. Contingent assets are not recognized. However, when inflow of economic benefits is probable, related assets are disclosed.
Employee benefits
Expenses and liabilities in respect of employee benefits are provided in accordance with Indian Accounting Standard 19 employee benefits.
Defined contribution plans:
Provident Fund The Group makes contribution to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952. The plan is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee. Defined benefit plans (gratuity) The Group operates one defined benefit plan for its employees, viz. gratuity. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end using the projected unit credit method. Actuarial gain and loss for the defined benefit plan is recognized in full in the period in which they occur in other comprehensive income. Short-term employee benefits Expense in respect of other short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee. Accumulated leave, which is expected to be utilized within a period of next 12 months, is treated as short term employee benefit. The Group measures the expected cost of such absences as the additional amount that it expects to pay as a result of unused entitlement that has accumulated at the reporting date.
Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue. For the purpose of 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.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting done to the chief operating decision maker. The Group operates in a single operating segment and geographical segment.
Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquirees identifiable net assets. Acquisition-related costs are expensed as incurred. At the acquisition date, the identifiable assets acquired, and the liabilities assumed are recognised at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable.
Significant accounting judgments, estimates and assumptions
When preparing the restated financial information management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results are likely to differ from the judgments, estimates and assumptions made by management, and will seldom equal the estimated results. Information about significant judgments, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below:
Significant judgements:
a. Evaluation of indicators for impairment of non-financial assets The evaluation of applicability of indicators of impairment of non-financial assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.
b. Recognition of deferred tax assets The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the future taxable income against which the deferred tax assets can be utilized. The recognition of deferred tax assets and reversal thereof is based on estimates of future taxable profits.
c. Employee benefits The accounting of employee benefit plans in the nature of defined benefit requires the Group to use assumptions. These assumptions have been explained under employee benefits note.
Sources of estimation uncertainty:
a. Provisions At each balance sheet date, basis the management judgment, changes in facts and legal aspects, the Group assesses the requirement of provisions against the outstanding guarantees. However, the actual future outcome may be different from managements estimates.
b. Fair valuation of financial instruments Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.
c. Recoverability of advances/receivables At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
d. Allowance for doubtful trade receivables The allowance for doubtful trade receivables reflects managements estimate of losses inherent in its credit portfolio. This allowance is based on Groups estimate of the losses to be incurred, which derives from past experience with similar receivables, current and historical past due amounts, write-offs and collections, the careful monitoring of portfolio credit quality and current and projected economic and market conditions.
e. Allowance for obsolete and slow-moving inventory The allowance for obsolete and slow-moving inventory reflects managements estimate of the expected loss in value, and has been determined on the basis of past experience and historical and expected future trends in the used RAC market. A worsening of the economic and financial situation could cause a further deterioration in conditions in the used RAC market compared to that taken into consideration in calculating the allowances recognised in the restated financial information.
f. Useful lives of depreciable/amortisable assets Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of certain software, IT equipment and other plant and equipment.
g. Defined benefit obligations ("DBO") Managements estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
Recent Accounting Pronouncements
MCA vide notification no. G.S.R. 242(E) dated March 31, 2023, has issued the Companies (Indian Accounting Standards) Amendment Rules, 2023, which amends following Ind AS (as applicable to the Group)
a. Ind AS 107, Financial instruments: disclosures b. Ind AS 109, Financial instruments c. Ind AS 115, Revenue from contracts with customers
d. Ind AS 1, Presentation of financial statements e. Ind AS 8, Accounting policies, changes in accounting estimates and errors f. Ind AS 12, Income taxes.
The amendments are applicable for annual periods beginning on or after April 1, 2023. The Group has evaluated the amendments and the impact is not expected to be material.
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
Income
.
Our total income comprises (i) revenue from operations; and (ii) other income.
Revenue from operations
Revenue from operations comprise the following:
(i) revenue from contract with customers comprising of revenue from sale of the following products:
a) manufactured goods; and b) traded goods
(ii) other operating revenue, which comprises revenue from the following:
a) scrap sales;
b) government grants;
c) export incentives; and
d) service charges
Other income
Other income primarily includes
(i) interest from
(a) bank deposits,
(b) other financial assets carried at amortised cost,
(c) loan to related party, and
(d) others ; and
(ii) other non-operating income such as
(a) profit on sale of property, plant and equipment (net),
(b) foreign exchange fluctuations (net),
(c) liabilities no longer required, written back, and
(d) miscellaneous income such as insurance claims, notice pay recovery and support service income.
Expenses
Our expenses comprise the following:
(i) cost of materials consumed;
(ii) purchases of stock in trade;
(iii) changes in inventories of finished goods and work in progress;
(iv) employee benefits expense comprising
(a) salary, wages and bonus,
(b) contribution to provident and other funds,
(c) gratuity expense and
(d) staff welfare expense;
(v) finance costs comprising
(a) interest on term loans,
(b) interest on cash credit and working capital demand loan,
(c) interest on lease liabilities,
(d) others (includes interest on customer bills discounting, vendor bill discounting, etc.),
(e) other borrowing costs, and
(f) transaction cost on issue of compulsorily convertible preference shares;
(vi) depreciation and amortisation expense comprising
(a) depreciation on property, plant and equipment,
(b) depreciation of on right-of-use assets, and
(c) amortisation on intangible assets; and
(vii) other expenses comprising amongst others,
(a) contract labour wages,
(b) consumption of stores and spares,
(c) rent expenses,
(d) power and fuel,
(e) legal and professional charges,
(f) repair and maintenance,
(g) bad debts and advances written off,
(h) insurance expenses,
(i) impairment of goodwill,
(j) corporate social responsibility expenses,
(k) loss allowance for doubtful receivables and advances,
(l) foreign exchange loss (net),
(m) rates and taxes,
(n) business promotion expenses,
(o) loss from asset sale, and
(p) miscellaneous expenses such as security charges, travelling expenses, vehicle maintenance, communication charges, R&D expenditure, among others.
RESULTS OF OPERATIONS
The following table sets forth certain information with respect to the results of operations of our Company based on the Restated Financial Information, for the years indicated:
| Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | ||||
| Particulars | in million | % of total income | in million | % of total income | in million | % of total income |
| Income | ||||||
| Revenue from operations | 15,388.32 | 99.91% | 9,241.62 | 99.66% | 7,362.45 | 99.54% |
| Other income | 14.21 | 0.09% | 31.79 | 0.34% | 34.13 | 0.46% |
| Total income | 15,402.53 | 100.00% | 9,273.41 | 100.00% | 7,396.58 | 100.00% |
| Expenses | ||||||
| Cost of materials consumed | 12,987.88 | 84.32% | 7,984.50 | 86.10% | 6,549.61 | 88.55% |
| Purchases of stock-in-trade | 296.47 | 1.92% | - | 0.00% | - | 0.00% |
| Change in inventories of finished goods and work-in- progress | (43.53) | (0.28)% | (41.09) | (0.44)% | (58.70) | (0.79)% |
| Employee benefits expense | 333.76 | 2.17% | 232.58 | 2.51% | 169.93 | 2.30% |
| Finance costs | 314.60 | 2.04% | 293.83 | 3.17% | 255.79 | 3.46% |
| Depreciation and amortisation expense | 260.77 | 1.69% | 162.97 | 1.76% | 89.90 | 1.22% |
| Other expenses | 788.49 | 5.12% | 377.60 | 4.07% | 281.28 | 3.80% |
| Total expenses | 14,938.44 | 96.99% | 9,010.39 | 97.16% | 7,287.81 | 98.53% |
| Restated Profit before share of profit/(loss) of associate, exceptional items and tax | 464.09 | 3.01% | 263.02 | 2.84% | 108.77 | 1.47% |
| Share of profit/(loss) of associate | (8.12) | (0.05)% | - | 0.00% | - | 0.00% |
| Restated profit before exceptional items and tax | 455.97 | 2.96% | 263.02 | 2.84% | 108.77 | 1.47% |
| Exceptional items | (15.50) | (0.10)% | - | 0.00% | - | 0.00% |
| Restated profit before tax | 440.47 | 2.86% | 263.02 | 2.84% | 108.77 | 1.47% |
| Tax expense: | ||||||
| Current tax | 104.45 | 0.68% | 77.02 | 0.83% | 27.61 | 0.37% |
| Tax pertaining to earlier periods | 0.78 | 0.01% | 0.42 | 0.00% | 1.51 | 0.02% |
| Deferred tax | 15.52 | 0.10% | 11.24 | 0.12% | 1.62 | 0..02% |
| Restated profit | ||||||
| 319.72 | 2.08% | 174.34 | 1.88% | 78.03 | 1.05% |
FISCAL 2023 COMPARED WITH FISCAL 2022
Set forth below is a discussion of our results of operations, on the basis of amounts derived from our Restated Financial Information for the Fiscals ended 2023 and 2022.
Income
Our total income increased by 66.09% from 9,273.41 million in Fiscal 2022 to 15,402.53 million in Fiscal 2023. Our total income comprised (i) revenue from operations, and (ii) other income.
Revenue from operations
Our revenue from operations increased by 66.51% from 9,241.62 million in Fiscal 2022 to 15,388.32 million in Fiscal 2023, primarily due to the following:
a) Revenue from contracts with customers
Our revenue from contracts with customers increased by 64.79% from 9,093.12 million in Fiscal 2022 to 14,984.61 million in Fiscal 2023, primarily due to increase in our sale of our manufactured goods which increased by 61.37% from 9,093.12 million in Fiscal 2022 to 14,673.59 million in Fiscal 2023. Additionally, we had an income of 311.02 million from sale of our traded goods in Fiscal 2023, whereas we had no such income in Fiscal 2022.
b) Other operating revenue
Our other operating revenue increased by 171.86% from 148.50 million in Fiscal 2022 to 403.71 million in Fiscal 2023, primarily due to increase in (i) our scrap sales which increased by 80.43% from
133.96 million in Fiscal 2022 to 241.70 million in Fiscal 2023, and (ii) government grants which increased by 22,976.92% from 0.65 million in Fiscal 2022 to 150.00 million in Fiscal 2023. These government grants in Fiscal 2023 comprised the incentives accrued from the Government, pursuant to our selection as beneficiaries for grant of incentives under the ‘PLI for White Goods (Air Conditioners & LED Lights) notified by the Ministry of Commerce & Industry on April 16, 2021. This was partially offset by our export incentives which decreased by 13.53% from 13.89 million in Fiscal 2022 to 12.01 million in Fiscal 2023.
Other income
Our other income decreased by 55.30% from 31.79 million in Fiscal 2022 to 14.21 million in Fiscal 2023, primarily due to a decrease in (i) interest from (a) bank deposits which decreased by 18.95% from 9.76 million in Fiscal 2022 to 7.91 million in Fiscal 2023, (b) other financial assets carried at amortised cost which increased by 23.33% from 0.60 million in Fiscal 2022 to 0.74 million in Fiscal 2023, (c) loan to related party of 3.78 million in Fiscal 2023, whereas we had no such income in Fiscal 2022, and (d) others increased by 113.33% from 0.15 million in Fiscal 2022 to 0.32 million in Fiscal 2023; and decrease in (ii) other non-operating income such as (a) profit on sale of property, plant and equipment (net) of 0.01 million in Fiscal 2023, whereas we had no such income in Fiscal 2022, (b) foreign exchange fluctuations (net) of 19.00 million in Fiscal 2022 whereas we had no such income in Fiscal 2023, (c) liabilities no longer required, written back decreased by 73.25% from 2.28 million in Fiscal 2022 to 0.61 million in Fiscal 2023, and (d) miscellaneous income of 0.84 million in Fiscal 2023 comprising insurance claims and notice pay recovery, whereas we had no such income in Fiscal 2022.
Expenses
Our total expenses increased by 65.79% from 9,010.39 million in Fiscal 2022 to 14,938.44 million in Fiscal 2023 primarily due to operationalization of our Dehradun Unit IV pursuant to the acquisition of EPACK Components Private Limited by our Company.
Cost of materials consumed
Our cost of materials consumed increased by 62.66% from 7,984.50 million in Fiscal 2022 to 12,987.88 million in Fiscal 2023.
Purchases of stock in trade
We had incurred 296.47 million in Fiscal 2023 on purchases of stock in trade whereas we had no such purchases in Fiscal 2022.
Changes in inventories of finished goods and work in progress
Our changes in inventories of finished goods and work in progress decreased by 5.94% from (41.09) million in Fiscal 2022 to (43.53) million in Fiscal 2023.
Employee benefits expense
Our employee benefits expense increased by 43.50% from 232.58 million in Fiscal 2022 to 333.76 million in Fiscal 2023 primarily due to increase in our expense on (i) salary, wages and bonus which increased by 41.94% from 207.49 million in Fiscal 2022 to 294.52 million in Fiscal 2023, which was primarily driven by increase in the number of our employees and increments in the salaries and wages of our employees, (ii) contribution to provident and other fund which increased by 25.11% from 11.75 million in Fiscal 2022 to 14.70 million in Fiscal 2023, (iii) gratuity expenses which increased by 23.71% from 5.44 million in Fiscal 2022 to 6.73 million in Fiscal 2023, and (iv) staff welfare expenses which increased by 125.44% from 7.90 million in Fiscal 2022 to 17.81 million in Fiscal 2023.
Finance costs
Our finance cost increased by 7.07% from 293.83 million in Fiscal 2022 to 314.60 million in Fiscal 2023 primarily due to increase in our (i) interest on term loans which increased by 18.18% from 71.13 million in Fiscal 2022 to 84.06 million in Fiscal 2023, (ii) interest on cash credit and working capital demand loan which increased by 30.81% from 36.22 million in Fiscal 2022 to 47.38 million in Fiscal 2023, (iii) interest on lease liabilities which increased by 9.18% from 25.71 million in Fiscal 2022 to 28.07 million in Fiscal 2023, (iv) others (which included interest on customer bills discounting and vendor bill discounting, among others) which increased by 57.36% from 80.09 million in Fiscal 2022 to 126.03 million in Fiscal 2023, and (v) other borrowing costs such as bank charges, etc. which increased by 10.64% from 19.73 million in Fiscal 2022 to 21.83 million in Fiscal 2023. These were partially offset by our transaction cost on issue of compulsorily convertible preference shares which decreased by 88.14% from 60.95 million in Fiscal 2022 to 7.23 million in Fiscal 2023.
Depreciation and amortization expenses
Our depreciation and amortization expense increased by 60.01% from 162.97 million in Fiscal 2022 to 260.77 million in Fiscal 2023, primarily due to increase in depreciation of property, plant and equipment (net) by 80.56% from 112.68 million in Fiscal 2022 to 203.46 million in Fiscal 2023 on account of operationalization of our Dehradun Unit IV pursuant to the acquisition of EPACK Components Private Limited by our Company, and increase in depreciation of right of use assets which increased by 14.22% from 49.65 million in Fiscal 2022 to 56.71 million in Fiscal 2023.
These were partially offset by decrease in amortization of intangible assets which decreased by 6.25% from 0.64 million in Fiscal 2022 to 0.60 million in Fiscal 2023.
Other expenses
Our other expenses increased by 108.82% from 377.60 million in Fiscal 2022 to 788.49 million in Fiscal 2023, primarily due to increase in our expenses on (i) contract labour wages which increased by 99.92% from
168.42 million in Fiscal 2022 to 336.71 million in Fiscal 2023, (ii) consumption of stores and spares which increased by 34.47% from 25.70 million in Fiscal 2022 to 34.56 million in Fiscal 2023, (iii) rent expenses which increased by 107.73% from 2.07 million in Fiscal 2022 to 4.30 million in Fiscal 2023, (iv) power and fuel which increased by 96.21% from 52.03 million in Fiscal 2022 to 102.09 million in Fiscal 2023, (v) legal and professional charges which increased by 39.44% from 23.30 million in Fiscal 2022 to 32.49 million in Fiscal 2023, (vi) repair and maintenance of buildings which increased by 243.81% from 3.15 million in Fiscal 2022 to 10.83 million in Fiscal 2023, (vii) repair and maintenance of plant and machinery which increased by 23.44% from 18.56 million in Fiscal 2022 to 22.91 million in Fiscal 2023, (viii) other repair and maintenance of buildings expenses which increased by 689.36% from 0.47 million in Fiscal 2022 to 3.71 million in Fiscal 2023, (ix) insurance expenses which increased by 58.09% from 10.76 million in Fiscal 2022 to 17.01 million in Fiscal 2023, (x) corporate social responsibility by 54.17% from 2.40 million in Fiscal 2022 to 3.70 million in Fiscal 2023, (xi) business promotion expenses which increased by 17,318.18% from 0.55 million in Fiscal 2022 to 95.80 million in Fiscal 2023, and (xii) miscellaneous expense such as security charges, travelling expenses, vehicle maintenance, communication charges, R&D expenditure, among others, which increased by 56.59% from 33.82 million in Fiscal 2022 to 52.96 million in Fiscal 2023. Additionally, we had expenses of
26.15 million on loss allowance for doubtful receivables and advances and 37.43 million on foreign exchange loss (net) in Fiscal 2023, whereas we did not incur such expenses in Fiscal 2022.
These expenses were partially set off by our expenses on (i) bad debts and advances written off which decreased by 55.81% from 3.10 million in Fiscal 2022 to 1.37 million in Fiscal 2023, (ii) rates and taxes which decreased by 57.68% from 15.29 million in Fiscal 2022 to 6.47 million in Fiscal 2023. Additionally, we had an expense of 15.60 million on impairment of goodwill, and 2.38 million on loss from asset sale, in Fiscal 2022, whereas we did not incur such expense in Fiscal 2023.
Restated profit before tax
On account of factors mentioned hereinabove, our restated profit before tax increased by 67.47% from 263.02 million in Fiscal 2022 to 440.47 million in Fiscal 2023.
Tax expense
Our tax expense increased by 36.16% from 88.68 million in Fiscal 2022 to 120.75 million in Fiscal 2023. This was due to increase in (i) current tax by 35.61% from 77.02 million in Fiscal 2022 to 104.45 million in Fiscal 2023, (ii) tax pertaining to earlier periods by 85.71% from 0.42 million in Fiscal 2022 to 0.78 million in Fiscal 2023, and (iii) deferred tax by 38.08% from 11.24 million in Fiscal 2022 to 15.52 million in Fiscal 2023.
Restated profit for the year
For the reasons discussed above, our restated profit for the year increased by 83.39% from 174.34 million in Fiscal 2022 to 319.72 million in Fiscal 2023.
FISCAL 2022 COMPARED WITH FISCAL 2021
Set forth below is a discussion of our results of operations, on the basis of amounts derived from our Restated Financial Information, for the Fiscals ended 2022 and 2021.
Income
Our total income increased by 25.37% from 7,396.58 million in Fiscal 2021 to 9,273.41 million in Fiscal 2022. Our total income comprised (i) revenue from operations, and (ii) other income.
Revenue from operations
Our revenue from operations increased by 25.52% from 7,362.45 million in Fiscal 2021 to 9,241.62 million in Fiscal 2022, primarily and comprised (a) revenue from contracts with customers and, (b) other operating revenue.
a) Revenue from contracts with customers
Our revenue from contracts with customers increased by 25.90% from 7,222.63 million in Fiscal 2021 to 9,093.12 million in Fiscal 2022, due to increase in our sale of our manufactured goods which increased by 25.90% from 7,222.63 million in Fiscal 2021 to 9,093.12 million in Fiscal 2022.
b) Other operating revenue
Our other operating revenue increased by 6.21% from 139.82 million in Fiscal 2021 to 148.50 million in Fiscal 2022, primarily due to increase in (i) our scrap sales which increased by 54.88% from
86.49 million in Fiscal 2021 to 133.96 million in Fiscal 2022, and (ii) export incentives which increased by 2254.24% from 0.59 million in Fiscal 2021 to 13.89 million in Fiscal 2022. This was partially offset by our revenue from government grants which decreased by 98.75% from 52.14 million in Fiscal 2021 to 0.65 million in Fiscal 2022. Additionally, we had revenue of 0.60 million in Fiscal 2021 from service charges whereas we had no such revenue in Fiscal 2022.
Other income
Our other income decreased by 6.86% from 34.13 million in Fiscal 2021 to 31.79 million in Fiscal 2022, primarily due to increase in (i) interest from (a) bank deposits which increased by 196.66% from 3.29 million in Fiscal 2021 to 9.76 million in Fiscal 2022, (b) other financial assets carried at amortised cost which increased by 36.36% from 0.44 million in Fiscal 2021 to 0.60 million in Fiscal 2022, and (c) others which decreased by 90.38% from 1.56 million in Fiscal 2021 to 0.15 million in Fiscal 2022; and decrease in (ii) other non-operating income such as (a) profit on sale of property, plant and equipment (net) of 0.54 million in Fiscal 2021 whereas we had no such income in Fiscal 2022, (b) foreign exchange fluctuations (net) which increased by 36.49% from 13.92 million in Fiscal 2021 to 19.00 million in Fiscal 2022, (c) liabilities no longer required, written back which decreased by 81.58% 12.38 million in Fiscal 2021 to 2.28 million in Fiscal 2022, and (d) miscellaneous income of 2.00 million in Fiscal 2021 comprising support service income, whereas we had no such income in Fiscal 2022.
Expenses
Our total expenses increased by 23.64% from 7,287.81 million in Fiscal 2021 to 9,010.39 million in Fiscal 2022 primarily due to operationalization of our Dehradun Unit IV pursuant to the acquisition of EPACK Components Private Limited by our Company.
Cost of materials consumed
Our cost of materials consumed increased by 21.91% from 6,549.61 million in Fiscal 2021 to 7,984.50 million in Fiscal 2022.
Changes in inventories of finished goods and work in progress
Our changes in inventories of finished goods and work in progress increased by 30.00% from (58.70) million in Fiscal 2021 to (41.09) million in Fiscal 2022.
Employee benefits expense
Our employee benefits expense increased by 36.87% from 169.93 million in Fiscal 2021 to 232.58 million in Fiscal 2022 primarily due to increase in our expense on (i) salary, wages and bonus which increased by 34.59% from 154.16 million in Fiscal 2021 to 207.49 million in Fiscal 2022, (ii) contribution to provident and other fund which increased by 42.77% from 8.23 million in Fiscal 2021 to 11.75 million in Fiscal 2022, (iii) gratuity expenses which increased by 23.08% from 4.42 million in Fiscal 2021 to 5.44 million in Fiscal 2022, and (iv) staff welfare expenses which increased by 153.21% from 3.12 million in Fiscal 2021 to 7.90 million in Fiscal 2022. This increase in our overall employee benefit expenses was attributable to an increase in the number of employees pursuant to the acquisition of EPACK Components Private Limited by our Company.
Finance costs
Our finance cost increased by 14.87% from 255.79 million in Fiscal 2021 to 293.83 million in Fiscal 2022 primarily due to increase in our (i) interest on term loans which increased by 47.88% from 48.10 million in Fiscal 2021 to 71.13 million in Fiscal 2022, (ii) interest on lease liabilities which increased by 79.79% from
14.30 million in Fiscal 2021 to 25.71 million in Fiscal 2022, and (iii) other borrowing costs such as bank charges, etc. which increased by 205.42% from 6.46 million in Fiscal 2021 to 19.73 million in Fiscal 2022. Additionally, we had incurred transaction costs on the issue of compulsorily convertible preference shares of 60.95 million in Fiscal 2022, whereas we had no such cost in Fiscal 2021.
These were partially offset by our interest on cash credit and working capital demand loan which decreased by 52.79% from 76.72 million in Fiscal 2021 to 36.22 million in Fiscal 2022, and others (which included interest on customer bills discounting, vendor bill discounting, etc.) which decreased by 27.33% from 110.21 million in Fiscal 2021 to 80.09 million in Fiscal 2022.
Depreciation and amortization expenses
Our depreciation and amortization expense increased by 81.28% from 89.90 million in Fiscal 2021 to 162.97 million in Fiscal 2022, primarily due to increase in (i) depreciation of property, plant and equipment (net) which increased by 114.51% from 52.53 million in Fiscal 2021 to 112.68 million in Fiscal 2022, (ii) depreciation on right of use assets which increased by 32.97% from 37.34 million in Fiscal 2021 to 49.65 million in Fiscal 2022, and (iii) amortization of intangible assets which increased by 2,033.33% from 0.03 million in Fiscal 2021 to 0.64 million in Fiscal 2022.
Other expenses
Our other expenses increased by 34.24% from 281.28 million in Fiscal 2021 to 377.60 million in Fiscal 2022, primarily due to increase in our expenses on (i) contract labour wages which increased by 70.09% from 99.02 million in Fiscal 2021 to 168.42 million in Fiscal 2022, (ii) consumption of stores and spares which increased by 34.77% from 19.07 million in Fiscal 2021 to 25.70 million in Fiscal 2022, (iii) power and fuel which increased by 48.49% from 35.04 million in Fiscal 2021 to 52.03 million in Fiscal 2022, (iv) legal and professional charges which increased by 42.42% from 16.36 million in Fiscal 2021 to 23.30 million in Fiscal 2022, (v) corporate social responsibility which increased by 9.59% from 2.19 million in Fiscal 2021 to 2.40 million in Fiscal 2022, (vi) rates and taxes which increased by 152,800% from 0.01 million in Fiscal 2021 to
15.29 million in Fiscal 2022,and (vii) business promotion expenses which increased by 57.14% from 0.35 million in Fiscal 2021 to 0.55 million in Fiscal 2022. Additionally, we had expenses on impairment of goodwill of 15.60 million, and loss from asset sale of 2.38 million in Fiscal 2022, whereas we did not have such expenses in Fiscal 2021.
These expenses were partially set off by our (i) rent expenses which decreased by 37.27% from 3.30 million in Fiscal 2021 to 2.07 million in Fiscal 2022, (ii) repair and maintenance of buildings which decreased by 46.79% from 5.92 million in Fiscal 2021 to 3.15 million in Fiscal 2022, (iii) repair and maintenance of plant and machinery which decreased by 12.95% from 21.32 million in Fiscal 2021 to 18.56 million in Fiscal 2022, (iv) other repair and maintenance expenses which decreased by 78.73% from 2.21 million in Fiscal 2021 to 0.47 million in Fiscal 2022, (v) insurance expenses which increased by 11.73% from 9.63 million in Fiscal 2021 to 10.76 million in Fiscal 2022, (vi) Bad Debts and advances written off which decreased by 84.22% from 19.64 million in Fiscal 2021 to 3.10 million in Fiscal 2022 and (vii) miscellaneous expense such as security charges, travelling expenses, vehicle maintenance, communication charges, R&D expenditure, among others, which decreased by 22.04% from 43.38 million in Fiscal 2021 to 33.82 million in Fiscal 2022. Additionally, we had an expense of 3.84 million on loss allowance for doubtful receivables and advances in Fiscal 2021, whereas we did not incur such expense in Fiscal 2022.
Restated profit before tax
On account of factors mentioned hereinabove, our restated profit before tax increased by 141.81% from 108.77 million in Fiscal 2021 to 263.02 million in Fiscal 2022.
Tax expense
Our tax expense increased by 188.48% from 30.74 million in Fiscal 2021 to 88.68 million in Fiscal 2022. This was due to increase in current tax by 178.96% from 27.61 million in Fiscal 2021 to 77.02 million in Fiscal 2022, and (ii) increase in deferred tax by 593.83% from 1.62 million in Fiscal 2021 to 11.24 million in Fiscal 2022. This was partially offset by a decrease in tax pertaining to earlier periods which reduced by 72.19% from 1.51 million in Fiscal 2021 to 0.42 million in Fiscal 2022.
Restated profit for the year
For the reasons discussed above, our restated profit for the year increased by 123.43% from 78.03 million in Fiscal 2021 to 174.34 million in Fiscal 2022.
CASH FLOWS
| Particulars | Fiscal ended | ||
| March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Net cash flow from / (used in) operating activities | 188.28 | (289.41) | 474.19 |
| Net cash flow from / (used in) investing activities | (2,175.02) | (2,041.94) | (66.91) |
| Net cash flow from / (used in) financing activities | 2,345.45 | 2,535.45 | (425.42) |
| Net increase/(decrease) in cash and cash equivalents | 358.71 | 204.10 | (18.14) |
| Cash and cash equivalents at the beginning of the year | 241.47 | 36.48 | 54.62 |
| Additions on account of business combination as at August | - | 0.89 | - |
| 1, 2021 | |||
| Cash and cash equivalents at the end of the year | 600.18 | 241.47 | 36.48 |
NET CASH GENERATED FROM/ USED IN OPERATING ACTIVITIES
Fiscal ended March 31, 2023
Net cash flow from operating activities was 188.28 million in Fiscal ended March 31, 2023. Restated Profit before tax was 440.47 million in Fiscal ended March 31, 2023. Adjustments to reconcile profit before tax to net cash flows primarily consisted of depreciation and amortisation expense of 260.77 million, loss on fair valuation of financial instruments (compulsorily convertible preference shares) carried at fair value through profit and loss of 15.50 million, share of loss of associate of 8.12 million, provision for slow moving inventory of 5.90 million, finance costs of 314.60 million, bad debts and advances written off of 1.37 million and loss allowance for doubtful receivables and advances of 26.15 million. This was partially offset by interest income of 12.75 million, unrealised foreign exchange gain of 1.03 million and liabilities no longer required, written back of 0.61 million. Operating cash flow before working capital changes was 1,058.48 million in Fiscal ended March 31, 2023. The main adjustments in Fiscal ended March 31, 2023, primarily consisted of increase in trade receivables of 1,255.43 million, increase in inventories of 169.65 million and increase in other assets of 56.29 million. This was partially offset by (i) decrease in financial assets of 5.13 million and (ii) increase in Trade payables of 559.04 million, increase in Other financial liabilities of 51.30 million, increase in sundry provisions of 1.15 million and increase in other liabilities of 121.79 million. Income taxes paid (net of refunds) amounted to 127.24 million in Fiscal ended March 31, 2023.
Fiscal ended March 31, 2022
Net cash flow used in operating activities was 289.41 million in Fiscal ended March 31,2022. Restated Profit before tax was 263.02 million in Fiscal ended March 31, 2022. Adjustments to reconcile profit before tax to net cash flows primarily consisted of Depreciation and amortisation expense of 162.97 million, finance costs of 293.83 million, Goodwill impairment of 15.60 million, rates and taxes of 8.80 million and loss on sale of property, plant and equipment of 2.38 million. This was partially offset by Interest income of 10.51 million, unrealised foreign exchange gain of 14.57 million and Liabilities no longer required, written back of
2.28 million. Operating cash flow before working capital changes was 722.34 million in Fiscal ended March 31, 2022. The main adjustments in Fiscal ended March 31, 2022, primarily consisted of (i) increase in trade receivables of 1,015.77 million, increase in inventories of 1,196.51, increase in financial assets of 4.58 million, increase in other asset of 220.04 million and (ii) decrease in other financial liabilities of 39.89 million, decrease in provision of 3.57 million and decrease in other liabilities of 129.35 million. This was partially offset by increase in trade payables of 1,689.94 million. Income taxes paid (net of refunds) amounted to 91.98 million in Fiscal ended March 31, 2022.
Fiscal ended March 31, 2021
Net cash flow from operating activities was 474.19 million in Fiscal ended March 31,2021. Restated Profit before tax was 108.77 million in Fiscal ended March 31, 2021. Adjustments to reconcile profit before tax to net cash flows primarily consisted of Depreciation and amortisation expense of 89.90 million, finance costs of
255.79 million and Bad debts and advances written off of 19.64 million, field rejection loss of 10.59 million and loss allowances for doubtful receivables and advances of 3.84 million. This was partially offset by Interest income of 5.29 million, unrealised foreign exchange loss of 0.17 million liabilities no longer required, written back of 12.38 million and profit of sale of property, plant and equipment of 0.54 million. Operating cash flow before working capital changes was 470.49 million in Fiscal ended March 31, 2021. The main adjustments in Fiscal ended March 31, 2021, primarily consisted of increase in trade receivables of 366.91 million increase in inventories of 52.91 million and increase in financial assets of 14.01 million. This was partially offset by (i) decrease in other assets of 146.75 million and (ii) increase in trade payables of 128.79 million, increase in other financial liabilities of 66.70 million, increase in provision of 4.72 million and increase in other liabilities of 108.99 million. Income taxes paid (net of refunds) amounted to 18.42 million in Fiscal ended March 31, 2021.
NET CASH GENERATED FROM/ USED IN INVESTING ACTIVITIES
Fiscal ended March 31, 2023
Net cash used in investing activities in Fiscal ended March 31,2023was 2,175.02 million. This was primarily on account of acquisition of property, plant and equipment, capital work-in-progress and intangible assets of 2,243.40 million, acquisition of leasehold land (included in right of use assets) of 81.15 million, investment in associate of 25.74 million and loans given to associate of 46.13 million. This was partially offset by redemption of bank deposits of 203.84 million, proceeds from sale of property, plant and equipment of 4.34 million. and interest received of 13.22 million.
Fiscal ended March 31, 2022
Net cash used in investing activities in Fiscal ended March 31,2022 was 2,041.94 million. This was primarily on account of acquisition of property, plant and equipment, capital work-in-progress and intangible assets of 1,425.48 million, acquisition of leasehold land (included in right of use assets) of 348.18 million, investment in other companies of 30.57 million and investment in bank deposits of 247.79 million. This was partially offset by interest received of 8.83 million and proceeds from sale of property, plant and equipment of 1.25 million.
Fiscal ended March 31, 2021
Net cash used in investing activities in Fiscal ended March 31, 2021 was 66.91 million. This was primarily on account of acquisition of property, plant and equipment, capital work-in-progress and intangible assets of 54.07 million, and investment in bank deposits of 29.11 million. This was partially offset by interest received of 8.92 million and proceeds from sale of property, plant and equipment of 7.35 million.
NET CASH GENERATED FROM/ USED IN FINANCING ACTIVITIES
Fiscal ended March 31, 2023
Net cash flow from financing activities in Fiscal ended March 31,2023was 2,345.45 million. This was primarily on account of proceeds from issue of compulsorily convertible preference shares of 1,600.00 million, proceeds from long term borrowings of 864.96 million and proceeds from short term borrowings (net) of 509.83 million. This was partially offset by repayments of long-term borrowings of 294.45 million, Interest paid on borrowings of 244.02 million, payment of lease liabilities of 33.75 million, interest paid on lease liabilities of 28.07 million and other finance cost paid of 29.05 million.
Fiscal ended March 31, 2022
Net cash flow from financing activities in Fiscal ended March 31, 2022 was 2,535.45 million. This was primarily on account of proceeds from issue of compulsorily convertible preference shares of 1,600.00 million, proceeds from long term borrowings of 309.76 million and proceeds from short term borrowings (net) of 1,242.52 million. This was partially offset by repayments of long-term borrowings of 289.96 million, interest paid on borrowings of 190.22 million, payment towards lease liabilities of 30.26 million, interest paid on lease liabilities of 25.71 million and other finance cost paid of 80.68 million.
Fiscal ended March 31, 2021
Net cash flow used in financing activities in Fiscal ended March 31, 2021, was 425.42 million. This was primarily on account of proceeds from long term borrowings of 507.26 million. This was partially offset by repayments of long-term borrowings of 60.90 million, repayment of short term borrowings (net) of 592.58, interest paid on borrowings of 231.72 million, payment of lease liabilities of 26.72 million, interest paid on lease liabilities of 14.30 million and other finance cost paid of 6.46 million.
LIQUIDITY AND CAPITAL RESOURCES
We have historically financed the expansion of our business and operations primarily through debt financing, equity funding and funds generated from our operations. From time to time, we may obtain loan facilities to finance our short-term working capital requirements. We evaluate our funding requirements regularly in light of cash flows from our operating activities, the requirements of our business and operations and market conditions.
The following table summarizes certain information in relation to our liquidity and capital resources for the years indicated:
| Particulars | As at the Fiscals ended | ||
| March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Cash and cash equivalents | 600.18 | 241.47 | 36.48 |
| Non-current borrowings | 1,135.80 | 596.20 | 677.10 |
| Current borrowings | 3,788.65 | 3,243.61 | 1,708.47 |
| Lease liabilities | |||
| - Current | 64.59 | 56.18 | 52.47 |
| - Noncurrent | 259.75 | 258.24 | 184.62 |
| Bank balances other than cash and cash | 154.38 | 348.19 | 78.91 |
| equivalents |
INDEBTEDNESS
As of June 30, 2023, we had outstanding borrowings amounting to 4,414.13 million. See "Financial Indebtedness" as on page 346.
There are a number of covenants in our financing agreements that we have entered into with our lenders. Further, some of our financing agreements include conditions and covenants that require us to obtain their consent prior to carrying out certain activities and entering into certain transactions. Failure to meet these conditions or obtain these consents could have significant consequences on our business. Typically, we require, and may be unable to obtain, lender consents to incur additional secured debt, issue equity, change our capital structure, undertake any major expansion and for any change our management structure, whether or not there is any failure by us to comply with the other terms of such agreements.
The details of our indebtedness (on a consolidated basis) as on June 30, 2023, is provided below:
| Category of borrowing | Sanctioned Amount | Outstanding amount as on June 30, 2023 |
| Secured (A) | ||
| Working capital demand loan / sales invoice discounting | 4,570.00 | 1,407.95 |
| Term Loan | 2,800.36 | 1,599.01 |
| Vehicle Loan | 15.44 | 13.22 |
| Non- Fund Based - Letter of Credit and Bank Guarantee issued | 4,000.00 | 1,310.84 |
| Total (A) | 11,385.80 | 4,331.03 |
| Unsecured (B) | ||
| Bill Discounting | 1,250.00 | 83.10 |
| Total (B) | 1,250.00 | 83.10 |
| Total (A+B) | 12,635.80 | 4,414.13 |
* As certified by the ICA, pursuant to their certificate dated August 11, 2023.
1. Sanctioned amount includes amount sanctioned for fund and non-fund based facilities. 2. As on June 30, 2023, the Subsidiary of the Company has not availed any borrowings.
Trade receivables
Trade receivables represent receivables from our customers. Our trade receivables were 4,790.87 million as of
March 31, 2023.
Trade payables
Our total trade payables were 3,890.75 million as of March 31, 2023.
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