Hilltone Software & Gases Annual Reports, Balance Sheet and Financials

Hilltone Software and Gases Limited Balance Sheet (Rs in Lakhs)

Hilltone Software and Gases Limited Profit & Loss Statement (Rs in Lakhs)

 Hilltone Software and Gases Limited Consolidated Cash Flow Statement (Rs in Lakhs)

Here is a summary of the Cash Flow Statement for the years 2024 and 2023:

Cash Flow from Operating Activities

Operating cash flow turned negative this year, with a cash outflow of Rs 718.73 lakhs compared to an inflow of Rs 57.51 lakhs in the prior year. This decline is largely driven by significant changes in working capital, particularly in other current assets, which increased by Rs 583.83 lakhs, indicating funds tied up in assets. Additionally, non-operational adjustments included Rs 13.59 lakhs from depreciation and amortization, while substantial interest income (Rs 47.06 lakhs) and dividend income (Rs 0.35 lakhs) were deducted. Although trade receivables and other financial liabilities had minor changes, the increase in other non-current assets (Rs 147.95 lakhs) further impacted cash flow negatively. Despite the operating loss, the adjustments for interest paid (Rs 11.85 lakhs) and direct taxes (Rs 25.57 lakhs) also contributed to the negative balance.

Cash Flow from Investing Activities

Investing activities saw a net cash outflow of Rs 81.29 lakhs, contrasting with a positive inflow of Rs 2.13 lakhs in the prior year. This was primarily due to Rs 128.69 lakhs spent on tangible and intangible asset purchases, indicating significant investment in capital assets. Interest income (Rs 47.06 lakhs) and dividend income (Rs 0.35 lakhs) partially offset these expenses. However, no proceeds from asset sales were recorded in the current period, as opposed to Rs 3.80 lakhs in the previous year.

Cash Flow from Financing Activities

Financing activities contributed substantially to cash inflow, amounting to Rs 810.05 lakhs, a significant improvement from the previous year's outflow of Rs 27.41 lakhs. This increase was primarily due to a new issuance of share capital totaling Rs 810.04 lakhs. Loan repayment amounted to Rs 11.85 lakhs, balancing the cash flow. Interest expenses of Rs 11.85 lakhs were also accounted for under this category, matching the previous year’s levels.

Net Change in Cash & Cash Equivalents

Overall, the company reported a minor net increase in cash and cash equivalents of Rs 10.03 lakhs, resulting in an ending balance of Rs 47.31 lakhs. This slight increase reflects the higher financing inflows offsetting the operational and investing outflows. Starting the period with Rs 37.28 lakhs, the final cash position includes cash on hand of Rs 32.95 lakhs, cheques in hand at Rs 6.20 lakhs, and Rs 8.17 lakhs in bank balances, contributing to the total balance.

Financial Ratios of Hilltone Software and Gases Limited

Here is a summary of the financial and operational metrics for Hilltone Software and Gases Limited for the year 2024 and 2023:

Current Ratio: The current ratio, which measures the company's ability to meet short-term liabilities with short-term assets, increased from 1.78 in 2023 to 6.78 in 2024. This high ratio indicates an abundance of current assets relative to liabilities, suggesting robust liquidity but potentially underutilized assets that could be otherwise invested.

Debt-Equity Ratio: This ratio, which reflects the proportion of debt used in relation to equity, decreased from 0.06 to 0.03, indicating a lower reliance on debt. A declining debt-equity ratio signifies lower financial risk and a conservative approach to financing, which could result in reduced interest obligations but may also limit growth if the company avoids leveraging debt.

Debt Service Coverage Ratio (DSCR): The DSCR, which measures the ability to cover debt obligations with operational income, dropped from 4.74 to 3.7. While still comfortably above 1, this decrease suggests a slight reduction in the company’s capacity to service its debt, potentially due to lower earnings or higher debt costs.

Return on Equity (ROE): The ROE remained constant at 0.14 in both years, indicating steady returns generated on shareholders' equity. This stable ROE shows consistent profitability in relation to the equity base, though it suggests that the company may not have achieved growth in returns.

Inventory Turnover Ratio: This ratio stayed steady at 16.48, indicating that inventory was sold and replaced 16.48 times within the year. A high, stable inventory turnover ratio suggests efficient inventory management and strong sales, with minimal change in demand or stockholding practices.

Trade Receivables Turnover Ratio: Rising from 3.89 to 4.36, this ratio suggests improved efficiency in collecting receivables. A higher ratio means that customers are paying more promptly, which positively impacts cash flow and reduces the risk of bad debts.

Trade Payable Turnover Ratio: Slightly decreasing from 5.93 to 5.8, this ratio reflects a marginally slower pace in paying suppliers. While not a major change, a lower turnover ratio may indicate a strategic approach to managing cash flow by extending payment periods without straining supplier relationships.

Net Capital Turnover Ratio: Dropping from 1.07 to 0.5, this ratio shows decreased efficiency in generating revenue from net working capital. The decline suggests the company’s working capital was less productive in 2024, potentially due to increased current assets not translating into equivalent sales.

Net Profit Ratio: The net profit ratio fell from 0.13 to 0.07, indicating that a smaller proportion of revenue was retained as net profit. This drop could imply increased expenses or decreased pricing power, leading to tighter margins.

Return on Capital Employed (ROCE): The ROCE dropped sharply from 0.2 to 0.06, suggesting reduced efficiency in generating returns from the total capital employed. This reduction points to lower operating profits or potential inefficiencies in the allocation of capital resources.