KCL Limited Annual Reports, Balance Sheet and Financials

KCL Limited Balance Sheet (Rs in Lakhs)

KCL Limited Profit & Loss Statement (Rs in Lakhs)

 KCL 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 activities refer to the cash inflows and outflows resulting from the company 's core business operations. The Net Profit Before Tax (PBT) for the year 2023-24 is Rs. 1,551.04 Lakhs, a decrease from Rs. 2,077.68 Lakhs in the previous year (2022-23), showing a decline in profitability.

However, when we adjust for non-cash and non-operating items, the operating profit increases significantly. The primary adjustments include:

Depreciation and Amortisation (Rs. 1,135.95 Lakhs): This is a non-cash expense added back to the cash flow since depreciation is deducted in calculating the profit, but does not result in an actual cash outflow.

Loss on Investments: No losses were recorded in the current year, compared to Rs. 49 Lakhs in the previous year. This contributed to an improvement in the cash flow from operations.

Finance Cost (Rs. 353.20 Lakhs): The finance cost, reflecting the interest expense on borrowings, was also added back as it is a non-operating cash outflow.

Provision for Gratuity & Leave Encashment: The company has reduced its provision for gratuity and leave encashment in 2023-24 by Rs. 82.19 Lakhs (compared to an increase in provision of Rs. 5.47 Lakhs in the prior year). This adjustment is a non-cash item.

The total Operating Profit before Working Capital Changes comes to Rs. 2,932.28 Lakhs in FY 2023-24, down from Rs. 3,770.98 Lakhs in FY 2022-23.

Working capital changes, which reflect movements in current assets and liabilities, show significant variation:

Inventories increased by Rs. 47.01 Lakhs (a much smaller increase than Rs. 435.47 Lakhs in 2022-23), implying better management of inventory.

Trade Receivables increased by Rs. 281.94 Lakhs, compared to Rs. 63.20 Lakhs in the previous year, suggesting that the company extended more credit to customers during the year.

Trade Payables increased by Rs. 177.34 Lakhs, a reversal from the previous year, when trade payables decreased by Rs. 642.36 Lakhs, indicating the company may have delayed payments to suppliers.

Other movements include changes in loans, other current assets, and other current liabilities, which collectively resulted in a positive cash generation of Rs. 3,591.76 Lakhs, a marginal increase from Rs. 3,396.69 Lakhs in the previous year.

After deducting Income Tax Paid (Rs. 377.03 Lakhs in FY 2023-24, as opposed to Rs. 699.05 Lakhs in the prior year), the company reported a Net Cash Flow from Operating Activities of Rs. 3,214.72 Lakhs in FY 2023-24, an increase from Rs. 2,697.64 Lakhs in FY 2022-23.

Cash Flow from Investing Activities

Cash flow from investing activities reflects the company’s spending on capital expenditures (Capex) and investment activities. During the year, the company made significant investments:

Purchase of Property, Plant, and Equipment & Intangible Assets amounted to Rs. 1,551.31 Lakhs in FY 2023-24, a large increase compared to Rs. 439.34 Lakhs in the previous year, reflecting higher capital expenditure on physical assets.

Advances for Capex stood at Rs. 365.15 Lakhs, up from Rs. 36.33 Lakhs in the previous year, indicating a higher commitment towards future capital expenditures.

The company earned Rs. 23.14 Lakhs in interest and dividend income, compared to Rs. 18.45 Lakhs in FY 2022-23, providing some offset to the capital expenditures.

These investing activities resulted in a Net Cash Used in Investing Activities of Rs. 1,878.96 Lakhs, a much higher outflow than the Rs. 440.99 Lakhs in FY 2022-23.

Cash Flow from Financing Activities

Cash flow from financing activities includes cash raised or repaid through borrowings and equity. The financing cash flows for FY 2023-24 reflect the following:

Proceeds from Long-Term Borrowings were Rs. 638.05 Lakhs, a decrease from Rs. 704.51 Lakhs in the prior year, indicating slightly reduced borrowing activity.

The Net Decrease in Short-Term Borrowings was Rs. 235.08 Lakhs in FY 2023-24, a smaller reduction compared to Rs. 794.62 Lakhs in the previous year, reflecting a more stable short-term financing position.

Interest Paid was Rs. 353.20 Lakhs, slightly lower than Rs. 386.82 Lakhs in FY 2022-23, indicating a marginal decrease in interest expenses.

Together, these financing activities resulted in a Net Cash Flow from Financing Activities of Rs. -1,232.78 Lakhs, which is a reduction in cash compared to Rs. -1,909.31 Lakhs in FY 2022-23.

Net Increase/Decrease in Cash and Cash Equivalents

The net result of all the above activities is an Increase in Cash and Cash Equivalents of Rs. 102.99 Lakhs in FY 2023-24, compared to an increase of Rs. 347.30 Lakhs in FY 2022-23. Despite the significant outflows from investing and financing activities, the company’s operating activities contributed positively, resulting in an overall increase in cash.

Cash and Cash Equivalents at the End of the Year

The company 's Cash and Cash Equivalents at the end of the year stood at Rs. 676.30 Lakhs, compared to Rs. 573.31 Lakhs in FY 2022-23, reflecting an overall increase in liquidity.

The breakdown of cash at year-end is as follows:

Cash on Hand: Rs. 3.34 Lakhs, a decrease from Rs. 8.74 Lakhs in the prior year.

Bank Balances:

In Current Accounts: Rs. 272.96 Lakhs, significantly up from Rs. 14.57 Lakhs.

In Fixed Deposits: Rs. 400 Lakhs, a decrease from Rs. 550 Lakhs.

This indicates an improvement in liquidity, with a stronger balance in current accounts, although fixed deposit balances have reduced.

Financial Ratios of KCL Limited

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

Current Ratio (2024: 1.38, 2023: 1.46)

The Current Ratio measures a company’s ability to pay its short-term liabilities with its short-term assets. A ratio of 1.38 in 2024, compared to 1.46 in 2023, indicates a slight decline in liquidity, meaning that the company has slightly fewer assets available to cover its liabilities than it did in the previous year. A ratio above 1 is typically considered healthy, suggesting that the company can still meet its short-term obligations, but the decline indicates a potential tightening of its working capital or a reduction in current assets relative to current liabilities.

Debt Equity Ratio (2024: 0.1, 2023: 0.18)

The Debt Equity Ratio measures the company’s financial leverage, i.e., the proportion of debt used to finance the company’s assets relative to equity. A ratio of 0.1 in 2024, down from 0.18 in 2023, indicates a significant reduction in the company 's reliance on debt for financing. This suggests a conservative approach toward borrowing and a stronger equity base, which is typically seen as positive as it reduces financial risk. The lower the ratio, the more financially stable and less risky the company is perceived to be.

Debt Service Coverage Ratio (2024: 2.67, 2023: 2.13)

The Debt Service Coverage Ratio (DSCR) measures the company’s ability to service its debt with its operating income. A ratio of 2.67 in 2024, compared to 2.13 in 2023, indicates an improvement in the company’s ability to meet its debt obligations. It means that the company generates enough cash flow from operations to cover its debt servicing (principal and interest) almost 2.67 times, up from 2.13 times the previous year. A higher DSCR is favorable, as it implies a stronger capacity to manage debt and reduces the risk of default.

Return on Equity (ROE) (2024: 9.02%, 2023: 12.50%)

The Return on Equity (ROE) measures the profitability of a company in relation to shareholders ' equity. In 2024, the ROE stands at 9.02%, down from 12.50% in 2023. This decline suggests that the company is generating less profit for each unit of shareholder equity, which could be due to reduced profitability or increased equity base. While 9.02% is still a positive return, the drop may indicate a less efficient use of equity in generating profits, which could be a concern for investors.

Inventory Turnover Ratio (2024: 13.69, 2023: 13.5)

The Inventory Turnover Ratio measures how efficiently a company is managing its inventory. A ratio of 13.69 in 2024, compared to 13.5 in 2023, shows a marginal improvement in the company’s ability to sell and replenish its inventory. This suggests that the company is managing its stock slightly more efficiently, turning over its inventory faster and possibly reducing holding costs. A higher ratio is generally favorable as it indicates better inventory management and quicker sales.

Trade Receivables Turnover Ratio (2024: 7.13, 2023: 7.42)

The Trade Receivables Turnover Ratio indicates how quickly the company collects payments from its customers. A ratio of 7.13 in 2024, down from 7.42 in 2023, shows a slight deterioration in the company 's ability to collect receivables. This suggests that the company may be extending more credit or taking longer to collect payments from customers, potentially increasing the risk of bad debts or liquidity strain. However, the ratio is still reasonable, and the decrease may be due to changes in customer payment terms or economic factors.

Trade Payables Turnover Ratio (2024: 5.9, 2023: 5.9)

The Trade Payables Turnover Ratio measures how quickly the company pays its suppliers. With a ratio of 5.9 in both 2024 and 2023, there has been no change in the company’s payables management. This indicates that the company is maintaining a consistent approach to paying its suppliers. The ratio suggests the company pays off its trade payables in a timely manner, which is typically viewed positively by suppliers and creditors.

Net Capital Turnover Ratio (2024: 12.42%, 2023: 15.47%)

The Net Capital Turnover Ratio measures the efficiency of the company in using its capital to generate revenue. A ratio of 12.42% in 2024, compared to 15.47% in 2023, indicates a decline in efficiency. The company is generating less revenue for each unit of capital employed, which could suggest that the company is either not utilizing its capital as effectively as it did last year or there was an increase in capital without a proportional increase in sales.

Net Profit Ratio (2024: 2.80%, 2023: 3.27%)

The Net Profit Ratio indicates the percentage of revenue that translates into profit. A ratio of 2.80% in 2024, down from 3.27% in 2023, suggests a decline in the company’s profitability. Despite generating revenue, the company’s costs (including operating and non-operating expenses) have increased, reducing the proportion of profit. This could be due to rising costs, pricing pressures, or lower sales volume, and might be a cause for concern for stakeholders focused on profitability.

Return on Capital Employed (ROCE) (2024: 13%, 2023: 17.19%)

The Return on Capital Employed (ROCE) measures the efficiency and profitability of a company in utilizing its capital to generate earnings before interest and tax (EBIT). The ROCE decreased from 17.19% in 2023 to 13% in 2024, indicating a reduction in the company 's ability to generate returns from its capital base. This suggests that either profits have decreased, or capital has increased without a corresponding increase in operating profit. The drop could point to inefficiencies or challenges in capital management.

Return on Investments (2024: 3.5% to 5.5%, 2023: 4% to 6.5%)

The Return on Investments (ROI) reflects the return generated on investments made by the company. The range in 2024 is 3.5% to 5.5%, down from 4% to 6.5% in 2023. This indicates a decline in the company’s investment returns, which may suggest that investments made in the current year have not been as profitable as those in the previous year. The lower ROI range might also reflect a more cautious or less profitable investment environment.