Kwality Limited Annual Report

Kwality Limited (Kwality Limited) Return Comparision with Primex 40 Index

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Kwality Limited

KWALITY Limited Balance Sheet (RUPEES IN LAKHS)

PARTICULARS	2020	2019
ASSETS
Non-current assets
Property, plant and equipment	27,552.03	31,158.43
Capital work-in-progress	662.16	662.16
Intangible assets	62.91	95.95
Financial assets
Investments	17.46	16.66
Loans	160.05	166.56
Other financial assets	63.11	60.93
Other non-current assets	-	4,915.63
Total non - current assets	28,517.72	37,076.32
Current assets
Inventories	509.09	1,226.53
Trade receivables	1,516.24	5,823.16
Cash and cash equivalents	303.09	187.33
Other bank balances	170.05	159.61
Loans	6.55	25.82
Other current assets	234.12	576.88
Asset held for sale	435.86	400.91
Total current assets	3,175.00	8,400.24
Total assets	31,692.72	45,476.56
EQUITY AND LIABILITIES
Equity
Equity share capital	2,413.54	2,413.54
Other equity	2,11,457.00	1,95,967.61
Total Equity	2,09,043.46	1,93,554.07
Liabilities
Non-current liabilities
Other non-current liabilities	-	431.29
Provisions	138.08	223.32
Total noncurrent liability	138.08	654.61
Current liabilities
Financial liabilities
Borrowings	1,97,948.32	1,95,256.20
Trade payables	6,514.70	7,061.16
Other financial liabilities	15,584.32	16,033.96
Other current liabilities	1,711.41	1,157.85
Provisions	40.02	52.17
Current tax liabilities (net)	18,799.33	18,814.68
Total current liability	2,40,598.10	2,38,376.02
Total liability	2,40,736.18	2,39,030.63
Total equity and liabilities	31,692.72	45,476.56

KWALITY LIMITED PROFIT & LOSS (RUPEES IN LAKHS)

PARTICULARS	2020	2019
Revenue
Revenue from operations	15,056.81	2,12,987.54
Other income	75.64	481.41
Total income	15,132.45	2,13,468.95
Expenses
Cost of materials consumed	11,194.15	1,59,421.85
Purchase of stock-in-trade	-	5,194.66
Changes in inventories of finished goods, work-in-progress and stock-in-trade	479.35	19,861.06
Employee benefits expense	1,248.35	4,189.82
Finance cost	1,557.78	19,808.30
Depreciation and amortization expense	3,475.08	13,035.79
Other expenses	11,620.95	3,13,659.38
Total expenses	29,575.66	5,35,170.86
Profit/(loss) before tax	14,443.21	3,21,701.91
Current tax	-	5.99
Deferred tax	-	92.99
Profit/(loss) after tax	14,443.21	3,21,614.91
Other comprehensive income/(loss)
Items that will not reclassify to profit or loss
Re-measurements profit/(loss) on defined benefit	56.1	28.57
Items that will be reclassified to profit or loss
Exchange difference on translation of foreign operations	1,102.28	925.31
Other comprehensive income/(loss) for the year	1,046.18	953.88
Total comprehensive income/(loss) for the year	15,489.39	3,20,661.03
Earnings per equity share
Basic	5.98	133.25
Diluted	5.98	133.25

KWALITY Limited Consolidated Cash Flow Statement (Rs in LAKHS)

PARTICULARS	2020	2019
CASH FLOW FROM OPERATING ACTIVITIES
Profit/(loss) before tax	14,443.21	3,21,701.91
Adjustments for
Depreciation and amortization expense	3,475.08	13,035.79
Loss on discard of fixed assets	183.91	6,659.72
Loss on impairment of fixed assets	-	203.13
Profit on Sale of fixed assets	0.29	56.45
Interest income	12.23	40.93
Unrealized foreign exchange fluctuation (net)	-	739.09
Finance costs	1,557.78	19,808.30
Share based payment expense	-	1,447.53
Provision for doubtful receivables	2,567.15	1,78,285.27
Provision for doubtful advances	4,915.63	29,398.95
Write-back of provision for doubtful debts/advances	43.52	-
Write-off of other current assets	149.65	-
Provision for doubtful other current assets	223.13	-
Provision for doubtful deposits	9.26	-
Movement in provision for employee benefits	41.28	208.84
Release of derivative liability redeemable debentures	-	350.72
Discard of Packing Material	133.77	212.87
Reinstatement of Non Current Investment as per Market Value	0.8	1
Scheme/Discount/Bad debts	-	86,335.77
Operating profit/(loss) before working capital changes	1,325.97	13,766.57
Movement in working capital
Decrease/(Increase) in non - current loans	6.51	87.27
Decrease/(Increase) in current loans	10.01	22.54
Decrease/(Increase) in inventories	583.67	22,193.71
Decrease/(Increase) in other financial assets	-	103.02
Decrease/(Increase) in other noncurrent assets	-	8,963.24
Decrease/(Increase) in other current assets	27.21	28,023.21
Decrease/(Increase) in trade receivables	1,780.48	80,532.59
(Decrease)/Increase in other liabilities	122.27	232.05
(Decrease)/Increase in other financial liabilities	449.64	44.74
(Decrease)/Increase in trade and other payables	546.46	8,263.04
Change in Working Capital	1,479.63	29,389.87
Cash flow from/(used in) operating activities post working capital changes	153.66	15,623.30
Income tax paid (net)	15.35	441.32
Net cash flow from/(used in) operating activities	138.31	16,064.62
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (including capital work-in-progress)	19.75	70.15
Proceeds from sale/disposal of fixed assets	0.5	273.56
Movement in fixed deposits and Other Bank Balance (net)	3.75	2,911.62
Interest received	-	40.93
Net cash flows from /(used in) investing activities	23	3,155.96
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds/ (Repayment) of borrowings (net)	3.46	14,083.63
Finance cost paid	0.36	8,341.61
Dividend paid (including tax)	3.35	7.19
Net cash flow from/(used in) financing activities	0.47	5,734.83
(Decrease)/ Increase in cash and cash equivalents	114.84	7,173.83
Cash and cash equivalents at the beginning of the year	187.33	6,484.11
Effect of foreign exchange on foreign operation	0.92	877.05
Cash and cash equivalents at the end of the year	303.09	187.33
Cash and Cash equivalents	303.09	187.33
Balance as per statement of cash flows	303.09	187.33

Certainly, here is a summary of the Cash Flow Statement for the years 2020 and 2019, broken down by activity:

CASH FLOW FROM OPERATING ACTIVITIES:

1. Profit/(Loss) Before Tax: In 2020, the company reported a Profit Before Tax of 14,443.21 Rupees, a significant increase from the 2019 figure of 3,21,701.91 Rupees.

2. Adjustments: Various adjustments were made to calculate cash flow, including depreciation, loss on the discard of fixed assets, interest income, and provisions for doubtful receivables and advances.

3. Operating Profit before Working Capital Changes: After adjustments, the operating profit before working capital changes in 2020 was 1,325.97 Rupees, much lower than the 2019 figure of 13,766.57 Rupees.

4. Movement in Working Capital: There was a substantial change in working capital, with an increase of 1,479.63 Rupees in 2020 compared to 29,389.87 Rupees in 2019.

5. Cash Flow from Operating Activities Post Working Capital Changes: The cash flow from operating activities after considering working capital changes was 153.66 Rupees in 2020, a notable decrease from 15,623.30 Rupees in 2019.

6. Income Tax Paid (Net): The company paid a net amount of 15.35 Rupees for income tax in 2020, compared to 441.32 Rupees in 2019.

7. Net Cash Flow from/(Used in) Operating Activities: The net cash flow from operating activities was 138.31 Rupees in 2020, down from 16,064.62 Rupees in 2019.

CASH FLOWS FROM INVESTING ACTIVITIES:

1. Purchase of Fixed Assets: The company invested 19.75 Rupees in fixed assets in 2020, a slight increase from 70.15 Rupees in 2019.

2. Proceeds from Sale/Disposal of Fixed Assets: There were proceeds of 0.5 Rupees from the sale/disposal of fixed assets in 2020, compared to 273.56 Rupees in 2019.

3. Movement in Fixed Deposits and Other Bank Balance (Net): The movement in fixed deposits and other bank balances resulted in a net inflow of 3.75 Rupees in 2020, contrasting with 2,911.62 Rupees in 2019.

4. Interest Received: No interest was received in 2020, while 40.93 Rupees were received in 2019.

5. Net Cash Flows from/(Used in) Investing Activities: The net cash flow from investing activities was 23 Rupees in 2020, compared to 3,155.96 Rupees in 2019.

CASH FLOWS FROM FINANCING ACTIVITIES:

1. Proceeds/(Repayment) of Borrowings (Net): There was a net repayment of 3.46 Rupees in borrowings in 2020, contrasting with 14,083.63 Rupees in 2019.

2. Finance Cost Paid: The finance cost paid was 0.36 Rupees in 2020 and 8,341.61 Rupees in 2019.

3. Dividend Paid (Including Tax):the company paid 3.35 Rupees in dividends in 2020, compared to 7.19 Rupees in 2019.

4. Net Cash Flow from/(Used in) Financing Activities: The net cash flow from financing activities was 0.47 Rupees in 2020, while it was 5,734.83 Rupees in 2019.

(Decrease)/ Increase in Cash and Cash Equivalents:

1. The company experienced a decrease/(increase) in cash and cash equivalents of 114.84 Rupees in 2020, compared to 7,173.83 Rupees in 2019.

CASH AND CASH EQUIVALENTS:

1. The cash and cash equivalents at the beginning of the year were 187.33 Rupees in 2020 and 6,484.11 Rupees in 2019.

2. The effect of foreign exchange on foreign operations was 0.92 Rupees in 2020 and 877.05 Rupees in 2019.

3. The cash and cash equivalents at the end of the year were 303.09 Rupees in 2020, compared to 187.33 Rupees in 2019.

Balance as per Statement of Cash Flows:

The final balance of cash and cash equivalents as per the statement of cash flows was 303.09 Rupees in 2020, exceeding the 187.33 Rupees reported in 2019.

Below are the Financial Ratios

PARTICULARS	2022
EBITDA	98.12 %
Net worth	99.30 %
Total Assets	-9.23 %
Fixed Assets	-9.84 %
Current Assets	-6.17 %
Current Liabilities	-96.28 %
Trade Receivables	-78.26 %
Trade Payables	-98.06 %
Current Ratio	0.11

Certainly! Let 's break down the financial particulars for the year 2022 point by point:

1. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): The EBITDA margin of 98.12% indicates that the company 's operating profitability is robust, with a high percentage of revenue converting into operating income before accounting for interest, taxes, and non-cash expenses.

2. Net worth: The Net worth percentage of 99.30% suggests that the company 's equity base is substantial, representing a high proportion of the total capital structure. This indicates a strong financial position and a relatively low level of debt compared to equity.

3. Total Assets: The negative percentage (-9.23%) for Total Assets suggests a decrease in the total asset base. This could be attributed to various factors such as asset sales, write-downs, or other strategic decisions impacting the overall asset structure.

4. Fixed Assets: The negative percentage for Fixed Assets (-9.84%) indicates a decline in the value of fixed assets. This could be due to depreciation, impairment, or the sale of certain fixed assets during the period.

5. Current Assets: The negative percentage for Current Assets (-6.17%) implies a reduction in short-term assets. This could include a decrease in cash, accounts receivable, or other short-term assets, impacting the liquidity position of the company.

6. Current Liabilities: The significant negative percentage for Current Liabilities (-96.28%) indicates a substantial decrease in short-term obligations. This could result from the repayment of short-term debts or a decrease in accounts payable and accrued liabilities.

7. Trade Receivables: The negative percentage for Trade Receivables (-78.26%) suggests a significant reduction in the value of outstanding receivables. This could be due to effective credit management or a write-off of unrecoverable receivables.

8. Trade Payables: The negative percentage for Trade Payables (-98.06%) indicates a substantial decrease in the amount the company owes to its suppliers. This may be a result of prompt payment to suppliers or a decrease in purchases on credit.

9. Current Ratio: The current ratio of 0.11 is calculated as current assets divided by current liabilities. A ratio below 1 suggests potential liquidity challenges, indicating that the company may have difficulty meeting its short-term obligations with its current assets alone. This could be a point of concern and requires further examination of the company 's liquidity management.