Modern Thread Annual Report, Balance Sheet & Financials

Modern Threads (India) Limited Balance Sheet (Rs in Lakhs)

Modern Threads (India) Limited Profit & Loss Statement (Rs in Lakhs)

 Modern Threads (India) 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 represent the company 's core business operations, indicating how much cash is generated from its day-to-day business before considering capital investments and financing activities. In 2024, the company reported a profit before tax of ₹2,593.37 lakhs, a significant drop compared to ₹21,411.64 lakhs in 2023. This decline is mainly due to the exceptional items in the prior year, specifically the write-back of loans and debentures amounting to ₹18,874.85 lakhs, which inflated the profit in 2023.

Adjustments such as depreciation and amortization (₹413.88 lakhs in 2024 and ₹349.15 lakhs in 2023) and finance costs (₹305.59 lakhs in 2024 and ₹328.67 lakhs in 2023) have been added back to the profit as these are non-cash expenses. Interest income and gains from the sale or fair value of investments have been subtracted as they do not reflect core operational cash flow. After adjusting for these factors, the operating profit before changes in working capital for 2024 stands at ₹3,207.87 lakhs, slightly higher than ₹3,183.28 lakhs in 2023.

The working capital adjustments represent changes in the company’s current assets and liabilities, which directly impact the cash available from operations. In 2024, favorable movements in inventories (₹230.92 lakhs) and other current assets (₹70.72 lakhs) helped improve cash flows. However, negative movements in trade receivables (₹-704.61 lakhs) and trade payables (₹-125.58 lakhs) slightly offset this. Overall, cash generated from operations increased to ₹2,441.37 lakhs in 2024 from ₹1,558.77 lakhs in 2023, reflecting improved operational efficiency.

After accounting for tax payments, the net cash flow from operating activities in 2024 was ₹2,440.51 lakhs, a substantial improvement from ₹1,560.02 lakhs in 2023.

Cash Flow from Investing Activities

Investing activities show how much cash was used or generated from buying and selling long-term assets, such as property, equipment, and investments. In 2024, the company spent ₹1,042.36 lakhs on purchasing property, plant, and equipment, a higher outflow compared to ₹804.15 lakhs in 2023, indicating continued investment in fixed assets. The company also increased its investment in mutual funds, spending ₹1,250.00 lakhs in 2024 versus ₹195 lakhs in 2023.

Proceeds from the sale of property, plant, and equipment were modest at ₹64.70 lakhs in 2024 and ₹50.94 lakhs in 2023. The interest income earned, albeit small, contributed positively to cash flows. Overall, the company experienced a net cash outflow of ₹2,191.85 lakhs from investing activities in 2024, compared to a smaller outflow of ₹927.07 lakhs in 2023. The larger outflow in 2024 reflects increased capital expenditures and investment in financial assets.

Cash Flow from Financing Activities

Financing activities reflect the company 's borrowing, repayment of debts, and costs associated with financing its operations. In 2024, there were no proceeds from borrowings or repayments, whereas in 2023, there was a small repayment of ₹75 lakhs. The finance costs, representing interest payments on borrowings, amounted to ₹305.54 lakhs in 2024, slightly lower than ₹328.67 lakhs in 2023.

As a result, the net cash flow from financing activities was negative at ₹305.58 lakhs in 2024, slightly improved compared to the outflow of ₹403.65 lakhs in 2023. This suggests that the company incurred fewer financing-related costs during the year.

Net Change in Cash and Cash Equivalents

After considering all the operating, investing, and financing activities, the company experienced a small net cash outflow of ₹56.92 lakhs in 2024. This contrasts with a positive cash inflow of ₹229.30 lakhs in 2023. Despite the improved cash generation from operations, the increased investments in fixed assets and financial instruments contributed to the overall reduction in cash balances.

 Financial Ratios of Modern Threads (India) Limited

Here is a summary of the financial and operational metrics for Modern Threads (India) Limited for the year 2024 and 2023:

Current Ratio

2024: 2.11 | 2023: 1.81

The current ratio measures a company 's ability to pay off its short-term liabilities using its short-term assets. A ratio of 2.11 in 2024 means that for every ₹1 of current liabilities, the company has ₹2.11 in current assets. This is an improvement from the 2023 ratio of 1.81, indicating stronger liquidity and a greater ability to meet short-term obligations.

Return on Equity (ROE)

2024: 21.88% | 2023: 28%

ROE measures a company’s profitability in relation to shareholders’ equity. It indicates how efficiently the company is using shareholders ' funds to generate profits. In 2024, the company generated a return of 21.88% on the equity invested by shareholders, down from 28% in 2023.

Inventory Turnover Ratio

2024: 3.59 | 2023: 3.87

This ratio shows how many times a company’s inventory is sold and replaced during a period. A ratio of 3.59 in 2024 indicates that inventory turned over roughly 3.6 times during the year, a slight decrease from 3.87 in 2023. A lower turnover may suggest slower sales or an accumulation of inventory, which could tie up capital in stock that is not moving as quickly as before.

Trade Receivables Turnover Ratio

2024: 6.96 | 2023: 9.56

This ratio measures how effectively a company collects its receivables. A ratio of 6.96 in 2024 means the company collected its receivables almost 7 times during the year. This is a decline from the 2023 ratio of 9.56, indicating that the company is taking longer to collect payments from customers in 2024 compared to the previous year.

Trade Payables Turnover Ratio

2024: 4.44 | 2023: 5.75

The trade payables turnover ratio reflects how quickly a company pays its suppliers. In 2024, the company paid off its payables 4.44 times during the year, down from 5.75 times in 2023. A lower ratio could indicate that the company is taking longer to settle its obligations, which may be a sign of managing cash flow by delaying payments.

Net Capital Turnover Ratio

2024: 3.94 | 2023: 5.33

This ratio measures how efficiently a company uses its working capital to generate revenue. A ratio of 3.94 in 2024 means the company generated nearly ₹4 of revenue for every ₹1 of net capital. This is a drop from 5.33 in 2023, suggesting that the company’s ability to generate sales from its working capital has slightly declined

Net Profit Ratio

2024: 8.46% | 2023: 71.11%

The net profit ratio measures how much of each rupee of revenue translates into profit. The sharp drop from 71.11% in 2023 to 8.46% in 2024 is significant and requires special attention. The extraordinarily high net profit ratio in 2023 was likely due to one-off exceptional items, particularly the write-back of loans and debentures, which inflated the profit figures.

Return on Capital Employed (ROCE)

2024: 24.18% | 2023: 227.96%

ROCE measures the profitability and efficiency of the company in using its total capital (both equity and debt). The dramatic drop in ROCE from 227.96% in 2023 to 24.18% in 2024 again reflects the effect of exceptional items in the prior year. In 2023, the write-back of loans greatly inflated the profit, leading to an unusually high ROCE.

Return on Investment (ROI)

2024: 15.31% | 2023: 137.87%

ROI measures the gain or loss generated on an investment relative to the invested capital. Similar to other profitability metrics, the ROI saw a sharp decline in 2024 due to the absence of the extraordinary gains from exceptional items that were present in 2023. While the ROI of 137.87% in 2023 was artificially high, the 2024 figure of 15.31% is more indicative of the company’s true investment performance.