STERLIN BIO Annual Reports, Balance Sheet and Financials

STERLING BIOTECH Limited Balance Sheet (Rs In lakhs)

STERLING BIOTECH Limited Profit& Loss Statement (Rs In LAKHS)

STERLING BIOTECH LIMITED Consolidated Cash Flow Statement (Rs In LAKHS)

Certainly, let 's delve into a more detailed point-wise explanation of each section of the Cash Flow Statement for the years 2016 and 2017.

 Cash Flow from Operating Activities:

1. Net Profit before Taxation: In 2016, the company incurred a net loss of Rs. 61,679.50, which increased to Rs. 68,762.11 in 2017.

2. Adjustments for Depreciation/Amortization and Interest Expenses: The company made adjustments for non-cash expenses, such as depreciation and amortization, as well as interest expenses. These adjustments resulted in an operating profit before working capital changes of Rs. 1,655.05 in 2016 and Rs. 7,230.56 in 2017.

3. Working Capital Changes: The movement in working capital involves changes in Trade Receivables, Other Receivables, Inventory, and Trade Payables. Notably, there was an increase in Trade Receivables and Inventory in 2017, reflecting potential challenges in collecting receivables and managing inventory.

4. Direct Tax: In 2017, the company incurred direct tax expenses amounting to -Rs. 670.95, indicating a tax benefit or credit.

5. Net Cash Flow from Operating Activities: The net cash flow from operating activities was Rs. 94.85 in 2016 and significantly improved to Rs. 6,703.19 in 2017. This positive trend suggests improved operational efficiency and cash generation in the latter year.

 Cash Flows from Investing Activities:

1. Purchase/Sale of Fixed Assets and Investments: The company utilized cash for the purchase of fixed assets and investments. In 2017, the cash outflow increased substantially to Rs. 8,445.49, indicating significant investment or expansion activities.

2. Net Cash Flow Used in Investing Activities: The net cash outflow from investing activities was Rs. 4,927.67 in 2016 and increased to Rs. 8,445.49 in 2017, reflecting increased capital expenditure and investment.

 Cash Flows from Financing Activities:

1. Proceeds from Issue of Preference Shares and Share Premium: The company generated cash through the issue of preference shares, with Rs. 5,856.50 in 2016 and Rs. 34,720.84 in 2017. There were no proceeds from share premium in 2016.

2. Long-Term and Short-Term Borrowings: The company generated cash through long-term borrowings in both years, with Rs. 35,755.49 in 2016 and Rs. 24,386.36 in 2017. Short-term borrowings contributed Rs. 229.53 in 2016 and offset by -Rs. 15,988.75 in 2017.

3. Interest Paid: The Company paid interest on borrowings, with amounts of -Rs. 36,979.77 in 2016 and -Rs. 41,478.19 in 2017.

4. Net Cash Flow from Financing Activities: The net cash inflow from financing activities was Rs. 4,861.75 in 2016 and Rs. 1,640.26 in 2017, indicating the net positive impact of financing decisions on cash.

Net Increase/(Decrease) in Cash & Cash Equivalents:

The net increase/(decrease) in cash and cash equivalents was Rs. 28.93 in 2016, reflecting a modest positive impact. However, in 2017, there was a decrease of Rs. 102.04, indicating a reduction in overall cash and cash equivalents during the year.

Cash and Cash Equivalents at the Beginning and End of the Year:

The cash and cash equivalents at the beginning of the year were Rs. 1,663.88 in 2016, increasing to Rs. 1,692.81 by the end of the year. In 2017, the cash and cash equivalents at the beginning of the year were Rs. 1,765.92, decreasing to Rs. 1,663.88 by the end of the year. These figures highlight the company 's liquidity position and its ability to manage cash over time.

Below are the Financial Ratios

Certainly, let 's delve into a detailed point-wise explanation of the financial particulars for the year 2017:

1. EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization):

  The EBITDA margin, representing EBITDA as a percentage of revenue, is -80.49%. This indicates that the company 's operational profitability, excluding interest, taxes, and non-cash expenses, resulted in a negative margin. A negative EBITDA margin suggests challenges in generating sufficient operational income to cover fixed costs.

2. Net worth:

   The Net worth is reported as -23.30%, indicating that the company 's total assets are 23.30% less than its total liabilities. A negative net worth can be a cause for concern, as it implies potential financial instability and a higher degree of indebtedness.

3. Debt/Equity Ratio:

   The Debt/Equity Ratio stands at 3.88, suggesting that the company has a higher proportion of debt in its capital structure compared to equity. A higher ratio implies a relatively higher financial risk and could be a concern for investors and creditors.

4. Return on Equity (ROE):

   - The Return on Equity is -32.32%, indicating a negative return. This suggests that the company experienced a loss in shareholder value during the period. Negative ROE can be attributed to the company 's net loss and may signal financial challenges.

5. Total Assets:

   The Total Assets show a decrease of -0.06%, implying a slight reduction in the company 's overall assets during the year. A negative percentage indicates a contraction in total assets, which could result from asset write-downs, disposals, or other factors.

 6. Fixed Assets:

   Fixed Assets decreased by -4.54%, suggesting a reduction in long-term, non-current assets. This reduction may be attributed to asset impairments, sales, or a shift in the company 's capital expenditure strategy.

7. Current Assets:

    Current Assets increased by 3.08%, indicating a rise in short-term assets such as cash, receivables, and inventory. This could be a positive sign, contributing to the company 's liquidity and operational flexibility.

8. Current Liabilities:

   Current Liabilities increased significantly by 22.02%, representing the company 's short-term obligations. This substantial increase may raise liquidity concerns, as it indicates a higher need for short-term funds to meet immediate obligations.

9. Trade Receivables:

  Trade Receivables increased by 2.55%, suggesting a moderate growth in amounts owed to the company by its customers. Efficient management of receivables is crucial for maintaining healthy cash flow.

10. Trade Payables:

     Trade Payables increased significantly by 69.68%, indicating a substantial rise in amounts owed by the company to its suppliers. While this may provide short-term financing, careful management is needed to avoid liquidity issues.

11. Current Ratio:

   The Current Ratio is 0.35, indicating that the company may face challenges in meeting its short-term obligations with its current assets. A ratio below 1 suggests potential liquidity problems.