Kineco Shares

Financial Report Summary

KINECO LIMITED Consolidated Financial Statements for the period 01/04/2021 to 31/03/2022.

General Information About Company

• Name & Identification: KINECO LIMITED, a public limited company (CIN: U24134GA1994PLC001672), is a multi-dimensional composite producer with manufacturing facilities in Goa, India.
• Address: Registered office and works are located at plot no.41 - Pilerne Industrial Estate, Pilerne, Bardez - Goa 403511.
• Industry & Scope: Offers a spectrum of composites for Aerospace, Defense, Railways, Automotive, Motorsport, Telecommunication & Chemical Industries.
• Subsidiaries: Includes Kineco Alte Train Technologies Private Limited (89.66% stake) and Kineco Kaman Composites India Private Limited (51% stake).
• Parent Company: Indo National Limited is the ultimate holding company via its subsidiary Helios Strategic Systems Limited.
• Reporting Period: Covers consolidated financial statements from April 1, 2021, to March 31, 2022.
• Impact of COVID-19: The company operations were impacted due to the Coronavirus disease (COVID-19) pandemic in India in 2020. The management has considered the possible effects that may result from the pandemic on the company's operations during the year, particularly in the first 15 days of the year and also subsequently thereafter, including the impact on carrying amount of receivables, inventories and the company's ability to fulfill existing loan obligations and sourcing of materials. Based on the current indicators of future economic conditions, the management expects to recover the carrying amount of these assets and that there would be sufficient cash flows for repayment of loans. However, the management continues to closely monitor any material changes to future economic conditions.
• Approval: The consolidated financial statements are approved for issue by the Board of Directors on June 18, 2021.

Auditor's Report

• Auditor: V.B. PRABHU VERLEKAR & CO, Chartered Accountants.
• Opinion: The consolidated financial statements provide a true and fair view in conformity with Indian Accounting Standards (Ind AS) and accounting principles generally accepted in India.
• Basis for Opinion: The audit was conducted in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Sufficient and appropriate audit evidence was obtained to provide a basis for the opinion.
• Responsibilities: Management is responsible for the preparation of the consolidated financial statements. Auditor is responsible for expressing an opinion on the consolidated financial statements based on the audit. Auditor is also responsible for reporting on the internal financial controls system.
• Other Matters: The auditor did not audit the financial statements of two subsidiaries and one joint venture company; the opinion on the consolidated financial statements, insofar as it relates to the amounts and disclosures included in respect of these entities, is based solely on the report of other auditors.
• Internal Financial Controls: The parent and its subsidiary companies have, in all material respects, an adequate internal financial controls system over financial reporting.

Key Financial Data (Values in Lakhs of INR Unless Otherwise Specified)

• Balance Sheet (as of March 31, 2022):
  • Total Assets: 20,298.35
  • Total Equity: 5,552.08
  • Total Liabilities: 14,746.27
• Statement of Profit and Loss (for the year ended March 31, 2022):
  • Revenue from Operations: 20,191.19
  • Total Income: 20,925.89
  • Total Expenses: 19,771.08
  • Profit Before Tax: 1,154.81
  • Total Tax Expense: 468.81
  • Total Profit: 686
  • Profit Attributable to Owners of Parent: 275.47
  • Basic Earnings Per Share: 9.93
• Cash Flow Statement (Indirect Method):
  • Net cash flows from operating activities: 2,958.87
  • Net cash flows from investing activities: (82.87)
  • Net cash flows from financing activities: (2,710.22)
  • Cash and cash equivalents at end of period: 4,017.05

Key Accounting Policies

• Compliance: Prepared in accordance with Indian Accounting Standards (Ind AS).
• Basis of Preparation: Going concern basis, historical cost convention, accrual method.
• Consolidation: Line-by-line consolidation of Group companies, elimination of intra-group balances and transactions.
• Functional & Presentation Currency: Indian Rupees (INR).
• Estimates & Judgments: Financial statement preparation requires management to make estimates and assumptions. Key sources include useful lives of assets, valuation of deferred tax assets, actuarial valuation, and provisions for contingent liabilities.
• Property, Plant & Equipment: Carried at acquisition cost less accumulated depreciation and impairment losses. Depreciation is calculated using the straight-line method.
• Intangible Assets: Stated at cost less accumulated amortisation and impairment losses. Computer software licenses are amortised over their estimated useful life on a straight line basis.
• Impairment: Reviewed at each Balance Sheet date. An impairment loss is recognised if the carrying amount of these assets exceeds their recoverable amount.
• Leases: The group recognizes Right of Use (ROU) assets and lease liabilities for most of its leases.
• Inventories: Valued at the lower of cost (weighted average basis) and net realisable value.
• Cash Flows: Reported using the indirect method.
• Provisions, Contingent Liabilities & Assets: Provisions are recognized when the company has a present obligation and outflow is probable.
• Revenue Recognition: Based on consideration specified in a contract with a customer, revenue is recognized when control over a product or service is transferred to customer.

Additional Key Notes & Disclosures

• Contingent Liabilities: Bank guarantees, letters of credit, corporate guarantees on behalf of a joint venture.
• Commitments: Estimated amount of contracts remaining to be executed on capital account.
• Related Party Transactions: Names of related parties and their relationships, details of specific transactions, and outstanding balances.
• Financial Instruments: Details of financial assets and liabilities, measurement at amortized cost or fair value, and related gains/losses.
• Borrowings: Details on secured and unsecured borrowings, interest rates, and repayment terms. Working Capital Term Loans from Banks are Secured by hypothecation of stocks of Raw Material, Stock in Process, Finished goods, Consumables and book-debts and all other current assets. Secured by mortgage of land and building and movable assets at plot no. 34, 35, 36, 41, 42, 43 and 61A.
• Earnings Per Share: Method of computation and basic/diluted earnings per share amounts.
• Government Grants: Government grants are recognized where there is reasonable assurance that the grant will be received and the Group will comply with the conditions attached to them.
• Statement of Changes in Equity: Details of changes in equity share capital, reserves, and retained earnings.
• Financial Ratios: Analysis of key financial ratios, including current ratio, debt service coverage ratio, inventory turnover ratio, trade payable turnover ratio, net profit ratio, return on investment, debt-equity ratio, and trade receivables turnover ratio.
• Significant Investments and JV’s: Details of the company’s investments in subsidiaries, including Kineco Alte Train Technologies Private Limited and Kineco Kaman Composites India Private Limited, and establishment of a Joint Venture
• Impact of COVID-19: Management expects to recover the carrying amount of assets (receivables, inventories) and that there would be sufficient cash flows for repayment of loans.
• Recent Pronouncements: Impact of new or amended accounting standards (Ind AS) notified by MCA.
• Employee Benefits: Discussion of employee benefit plans including defined contribution and defined benefit plans, including actuarial valuation methods and assumptions.
• Inventories: Valuation at lower of cost and net realisable value.
• Disclosure of Notes on Equity Share Capital Explanatory: The Company has issued 8,00,000 1% Cumulative Optionally Convertible Preference Shares of Rs. 100/- each
• Subsequent Events: Subsequent to year end on May 17, 2022 & May 23, 2022 the Group has filed revised return for statement of current assets given as security against the borrowings from banks. Basis the revised returns filed there are no material discrepancies between the books of account and the returns submitted to bank.
• **Commitments and contingent liabilities: ** details of guarantees, pending litigations and disputed revenue
• Segment reporting is not applicable

This summary provides a detailed yet concise representation of the financial statements of KINECO LIMITED for the specified period, encapsulating its financial performance, position, and key accounting policies.