Page 15 - Kolte Patil AR 2019-20

Net profit^ RoCE^ Net Debt Gearing^ Debt cost
(C Crore) (%) (C Crore) (x) (%)

87.2 121.5 122.3 137.5 14.5 18.4 15.6 12.8 455 288 517 434 0.53 0.29 0.47 0.35 12.1 10.4 10.4 10.5

FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20

Definition Definition Definition Definition Definition
Profit earned during This financial The quantum of debt This ratio measures This is derived through
the year after number measures the after deducting the cash net debt to net worth the calculation of the
deducting all expenses efficiency with which on the Company’s books. (less revaluation average cost of the
and provisions capital is employed in Net debt for FY20 does reserves). consolidated debt on
the business. not include C196 Crore the Company’s books.
Why we measure towards OCD, CCD, Why we measure
It highlights the Why we measure OCRPS and Zero Coupon This is one of the Why we measure
strength of the ROCE is a useful NCD subscribed by PE defining measures of This indicates our
business model in metric for comparing investors. a Company’s financial ability in convincing
enhancing value for profitability across health, indicating the bankers and other
shareholders. companies based on Why we measure ability of the Company debt providers of
the amount of capital This number provides a to remunerate the robustness of
Performance they use - especially true and fair picture of shareholders over debt our business model,
The Company’s net in capital-intensive the company’s intrinsic providers (the lower translating into a
profit grew every sectors. profitability. the gearing the better). progressively lower
single year through debt cost (potentially
the last few years. Performance Performance Performance leading to higher
The Company The Company The Company’s net debt The Company’s margins).
reported a 12.2% reported 12.8% ROCE declined from C517 Crore gearing decreased
increase in net profit in FY 20, prudently in FY 19 to C434 Crore in from 0.47 in FY19 Performance
in FY20, reflecting investing every rupee FY 20, an achievement to 0.35 in FY 20. We The Company’s debt
the resilience of in profitable projects considering that the year recommend that cost progressively
the business model to generate attractive under review was marked this ratio be read in declined from 12.1% in
in a challenging returns. by sluggish sectorial conjunction with net FY17 to 10.5% in FY20,
downtrend. offtake and liquidity debt/operating profit. indicating a superior
crunch. credit-rating.
Note: ^The Company adopted IND AS 115 (Completion Contract Method – CCM) effective from 1 April, 2018 and opted for the modified retrospective method; To
facilitate a like-to-like comparison, the figures shown above are based on the previously applicable Percentage of Completion Method (POCM).
Annual Report 2019-20 | 13