A. Key financial ratios

  Standalone Consolidated
  FY 22-23 FY 21-22 FY 22-23 FY 21-22
Debtors turnover ratio 22.90 23.24 11.18 11.48
Inventory turnover ratio 10.89 9.13 7.20 6.33
Interest coverage ratio 529.25 199.83 12.02 19.11
Current ratio 3.03 2.62 1.76 1.43
Debt equity ratio - - 0.07 0.14
Operating profit margin (%) 24.37 24.90 19.07 20.30
Net profit margin (%) 20.10 21.69 12.90 14.65
Return on net worth (%) 17.56 20.82 13.34 16.99

Reasons for change in standalone ratios

  • Increase in interest coverage ratio is due to lower borrowings in the current year

Reasons for change in consolidated ratios

  • Interest coverage ratio has decreased due to an increase in interest cost of approx 60%, as compared to last year
  • Debt equity ratio has decreased due to repayment of long-term debt
  • The reduction in return on net worth is on account increase in net worth on account of profit for the year and foreign currency translation reserve
Formulae used for calculation of the ratios
Debt equity ratio (including financial liabilities) Net sales/average of opening and closing trade receivables
Inventory turnover ratio Net sales/average of opening and closing inventories
Interest coverage ratio (PAT + finance cost + depreciation and amortszation expense + (profit)/loss on the sale of fixed assets)/finance cost
Current ratio Current assets/current liabilities
Debt equity ratio (including financial liabilities) Non-current + current borrowings/total equity
Operating profit margin (%) (Profit before depreciation, interest, tax, exceptional items and foreign exchange gain/loss less other income)/total revenue from operations
Net profit margin (%) Profit after tax/net sales
Return on networth (%) Profit after tax/average equity

B. Internal control systems and their adequacy

We have implemented an internal control framework to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and that transactions are authorised, recorded, and reported correctly. The framework includes Internal Financial Controls over Financial Reporting, which provides reasonable assurance over the integrity of financial statements of the company and reduces the possibility of frauds. Our Corporate Audit and Assurance department issues well-documented operating procedures and authorities with adequate built-in controls keep track of any major changes both at the beginning of any activity as well as during the process.

As part of the audits, they also review the design of key processes from the point of view of adequacy of controls. Periodic reports—as part of continuous monitoring—are generated to identify exceptions through data analysis. The internal controls are tested for their design and operating effectiveness across all our locations and functions by the Corporate Audit team; control failures are reviewed by the management from time to time for corrective action.

Controls with respect to authorisation in underlying IT systems are also reviewed periodically to ensure that users have access to only those transactions that their roles require. Our head office in Mumbai, offices across India, and all major factories follow an Information Security Management System and are ISO/IEC 27001:2013 certified.