年報 - HKExnews

MANAGEMENT’S DISCUSSION AND ANALYSIS
FINANCIAL CONDITION
Liquidity and financial resources
The Group continued to maintain a strong financial position. The
current ratio, the total bank debts and the gearing ratio as at
the year end were 1.9, HK$1,713 million and 0.0 (2009: 2.0,
HK$906 million and 0.0) respectively. The gearing ratio refers
to the ratio of the total interest-bearing debts, less of cash
and cash equivalents, divided by total equity. The increase in
bank borrowings was mainly for financing short term held-tomaturity
investments and bank deposits. The net cash inflow
from operating activities for the year was HK$797 million (2009:
HK$1,052 million). The drop in net cash inflow from operating
activities was mainly due to the increase in inventory level for
the hedge of the surge in cotton price during the year.
During the year, the interest cover, the trade and bills
receivables to turnover and the inventory to turnover for the
year under review were 118 times, 35 days and 75 days (2009:
26 times, 34 days and 60 days) respectively. The increase
in inventory turnover days was mainly due to the increase in
inventory level during the year for the reason stated above.
The Group mainly satisfied its funding requirements with cash
inflow from its operating activities and bank borrowings. At the
year end, the cash and cash equivalents, the equity attributable
to equity holders of the Company and the unutilized banking
facilities were HK$1,526 million, HK$4,573 million and
HK$3,074 million (2009: HK$801 million, HK$4,138 million
and HK$3,417 million) respectively. To maintain high liquidity
and improve the yield from its investment, the Group increased
its short term held-to-maturity investments to HK$273 million
(2009: HK$21 million) as at the year end. The counterparties of
the investments are all well established corporations.
Capital expenditure
As the global economic recovery was still moderate during the
year, the Group remained cautious with its capital expenditure
spending strategy. For the year under review, the total capital
expenditure incurred by the Group was HK$174 million (2009:
HK$216 million). HK$121 million (2009: HK$104 million)
was incurred by the textile business for the expansion of its
manufacturing plant and the addition of machinery. And, HK$53
million (2009: HK$107 million) was incurred by the retail and
distribution business mainly for the expansion of its retail
network in the PRC and the refurbishment of its existing outlets.
Pledge of assets
No significant assets were pledged as at 31 March 2010 and
31 March 2009.
1.91,7130.0
2.09060.0
797
1,052
11835752634
60
1,5264,5733,074
8014,138
3,417
273
21
174216
121
104
53107
TEXWINCA HOLDINGS LIMITED ANNUAL REPORT 2010
11