Annual Report 2010-2011 - Colombo Stock Exchange

Financial Review
strengthened by Rs. 1,241 mn during the year due to healthy
cash profits generated by the Group. Trade Creditors and Other
Payables balances in total increased from Rs. 2,633 mn to Rs.
3,653 mn.
The Working Capital investment of the Group has significantly
improved during the year, mainly due to an improvement in the
Cash and the Trade Receivable balances of the Group. The
Group recorded a positive net Working Capital investment of
Rs. 186 mn compared to a negative Working Capital investment
of Rs. 794 mn recorded in the previous year. Hence, the
Current Ratio improved from 0.89 to 1.02 while the Quick
Assets Ratio improved from 0.56 to 0.64.
Cash Flows
The Group has made a cash profit of Rs. 4,555 mn with an
impressive growth of 37% compared to the previous financial
year. However, an increase in Inventory and Trade Debtor
balances resulted in a negative Working Capital change of Rs.
371 mn during the year compared to a positive change of Rs.
124 mn in the previous period. Group Finance Cost declined by
Rs. 174 mn to Rs. 795 mn while both Group tax payments and
the gratuity payment increased by Rs. 233 mn and Rs. 19 mn,
respectively. Plantations, Services and Plastic sectors remained
the best cash generating units, and helped the Group to record a
net operating cash flow of Rs. 2,819 mn with the growth of 31%.
Investment in new super centers, continuous investment in
replanting agricultural crops, and subscription for the rights
shares of Asian Alliance Insurance PLC resulted in a negative
cash flow of Rs. 1,389 mn from investing activities compared to
Rs. 542 mn in the previous financial year.
The repayment of loans amounted to Rs. 1,248 mn, exceeding
the proceeds of new loans amounting to Rs. 1,134 mn which
resulted in a net loan repayment of Rs. 114 mn. In addition,
the Group has distributed Rs. 572 mn as Dividends to its
shareholders during the year, and recorded net cash outflow of
Rs. 645 mn from financing activities which has increased by Rs.
396 mn compared to previous financial year.
Despite the negative cash flow from investing and financing
activities, a strong cash flow from operating activities has
created a positive net cash flow of Rs. 784 mn to the Group,
compared to Rs. 1,365 mn in the previous period.
Capital Structure
Total Assets of the Group grew by 19% during the year to
Rs. 20,639 mn while Total Liabilities increased by 14% to Rs.
13,776 mn. Total Shareholders Fund was enhanced by Rs.
1,210 mn to Rs. 5,003 mn by Retained Profits after distributing
Rs. 516 mn as Dividends to its shareholders of parent company.
Total Assets were funded by Shareholders’ Funds (24%),
Minority Interest (9%), Long Term Liabilities (24%) and Short
Term Liabilities (43%). During the year the significance of
the Shareholders’ fund increased from 22% to 24% while the
relative prominence of long term liabilities dropped from 27%
to 24%. Minority Interest and short term liabilities were at the
same level of importance as in the previous year.
Equity
During the year, Richard Pieris and Company PLC made
a share split of 1 to 15 and this has increased the number
of Ordinary Shares from 128,251,023 to 1,937,241,535.
Subsequent to exercising of the Employee Shares Option
Scheme by the employees of the Parent company, the Stated
Capital of the Group increased by Rs. 49 mn to Rs. 1,628 mn.
Following a distribution of Dividends amounting to Rs. 516 mn,
Total Shareholders Fund increased by Rs. 1,210 mn to Rs.
5,003 mn. In view of the significant increase in profitability of
Plantation Sector, Minority Interest also increased by 24% from
Rs. 1,503 mn to Rs. 1,861 mn during the period under review.
Debt
Group Debt continued to further decrease by Rs. 912 mn
during the year and stood at Rs. 4,318 mn at the end of the
year.
As a result of strong profitability, Plantation sector debt reduced
significantly by Rs. 1,221 mn, and Plastic Sector also showed
an improvement of Rs. 274 mn. Aggressive expansion in super
markets resulted in the retail sector debt increasing by Rs.
155 mn during the period under review. In order to facilitate
its future capital expenditure, Retail sector raised over Rs.
1,014 mn through the first ever credit card securitization loan
transaction in the country. Due to the escalated raw material
prices coupled with the increase in working capital investments,
both Rubber and Tyre Sector debt increased by Rs. 239 mn
and Rs. 90 mn, respectively, during the period under review.
Investment in Asian Alliance Insurance PLC, Stock Broking and
Margin Trading business resulted in an increase of Rs. 99 mn in
the Service sector debt.
With the addition of Credit Card Securitization loan, the Group’s
long term debt increased from 37% to 47% while short term
debt decreased from 63% to 53% as percentage of total
Group debt. 53% of the total debt is secured and 47% is on
clean basis. 7% of Total Group Debts is in foreign currency
compared to 10% in the previous financial year. Export turnover
represents only 9% of the total Group turnover for the period
under review.
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Annual Report 2010/2011 | Richard Pieris and Company PLC