Annual report for 2004/05 - Hemas Holdings, Ltd

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Financial ReviewCompany StatusRs' Mn.7,0006,0005,0004,0003,0002,0001,0000Capital Employed20011,180 838 48720021,314 399 48520031,532 407 49520042,157 1,489 527Average Shareholders FundAverage BorrowingsAverage Minority Interest3,085 2,746 6142005The year under review was the first complete financial year as a public companyafter the listing on the Colombo Stock Exchange on 15th October 2003. During theyear 1,129,550 shares were issued to employees as a result of them exercising theirshare options and the issued share capital was increased to Rs. 791,295,500 as atthe year end. The Hemas share was selected to be included in the Milanka Indexand achieved the 10th position in terms of market capitalization as at 31st March2005.Joint VentureThe company owns 50% of Heladhanavi Ltd in a joint venture with Lakdhanavi Ltd.The interest in this joint venture is accounted for by proportionate consolidation,whereby the venturer’s 50% share of each of the assets, liabilities, income andexpenses are combined on a line by line basis with similar items in theconsolidated financial statements.RevenueThe group achieved a consolidated revenue of Rs. 8.8 billion for the year endedMarch 2005 recording a growth of 35.7% over the previous year. The main factorfor higher growth was the contribution to revenue from Heladhanavi Limited whichcommenced commercial operations in the supply of power to Ceylon ElectricityBoard in September 2004.Segmental ContributionTurnover33.6%32.9%Operating ProfitsEarnings before interest and tax (EBIT) grew by 33.7% to Rs. 1,180 million, as aresult of the revenue growth coupled with improvement in performance efficienciesin most of the sectors. Profit after tax was Rs. 800 million, an increase of 22% overthe previous year.4.0%5.1%24.4%FMCGHealthcareLeisureTransportationStrategic InvestmentsPerformanceEarnings per share (EPS) for the year under review was Rs. 10.11. The company’sPrice/Earnings (PE) ratio was 10.8 at the year end share price of Rs. 109. Thecomparative market PE of the diversified sector as published by the Colombo StockExchange ratio was 17.7.Segmental Contribution Rs. Mn.TurnoverProfit after taxFMCG 2,898 353Healthcare 2,144 103Leisure 445 19Transportation 353 54Strategic Investments 2,958 2718,798 80014H E M A S H O L D I N G S L I M I T E D
Financial ReviewTaxationGroup provision for taxation for the year under review increased to Rs. 225 millionfrom Rs. 180 million in the previous year. The dividend tax on the dividends paidby the subsidiary companies amounted to Rs. 30 million, which is included in theSegmental ContributionProfitgroup tax expense. Excluding the dividend tax, the effective rate of taxation onprofits reduced from 21.5 % last year to 19.1%. Effective tax rate includingdividend tax, was marginally increased to 21.9% from 21.6%. The tax free profitsfrom strategic investments contributed to the reduction in effective rate of tax for33.9%44.1%the year under review. The group was also able to claim tax exemptions frominvestment relief, and certain expansion profit exemptions under the InlandRevenue Amendment Act.DividendsA first interim dividend of Rs. 1.25 per share was paid in November 2004 and a6.8%2.3%12.9%FMCGHealthcareLeisureTransportationStrategic Investmentssecond interim dividend of Rs. 1.75 per share was declared on 29th March 2005 andpaid in April 2005. The dividend cover is 3.7 times against 4.2 times in the previousyear.Investments / DivestmentsThe group invested Rs. 63 million in acquiring a 56% stake in exchange & FinanceInvestments Ltd and increasing the shareholding in Peace Haven Resorts Ltd andAssociated Hotels Ltd. Hemas Holdings divested 70% of the shareholding in HemasGarments, for Rs. 123 million.Cash Flows30Earnings per Share& Return on Equity28.4Net Cash Flow from operating activities was Rs. 1182 million recording a 105.9%increase over the previous year.252017.626.225.9Funding & Liquidity1515.5The total borrowings of the Group increased from Rs. 2565 million to Rs.2927 million over the year under review decreasing the Group Debt to Equity ratioto 82.6% from 97.6% the previous year. The consolidation of the financialstatements (50% Joint Venture) of Heladhanavi Ltd, has increased the total debtof the group. The loans obtained by Haladhanavi is encumbered only on the projectassets. The proportion of borrowings of Heladhanavi as at 31 March 2005,1052.972.915.738.2810.1102001 2002 2003 2004 2005Earning Per Share (Rs.)Return on Equity (%)amounted to Rs. 2450 million. Excluding same, the total borrowings of the groupstood at Rs. 477 million.The trade receivables excluding Heladhanavi receivables of Rs. 727 million,amounts to Rs. 1468 million compared to Rs. 1582 million as at the previous yearend.A N N U A L R E P O R T 2 0 0 4 - 2 0 0 5 15
Page 4: Group ProfileIt was a far thinking
Page 7 and 8: Financial HighlightsYear Ended 31st
Page 9 and 10: CEO’s Reviewfinancial year. We pe
Page 11 and 12: Members of the BoardDebu BhatnagarD
Page 13 and 14: Group Management CommitteeFrom left
Page 15: Review of OperationsFinancial Revie
Page 19 and 20: FMCG Sectorin the market. In the Ha
Page 21 and 22: Leisure SectorThe primary business
Page 23: Strategic InvestmentsPowerAs report
Page 26 and 27: Hemas Tsunami Response Plan26 Decem
Page 28 and 29: Piyawara ProgrammeEarly Childhood C
Page 30 and 31: The Hemas TeamOur team has always b
Page 32 and 33: Corporate GovernanceCommitment to t
Page 34 and 35: Report of the DirectorsDIRECTORS’
Page 36 and 37: Statement of Directors’ Responsib
Page 38 and 39: Income StatementYear ended 31 March
Page 40 and 41: Statement of Changes in EquityYear
Page 42 and 43: Notes to the Financial StatementsYe
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Notes to the Financial StatementsYe
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Five Year SummaryYear Ended 31st Ma
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GlossaryCAPITAL EMPLOYEDTotal share
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Notes74H E M A S H O L D I N G S L
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Form of ProxyNote:1. *Please delete
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Annual report for 2004/05 - Hemas Holdings, Ltd

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