Hemas Holdings PLC l Annual Report 2023/24
For over 75 years Hemas has empowered the lives of millions of Sri Lankans through innovative solutions. We are proud to celebrate our presence in our island nation today as a respected and successful diversified corporate, leading the charge in Consumer Brands,
Healthcare and Mobility Sectors.
Over the recent years, we have stood unwavering and focused in the face of the tumultuous headwinds of economic crisis and uncertainty, bravely navigating all challenges with our heads held high, and always prioritising the wellbeing of our teams, our customers,
our community and our planet.
With an unmatched task force of determined teams and partners whose loyalty has never wavered, we have risen up from the depths of unpredictability and have taken our place at the forefront of a thriving new Sri Lanka. As we move forward with excellence and continue to prioritise serving our customers and community, we continue to attune ourselves to the ever-evolving needs of
our people. Stepping forth into new beginnings, we take great care to create a positive impact
on all communities of our wonderful nation.
CONTENTS
About Us | 4 | ||
About this Report | 6 | ||
Performance Highlights | 8 | ||
12Page | 32Page | ||
MANAGEMENT DISCUSSION | |||
EXECUTIVE REVIEWS | |||
AND ANALYSIS | |||
Chairman's Message
CEO's Review
Board of Directors
Board of Management
12Page
Chairman's
Message
12 | Creating Value | 32 |
16 | Our Business Model | 34 |
22 | Investor Relations | 36 |
26 | Operating Environment | 38 |
The Group's Strategy | 42 | |
Sustainability Integration | 49 | |
The Capitals Report | ||
Financial Capital | 58 | |
Manufactured Capital | 68 | |
Intellectual Capital | 74 | |
Human Capital | 90 | |
Natural Capital | 100 | |
Social and Relationship Capital | 110 | |
Sector Review | ||
Consumer Brands | 116 | |
Healthcare | 118 | |
Mobility | 120 |
2 Hemas Holdings PLC
Page
116 Sector Review
124Page
GOVERNANCE
Governance
Internal Audit
Risk Management
Annual Report of the Directors on the Affairs of the Company and the Group
Report of the Audit Committee
Report of the Human Resources and Remuneration Committee
Report of the Nomination and Governance Committee
Report of the Related Party Transactions Review Committee
Page
58 The
Capitals Report
170Page
FINANCIAL STATEMENTS
& SUPPLEMENTARY INFORMATION
124 | Index to Financial Statements | 170 |
144 | Statement of Directors' Responsibilities | 171 |
146 | Independent Auditor's Report | 172 |
152 | Statement of Profit or Loss | 176 |
159 | Statement of Comprehensive Income | 177 |
Statement of Financial Position | 178 | |
162 | Statement of Changes In Equity (Group) | 179 |
Statement of Changes In Equity | 180 | |
164 | Statement Of Cash Flows | 181 |
166 | Notes to the Consolidated Financial Statements | 182 |
Quarterly Snapshot | 252 | |
Indicative Us Dollar Financial Statements | 253 | |
Ten Year Summary | 254 | |
Shareholder Information | 255 | |
Independent Assurance Report | 259 | |
GRI Content Index | 261 | |
Alignment to Task Force on Climate-Related | ||
Financial Disclosures (TCFD) | 267 | |
Alignment To IFRS Standards (S1 And S2) | 268 | |
Glossary | 269 | |
Notice of Meeting | 270 | |
Form of Proxy | 271 | |
Annexure 1 | 273 | |
Form of Request | 275 | |
Corporate Information | 277 |
Annual Report 2023/24 | 3 |
ABOUT US
Hemas started with a simple intent: to empower families to aspire for a better tomorrow. This core belief has informed our growth for over 75 years. Today, we empower families to aspire for more through our focus in Consumer Brands, Healthcare and Mobility. Woven into the socioeconomic fabric of Sri Lanka, Hemas has also expanded operations to Bangladesh.
In our onward journey, we will continue to invest in diverse and passionate teams, create meaningful offerings, cultivate trusted partnerships, and champion a more inclusive world, so that we continue to create a positive impact for all our stakeholders.
4 Hemas Holdings PLC
CONSUMER BRANDS | HEALTHCARE | MOBILITY | |||
• Home and Personal Care | • | Hospitals | • | Aviation | |
• | Learning Segment | • | Pharmaceutical Distribution | • | Maritime |
• | Over the Counter Consumer | • | Pharmaceutical Manufacturing | ||
Products |
PURPOSE | VALUES | |
Empower families to aspire | • | Passion for customers |
for a better tomorrow | • | Obsession for performance |
• | Driven by innovation | |
• | Concern for people |
Annual Report 2023/24 | 5 |
ABOUT THIS REPORT
The Integrated Annual Report of Hemas Holdings PLC is prepared with the aim of providing a balanced, comprehensive and concise assessment of the Group's performance during the financial year ending 31st March 2024. The report presents an overview of the Group's operations, including its financial performance, governance and risk management strategies, and its commitment to environmental stewardship and social responsibility.
It also seeks to improve on the Group's previous Annual Report for the financial year ending 31st March 2023, continuing the journey to adopt international best practice in corporate reporting.
AVAILABLE MEDIUMS
Digital Presence: www.hemas.com
Printed
Scope & Boundary
The financial reporting boundary covers 40 legal entities and the parent company, collectively referred to as "the Group". The sustainability reporting boundary of the report covers 17 legal entities and parent company. Geographically, the non-financial information included in this report has been limited to operations of the Group within Sri Lanka.
During the year, there were no significant changes to the reporting boundary or any restatement of information.
Entities included in the financial and non-financial reporting boundary
(Page 248)
Regulatory Framework
The report complies with the reporting requirements of the following regulatory frameworks:
- Companies Act No.7 of 2007
- Sri Lanka Financial Reporting Standards issued by the Institute of Chartered Accountants of Sri Lanka
- Listing rules of the Colombo Stock Exchange
Assurance on Financial Statements has been provided by Ernst & Young
(Page 172)
Voluntary Framework
The following voluntary frameworks have been adopted in preparing the report:
- Code of Best Practice on Corporate Governance issued by the Institute of Chartered Accountants of Sri Lanka
-
Hemas Holdings Annual Report 2023/24 has been reported
in accordance with the GRI Standards for the period April 1, 2023 to March 31, 2024 - Aligned to International Financial Reporting Standards (IFRS) S1 and S2
- Recommendation of the Task Force on Climate Related Financial Disclosures (TCFD)
- Aligned to United Nations Sustainable Development Goals
Assurance on sustainability information has been provided by Ernst & Young
(Page 259)
NAVIGATING THIS REPORT
The following navigation icons have been used across the Report to showcase connectivity between strategy, KPIs, resource allocation, risks and other relevant information.
Capitals
Rs.
FINANCIAL | MANUFACTURED | INTELLECTUAL | HUMAN | SOCIAL AND | |
NATURAL | RELATIONSHIP | ||||
CAPITAL | CAPITAL | CAPITAL | CAPITAL | ||
CAPITAL | CAPITAL | ||||
Stakeholders | |||||
Consumers | Employees | Business Partners | Investors | Government | Community |
6 Hemas Holdings PLC
SUSTAINABILITY AND
SUSTAINABILITY RELATED
DISCLOSURES
The content of this report is determined by the Sustainability Management Framework established within the Group. This framework defines the methodology in determining materiality, data collection, setting targets, and monitoring the social and environmental impacts, as well as Sustainability Related Risks and Opportunities (SRROs) of Group operations. It encompasses the governance mechanism, strategies and initiatives that the Group undertakes to manage its material impact topics, as well as the management and metrics of the Group's SRROs and their financial impacts.
REPORTING PRINCIPLE
In preparing and presenting this Report, the Group has given due consideration to the guiding principles of the GRI Universal Standards, and the Hemas Holdings PLC has reported in accordance with these GRI Standards for the period 1st April 2023 to 31st March 2024.
In addition to the reporting the Group sustainability impacts are accordance with the GRI Standards, the Group has also aligned its investor focused sustainability-related disclosures to the IFRS S1 and S2 reporting requirements, subsequent to a double materiality approach and the identification
of Sustainability Related Risks and Opportunities (SRROs) arising from its material impacts.
This year, Hemas Holdings PLC considered an approach based on the principles of Double Materiality, where both Impact Materiality and Financial Materiality concepts are utilised to determine the disclosures of this report. This approach enables the Group to report the impacts arising from its business operations to its broad stakeholder groups, as well as the sustainability-related information relevant to its investors and shareholders.
The section on Sustainability Integration provides an overview of the manner in which the Group identifies and addresses its approach to double materiality. The Group commenced with identifying
its impacts based sustainability topics,
which then lead to the identification of Sustainability Related Risks and Opportunities (SRROs), by also taking into consideration the dependencies of environmental and social resources.
The material impact topics listed in the section "Sustainability Integration" refers to the key sustainability topics determined and addressed by the Group's Sustainability Management Framework, while the SRROs contained in the Risk Management Framework refers to the risks and opportunities applicable to the Group arising from these material impact topics
While the governance and management of the Group impacts are covered through the Sustainability Management Framework, the SRROs are managed through sustainability management framework and the Risk Management function. The Capital Review sections of this Report discusses the execution of the Group's strategies to manage our sustainability impacts as well as SRROs.
All indicators, measuring methodologies, assumptions and estimations with regard to sustainability topics, utilised in the preparation of this Report are
in accordance with GRI Standards guidelines as well as standard industry practices and the IFRS S1 and S2 reporting requirements. There have not been any significant changes to the Group structure or supply chain during this reporting period. Any restatements to the presented numbers and statements and their underlying reasons have been clearly stated under the relevant sections of this Report, wherever applicable.
The Group recognises the importance of transparent reporting and is committed to providing stakeholders with accurate and reliable information which is both internally reviewed and externally assured. It has implemented appropriate systems and processes to ensure that the information presented in this Report is complete, timely, and in accordance with applicable reporting standards. The Group will continue to refine its reporting practices and to seek feedback from stakeholders to ensure that its reporting remains relevant and meaningful.
FORWARD LOOKING STATEMENTS Forward looking statements have been included in this report, particularly in assessing risk and opportunities and discussion of the future plans of the Group, which are based on perceptions, opinions and views of external and internal information available at present as the Group believe these support the assessment of its future performance. These statements, assessments and estimates have varying degrees of uncertainty associated with them which the Group will know only with the benefit of hindsight as they relate to future events, outcomes and impacts which are beyond the control of the Group. This information is provided without recourse or any liability whatsoever to the Board or other preparers of the Annual Report due to uncertainty regarding the current economic conditions.
ACKNOWLEDGEMENT
All information contained in this report has been reviewed internally by the senior management team of the Group, and verified independently, in accordance with policies and methodologies carried in the 'Corporate Governance' section of this report.
The Board of Directors acknowledges its responsibility to ensure the integrity of the Integrated Report and is of the opinion that the Integrated Annual Report of Hemas Holdings PLC for the financial year ending 31st March 2024 is presented in line with the reporting principles mentioned above.
PUBLICATION DATE
May 22, 2024
FEEDBACK & INQUIRIES
Your feedback is valued and will be used in improving the Annual Report in the year that has commenced.
Hemas Corporate Services (Pvt) Ltd,
Hemas House No 75,
Braybrooke Place, Colombo 2.
+94 11 4731731
Annual Report 2023/24 | 7 |
PERFORMANCE HIGHLIGHTS
Rs. | Additional insights available on Page 58 | |||||||||
FINANCIAL | ||||||||||
CAPITAL | ||||||||||
FINANCIAL PERFORMANCE | ||||||||||
FY 24 | FY 23 | |||||||||
Revenue | Rs. 121,614 million | Rs. 113,940 million | ||||||||
Gross Profit | Rs. 35,997 million | Rs. 31,793 million | ||||||||
Gross Profit | Margin | 29.6% | 27.9% | |||||||
EBITDA | Rs. 13,604 million | Rs. 12,566 million | ||||||||
EBITDA Margin | 11.2% | 11.0% | ||||||||
EBIT | Rs. 11,921 million | Rs. 10,963 million | ||||||||
EBIT Margin | 9.8% | 9.6% | ||||||||
Net Finance Cost | Rs. 2,453 million | Rs. 3,198 million | ||||||||
Profit | Before Tax (PBT) | Rs. 9,468 million | Rs. 7,765 million | |||||||
Profit | After | Tax (PAT) | Rs. 6,355 million | Rs. 5,069 million | ||||||
Earnings | Rs. 6,109 million | Rs. 4,269 million | ||||||||
Earnings Margin | 5.0% | 3.7% | ||||||||
Interest Cover | 3.7 times | 2.7 times | ||||||||
FINANCIAL POSITION | ||||||||||
FY 24 | FY 23 | |||||||||
Total Assets | Rs. 98,498 million | |||||||||
Rs | Rs. 93,723 million | |||||||||
Total Equity | Rs. 44,120 million | Rs. 39,120 million | ||||||||
Total Liabilities | Rs. 49,603 million | Rs. 59,378 million | ||||||||
Net Working Capital | Rs. 18,226 million | Rs. 24,433 million | ||||||||
Gross Debt | Rs. 12,705 million | Rs. 21,457 million | ||||||||
Net Cash Flows from/(used in) Operating Activities | Rs. 13,906 million | Rs. (9,262) million | ||||||||
Net Cash Flows from/(used in) Investing Activities | Rs.(5,698) million | Rs. (1,308) million | ||||||||
Net Cash Flows from/(used in) Financing Activities | Rs. (8,523) million | Rs. 9,597 million | ||||||||
Cash and Short Term Deposits | Rs. 13,223 million | Rs. 16,331 million | ||||||||
Net Debt/(Cash) | Rs. (518) million | Rs. 5,127 million | ||||||||
Debt/EBITDA | 0.9 times | 1.7 times | ||||||||
Current Ratio | 1.6 times | 1.4 times | ||||||||
Quick Ratio | 1.0 times | 0.9 times | ||||||||
Gearing Ratio | 22.4% | 35.4% | ||||||||
Net Gearing Ratio | -1.2% | 11.6% | ||||||||
ROCE | 22.1% | 22.9% | ||||||||
MARKET AND SHAREHOLDER | ||||||||||
FY 24 | FY 23 | |||||||||
Market Capitalisation | Rs. 38,775 million | |||||||||
Rs. 47,972 million | ||||||||||
Market Price per Share | Rs. 80.40 | Rs. 65.00 | ||||||||
No. of Shares in Issue | 596,672,617 | 596,546,025 | ||||||||
Basic Earnings per Share | Rs. 10.24 | Rs. 7.16 | ||||||||
Price Earnings Ratio | 7.9 times | 9.1 times | ||||||||
Net Asset Value per Share | Rs. 72.8 | Rs. 64.4 | ||||||||
Dividend per Share | Rs. 2.35 | Rs. 2.35 | ||||||||
Dividend Cover | 4.4 times | 3.0 times | ||||||||
Dividend Payout Ratio | 23.0% | 32.8% | ||||||||
Return on Equity (ROE) | 15.3% | 13.4% | ||||||||
8 Hemas Holdings PLC
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