Haycarb Is One of the World’S Foremost Producers of Coconut Shell Based Activated Carbon
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Activated...Sustainable...Growing across the globe. It is characterized by a growing relevance of its products and solutions in globally topical concerns such as care for the environment sustainability and healthy living. Haycarb is one of the world’s foremost producers of coconut shell based activated carbon... but we’ve moved well beyond to the status of a renowned total solutions provider active in a The bottom line is – the activated carbon industry has huge growth potential as we move towards an ever ‘greener’ world; the market is well established and growing; sustainability is at an all time high. Haycarb is eminently geared to meet the demands of this rapidly developing market. Annual Report 2014/15 CONTENTS 01 Global Presence 02 Strategy 04 Chairman’s Review 06 Managing Director’s Review 12 Financial Review 16 CSR 22 Governance and Compliance Haycarb PLC - Annual Report 2014/15 24 Board of Directors 28 Management Team 32 Corporate Governance 38 Annual Report of the Board of Directors on the Affairs of the Company 41 Statement of Directors’ Responsibilities 42 Audit Committee Report 44 Financial Statements 46 Independent Auditors’ Report 47 Income Statements 48 Statements of Comprehensive Income 49 Statements of Financial Position 50 Statements of Changes in Equity 51 Consolidated Statements of Cash Flow 52 Notes to the Financial Statements 108 Statement of Group Value Added Haycarb PLC 109 Investor Information 400, Deans Road, Colombo 10, Sri Lanka. 111 Ten Year Financial Review 112 P hone: +94 11 262 7000, +94 11 267 7364 (Finance) 114 Glossary Fax: +94 11 2699630 115 Notice of Meeting E-mail: [email protected] Form of Proxy Enclosed Web: www.haycarb.com Corporate Information Inner Back Cover Activated...Sustainable...Growing The activated carbon industry and its attendant market is well rooted and firmly established across the globe. It is characterised by a growing relevance of its products and solutions in globally topical concerns such as care for the environment sustainability and healthy living. Haycarb is one of the world’s foremost producers of coconut shell based activated carbon... but we’ve moved well beyond to the status of a renowned total solutions provider active in a number of related fields such as water/air treatment systems and regeneration services. The bottom line is – the activated carbon industry has huge growth potential as we move towards an ever ‘greener’ world; the market is well-established and growing; sustainability is at an all time high. Haycarb is eminently geared to meet the demands of this rapidly developing market. CONTENTS 01 Global Presence 02 Strategy 04 Chairman’s Review 06 Managing Director’s Review 12 Financial Review 16 CSR 22 Governance and Compliance 24 Board of Directors 28 Management Team 32 Corporate Governance 38 Annual Report of the Board of Directors on the Affairs of the Company 41 Statement of Directors’ Responsibilities 42 Audit Committee Report 44 Financial Statements 46 Independent Auditors’ Report 47 Income Statements 48 Statements of Comprehensive Income 49 Statements of Financial Position 50 Statements of Changes in Equity 51 Consolidated Statements of Cash Flow 52 Notes to the Financial Statements 108 Statement of Group Value Added 109 Investor Information 111 Ten Year Financial Review 112 Group Profile 114 Glossary 115 Notice of Meeting Form of Proxy Enclosed Corporate Information Inner Back Cover Global Presence Germany Spain Turkey Parent Company Manufacturing/ Marketing Colombo, Sri Lanka Melbourne Perth Texas, Ontario, Pittsburgh, Santiago, Bristol, Johannesburg, Seoul, Moscow, Bangkok, Bitung, Taipei, Tokyo, Melbourne, USA Canada USA Chile UK South Africa S. Korea Russia Chonburi, Palu, Taiwan Japan Perth, Ratchaburi, Indonesia Australia Thailand Beijing, Accra, Kielce, Kuala Lumpur, Marketing Subsidiary Distributor Manufacturing Poland Malaysia China Ghana 7% 2% 2% Others 32% Other Solvent Asia Recovery 7% 18% Australia Air 4% Treatment Respirator 10% Africa 50% 28% Water 16% 24% Turnover - USA Gold Treatment Europe Treatment Geographical Turnover - Location wise Application wise 40,000 Metric Tons Activated Carbon manufacturing capacity per annum 2014/15. Key Performance Indicators Statement of Income Return to Shareholders in Rs. million in Rs. 11,934 32 27 10,150 10,339 23 8,509 16 Revenue 2012 2013 2014 2015 EPS 2012 2013 2014 2015 3,014 192 2,733 2,564 147 160 121 1,794 Gross Pro5t 2012 2013 2014 2015 NAV Per Share 2012 2013 2014 2015 26% 7.00 25% 25% 5.50 6.00 6.00 21% Gross Pro5t Margin 2012 2013 2014 2015 DPS 2012 2013 2014 2015 945 788 695 471 Pro5t Attributable to Equity Shareholders 2012 2013 2014 2015 Cash Flows Ratios in Rs. million 1,024 21 19 18 711 660 640 16 Capital Expenditure 2012 2013 2014 2015 ROCE 2012 2013 2014 2015 208 178 32% 163 178 30% 30% 29% Dividend Payment 2012 2013 2014 2015 Gearing Ratio 2012 2013 2014 2015 1,275 14.9% 1,034 14.6% 795 13.8% 621 12.2% Operating EBITDA to Cash Flow 2012 2013 2014 2015 Sales 2012 2013 2014 2015 14% 15% 12% 13% Overheads Cost to Income Ratio 2012 2013 2014 2015 57% 58% 55% 51% Overheads to Gross Pro5t Ratio 2012 2013 2014 2015 StrategyStrategy HaycarbHaycarb PLC Group continues will continue to follow to afocus well-formulated primarily on strategic its aggressive plan designedgrowth planto deliver to double aggressive the size growth. of its business, under a well-formulated strategic plan that is in motion. Although, we operate in a global We are intent on expanding capacity and gaining optimal positioning economy that continues to display a significant amount of uncertainty for our products in emerging markets and areas calling for niche in political and economic fronts, we believe that through the prudent high end applications such as alternate energy storage. We are also strategies developed, the negative consequence on the Company of looking to consolidate our market position in key application and such macro economic variables can be effectively mitigated. customer segments in traditional, developed markets. BeyondWe continue availing to ourselves focus on fullyexpanding of the growthour capacity opportunities and position available our forbroad our core portfolio product of productsportfolio –in coconut emerging shell markets, derived niche activated high-end carbonapplications – we are as committed in the case to of ensuring alternative and energy enhancing storage sustainable and other topspecialised and bottom segments, line growth whilst through setting the up development plans to consolidate of related our servicesmarket such position as regeneration in key target of application spent carbon and and customer turnkey segments water in purificationthe traditional systems. developed markets. Further to the growth opportunities for the Company’s core product portfolio of coconut shell activated carbon, we will ensure sustainable top and bottom line growth through the development of related services such as spent carbon regeneration and turnkey water purification systems. Chairman’s Review 04 Managing Director’s Review 06 Financial Review 12 CSR 16 CHAIRMan’s REVIEW The Haycarb Group achieved a significant milestone in reaching in-house manufacturing capacity of 40,000 MT per annum, whilst reporting a profit before tax of over Rs. 1.0 billion for the third consecutive year. 4 | Haycarb PLC | Annual Report 2014/15 I am pleased to present the Annual Report of Haycarb I wish to note the success of the flagship CSR initiative PLC for 2014/15. of Haycarb Group, the Puritas Sath Diyawara project to provide purified drinking water to selected villages in the The Haycarb Group recorded a turnover of Rs. 11,934 North Central Province where Chronic Kidney Disease million, profit before tax of Rs. 1,070 million and profit after (CKD) affects over 400,000 persons. Following the first tax of Rs. 874 million for the year ending 31st March 2015. Reverse Osmosis (RO) Purification Plant and water distribution system commissioned by Haycarb Group in Recognising the creditable performance of the Company the village of Maithreepura in Padaviya, Hayleys Group and future prospects, the Board has recommended a pledged to cover a total of 10 villages in the current and final dividend of Rs. 4/- per share which together with next financial year, touching the lives of 15,000 persons in the interim dividend disbursed in April 2015, will amount the process. to a total dividend of Rs. 6/- per share. Mr. Ranjeevan Seevaratnam retired from the Board of It is noteworthy that Haycarb’s results were sustained Directors in June 2014 having served as an Independent in a challenging year marked by challenging market Non-Executive Director. The members of the Board conditions, currency devaluation and escalating raw join me in thanking him for his contribution and wish material prices. Lean initiatives that enabled the Company him success and fulfilment in the future. Mrs. Sharmalie to retain competitiveness and growth in existing and new Weerasuriya (alternate to Mr. Dhammika Perera) resigned key customer accounts in value added product segment, in May 2015 and we thank her and wish her success. contributed positively to the overall results. The Haycarb Group achieved a significant milestone in reaching It is with pride that I note the resilience of Team Haycarb, in-house manufacturing capacity of 40,000 MT per whose commitment and passion for results, whilst facing annum, whilst reporting a profit before tax of over a challenging external environment, culminated in the Rs. 1.0 billion for the third consecutive year. noteworthy performance reported to you. My colleagues on the Board join me in thanking our valued customers, Haycarb is positioned as a market leader and has initiated joint venture partners, shareholders and suppliers for the strategies required to capture the growth potential their support and loyalty extended throughout the year. of the activated carbon industry which is driven by the emphasis on environmental sustainability across the world.