daily life retail trading ltd Management discussions

DAILY LIFE RETAIL AND TRADING LIMITED ANNUAL REPORT 2006-2007 MANAGEMENT DISCUSSION AND ANALYSIS DISCUSSION ON FINANCIAL PERFORMANCE * The company achieved a turnover of Rs.532.98 Million in the current financial year against Rs. 256.997 Million reported in the previous financial year. * Profit before depreciation and tax increased from Rs.15.76 Million in 2005-06 to Rs.32.45 Million in 2006-07, while profit after tax rose from Rs.9.14 Million to Rs. 21.85 Million during the same period. * Profit before depreciation and tax increased by 205 percent and Profit after tax increased by 209 per cent over the previous year. SURPLUS MANAGEMENT The company generated a cash profit of Rs.25.57 Million as compared to Rs.11.75 Million in the last year, registering the growth of 217 per cent and amount is ploughed back into the business to fund the growth. MARGINS Net margins improved from 3.36 per cent in 2005-06 to 4.00 percent in 2006- 07. CAPITAL EMPLOYED The capital employed in the business increased by Rs 162.37 Millions in the current year. The ratio of sales-to-average capital employed improved from 4.93 in 2005-06 to 5.98 in 2006-07. CAPITAL STRUCTURE * The companys has authorized capital (equity) of Rs.13.0 Million comprising 1.3 Million equity shares of Rs.10/- each. * During the year the company had raised an additional capital of Rs.600 Lacs from the existing shareholders/employees wider ESOP/lights options exercised by the existing members and the same is treated as unsecured loans due to pending increase of authorized capital of the company. The company during this year obtained factoring facility from Global Trust Finance Limited to the tune of Rs.75.0 Million. CAPITAL EXPENDITURE During 2006-07, the company incurred a capital expenditure of Rs. 53.94 Million ( the total work in progress on capital account as on 31st March 2007. The capital expenditure incurred during the year is primarily on account of opening of new warehousing facilities for institutional division. INVESTMENT During the year the company has not invested in any investments. GROSS BLOCK SIZE AND NATURE OF ASSETS * The companys gross block (including capital work in progress) increased from Rs 58.48 Million 2005-06 to Rs 112.39 Million in 2006-07. * Work in progress of Rs 96.44 Million represents on-going projects pending completion during the year 2007-08. * The ratio of sales-to-gross block has increased to 4.74 in 2006-07 from 4.4 in 2005-06. DEPRECIATION The company provided Rs.3.41 Million for depreciation in 2006-07 as against Rs. 2.32 Million 2005-06 The accumulated depreciation of the company comprised 63.08% of its gross block. The company continues with the written down value Method for computing depreciation on the companys assets. LOANS AND ADVANCES Loans and advances at Rs.9.34 Million in 2006-07 represented a increase of Rs. 2.38 Million over the previous financial year. The major component of loans and advances represents advance lease deposits for the stores paid to Lessors and advances given to suppliers. INTEREST AND ADVANCES The interest & financial charges spent during the year by the company to the extent of Rs. 2.17 Million towards the factoring facilities. BASIC EARNING PER SHARE (EPS) Basic Earning Per Share (UPS) is Rs 16.81, which was Rs. 7.03 in the preceding year registering the growth of 139 per cent. BASIC CASH EARNING PER SHARE (CPES) Basic Cash Earning Per Share (CPES) is Rs 19.43, which was Rs 8.80 in the preceding year. OUTLOOK The outlook for the company is buoyant. As a company we are confident than ever before and want to make the most of the first mover advantage.