Page 15 - SABN AR 2021

Working capital amounted to R314 million at 31 March 2021, which is the same as the prior financial year. The composition thereof is attributable to a year-on-year increase in inventory levels, offset by an increase in trade payables.
Other financial measures
Net assets decreased from R1 485 million in the 2019/20 financial year to R1 462 million in the 2020/21 financial year due to a decrease in capital expenditure.
Free cash flow amounted to R118 million in the 2020/21 financial year compared to R82 million in the previous financial year − an increase of 44%. This is attributed to a decrease in capital expenditure following the roll-over of key projects to 2021/22.
Post-retirement benefit obligations for the current financial year amounted to R205 million compared to R185 million in the prior financial year. The increase is attributable to a change in the actuarial assumptions based on market data where the net discount rate decreased in relation to the prior year.
The operating ratio improved year on year, indicating a reduction in total operating expenses in relation to sales.
The Company’s liquidity has remained relatively stable due to increased cash balances and receivables, offset by increased trade payables and year-end accruals.
Emerging risks: a prospective outlook
The SABN continued to assess its exposure to financial risk and the potential impact on operational performance, cost control and cash generation on an ongoing basis. As at the reporting date, it was considered that there are no material risks for the foreseeable future.
Conclusion
The SABN has a full banknote order book for the 2021/22 financial year, as well as sufficient cash resources to fund its capital expenditure and working capital requirements.
Financial position as at 31 March 2021 350
337
277
314 314
R millions
Net assets Free cash flow
300 250 200 150 100
50 184 0
246
202 153
Post-retirement 205 obligations
Equity Operating ratio Current ratio
COVID-19
1 811 2.72 5.30
2 223 4.71 2.14
Capital expenditure
R millions
200 150
115
2021 2020 2019 2018 2017 2016 2015 2014
1 462
118
1 485 82
185
1 757 3.23 5.60
1 414 315
211
1 626 2.42 6.12
1 498 (169)
235
1 443 2.73 7.17
1 322 285
202
1 463 2.17 6.48
1 451 120
188
1 620 3.19 9.69
1 712 41
197
2 041 3.49 5.23
1 627 55
24
2014 2015 2016 2017 2018 2019 2020 2021
Economic activity country-wide is expected to rebound following the easing of lockdown regulations and the implementation of the vaccine rollout strategy by the National Department of Health. The SABN expects that this, together with the continued efforts and operations of the SABN’s JOC in ensuring a comprehensive and monitored return-to-work strategy, will minimise the impact of the virus on operations and maximise production capacity.
South African Bank Note Company (RF) Proprietary Limited
Annual Report 2021
59 26
800 700 600
R millions
100 50 0
80
80
86
Cash and cash equivalents
500 352 393 400
365 370
300 200 100
0
201
2014 2015 2016 2017 2018 2019 2020 2021
Working capital
R millions 400
2014 2015 2016 2017 2018 2019 2020 2021
A S Haffejee
Chief Financial Officer 20 May 2021
516
153 135
598 716
15