QUESTION 5 (10 Marks) Phumela Gaming and Leisure Limited is listed on the Johannesburg Stock Exchange (JSE). The following two extracts from the integrated report (for the year ended 31 July 2018) are relevant: - Group multi-year review - Statements of cash flows 2018 GROUP REVIEW STATEMENTS OF CASH FLOWS for the year ended 31 July 2018 2018 ROOO 2017 R'000 2016 ROOO 2015 ROOD 2014 R'ODOR 2013 'OOO 2012 OO CAGR GROUP STATEMENTS OF COMPREHENSIVE INCOME Year ended 31 July Income GROUP 2018 1 500 797 1266 205 COMPANY 2018 R 000 1192 109 1014 82 90S BECU Note 1 526 979 17 315 (34 577) 1520 15 49 029 (20 323) 2017 R'000 (62 201) R'000 (94 640) Profit from operations Finance costs 2017 R'000 (27 805) 43098 (9368) 79 30161 833 (S 828) (1183) 85 304 (779) Net cash outflow from operating activities (52 371) (1409) 351 Profit before share of profit of equity-accounted investees Share of profit of equity-accounted (16 059) (36 817) (17 262) 28 706 33 730 734736065034 525 81137 352 169 169 122 591 94 694 4706057 98326 20515 544 35.3 70 716 (7 815) 62 901 (24 961) (113734) 8 385 151 907 96 681 Profit before income tax expense Fair value adjustments 151 297 946 Cash generated by operations Movements in working capital Cash generated/(utilised) by operating activities Income tax (paid)/refunded Dividends paid to shareholders Interest received Dividends received Finance costs paid 128424 5578 120 533118 633111230 (21 298) 11135 88 721 (43 022) 45 749 (15 0B2) (86 875) 11320 637 (17950) (52 876) (4 726) (114 801) 11 161 136 446 (27575) (114 072) 21983 (87277) (65 294) 4220 (88 822) 11132 127 819 (16 860) 307 798) Profit before income tax expense Income tax expense 152453 (707) 152 2431344 00299235 (9641) (12 912) (19 713) 129 768 (19373) 11123096 681 (25 257) (27 801) 618 Profit for the year Attributable to non-controlling interest 151 746 3 366 142 602 3 918 121 090 854 79 522110 395 (6) 14 BS 973 (102) 68 880 (206) (27 849) (25 101) (250 879) Profit attributable to ordinary equity holders of the parent 155 112 146 520 121 944 79 516 110 40985 871 68 674 (199) (67 316) (3 611) (78 612) (241) (37 757) (36 038) GROUP STATEMENTS OF FINANCIAL POSITION At 31 July 270 (87 356) 863 1664 (330) (255 010) (99 904) 75 472 109 452 1 338 BSO 1280 609 635 466 311 824 259 200308 484 Non-current assets Current assets 575 OBBS67 518 200 751 220 537 495 400 149 028 626 (85 979) (3 993) (130 925) 133 283 130 402 415 390 176 567 Net cash outflow from investing activities Acquisition of intangible assets Acquisition of property, plant and equipment Proceeds on disposal of property, plant and equipment Contingent consideration liability paid Investment in equity-accounted investees Loans advanced Loans repaid Dividends received from equity-accounted investors Net cash inflow from financing activities Repayment of finance leases Shares repurchased and options issued Borrowings raised Borrowings repaid Share capital raised 330) (255 010) (90 795) 75472 (124 231) 133 283 Total assets 1650 674 1539 809 943 950 725 019 788 055 644428591 957 122 679 180 000 Equity and liabilities Capital and reserves Non-current liabilities Current liabilities 1 012 624 1029 993 301 319 123 370 336 731386 446 513 051 64 489 366 410 447 743 478 791 432 345 54 735 9 397 3 734 273 361299 B67208 349 403 881 5 809 182 267 347915 (425) 332 195 (425) (14 276) 60 000 (1444) 288 340 Total equity and liabilities 1 650 674 1539 809 943 950 775 839 788 055 644 428 (55 030) 178 470 (761) 591 957 180 000 60 000 288 340 GROUP CASH FLOW STATEMENTS Year ended 31 July Net cash flow from operating activities Net cash utilised in investing activities Net cash flow from financing activities (94 640) (25 101) 122 679 (62 201) 38 594 (250 879) (19 549) 332 195 12743 3761 (54 057) 1073 40 724 (11 293) 586 66 706 (105 731) 53 883 (85 250) (5362) 2938 19 115 13 557 12 312 Net increase in cash and cash equivalents for the year Effect of conversion of foreign operations on cash and cash equivalents Cash and cash equivalents at beginning of year Net Increase/(decrease) in cash and cash equivalents 2933 19 115 31 788 49 223) 38 017 (39 025) (36729) 623 96 634 (151) 77 670 96 634 2018 2017 2016 2015 2014 cents 2013 2012 cents 63 522 77 079 51210 63 522 Cash and cash equivalents at end of year 100 195 Make-up of balance of cash and cash equivalents Cash and cash equivalents Bank overdraft 16 19 114 374 (14179) 98 455 (1821) 91 258 (14 179) 65 343 (1821) Year ended 31 July Basic earnings per share Diluted earnings per share Headline earnings per share Diluted headune earnings per share Net asset value per share Dividends./capital distributions per share 153,78 153,78 154,23 154,23 1012.93 112,00 168.46 160.84 167.96 160.36 101617 104,00 163,62 155,01 164 51 155,85 688,33 104.00 105.98 146,07 10114 139.13 117,06 132.10 111,72 125,83 600.79633.04 B8.00 88.00 113.61 110.85 114.46 111.69 571.58 88.00 90.85 89.09 90.99 89,23 53405 76.00 Cash and cash equivalents at end of year 100 195 96634 7 7079 63522 REQUIRED: a By only reviewing the disclosed group review The compound annual growth rate (CAGR) for the income (sales) over the multi year period was 8,5% and for the profit from operations -22,9% (a decline) By referring to the operating leverage of the company, comment on the profitability of the group for the disclosed multi year period Show all calculations. By only reviewing the disclosed statements of cash flows: Comment on the cash flows from operating activities of the group, as well as the free cash flow of the group. Note: no calculations are required for this section. QUESTION 5 (10 Marks) Phumela Gaming and Leisure Limited is listed on the Johannesburg Stock Exchange (JSE). The following two extracts from the integrated report (for the year ended 31 July 2018) are relevant: - Group multi-year review - Statements of cash flows 2018 GROUP REVIEW STATEMENTS OF CASH FLOWS for the year ended 31 July 2018 2018 ROOO 2017 R'000 2016 ROOO 2015 ROOD 2014 R'ODOR 2013 'OOO 2012 OO CAGR GROUP STATEMENTS OF COMPREHENSIVE INCOME Year ended 31 July Income GROUP 2018 1 500 797 1266 205 COMPANY 2018 R 000 1192 109 1014 82 90S BECU Note 1 526 979 17 315 (34 577) 1520 15 49 029 (20 323) 2017 R'000 (62 201) R'000 (94 640) Profit from operations Finance costs 2017 R'000 (27 805) 43098 (9368) 79 30161 833 (S 828) (1183) 85 304 (779) Net cash outflow from operating activities (52 371) (1409) 351 Profit before share of profit of equity-accounted investees Share of profit of equity-accounted (16 059) (36 817) (17 262) 28 706 33 730 734736065034 525 81137 352 169 169 122 591 94 694 4706057 98326 20515 544 35.3 70 716 (7 815) 62 901 (24 961) (113734) 8 385 151 907 96 681 Profit before income tax expense Fair value adjustments 151 297 946 Cash generated by operations Movements in working capital Cash generated/(utilised) by operating activities Income tax (paid)/refunded Dividends paid to shareholders Interest received Dividends received Finance costs paid 128424 5578 120 533118 633111230 (21 298) 11135 88 721 (43 022) 45 749 (15 0B2) (86 875) 11320 637 (17950) (52 876) (4 726) (114 801) 11 161 136 446 (27575) (114 072) 21983 (87277) (65 294) 4220 (88 822) 11132 127 819 (16 860) 307 798) Profit before income tax expense Income tax expense 152453 (707) 152 2431344 00299235 (9641) (12 912) (19 713) 129 768 (19373) 11123096 681 (25 257) (27 801) 618 Profit for the year Attributable to non-controlling interest 151 746 3 366 142 602 3 918 121 090 854 79 522110 395 (6) 14 BS 973 (102) 68 880 (206) (27 849) (25 101) (250 879) Profit attributable to ordinary equity holders of the parent 155 112 146 520 121 944 79 516 110 40985 871 68 674 (199) (67 316) (3 611) (78 612) (241) (37 757) (36 038) GROUP STATEMENTS OF FINANCIAL POSITION At 31 July 270 (87 356) 863 1664 (330) (255 010) (99 904) 75 472 109 452 1 338 BSO 1280 609 635 466 311 824 259 200308 484 Non-current assets Current assets 575 OBBS67 518 200 751 220 537 495 400 149 028 626 (85 979) (3 993) (130 925) 133 283 130 402 415 390 176 567 Net cash outflow from investing activities Acquisition of intangible assets Acquisition of property, plant and equipment Proceeds on disposal of property, plant and equipment Contingent consideration liability paid Investment in equity-accounted investees Loans advanced Loans repaid Dividends received from equity-accounted investors Net cash inflow from financing activities Repayment of finance leases Shares repurchased and options issued Borrowings raised Borrowings repaid Share capital raised 330) (255 010) (90 795) 75472 (124 231) 133 283 Total assets 1650 674 1539 809 943 950 725 019 788 055 644428591 957 122 679 180 000 Equity and liabilities Capital and reserves Non-current liabilities Current liabilities 1 012 624 1029 993 301 319 123 370 336 731386 446 513 051 64 489 366 410 447 743 478 791 432 345 54 735 9 397 3 734 273 361299 B67208 349 403 881 5 809 182 267 347915 (425) 332 195 (425) (14 276) 60 000 (1444) 288 340 Total equity and liabilities 1 650 674 1539 809 943 950 775 839 788 055 644 428 (55 030) 178 470 (761) 591 957 180 000 60 000 288 340 GROUP CASH FLOW STATEMENTS Year ended 31 July Net cash flow from operating activities Net cash utilised in investing activities Net cash flow from financing activities (94 640) (25 101) 122 679 (62 201) 38 594 (250 879) (19 549) 332 195 12743 3761 (54 057) 1073 40 724 (11 293) 586 66 706 (105 731) 53 883 (85 250) (5362) 2938 19 115 13 557 12 312 Net increase in cash and cash equivalents for the year Effect of conversion of foreign operations on cash and cash equivalents Cash and cash equivalents at beginning of year Net Increase/(decrease) in cash and cash equivalents 2933 19 115 31 788 49 223) 38 017 (39 025) (36729) 623 96 634 (151) 77 670 96 634 2018 2017 2016 2015 2014 cents 2013 2012 cents 63 522 77 079 51210 63 522 Cash and cash equivalents at end of year 100 195 Make-up of balance of cash and cash equivalents Cash and cash equivalents Bank overdraft 16 19 114 374 (14179) 98 455 (1821) 91 258 (14 179) 65 343 (1821) Year ended 31 July Basic earnings per share Diluted earnings per share Headline earnings per share Diluted headune earnings per share Net asset value per share Dividends./capital distributions per share 153,78 153,78 154,23 154,23 1012.93 112,00 168.46 160.84 167.96 160.36 101617 104,00 163,62 155,01 164 51 155,85 688,33 104.00 105.98 146,07 10114 139.13 117,06 132.10 111,72 125,83 600.79633.04 B8.00 88.00 113.61 110.85 114.46 111.69 571.58 88.00 90.85 89.09 90.99 89,23 53405 76.00 Cash and cash equivalents at end of year 100 195 96634 7 7079 63522 REQUIRED: a By only reviewing the disclosed group review The compound annual growth rate (CAGR) for the income (sales) over the multi year period was 8,5% and for the profit from operations -22,9% (a decline) By referring to the operating leverage of the company, comment on the profitability of the group for the disclosed multi year period Show all calculations. By only reviewing the disclosed statements of cash flows: Comment on the cash flows from operating activities of the group, as well as the free cash flow of the group. Note: no calculations are required for this