Success is a journey - Jamaica Stock Exchange€¦ · Success is a journey... 2 Caribbean Producers (Jamaica) Limited - 2016 Annual Report...not a destination. Focus on the process

Caribbean Producers (Jamaica) Limited Annual Report 2016

Success is a journey...

2 Caribbean Producers (Jamaica) Limited - 2016 Annual Report

...not a destination.Focus on the process.

Caribbean Producers (Jamaica) Limited - 2016 Annual Report 3

CO

NT

EN

TS

Mission and Vision Statements 4

Notice of AGM 5

Financial Highlights 6

Chairman’s Statement 9

CEO & Co-Chairman’s Statements 10

Board of Directors 14

Executive Managers 20

Corporate Data 23

Top Ten Shareholders 25

Directors & Senior Officers’ Interests 25

Corporate Governance 27

Management, Discussion & Analysis 39

HR Report 48

Corporate Social Responsibility 51

Auditors’ Report 55

Audited Financial Statements 57

Form of Proxy

CPJ Annual Report 2016


INT

EG

RIT

Y

GO

ING

TH

EEX

TR

AM

ILE

CO

MM

ITM

EN

TM

ISSION

VISIO

NCUSTOMER SERVICE

MOTTOST

RA

TEG

Y

To provide the highest levels

of service and quality products

available, in striving to ensure the

success of our customers.

To expand in new markets while maintaining a leadership position in established markets, and to provide an energised and harmonious workplace for our employees.

To drive profitability through strong supplier relationships by delivering great products with exceptional service.

We measure our

effectiveness as a

company by our

ability to meet

the expectations

of our customers.

We strive to

ensure our

professional team

of representatives

reflect this commitment.

By building

strong customer

relationships we

promote our

continued growth.


1. To receive the Reports of Directors and Auditors and

the audited accounts of the Company for the financial

year ended 30th June 2016.

To consider and (if thought fit) pass the following

resolution:

“THAT the Reports of the Directors and Auditors and

the Audited Accounts of the Company for the year

ended 30 June, 2016 be adopted”.

2. To declare the interim dividend paid on 8 February

2016 as final for the year under review.


resolution:

“THAT the interim dividend of $0.06 paid on 8th

February 2016 to shareholders be declared as final for

the year under review.

3. In accordance with Article 102 of the Company’s

Articles Incorporation, Mr. Richard Mark Hall,

Ms. Jan Marie Polack and Ms. Camille Shields,

retire from office by rotation and being eligible

offer themselves for re-election.


resolutions:

(a) ‘THAT Mr. Richard Mark Hall who retires by rotation

and being eligible for re-election be and is hereby

re-elected a Director of the Company”.

(b) ‘THAT Ms. Jan Marie Polack who retires by rotation



(c) ‘THAT Ms. Camille Shields who retires by rotation



4. In accordance with Article 110 of the Company’s

Articles Incorporation, the following directors having

been appointed during the year retire and are eligible

for re-election.

(a) “THAT Christopher Berry, having been appointed on

1 December 2015 to fill a casual vacancy, retires and,

being eligible, hereby offers himself for re-election.

Be it resolved that Mr. Christopher Berry be and is

hereby re-elected a Director of the Company”.

(b) “THAT Mark Konrad Berry, having been appointed

on 1 December 2015 to fill a casual vacancy, retires

and, being eligible, hereby offers himself for re-

election.

Be it resolved that Mr. Mark Konrad Berry be and is

hereby re-elected a Director of the Company”.

(c) “THAT Dr. David Lowe, having been appointed on 9

May 2016 to fill a casual vacancy, retires and, being

eligible, hereby offers himself for re-election.

Be it resolved that Dr. David Lowe be and is hereby

re-elected a Director of the Company”

5. To appoint the Auditors and authorize the Directors to

fix the remuneration of the Auditors.


resolution:

“THAT KPMG, Chartered Accountants, having agreed

to continue in office as auditors, be and are hereby

appointed auditors of the Company to hold office until

the next Annual General Meeting at a remuneration to

be fixed by the Directors of the Company”

6. To fix the remuneration of the Directors.


resolution:

“THAT the amount included in the Audited Accounts

of the Group for the year ended June 30, 2016, as

remuneration for their services as Directors be and is

hereby approved.”

Dated this 28 day of October 2016

By Order of the Board

Theresa Chin

Company Secretary

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Annual General Meeting of Caribbean Producers (Jamaica) Limited Group will be held at at

Sunscape Splash, Sunset Drive, Freeport, Montego Bay, St. James, on Monday February 13, 2017 at 3:00 p.m. for shareholders to

consider, and if thought fit, to pass the following resolutions:

Ordinary Resolutions

The following document accompanies the Notice of Annual General Meeting:

A form of proxy. A shareholder who is entitled to attend and vote at the Annual General Meeting of the company may appoint one or more proxies to attend in

his/her place. A proxy need not be a shareholder of the company. All completed original proxy forms must be deposited together with the power of attorney or

other document accompanying the proxy at the registered office of the company at least 48 hours before the Annual General Meeting.

Gross Operating Revenue

Gross operating

revenue grew by 39%

from US$67.49M in

2012 to US$94.10M

in fiscal year 2016.

The Group enjoyed

steady growth in

revenue over the

five year period by

expanding into the

Caribbean region

with its new sub-

sidiary CPJ St. Lucia

hence increasing its

customer base; setting up a food processing plant and

growing its sales in the retail trade by adding new cat-

egories of products and growing its product offerings.

The gross operating revenue reflects an 8% increase for

the year which was less favourable than the previous

year’s growth of 10%. The compound annual growth

rate (CAGR) over the last five years is 6.9%.

Operating Expenses

Selling and Administration Expenses increased from US$11.60

to US$20.24 or 74.5% for the 5 year period. The new subsidiary,

food processing and expansion in the retail division were the

main reasons for the increases noted. Cost of Operating Reve-

nue increased from US$50.09M to US$69.0M or a 36% increase.

There was an 11% increase in cost of operating revenue from the

previous year consistent with the increase in revenue, relating

to a one–time inventory adjustment and a general increase in

cost of goods sold, due to the current economic and regulatory

environment. Operating Expenses increased by a CAGR of 7.7%.

2012

Selling & Administrative Expenses Cost of Operating Revenue

11.60

50.09

13.47

49.46

15.85

55.81

17.59

62.13

20.24

69.00

2013 2014 2015 2016

2012

67.49 69.37

78.64

86.85

94.10

2013 2014 2015 2016

6 Caribbean Producers (Jamaica) Limited -2016 Annual Report

fIVE-YEAR fINANCIAL REVIEW

2012 2013 2014 2015 2016

Important Ratios 2016 2015 2014 2013 2012

Debt to Equity Ratio 1.90 1.82 1.91 2.34 2.55

Return on Equity 5.45% 18% 21% 24% 29%

Profit before Taxation/Sales 0.77% 3.8% 4.4% 4.4% 4.6%

Return on Assets 1.88% 6.5% 7.3% 7.3% 8.3%

Current Ratio 2.22 2.34 2.19 2.15 1.83

Earnings per

Stock Unit (US cents) 0.10 0.32 0.31 0.29 0.28

Weighted Avg.

Exchange Rate J$:$US 120.90 114.33 106.54 94.11 86.88

Caribbean Producers (Jamaica) Limited -2016 Annual Report 7

Earnings before Interest, Taxes and Depreciation (EBIDTA)

Earnings before Interest, Taxes and Depre-

ciation decreased from US$5.8M in financial

year 2012 to US$4.87M in financial year 2016

at a CAGR of 3.4%. The year 2016 shows

a net profit of US$1.0M which was lower

than the corresponding period last year of

US$3.43M. The company entered the Junior

Stock Exchange on July 20, 2011 and as such

enjoys a 10-year tax benefit as follows:

Years 1-5: 100% | Years 6-10: 50%


“The greatest thing in this world is not so much where we stand, as in what direction we are moving”

- Oliver Wendell Holmes, Senior


Chairman ‘S meSSage

Our business was started more than

twenty years ago and has since blazed

an extraordinary path of innovation,

growth and development.

CPJ’s entry in 1994 as a key supply

partner to the Jamaican Hotel Industry

was timely as the Industry began an

intense evolution to exceed a new

generation’s expectations of travel.

Hotels could no longer rely on rum-

based drinks and jerk chicken, and

were expected to offer more choices

of International and fusion cuisine in

addition to traditional Jamaican fare.

It has taken a long time for the

economic importance of Tourism to be

recognized in the way that it deserves

and many still question the extent of

the added value and linkages that the

industry supports. We have worked with

stakeholders to inform policymakers of the

importance of access to affordable quality

food categories to enhance the culinary

experience of our Hospitality Industry.

When Senior Executives and Directors

of large Hotel Groups chose Jamaica

over other Caribbean destinations, they

evaluate Jamaica’s compelling value

proposition which includes the question

of access to cost effective food and

beverage offerings to their guests.

We continue to support the premise

that food and beverage and almost

all inputs to the visitor experience are

essential raw materials that add value.

Current logistic options can present

challenges that could make the cost

prohibitive to supply a range of fresh and

frozen food to the industry. Therefore,

an effective ecosystem is required to

combine sourcing, transportation, storage,

distribution, and excellent customer

service within a regulatory environment

that is complimentary to the industry.

CPJ has evolved with the industry and

has become a vital logistics supply partner

to this most important sustainable sector

of our economy. We have transitioned

from early days selling paper and dry

consumables to supporting the full range

of over three thousand (3,000) SKU’s

that we currently offer. Our wide range

currently includes our renowned high-

quality products manufactured in our

Food and Beverage plants. Independent

market feedback continue to suggest that

our bacon, burgers, hams and sausages,

have set a new standard of quality. Similar

market endorsements have been received

regarding our institutional juices and

frozen mixes that have been growing in

demand in the Eastern Caribbean.

Our commitment to supplying the

highest quality products, with great value

and exceptional service continues to

be the proven formula that has earned

the coveted loyalty of our customers.

Therefore, we continue to remain

relevant to the hospitality industry

by understanding their demands and

challenges, and providing a holistic

service to ensure that we contribute to

their success.

It is for this reason that we were

honored once again this year to receive

the Purveyor of the Year award from the

Jamaica Hotel and Tourism Association. I

would like to thank our customers for your

continued confidence and will continue

our efforts to support your success.

To our valued employees, I thank you

for your passion, drive and commitment.

Finally, to our shareholders, we look

forward to building your company beyond

all boundaries.

A. Mark Hart

Chairman

A. Mark Hart, Chairman


Dr. David Lowe Mr. A. Mark Hart

Passion to succeedThe end of this fiscal year represents another

highpoint in the evolution and development of

Caribbean Producers (Jamaica) Limited (CPJ).

We have made progress in continuing to remain

relevant to our key markets and have expanded

into new ventures.

The most significant change will be my

leadership transition from Chief Revenue Officer

to Chief Executive Officer in the new fiscal year

ending June 30th 2017. The opportunity to lead

this innovative company of high performers is a

privilege and honor. The scope of responsibility at

this time is only exceeded by the motivation and

passion to succeed.

The previous CEO, Mr. Tom Tyler has navigated

the growth of the company through a number of

market changes and shocks over the last 22 years.

His spirit of entrepreneurship and commitment

to service delivery has become part of the DNA

of the company and will be preserved as we

continue our journey. I wish to thank him for his

support during this period of transition along with

our Executive Chairman, Mark Hart.

The vision of the future is to continue to be the

best in class, and an industry leader that sets the

standards that other companies will be compared.

Our capacity to embrace change as well as to seek

ways to satisfy and exceed the demands of our

valued clients and customers will be our priority.

The 5 principles that will contribute to our

quest towards achieving our vision are as follows:

1. Best business

2. Best customers

3. Best products and services

4. Best practices

5. Best people

The future of our core business remains strong

and is well aligned to achieve continued growth

and compete both in Jamaica and in the region.

Thanks to all of our stakeholders for the support

and encouragement.

David Lowe, PhD.Chief Executive Officer

(Appointed June 1, 2016)


CeO meSSageS

As Co-founder of Caribbean

Producers (Jamaica) Limited

(CPJ) the journey for the past 22 years

has had many exciting and challenging

times.

We have navigated a range of major

milestones and events that have had a

correlated effect on our business model

and the Jamaican Tourism Industry.

These include, but were not limited to,

the disruptive impact of hurricanes, the

effect of travel psychology following

the 9/11 terrorist attack in the U.S.,

economic downturns, volatile swings

in commodity prices, and rapid

devaluation of the local currency. Each

time we have prevailed and emerged

stronger.

Nonetheless, our business model has

been built on a platform of quality of

service and a determination to expand

our portfolio to the benefit of our clients

and customers.

Looking back at our financial

performance over the last year, the

first half of the year was encouraging.

The company was on a trajectory to

achieve a record setting year on our 5th

year as a public company listed on the

Jamaican stock exchange. However, our

capacity became significantly leveraged

with operational inefficiencies therefore

leading to an exponential increase

in cost, and so the annual audited

results reflected a disappointing year

end performance. Nevertheless,

our business model remains strong

and our balance sheet supports our

capacity to continue to grow and fund

further expansion, and capture new

opportunities.

The appointment of the new CEO,

Dr. David Lowe, in the next fiscal year

is another milestone for the company.

Beginning with the company as the Vice

President of Retail Sales and Marketing,

then in his subsequent role as Chief

Revenue Officer, his appointment by

the board was in keeping with the

planned succession to the position

of CEO. David has been instrumental

to the business over the last 5 years,

understanding and while learning the

nature of our business from the core, he

has had a very hands-on approach.

I feel that with his international

experience and educational

background, combined with the past

five years at CPJ, the transition to CEO

is a decision with which I feel very

comfortable that CPJ will be propelled

to new heights under his guidance. The

time is right for us to make this move.

I must express my personal

satisfaction and pleasure in seeing

the growth and development of

current and former employees and

their commitment to excellence. My

contribution to institutional memory

will continue to provide a source of

knowledge and reference.

In my new capacity as executive

Co-Chairman, I will be there to support

Dr. Lowe with this transition over the

coming year and look forward to seeing

him take CPJ to the next level.

Thomas Tyler Executive Co-Chairman

Building on a platform of quality

Mr. Thomas Tyler



“If everyone is moving forward together,

then success takes care of itself ”

- Henry Ford


A. Mark Hart J.P. Executive Chairman (appointed April 1994)

A. Mark Hart served as its Chief

Executive Officer from 2004 until early

in 2011, until he was promoted to his

current position of Executive Chairman.

He is also the founding and controlling

shareholder of the Company. Mr. Hart

began his career as the Managing

Director of the Hart family’s group

of companies in 1982, eventually

becoming Chairman and Chief Executive

Officer in 1997. Mr. Hart has also

served as Chairman of Montego Bay Ice

Company Limited, a JSE Main Market

listed company.

Mr. Hart is a graduate of the

University of Miami. Mr. Hart is currently

the Chairman of the Montego Bay Free

Zone Company Limited as well as a

member of the boards of the NMIA

Airports Limited, Port Authority of

Jamaica, Alpha Angels Investor Group,

Bank of Nova Scotia Jamaica Limited

and Scotia Group Jamaica Limited.

Thomas TylerExecutive Co-Chairman

(appointed April 2007)

Thomas (Tom) Tyler is currently the

Chief Executive Officer of Caribbean

Producers with oversight responsibility

for its day to day operations. He

cofounded the Company in 1994

together with Mark Hart. Mr. Tyler

also serves as President of Hospitality

Services Unlimited, a company

registered in the U.S. that engages in

business with the Company.

Mr. Tyler was educated at the

University of South Florida. He joined

Caribbean Producers; a US based

family company supplying furniture

and equipment to the hospitality and

hotel sectors across the Caribbean.

While working there Mr. Tyler had

the vision to create an integrated

distribution company that led to his

establishment of the Company with

Mark Hart.

BOard Of direCtOrS

David Lowe, PhDChief Executive Officer/Director

(appointed May 9, 2016)

Dr. David Lowe joined CPJ in

January 2012 as the VP of Retail sales

and marketing. He was promoted to

Chief Revenue Officer in January 2014

until his recent promotion to Chief

Executive Officer in June 2016.

Dr. Lowe has had extensive

international management experience

and has served on numerous public

and private sector boards. Dr. Lowe has

a PhD in Finance from the University of

Manchester, U.K.


Jan PolackChief Financial Officer

(appointed September 2011)

Jan Polack is currently the Chief

Financial Officer of the Company, and

her primary focus is to oversee the

financial and administrative operations

and continued expansion, in which she

plays an integral role.

Ms. Polack joined the Company

as its Chief Financial Officer in 2006.

Her financial career in the hospitality

services industry began in 1990 where

she served as Financial Controller for

16 years for various hotel chains in

Jamaica.

In 1983 Ms. Polack graduated with

a B.A. in Accounting from St. Leo’s

College, Florida. She is a Certified

Public Accountant (CPA). She is a

former Director of the Montego

Bay Chamber of Commerce and

Industry. At CPJ she is a director of CPJ

Investments and CPJ St. Lucia Limited.

Antony Hart, C.D., J.PNon - Executive Director

(appointed April 2007)

Antony (“Tony”) Hart is a prominent

local businessman. A graduate of

Munro College, Mr. Hart is also the

recipient of an honorary doctorate from

both the University of Technology &

Northern Caribbean University, and has

been honoured as a Commander of

Distinction (C.D.) by the Government

of Jamaica.

Mr. Hart is the past Chairman of Air

Jamaica Limited (1980 – 1988) and the

past Chairman and Managing Director

of the Montego Freeport (1967 – 1980).

He is currently Chairman of the Branson

Centre of Entrepreneurship, a director of

the Port Handlers, Good Hope Holdings

and Cargo Handlers, the latter company

was admitted to trading on the Junior

Market of the JSE in December 2010.

L. Camille ShieldsNon-Executive Independent Director

(appointed February 2014)

L. Camille Shields is a Barrister and

Attorney-at-Law with more than 12

combined years of experience in both

the Jurisdictions of England & Wales and

Jamaica. She has extensive international

experience and a client-base spanning

multiple industries representing companies

and individuals in Jamaica and overseas. She

has spent the last seven years establishing

a Private Law Practice specializing in Land

and Conveyance matters, Company and

Commercial matters, and Probate and

Succession. She obtained a Legal Education

Certificate from the Norman Manley

Law School (“Norman Manley”) and was

enrolled as an Attorney-at-Law in Jamaica

in mid 2003 and prior was called to the

Bar of England and Wales and was entered

as a member of the Honourable Society

of Lincoln’s Inn In 2002. Additionally she

holds a Bachelor of Arts from University of

Western Ontario (“Western”) at London,

Ontario, Canada and a Bachelor of Laws from

the University of London (“UL”) at London,

England. As an independent Non-Executive

member of the Board, Ms. Shields chairs the

Corporate Governance Committee of the

Board and also serves on the Compensation

and Audit Committees.


Konrad Mark Berry Non-Executive Independent Director

(appointed December 1, 2015)

Konrad Berry joined Mayberry

Investments Limited at its inception

and was one of its founding Directors.

He has been the Company Secretary

since 1985, Finance Director between

1992 and 1995 and in 1999 assumed

the position of Vice Chairman. He has

over thirty (30) years of experience in

the securities industry. Having joined

Mayberry Investments Limited in 1985

where he was primarily responsible for

the company’s day to day operations

including the development and

supervision of its management and

operating system.

Mr. Berry obtained a B.Sc (Hons)

degree in Management and Economics

from the University of the West Indies in

1992. In that year, he also successfully

completed the Canadian Securities

Course.

Ronald SchragerNon-Executive Director (appointed June 2011)

Mr. Schrager is a principal and

co-founder of Eightfold Real Estate

Capital, LP a real estate investment and

advisory firm. Prior to forming Eightfold,

Mr. Schrager was the Chief Operating

Officer of LNR Property LLC of the

USA, from May 2003 until December

2010. In 1997, Mr. Schrager came to

Lennar from Chemical Bank (now JP

Morgan Chase) in New York, where he

served as Vice President. Mr. Schrager

received a Masters Degree in Business

Administration from Harvard Business

School in 1988.

As an Non-Executive member of the

Board, Mr. Schrager is the Chairman of

the Audit Committee and also a member

of the Compensation Committee.

Theresa Chin Non-Executive Director and Company Secretary


Theresa Chin is a graduate of York

University, Toronto Canada where she

gained a Bachelor of Science degree in

Mathematics. Mrs. Chin has worked with

the Hart family shareholders since 1993.

She is currently the Managing Director

of Montego Bay Ice Company Limited, as

well as acting as Financial Manager for

most of the other Hart group companies

(not including this Company). Prior to

joining the Hart group of companies,

Mrs. Chin worked as a financial analyst

for the Four Seasons Hotel, Toronto,

Canada, as a tax consultant for the

Borough of East York, Toronto, Canada

and as an auditor at Deloitte & Touche.

As an independent Non-Executive

member of the Board, Mrs. Chin also

serves on the Audit and Compensation

Committees of the Board. Mrs. Chin is

also the Company Secretary.


Christopher Berry Non-Executive Independent Director

(appointed December 1, 2015)

Christopher Berry has been the

Executive Chairman of Mayberry

Investments Limited since 1993. A

former Deputy Chairman of the Jamaica

Stock Exchange, he also sits on several

boards, including the Lasco Financial

Services, Apex Health Care Associates

Limited and Apex Pharmacy Limited. He

has over twenty-five years of experience

in the securities industry. Having joined

Mayberry Investments Limited in 1987

where he was responsible for corporate

planning and information technology.

He subsequently led the company’s

listing on the Jamaica Stock Exchange

in 2005.

Mr. Berry has a Bachelor of Industrial

Engineering (Hons.) from the Georgia

Institute of Technology, Atlanta, Georgia.

BOard Of direCtOrS (COntinued)

Robert J. Hooker Jr. Non-Executive Director (appointed June 2011)

Robert (Bob) Hooker is President of

Honey Industries Inc., a consultancy

company. He has over 35 years food

industry experience, having previously

served as President/CEO of Purity

Products Inc., and as founder and

President/CEO of Emerald Diversified

Inc., and Executive Vice President of

Florida Shortening Company. He has

also been a consultant to the Company

since 2005.

Mr. Hooker was educated at Norwich

University and Brookdale College. He

started his career as a junior chemist,

before moving into sales and then into

management. He is an active member of

charitable organizations including but

not limited to Rotary International, and

the Knights of Columbus.

Richard “Mark” HallNon-Executive Independent Director


For the past 25 years Mark Hall has

been the CEO of Hall’s Investment

Limited, operating the IGL filling plant

franchise and Boomerang Tyre Sales in

Western Jamaica.

As an independent Non-Executive

member of the Board, Mr. Hall also serves

as the Chairman of the Compensation

Committees and a member of the Audit

committee of the Board.

Anil ChataniMr. Chatani resigned effective December 1, 2015.


Board of directors:

Richard Du Boulay, Chairman

Tony Du Boulay, Director

Dunstan Du Boulay, Director

Mark Hart, Director

Thomas Tyler, Director

Jan Polack, Director

senior ManageMent:

Radcliffe Murray,

Acting General Manager

Glenroy Regis,

Finance ManagerRichard Du BoulayChairman CPJ St. Lucia

Tony Du BoulayDirector

CPJ St. LuCia: BOard Of direCtOrS

Sandra GlasgowMentor to the Board (appointed June 2011)

Sandra A. C. Glasgow is the Founder

and Managing Director of BizTactics

Limited. She is a Member of the Board of

Directors of National Commercial Bank

Jamaica Limited, eMedia Interactive

Limited, Medical Disposables and

Supplies Limited, YUTE Limited, the

National Crime Prevention Fund (Crime

Stop) and DRT Communications Limited.

She is a Trustee of the NCB Pension

Funds and the SMART Retirement Fund;

Mentor to Medical Disposables and

Supplies Limited and a Co-Founder of

FirstAngelsJA.

She has a Bachelor of Science Degree

in Applied Zoology and Applied Botany

and a Master of Business Administration

from the University of the West Indies,

Mona. She is a certified as a Director;

a Trainer of Trainers in Corporate

Governance Board Leadership and a

Trainer of Trainers in Business Ethics.

She was Jamaica’s Eisenhower Fellow in

2000.

She resigned as Mentor to the Board

of Caribbean Producers Jamaica Limited

effective June 30, 2016.

BOard Of direCtOrS (COntinued)


Dunstan Du BoulayDirector

Glenroy RegisFinance Manager

Radcliffe MurrayGeneral Manager

From left: Radcliffe Murray, General Manager of CPJ St. Lucia Limited, Thomas Tyler and Mark Hart, directors of CPJ St. Lucia Limited & the Prime Minister of St. Lucia,

Hon. Dr. Kenny Anthony on Thursday, November 5, 2015 at the grand opening ceremony of CPJ St Lucia Ltd. – a joint venture between Duboulay’s Bottling and Carib-

bean Producers Jamaica. Located at Cul de Sac, the company represents a EC$25 million investment in new plant and equipment and employment of 40 locals. Prime

Minister and Minister of Finance, Economic Affairs, Planning and Social Security, Hon. Dr. Kenny D. Anthony delivered the opening address which was well received.


eXeCutiVe management

Hugh LoganDirector of Hospitality Sales

Hugh Logan joined the Company in February 1997 as the

Beverage Systems Manager before being promoted to Sales

Manager, Vice President of Hospitality Sales, and his current role

as Director of Hospitality Sales & Export.

Prior to joining the Company Mr. Logan worked in various

management roles in the hotel sector. He graduated from

Seneca College and Queen’s University (both of Ontario Canada)

where he received a Bachelor of Science degree in Psychology.

Kesha-Ann HarperDirector of Finance

Ms. Harper joined Caribbean Producers Jamaica

Limited on September 2014 as Director of Finance.

She brings to the post over 16 years’ experience in

finance and auditing having served several key roles

in public and private entities. Prior to joining CPJ

she assisted small businesses and entrepreneurs

with business plans and loan packages while

functioning as the Vice President of Corporate

Strategies Limited. She also worked as Assistant

Vice President of Finance at the Port Authority of

Jamaica with responsibility for six of its subsidiaries.

Ms. Harper attended the University of the West

Indies, where she graduated with a B.Sc. degree in

Chemistry and Management Studies. She attained

an MBA in Banking and Finance from Mona School

of Business and is a Certified Public Accountant.

She is also an accredited Certified Information

Systems Auditor.

Mr. Thomas TylerCo-Chairman

Dr. David LoweChief Executive Officer

Ms. Jan PolackChief Financial Officer


Debbie ClarkeDirector of Human Resources

Ms. Clarke joined Caribbean

Producers Jamaica Limited in

February 2016 as Director of

Human Resources with over 20

years of experience in the Human

Resources and Administration

field. Prior to CPJ, she worked

with Island Entertainment

Brands. Her key responsibilities

will be the day to day human

resources needs as well as

developing strategic initiatives

jointly with the Executive team

to integrate HR policies into the

organization’s overall mission

and operational strategy.

She holds a MSc in Hospitality

& Tourism Management from

Revans University and is now

completing her Executive Masters

in Public Administration (UCC).

Wayne Tony SoltauDirector of Supply Chain

Mr. Soltau re-joined Caribbean

Producers Jamaica Limited in January

2016 as the Director of Supply Chain

after 10 years in Canada where he

worked as an international trade

specialist for a number of companies.

His previous position at CPJ was

Director of Operations in Montego

Bay and he was also Vice President

of Hospitality Services Unlimited

in Miami, Florida. He started his

career in Canada where he worked

in a number of agri-food companies

and at the Ontario Ministry of

Agriculture and Food. He also worked

for Parmalat Canada Inc., Alain

Royer Dairy Group and M. Larivee

International as Director of Sales.

Mr. Soltau is a graduate of the

University of Guelph with an Honours

Bachelor of Science degree majoring

in Agricultural Economics.

Ryan PeartSenior Operations Manager

Ryan Peart joined the

company on April 4, 2016 as

Senior Manager Operations

and comes with 10 years

of operational experience.

In his current role he is

responsible for the day

to day operations of the

Warehouse Distribution and

Manufacturing business

units of the company. Prior

to joining the company Mr.

Peart worked for Kingston

Wharves Limited as

Operations Manager where

he was tasked with managing

the daily Terminal Operations

to ensure productivity targets

were met.

Ryan holds a BSc in

Accounting and an MBA in

International Business from

Mona School of Business.



COrPOrate data

HEADQUARTERS

Montego Bay

Caribbean Producers

(Jamaica) Limited

1 Guinep Way,

Montego Freeport,

St. James, Jamaica

Mailing address:

P.O. Box 302, Montego Bay,

St. James, Jamaica W.I.

Tel: (876) 979-8134 / 8136

Fax: (876) 953-6898

Email: [email protected]

Websites:

www.caribbeanproducers.com

www.cpjmarketonline.com

Kingston

CPJ Market & CRU bar

71 Lady Musgrave Road

Kingston 10, Jamaica

Tel: (876) 633-5973 / 633-5976

Tel: (876) 618-0852 (Cru)

REGISTERED OFFICE

Shop#14, Montego Freeport

Shopping Center

Montego Freeport,

St. James, Jamaica

AUDITORS

KPMG

6 Duke Street,

Kingston, Jamaica

INTERNAL AUDITORS

PriceWaterhouseCoopers LLP

Scotiabank Centre

Corner of Duke &

Port Royal Streets

P.O. Box 372

Kingston, Jamaica

BANKERS

Sagicor Bank Jamaica Limited

17 Dominica Drive,

Kingston 5, Jamaica

The Bank of Nova Scotia

Jamaica Limited

Scotiabank Centre

Corner of Duke &

Port Royal Streets

Kingston, Jamaica

National Commercial Bank

Baywest Center,

Harbour Street

Montego Bay, Jamaica

JAMAICA

ST. LUCIA

REGISTERED ADDRESS:

6 Brazil Street,

Castries, St. Lucia

AUDITORS:

KPMG

Morgan Buiding

P.O. Box 1101

Castries, St. Lucia

HEADQUARTERS:

Cul De Sac,

Castries, St. Lucia

BANKERS:

Bank of Nova Scotia

Castries, St. Lucia

RBC St. Lucia Limited

Castries, St. Lucia


Caribbean Producers Limited Annual Report 2015 25

Top Ten (10) Shareholders (As at 30 June 2016)

naMe sHares

Wave Trading Limited 440,000,000

Sportswear Producers Limited 248,000,000

Mayberry West Indies Limited 229,377,815

JCSD Trustee Services Ltd. A/C#76579-02 13,679,900

ATL Group Pension Fund Trustees Nom. Ltd. 12,982,044

SJIML A/C 3119 11,906,171

Yuan, Liao 9,971,710

JCSD Trustee Services Ltd. - Sigma Venture 6,745,084

SJLIC for Scotiabridge Retirement Scheme 6,070,917

SJIML A/C 831 5,975,229

Directors’ & Senior Officers’ InterestsThe interests of the Directors and Senior Officers, holding office at the end of the quarter, along with

their connected persons*, in the ordinary stock units of the Company were as follows:

directors

Mark Hart 1, 2

Ronald Schrager 3

Antony Hart 1

Conrad Mark Berry 4

Christopher Berry 4

Jan Polack 2,790,185

Antony Hart 2,616,324

Richard Mark Hall 114,090

Theresa Chin 760,900

Sandra Glasgow (Mentor) 100,000

senior officers

Radcliffe Murray 400,000Hugh Logan 144,343

1 Interests in Sportswear Producers Limited 248,000,0002 Interests in Wave Trading Limited 440,000,0003 Interests in Alpine Endeavors Limited 1,881,1004 Interests in Mayberry West Indies 229,377,815

* Persons deemed to be connected with a director/senior manager are:

i. The director’s/senior manager’s husband or wife.

ii. The director’s/senior manager’s minor children (these include step-children)

and dependants and their spouses.

iii. The director’s/senior manager’s partners.

iv. Bodies corporate of which the director/senior manager and or persons

connected with him together



1. IntroductionThis Statement sets out the corporate governance principles

and practices of Caribbean Producers Jamaica Limited (“the

Company’) for the financial year ending 30 June 2016. The

Company is one of Jamaica’s leading food-service distributors,

a manufacturer, retailer and a growing distributor in the

retail sector for a wide array of international and locally

manufactured products including wines, spirits, beverages,

groceries, meats and select seafood.

The Corporate Governance Statement is presented in five

sections:

(a) Board Structure and Responsibilities

(b) Board Committees

(c) Oversight, Governance and Ethical Leadership

(d) Remuneration and Performance Management, and

(e) Risk Management.

2. Board Structure and Responsibilities

2.1. THE CHARTER

The Company’s Charter, approved by the Board, details the

functions and responsibilities of the Board, each Director

and the Chairman. The provisions in the Charter are

complementary to the requirements regarding the board

and board members contained in the Companies Act 2004,

regulations of the Jamaica Stock Exchange, the Articles of

Incorporation of the Company and those governing the

relationship between the Board and its committees as

contained in the Charters of the Committees (which have

been approved by the Board). The Charter is posted on the

Company’s website: http://www.cpj.com/about/corporate-

governance/

Under the Charter, the Board is accountable to

shareholders for the overall performance of the Company

and management of its affairs.

COrPOrate

gOVernanCe

Statement


2.2 MATTERS RESERvED fOR THE BOARD

The Board is responsible to shareholders for the proper

management of the Company. The Board Charter contains

a schedule of matters that are specifically reserved for the

Board’s decision that covers key areas of the Company’s

affairs, including:

1. Regulatory/Legal Requirementso Approval of the interim and preliminary Company

results

o Approval of any interim dividend and

recommendation of any final dividend

o Approval of the Annual Report and Accounts,

Summary Financial Statement of the Company and

any interim statement released to shareholders

o Receipt of declarations of interest from Directors.

2. Appointments, Training, Evaluation and Terms of Reference

o Appointment and removal of Directors

o Determination of the independence of any Director

or proposed Director

o Apportionment of responsibilities to the Executive

Directors of the Company including appointments

to (and removal from) the positions of Chief

Executive Officer and Chief Financial Officer

o Approval of the terms of reference of all Board

Committees

o Performance evaluation of the Board at least once

each year, and reporting in the Annual Report

and Accounts as to whether such performance

evaluation has taken place and how it has been

conducted

o Approval of policy on Executive Directors’

remuneration

o Approval by the Chairman and Executive Directors

of the remuneration and terms of appointment of

Non-Executive Directors

o Ensuring that a satisfactory dialogue with

shareholders takes place.

3. Managemento Approval of the Strategic Plan and annual budget

o Approval of any significant changes to Company

policies on financial and non-financial risks

o Approval of the policy in relation to the provision

of non-audit services by the external auditors, as

recommended by the Audit Committee

o The review and approval of any material changes

to the levels and nature of the insurance cover and

other risk management matters concerning the

Company

o Approval of, and significant changes to, the

Company’s internal controls system

o Annual review of the effectiveness of the

Company’s internal controls system and reporting

to shareholders that this has been done

o Approval of, on the recommendation of the Audit

Committee, the Audit Engagement Letter.

4. Transactionso Approval of any substantial transaction as defined

by the Jamaica Stock Exchange Listing Rules or

any substantial capital and revenue expenditure,

including an acquisition or disposal of financial

assets

o Approval of commencement, by the Company,

where such business has not previously been

transacted and where the activity is expected to

represent, in its first full year of trading, more than

1% of gross income of the Company in the recent

financial year

o Approval of cessation, by the Company, of any

activity previously conducted, representing more

than 1% of gross expenses of the Company in the

most recent financial year

5. Guarantees/Indemnities/Securitieso Approval of the provision of any guarantee,

indemnity or security by the Company.

6. Share Capital and financingo Approval of any increase/reduction in the issued

share capital within the Authorised Share Capital

approved by Shareholders

o Approval of the issue or repayment of any share

capital or debt securities or any other borrowings

by the Company other than where such issue,

repayment, subscription or borrowing is in

the ordinary course of business and has been

approved as part of the Company’s Business Plan.

2.3 BOARD SIzE AND COMPOSITION

The Company is committed to ensuring that the

composition of the Board continues to comprise

Directors who bring the best mix of skills, experience,

expertise and diversity to Board decision-making. The

Corporate Governance and Nomination Committee has

the responsibility to periodically review the size and

composition of the Board, define the desired profile of any

new candidates for election, assess candidates against the

required skills and on their qualifications, backgrounds and


personal qualities, undertake the appropriate background

and other checks and recommend the most appropriate

candidate(s) for consideration by the Board.

The Board is led by Executive Chairman, A. Mark Hart who

is primarily responsible for the activities of the Board and

its committees, acting as the spokesman for the Board and

presiding over the Annual General Meeting.

During the year, changes were made with respect to

the Board’s composition and the responsibilities of

the executive. Director Anil Chatani resigned effective

December 1, 2015 to facilitate the addition to the Board

of two shareholders of Mayberry Investments Limited,

Christopher Berry and Mark Konrad Berry, consequent on

Mayberry’s acquisition of 20% of the shares in the Company.

Dr. David Lowe was promoted to Chief Executive Officer

(CEO) of the Company with effect from June 1, 2016. Dr.

Lowe is responsible for the overall management of the

company. Dr. Lowe was also appointed a director of the

Company in a resolution passed at a meeting of the Board of

Directors on May 9, 2016. The former Chief Executive Officer,

Mr. Thomas Tyler, remains on the Board as Co-Chairman.

Mrs. Sandra Glasgow, Mentor to the Board, resigned

effective June 30, 2016.

As at June 30, 2016, the Board consisted of eleven Directors,

including five Executive Directors, including the Executive

Chairman, and six Non-Executive Directors, among

them four Independent Directors. One third of Directors

(excluding the CEO and a Director appointed to fill a casual

vacancy and rounded down to the nearest whole number)

will retire at the next annual general meeting. Other than

the CEO, no Director may remain in office for more than

three years without resigning and standing for re-election.

The Directors appointed by the Board will stand for election

at the next annual general meeting.

The Board has a good mix of skills and diversity which are

aligned with the strategy of the Company and which provide

good corporate governance and oversight. The graphic

below shows the expertise, experience and diversity of the

current composition of the Board, required for effective Board

deliberations.

• Board efficiency and effectiveness

• General management with P&L responsibility

• Strategy

• Banking

• International and emerging markets

management experience

• Understanding of legal, ethical & fiduciary duties

• Governance and Committee

experience

• Risk management

• Project management

• Mergers and acquisitions (including

divestments and joint ventures)

• Supply chain

• Marketing, sales

and customer service –

industrial, hospitality, and

retail

• Distribution

• Restaurant operations

• Manufacturing

• Hotel operations

• Manufacturing

• Logistics

• Distribution

• Supply chain management

• International trade

• Gender: Female 27%;

Male 73%

• Age

• Ethnicity

• Nationalities

General Governance Technical Industry Experience

Diversity

Board Expertise, Skills and Diversity

COrPOrate gOVernanCe Statement (COntinued)


2.4 INDEPENDENCE Of NON-ExECuTIvE DIRECTORS

The Board regularly assesses the independence of each

Non-Executive Director. An independent Director is one

who (to the satisfaction of the Board) meets the following

criteria:

• Is not, and has not been employed by the Company or any of its related parties at any time during the past five

years;

• Is not, and has not been affiliated with a Company that acts as an advisor or consultant to the Company or its

related parties, and has not acted in such capacity at any

time during the past five years;

• Is not, and has not been affiliated with any significant customer or supplier of the Company or its related

parties at any time during the past five years;

• Does not currently have, nor has had any personal service contracts with the Company, its related parties or

its senior management at any time during the past five

years;

• Is not affiliated with any non-profit organisation that receives significant funding from the Company or its

related parties;

• Does not receive and has not received any additional remuneration from the Company apart from a Director’s

remuneration, nor participates in the Company’s share

option or performance-related payment plans, nor is a

participant of the Company’s pension plan;

• The Director’s remuneration does not constitute a significant portion of the person’s annual income;

• Is not employed as an executive officer of another Company where any of the Company’s executives serve

on that Company’s Board;

• Is not a member of the immediate family of any individual who is, or has been at any time during the

past five years, employed by the Company or its related

parties as an executive officer;

• Is not, nor has been at any time during the past five years, affiliated with or employed by a present or former

auditor of the Company or auditor of any related party;

and

• Is not a controlling person of the Company (or member of a group of individuals and/or entities that collectively

exercise effective control over the Company) or such

person’s brother, sister, parent, grandparent, child,

cousin, aunt, uncle, nephew or niece, or a spouse,

widow, in-law, heir, legatee and successor of any of the

foregoing, (or any trust or similar arrangement of which

any such persons or a combination thereof are the sole

beneficiaries) or the executor, administrator or personal

representative of any person described in this paragraph

who is deceased or legally incompetent.

On the basis of these provisions, the Directors deemed to be

independent as of June 30, 2016 are:

o Mark Hall

o Camille Shields

o Christopher Berry, and

o Konrad Mark Berry

2.5 BOARD PROCESSES

There is a clear division of responsibility between the Chief

Name Position Number of meetings Number of % of eligible

eligible to attend meetings attended meetings attended

A. Mark Hart Executive Chairman 6 6 100%

Thomas Tyler Co-Chairman 6 6 100%

Jan Polack Director and Chief Financial Officer 6 6 100%

Ronald Schrager Non-Executive Director 6 4 67%

Robert Hooker Non-Executive Director 6 6 100%

Antony Hart Non-Executive Director 6 6 100%

Mark Hall Non-Executive, Independent Director 6 6 100%

Camille Shields Non-Executive, Independent Director 6 6 100%

Anil Chatani Non-Executive, Independent Director 3 2 67%

Theresa Chin Non-Executive Director and Company Secretary 6 6 100%

Christopher Berry Non-Executive Director 3 2 67%

Mark Berry Non-Executive Director 3 3 100%

Board meeting attendance



Executive Officer, who is required to develop and lead

business strategies and processes to enable the Company’s

business to meet the requirements of its shareholders,

and the Chairman who is responsible for leadership of

the Board and ensuring that appropriate conditions are

created to enable the Board to be effective in providing

entrepreneurial leadership to the Company.

The key functions of the Chairman are to conduct board

meetings, meetings of shareholders and to ensure that all

Directors are properly briefed in order to take a full and

constructive part in Board discussions.

In carrying out its duties, the Board generally meets at

least quarterly but may meet more often, as circumstances

dictate. Meetings are scheduled annually in advance

according to an annual Board calendar. Meetings are held

at the Company’s Head Office in Freeport, Montego Bay,

sometimes by telephone, as some Directors, particularly

those based overseas, may not be able to join in person.

The agenda for meetings is prepared in conjunction with

the Chairman, the Chief Executive Officer, the Chief Financial

Officer and the Company Secretary. Standing items include

the CEO’s report, division operating reports, committee

minutes and reports, financial reports, strategic matters and

governance and compliance updates. All submissions are

circulated in advance of the meetings to allow the Board

time to review and give due consideration to each report.

The Board has access to Company executives and

management, and independent advisors, if required.

Members of the senior management team are regularly

invited to participate in Board deliberations and Directors

have other opportunities to interact with management and

employees during visits to the plant for Board meetings.

The Company has established policies and procedures

to ensure timely and balanced disclosure of all material

matters concerning the Company, and to ensure that all

investors have access to information on the Company’s

financial performance. These policies and procedures

include a Disclosure Policy that includes identification of

matters that may have a material effect on the price of the

Company’s securities, notifying them to the JSE, posting

relevant information on the Company’s website and issuing

media releases.

3. Board CommitteesThe Board recognises its responsibility for the oversight of

management on behalf of stakeholders, but to discharge

these responsibilities more effectively it has appointed three

standing committees from among its members to perform

specific tasks.

The Board has the following standing Committees

• Audit• Compensation, and• Corporate Governance a Nomination

Each Committee operates under specific Terms of Reference,



which is reviewed periodically by the Board and is available

on the Company’s website at www.caribbeanproducers.com/

about/corporategovernance.

Each committee is required to promptly inform the Board of

the actions it has taken and major developments of which it

becomes aware. Each Director has unrestricted access to all

committee meetings and records.

3.1 AuDIT COMMITTEE

The Audit Committee comprises Mr. Ronald Schrager

(Chairman), Mrs. Theresa Chin, Mr. Mark Hall, Ms. Camille

Shields and Mr. Mark Berry, the latter appointed on

December 1, 2015. Mrs. Chin, Mr. Hall, Ms. Shields and Mr.

Berry are Non-Executive, Independent Directors. During the

reporting period the Audit Committee met 5 times. Below is

the attendance record.

During the year, the committee focused on

• an ongoing review of the performance of the internal audit function that has been outsourced to

PricewaterhouseCoopers (PwC)

• consideration of risk areas identified and incorporated into the internal audit plan

• reviewing and discussing the quarterly internal audit reports prepared by the PwC, including follow-up

reports on the findings of operational, financial,

compliance and IT audits and recommendations for

implementation, by management, of key changes

• reviews of the effectiveness of internal controls over financial reporting and financial risk management

• reviewing and agreeing on the audit plan and fee proposal from the external auditor, KPMG, and assessing

the firm’s independence and effectiveness

• reviewing and overseeing the Company’s quarterly and full year financial reporting and the associated audit

and recommending to the Board the approval of the

financial statements and the releases to shareholders

• receiving the audit report and management letter from KPMG

• recommending the payment of dividends to shareholders in accordance with the Company’s

dividend policy

• reviewing and reporting to the Board on compliance with regulatory disclosures and the filing and payment

of all statutory taxes and deductions.

3.2 COMPENSATION COMMITTEE

The Compensation Committee comprises Mr. Mark Hall

(Chairman), Mrs. Theresa Chin, Mr. Ronald Schrager, Ms.

Camille Shields and Mr. Christopher Berry, all of whom are

Non-Executive Directors and three of whom (Mr. Hall, Ms.

Shields and Mr. Berry) are Independent Directors. Mr. Berry

became a member of the Committee during the reporting

period.

In accordance with its Charter the Committee assists the

Board in fulfilling its fiduciary responsibilities relating to

the fair and competitive compensation of non-executive

Directors, executives and other key employees of the

Company, and in connection with the administration

of the general employee welfare plans of the Company.

The Committee is primarily responsible for providing

recommendations to the Board in regards to the

remuneration strategy, policies and practices applicable to

Non-Executive Directors, the CEO, and senior management.

Name # of meetings % of eligible attended meetings attended

Committee Chairman: Ronald Schrager 3 75%

Committee Members:

Mark Hall 3 75%

Theresa Chin 4 100%

Camille Shields 4 100%

Mark Berry * 1 50%

Number of meetings held = 4

* Mr. Mark Berry, having been appointed on December 1, 2015 was eligible to attend only 2 meetings of the Committee

Name # of meetings % of eligible attended meetings attended

Committee Chairman: Mark Hall 3 100%

Committee Members:

Theresa Chin 3 100%

Ronald Schrager 3 100%

Camille Shields 3 100%

Christopher Berry * 1 0%

Number of meetings held = 3

* Mr. Christopher Berry, having been appointed on December 1, 2015 was eligible to attend only 2 meetings of the Committee but was absent on both occasions.



During the year, the Committee’s

work entailed:

• overseeing key changes to the remuneration of CEO and

Key Management Personnel

and recommending revised

remuneration levels to the Board

• reviewing and recommending to the Board the incentive

arrangements for the CEO and the

senior management leadership

team

Remuneration to Non-Executive

Directors remained unchanged

during the year.

4. Oversight, Governance and Ethical Leadership The Board delegates the day-to-

day responsibility for managing the

Company to the Executive Management

Team. The Company recognises the

importance of honesty, integrity and

fairness in conducting its business, and

is committed to increasing shareholder

value in conjunction with fulfilling its

responsibilities as a good corporate

citizen. All Directors, managers and

employees-workers are expected to act

with the utmost integrity and objectivity,

striving at all times to enhance the

reputation and performance of the

Company. The Board sets the “tone at

the top” for the rest of the Company

and believes that the Company is not

only required to abide by the laws of

the countries in which it operates, but

that it must also conduct its business in

accordance with internationally accepted

standards of business conduct. These

core principles, which the Board and

senior management are committed to

upholding, are enshrined the Company’s

values statement and in the Board’s

Charter.

The Board acts in the best interests of

the Company and its business, taking

into consideration the interests of the

Company’s shareholders and other

stakeholders. Directors perform their

duties independent of any particular

interest in the Company and are

encouraged not to support one interest

without regard to the other interests

involved. The Board’s Charter sets out the

five moral duties of Directors:

i. To act with intellectual honesty in

the best interest of the Company

and all its stakeholders. Conflicts

of interest should be avoided.

Independence of mind should

prevail to ensure the best

interest of the Company and its

stakeholders is served.

ii. To devote serious attention to the

affairs of the Company, obtaining

relevant information required for

exercising effective control and

providing innovative direction to

the Company.

iii. To use and acquire the knowledge

and skills required for being

effective and continuously

developing competence; to be

willing to be regularly evaluated to

assess competence.

iv. To be diligent in performing

Directors’ duties, devoting

sufficient time to attend to

Company affairs, and

v. To have the courage to take the

risks associated with directing and

controlling a successful sustainable

COrPOrate

gOVernanCe

Statement (COntinued)


enterprise, but also the courage

to act with integrity in all Board

decisions and activities.

4.1 CONfLICTS Of INTEREST

A potential conflict of interest exists if

the Company intends to enter into a

transaction with a related party which

includes the following:

o The Board members of the

Company, affiliated companies and

associates

o The CEO and key officers, including

anyone who directly reports to the

Board or the CEO

o Any significant shareholder

owning or controlling more than

10% of the voting shares having

the ability to control, or exercise

a significant influence on, the

outcome of resolutions voted on

by shareholders or Directors of the

Company, affiliated or associated

companies

o The father, mother, sons,

daughters, husband, or wife of any

of the natural persons listed in the

Clauses above

o Any business, and the Directors,

CEO and key officers of any

business, in which the natural

persons listed, own jointly or

severally at least 20% of the voting

rights.

Directors are required to declare

any potential conflict of interest and

not to take part in any discussion

or decision-making regarding any

subject or transaction in which

there is a conflict of interest with

the Company. All transactions in

which there are conflicts of interest

with Directors are agreed on terms

that are customary for arm’s-length

transactions in the Company’s

business. Decisions to enter into

transactions in which there are

conflicts of interest with Directors

require the approval of the Board.

5. Remuneration and Performance ManagementThe Company’s remuneration policy

aims to attract, retain, motivate and

compensate talented executive and

non-executive directors who are of

high calibre in order to ensure that

the Company is managed successfully

over the long term to the benefit of

its shareholders. To achieve this, a

competitive salary and bonus package

linked to the Company’s strategy

and performance is provided to the

Executive Directors.

The Compensation Committee takes a

responsible approach to benchmarking

the remuneration for the Executive

Directors and reviews remuneration

relative to Company and individual

performance and to the practices

of other comparable companies in

Jamaica. The Board is satisfied that

the composition and structure of the

remuneration package is appropriate and

does not incentivise undue risk taking.

Current year Prior year % change

Executive Directors

653,233 467,734 39.6%

Non-Executive Directors

13,000 16,000 (18.8%)

TOTAL

666,233 483,734 37.7%


Each Non-Executive Director is paid a fee of US$250.00 based

on their attendance at each meeting of the Board and the

committee(s) on which they serve. The remuneration paid to

the members of the Board of Directors in the current and prior

year are detailed below.

The Governance and Nomination Committee is responsible

for establishing processes for reviewing the performance

of individual Directors, the Board as a whole, and Board

Committees and reviewing and finalising the matrix of skills,

experience and characteristics required to be collectively

met by the Board and each of the Committees. In the

year under review, the Board did not formally review its

performance.

6. Risk ManagementThe Company understands and recognises that rigorous risk

management is essential for the stability of the business and

for sustaining its competitive market position and long-term

performance. The following objectives drive the Company’s

approach to risk management:

• supporting the achievement of the Company’s strategic and operating plan through an effective balance of risk

and reward;

• having a culture that is risk aware and supported by high standards of accountability at all levels;

• working to achieve an integrated risk management approach in which risk management forms part of all key

organisational processes;

• improving stakeholder confidence and trust

• safeguarding the Company’s assets – human, property, reputation, knowledge; and

• enabling the Board to fulfil its governance and compliance requirements.


The Audit Committee of Board has responsibility for overseeing

risk and senior management has responsibility for driving

and supporting risk management in each division across the

Company. The Committee has responsibility for reviewing the

risk management framework annually to ensure that it remains

sound.

The Board has overall responsibility for the Company’s system

of internal controls and for monitoring its effectiveness. Such a

system is designed to manage rather than eliminate the risk of

failure and by its very nature can only provide reasonable and

not absolute assurance against material misstatement or loss.

The Board has established a continuous process for identifying,

evaluating and managing the significant risks the Company

faces. The Board, through its Audit Committee, reviews at each

meeting, the effectiveness of the Company’s internal controls

and is satisfied that the current internal control systems, though

subject to improvement, are in accordance with good practice.

The key elements of the system of internal controls include:

• Each member of the Company’s Executive Management team has responsibility for specific aspects of the

Company’s operations. The team meets on a regular basis

and is responsible for the operational strategy, reviewing

operating results, identification and mitigation of risks

and communication and application of the Company’s

policies and procedures. Where appropriate, matters are

reported to the Board and the Board receives regular

reports on key developments, financial performance and

operational issues concerning the business.

• The Company has clear operational and financial controls and procedures which include authorisation limits for

expenditure, sales contracts and capital expenditure,

signing authorities, IT application controls, organisation

structure, company policies, segregation of duties and

reviews by management.

• An annual operating and capital budgeting process, the outputs of which are annual budgets that are reviewed,

approved and monitored by the Board

• Regular meetings between the Executive Management team, sales and line of business managers to discuss

actual performance against forecast, budget and prior

years. The operating results are reported on a monthly

basis to the Board and compared to the budget and the

latest forecast as appropriate

• Quarterly internal audit reviews and annual external

audits, both of which focus on confirming the operation

of controls in key process areas, and

• Maintenance of insurance cover for all major risk areas of the Company based on the scale of the risk and

availability of the cover in the market.

The Board’s monitoring covers all material controls, including

financial, non-financial, operational and compliance controls

and risk management. It is based principally on reviewing

reports from management to consider whether significant

risks are identified, evaluated, managed and controlled and

whether any significant weaknesses are promptly remedied

and indicate a need for more extensive monitoring.

7. Annual General Meeting of Shareholders

The Annual General Meeting (AGM) of Shareholders is

the company’s ultimate decision-making body. It decides

the duties for which it is responsible in accordance with

the Companies Act 2004 and the Company’s Articles of

Incorporation. The AGM decides on, among other things, the

adoption of the financial statements and the consolidated

financial statements contained therein, and the approval of

dividend payments. In addition, the AGM elects the Members

of the Board and the auditors, and approves the remuneration

paid to the external auditors and allow the Board to fix the

remuneration of the Directors for the ensuing financial year.

The AGM may also be asked to approve amendments to the

Articles of Incorporation, share issues and the acquisition of the

company’s own shares.

– Sandra A. C. Glasgow, Mentor




Management, Discussion and AnalysisADM &

Determination, with an optimistic attitude is the key to success. - Dalai Lama

AD

M&

The financial year 2015-2016 yielded mixed results as

although the year started out positively in the first quarter,

our last quarter was hampered by fierce competition from

unregulated suppliers in the market which required the company

to realign its business model with one-off provisions that

severely impacted our profit.

Market ConditionsDuring the financial year there was an 5.7% devaluation of the

Jamaican dollar against the United States dollar which propelled

inflation higher than expected, the local market was not able

to absorb all of the increases and hence depressed our margins

Increase in Gross Revenue

26.7%8.4%2016 Gross

profit margin

Us$ rate of excHange

Ytd June 2016

BOJ Weighted Average

Rate for June 2016

$120.90

BOJ Weighted Average

Rate for June 2015

$114.33

June 2016 June 2015 Change % change

In J$ ‘000 YTD YTD

Gross Revenue 11,377,221 9,929,589 1,447,632 15%

Gross Profit 3,035,322 2,826,744 208,578 7%

Gross Profit % 26.7% 28.5% -- -1.8%

Operating Expenses 2,430,606 1,969,741 (460,866) 23%

EBIDTA 604,716 857,003 (252,287) -29%

Finance Cost & Depreciation 479,044 460,028 (19,016) 4%

Sale of loss in joint venture (1,392) 4,305 (5,697) 132%

Minortiy Interest Profit/(Loss) 319 (12,487) 12,805 -103%

Net Profit - Equity Holders 126,745 405,157 (278,412) -69%

Financial Highlights in JM$


Decrease in Short-term interest cost

Interim dividend payment per share

1.5%$0.06 8.4%Increase in

Gross profit

management, diSCuSSiOn & anaLySiS



ADM &in key categories. Strong competition

in certain categories of meats, dairy,

wine and spirits also impacted the

margins negatively, although top line

sales increased by 17.1% as a result

of additional hotel rooms coming

on stream during the year. Growth

in the retail market was influenced

by new brands and commodity

products offerings which deepened its

market penetration, specifically with

wholesalers and sub-distributors.

Financial performanceGross operating revenue of US$94.1

Million exceeded the US$86.8 Million

reported in the corresponding period

last year. This represented an increase

of US$7.3 Million or 8.4%. The overall

increase in revenue for the group is

attributable to increased sales to the

hospitality industry primarily due to

CPJ St. Lucia and new product offerings

introduced into the local market. Cost

of operating revenue increased by

US$6.9 Million or 11.1%. Accordingly,

Gross profit was US$25.1 Million, a

US$0.4 Million or 1.5% growth over the

prior year. The write down of inventory

that became impaired occurred in the

last quarter of the financial year and

adversely impacted the year’s gross

profit. All factors combined resulted

in the gross profit margin declining by

1.8% moving from 28.5% reported in

2015 to the 26.7% recorded in 2016.

Operating ExpensesSelling and administrative expenses

increased by US$2.6 Million or

15.0% (2016: US$20.2 Million; 2015

US$17.6 Million) this was attributable

to increased staff costs, repairs and

maintenance and administrative

expenses. These changes were due


to growth in the company’s staff

complement, increased subsidiary

expenses as well as higher utilization of

equipment which led to more need for

maintenance.

Depreciation and amortization

increased from US$2.2 Million to US$2.4

Million or 13.1% as a result of capital

expenditure for the manufacturing

and operational assets set up during

the year. In an effort to access greater

levels of working capital to support its

operations, CPJ moved its credit facility

to another banking institution. This

change yielded a reduction in our short

term debt borrowing cost from US$2.0

Million in 2015 to US$1.9 Million in 2016

resulting in an 8.4% decrease.

The sale of the joint venture to our

partners was concluded at the end of

the year, resulting in a small gain of


US$12 thousand. The Egg plant ceased

operations in November 2015.

The net profit attributable to

shareholders for the year June 30, 2016

was US$1.1 Million and earnings per

stock unit declined from US$ 0.32 to

US$ 0.10.

Balance SheetThe Company’s financial position

reflected favourable trends. Total

assets grew by 5.7% or US$3.0 Million,

moving from US$52.8 Million in 2015

to US$55.9 Million in the current year.

Total Liabilities reflected an increase of

7.4% or US$2.5 Million, moving from

US$34.1 Million to US$36.6 Million.

Current assets rose by US$2.4

Million or 6% over the same period

last year, relating to an increase in

Cash and cash equivalents by US$0.96

Million or 31.3%, Trade receivables

increased by US$1 Million or 10.4%

and Inventories increased by US$0.4

Million or 1.5%. Current liabilities

showed an increase of US$2 Million

or 12% mainly due to a US$1.4 Million

(21.8%) increase in Accounts payable.

Long term borrowings increased by

US$0.1 Million (0.2%) mainly due to two

loans funded by Development Bank of

Jamaica Limited (DBJ) for a solar project

completed in November 2015.

DividendOn February 8th, 2016 the Board of

Directors met and declared an interim

dividend of JA$.06 (2015: JA$.09) per

share amounting to US$543 thousand

(2015: US$863 thousand) it was paid on

March 25, 2016 to its shareholders on

record as at 24 February 2016, with an

ex-dividend date of February 22, 2016.

This represents the final dividend for

the financial year ended June 30, 2016.

In summaryManagement’s focus over the

upcoming year will be geared

specifically towards cost containment

and rationalization of our business

portfolio. The company intends to

invest more resources into developing

it’s people and systems to bring a high

level of efficiency and capability to the

operations.

Noteworthy our level of service and

quality of products continues to be

recognized by our hospitality customers

and this resulted in the company being

awarded for the ninth time the JHTA

Purveyor of the Year 2016. In addition,

the company was also the recipient of

the Champion Exporter Award by the

Jamaica Manufacturers Association for

small exporters based on the products

exported to the Eastern Caribbean .

We wish to thank our partners,

shareholders, customers, vendors and

employees for their unswerving loyalty

and commitment to excellence.

ADM &

Increase in Total Liabilites

Increase in Total Assets

7.4%

6.0%

AWARDS

JMA Champion Exporter

2015

JHTA Purveyor

of the Year 2016



Left: Caribbean Producers Jamaica

Limited was awarded the Champion

Small Exporter at 47th Annual

Awards Banquet held on October 14,

2015 by the Jamaica Manufacturers

Association (JMA) to Honour

Excellence in Manufacturing for 2015.

Above: Caribbean Producers

Jamaica Limited was also awarded

the JHTA Purveyor of the Year

Award 2016. From left, Tom Tyler

- Co-Chairman, Dr. David Lowe -

CEO, and Hugh Logan - Director of

Hospitality Sales, with award.


At 443 strong, CPJ’s human resource compliment continues

to grow and to focus on motivating and empowering our

workforce towards higher levels of performance and success for

Team CPJ. Of paramount importance also is meeting the needs

of our clients by ensuring we have the right people, the right

attitude and the right product.

Annual Employee Awards

Hard work leads to success, and at CPJ, we take it a

bit higher— we applaud and incentivize our staff as was

demonstrated in our annually held Employee Awards Function.

On March 23, 2016, approximately 56 team members were

honoured for their outstanding service to CPJ, some having

served in excess of 22 years. Thirty-seven were deemed top

performers in their department; 9 were selected as having the

attributes which displayed the “Passion & Drive” that exemplifies

CPJ; 7 were considered “Most Improved”. Awards were presented

for Manager of the Year, Employee of the Year, Chairman’s Award,

Safe Driver Award among others.

This is a calendar event that was well supported and lauded by

the team which showcases the hard working and committed CPJ

team.

Recruitment & Staffing

In April 2015, our staff compliment stood at 356; in April 2016,

we are at 443, an increase of 80%.

Increased food processing capabilities came onstream

officially in May 2016 which added approximately 13 persons to

the workforce. This addition will no doubt provide much needed

employment and a great source of income for the folks in the

breadbasket parish.

In June 2016, Dr David Lowe, former Chief Revenue Officer,

was confirmed as Chief Executive Officer, he is now charged with

leading the team of seven senior managers.

The composition of the Jamaican team is as follows: Revenue

at 29%; Administration at 21%; Operations at 42.4% and St Lucia

at 8%. The Company’s growth rate this financial year was 22%

and the attrition rate at 1.55%.

As we continue to grow and expand and fulfill the new CEO’s

vision—Best Business—Best Clients—Best Products & Services—

Best Practices—Best People with Best Fit—we envisage that

the hr rePOrt

moving forward



we will earn the title of being “the Best

place to work”—an Employer of Choice.

Compensation & Benefits

CPJ’s compensation policy remains

competitive, reflective of industry

standards.

Benefits represented a 4.8% of

adjusted gross profit which amounted

to a 1.3% increase of when compared

with the previous financial year. A large

portion of this cost continues to be

uniforms, medical insurance, general

staff welfare and training. While these

costs are high, CPJ is committed to

enhancing the professional image of

our employees, ensuring that every

member receives the necessary training

and health coverage as we grow and

develop as a company.

Learning & Development

Among the several training initiatives

undertaken, was a comprehensive

supervisory development programme,

aimed at creating more awareness,

cohesiveness and greater sensitivity

to workplace issues. This training

unearthed hidden skills among this

group; leaders emerged, and they were

given the opportunity to highlight their

recommendations for the growth of

their respective departments based

on their experiences. This training has

undoubtedly poised this tier of team

members to segue to the next level.

Our HACCP and YUM trainings have

also taken center-stage as we prepare

for these very important certifications

under the guidance of our Quality

Control Manager Odette Knight.

CPJ visits the Melody House for Girls.


Corporate Social Responsibility

One of the hallmarks that set CPJ apart, is their

commitment to being a responsible corporate

citizen by supporting ventures aimed at providing

beneficiaries with a better quality of life.

For the 2015/2016 year, the company’s annual

Scholarship and Book List Programme totaled

$2.2 million to 51 recipients and $110 Thousand

to 12 Book List recipients. These initiatives

are geared exclusively to the children of CPJ’s

employees, who have excelled academically and

express a desire to succeed in their chosen field.

Many requests are received for support

during the course of the year, and CPJ has

assisted several church groups and other service

organizations; schools, health care and education.

Wellness and a healthy lifestyle also factor

heavily in our everyday lives; hence, our state-

of-the-art gym continues to provide the much

needed exercise area for our team members. We

also participated in several walkathons including

the Montego Bay City Run and the highly

anticipated calendar event CUMI Come Run held

at the Tryall Club.

Our Labour Day Project this year involved

the Tower Hill Infant School. Team members

journeyed over to Tower Hill to give the school

a much needed face-lift by painting the exterior

walls, paving a section to provide easier access

for the students and beautifying the garden by

weeding and putting in additional plants. The

Principal and other members of the community

also assisted in this worthwhile project.

CPJ acted as the co-title sponsor at the Jamaica

Independent School Association/Caribbean

Producers Jamaica (JISA/CPJ) Invitational Track

meet held at the Montego Bay Sports Complex

on Wednesday, April 23rd, 2016. The event is a

part of CPJ’s drive to develop western Jamaica

through youth empowerment. Mr. Mark Hart, the

company’s chairman was elated about the Meet’s

growth and looked forward to this year, the fourth

year of sponsorship. Brands such as Cariburst,

Lifespan & Dellos kept all patrons and athletes

alike, refreshed and hydrated at the event.

Approximately 30 schools at the Preparatory/

Primary level attended the event.

In looking back, we can confidently say that

we have unreservedly done our part to be socially

responsible, and are totally committed to future

ventures as our contribution to nation building.



finanCiaL StatementS

54 CPJ Annual Report 2016 - financial Statements

Caribbean Producers (Jamaica) Limited

CPJ Annual Report 2016 - financial Statements 55





Statement of financial Position JUNE 30, 2016 (Presented in United States dollars)



Statement of Profit or Loss and Other Comprehensive Income JUNE 30, 2016 (Presented in United States dollars)

The accompanying notes form an integral part of the financial statements.

Notes Group Company2016 2015 2016 2015

Gross operating revenue 18 94,104,389 86,850,246 84,488,121 82,813,467

Cost of operating revenue 19(a) (68,998,334) (62,125,820) (61,498,993) (59,380,988)

Gross profit 25,106,055 24,724,426 22,989,128 23,432,479

Selling and administration expenses 19(b) (20,236,962) (17,590,656) (18,360,177) (16,136,788)

Depreciation and amortisation 12,13 ( 2,448,629) ( 2,164,373) ( 2,176,970) ( 1,985,747)

Other operating income, net 20(a) 132,691 362,102 95,976 340,719

Operating profit 2,553,155 5,331,499 2,547,957 5,650,663

Finance income 20(b) 12,557 3,609 12,557 3,609

Finance costs 20(c) ( 1,855,747) ( 2,026,066) ( 1,852,088) ( 2,021,649)

Share of loss in joint venture 10(b) - ( 37,652) - ( 37,652)

Gain on sale of interest in joint venture 10(c) 11,515 - 11,515 -

Profit before taxation 721,480 3,271,390 719,941 3,594,971

Taxation 21 329,505 163,142 331,809 63,549

Profit for the year, being totalcomprehensive income $ 1,050,985 3,434,532 1,051,750 3,658,520

Attibutable to:Shareholders 1,048,349 3,543,747 1,051,750 3,658,520Non-controlling interest 2,636 ( 109,215) - -

$ 1,050,985 3,434,532 1,051,750 3,658,520

Earnings per stock unit 22 0.10¢ 0.32¢ 0.10¢ 0.33¢



Statement of Changes in Equity JUNE 30, 2016 (Presented in United States dollars)


GroupNon-

Share Accumulated controlling capital surplus interest Total

(note 14)

Balances at June 30, 2014 4,898,430 11,289,402 - 16,187,832

Profit for the year, being total comprehensive income - 3,543,747 (109,215) 3,434,532

Transaction recorded directly in equity:Dividends (note 25) - ( 863,180) - ( 863,180)

Balances at June 30, 2015 4,898,430 13,969,969 (109,215) 18,759,184

Profit for the year, being total comprehensive income - 1,048,349 2,636 1,050,985


Balances at June 30, 2016 $4,898,430 14,475,108 (106,579) 19,266,959

Company

Balances at June 30, 2014 4,898,430 11,298,901 - 16,197,331

Profit for the year, being total comprehensive income - 3,658,520 - 3,658,520


Balances at June 30, 2015 4,898,430 14,094,241 - 18,992,671

Profit for the year, being total comprehensive income - 1,051,750 - 1,051,750


Balances at June 30, 2016 $4,898,430 14,602,781 - 19,501,211




Notes Group Company

2016 2015 2016 2015CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the year 1,048,349 3,543,747 1,051,750 3,658,520Adjustments for:

Depreciation and amortisation 12,13 2,448,629 2,164,373 2,176,970 1,985,747Share of loss in joint venture 10(b) - 37,652 - 37,652Gain on sale of interest in joint venture 10(c) ( 11,515) - ( 11,515) -Gain on disposal of property,

plant and equipment 20(a) ( 8,110) ( 19,967) ( 8,110) ( 19,967)Interest income 20(b) ( 12,557) ( 3,609) ( 12,557) ( 3,609)Interest expense 20(c) 1,855,747 2,026,066 1,852,088 2,021,649Non controlling interest 2,636 ( 109,215) - -Taxation 21 ( 329,505) ( 163,142) ( 331,809) ( 63,549)

4,993,674 7,475,905 4,716,817 7,616,443(Increase)/decrease in current assets:

Accounts receivable ( 1,038,693) 1,454,854 ( 832,798) 1,386,174Inventories ( 367,362) ( 5,301,338) ( 78,767) ( 2,571,547)

Increase in current liability:Accounts payable 1,458,878 1,728,934 1,190,006 989,485

Cash generated from operations 5,046,497 5,358,355 4,995,258 7,420,555

Interest paid ( 1,888,012) ( 2,033,554) ( 1,884,354) ( 2,029,137)Tax paid ( 377) ( 1,427) ( 377) ( 1,427)

Net cash provided by operating activities 3,158,108 3,323,374 3,110,527 5,389,991

CASH FLOWS FROM INVESTING ACTIVITIESInvestment 3 ( 28,964) 3 ( 28,964)Interest in subsidiary - - ( 221,088) ( 2,004,046)Interest in joint venture 170,701 22,948 170,701 22,948Additions to property, plant and equipment

and intangible asset 12,13 ( 2,935,302) ( 3,791,663) ( 2,491,789) ( 2,263,062)Proceeds from disposal of property, plant

and equipment 9,240 27,655 9,240 27,655Interest received 12,557 3,609 12,557 3,609

Net cash used by investing activities ( 2,742,801) ( 3,766,415) ( 2,520,376) ( 4,241,860)

CASH FLOWS FROM FINANCING ACTIVITIESDividends paid ( 543,210) ( 863,180) ( 543,210) ( 863,180)Promissory notes received 657,131 7,970 657,131 7,970Promissory notes repaid ( 15,465) ( 123,495) ( 15,465) ( 123,495)Long-term/short-term borrowings received 16,021,908 11,467,956 16,021,908 11,467,956Due to related company 353,382 1,668,458 - -Long-term/short-term borrowings repaid (15,745,568) (11,848,559) (15,735,826) (11,839,545)

Net cash provided/(used) byfinancing activities 728,178 309,150 384,538 ( 1,350,294)

Net increase/(decrease) in cash and cash equivalents 1,143,485 ( 133,891) 974,689 ( 202,163)

Cash and cash equivalents at beginning of the year 2,861,432 2,995,323 2,696,115 2,898,278

CASH AND CASH EQUIVALENTS AT END OFTHE YEAR $ 4,004,917 2,861,432 3,670,804 2,696,115

Comprised of:Cash and cash equivalents 4,004,917 3,049,479 3,670,804 2,884,162Bank overdraft - ( 188,047) - ( 188,047)

$ 4,004,917 2,861,432 3,670,804 2,696,115

Statement of Cash flows JUNE 30, 2016 (Presented in United States dollars)



1. Identification

Caribbean Producers (Jamaica) Limited (“company” or “parent company”) is incorporatedunder laws of and domiciled in Jamaica. Its registered office is situated at Shop No. 14, Montego Freeport Shopping Centre, Montego Bay, St. James and its principal place of business is at 1 Guinep Way, Montego Freeport, Montego Bay, St. James.

The company’s principal activities during the year were the wholesale and distribution of food and beverages, the distribution of non-food supplies and the manufacture and distribution of fresh juices and meats.

The company’s shares are listed on the Junior Market of the Jamaica Stock Exchange.

The company and its subsidiaries are collectively referred to as “the group”.

The company holds 100% of the issued share capital of CPJ Investments Limited, a company incorporated on September 16, 2013. CPJ Investments Limited’s principal activity is holding a51% investment in CPJ (St. Lucia) Limited, a company whose principal activity is the wholesaleand distribution of food and beverages and the distribution of non-food supplies. Both companies are incorporated and domiciled in St. Lucia.

2. Statement of compliance, basis of preparation and significant accounting policies

(a) Statement of compliance:

The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and their interpretations issued by the International Accounting Standards Board, and comply with the provisions of the Jamaican Companies Act.

New, revised and amended standards and interpretations that became effective

during the year:

During the year, certain new standards, interpretations and amendments to existing standards became effective. The adoption of those standards and amendments did not have a significant impact on the financial statements.

New, revised and amended standards and interpretations issued but not yet

effective:

At the date of authorisation of the financial statements, certain new, revised and amended standards and interpretations have been issued which are not yet effective for the current year and which the group has not early-adopted. The group has assessed the relevance of all such new standards, amendments and interpretations with respect to the group’s operations and has determined that the following are likely to have an effect on the financial statements.

Notes to the financial Statement JUNE 30, 2016 (Presented in United States dollars)



2. Statement of compliance, basis of preparation and significant accounting policies (cont’d)

(a) Statement of compliance (cont’d):

New, revised and amended standards and interpretations issued but not yet effective

(cont’d):

• Improvements to IFRS 2012-2014 cycle contain amendments to certain standards and interpretations and are effective for annual reporting periods beginning on or after January 1, 2016. The main amendments applicable to the group are as follows:

- IFRS 5 Non-current Assets Held for Sale and Discontinued Operations has been amended to clarify that if an entity changes the method of disposal of an asset or disposal group – i.e. reclassifies an asset or disposal group from held-for-distribution to owners to held-for-sale or vice versa without any time lag, then the change in classification is considered a continuation of the original plan of disposal and the entity continues to apply held-for-distribution or held-for-sale accounting. At the time of the change in method, the entity measures the carrying amount of the asset or disposal group and recognises any write-down (impairment loss) or subsequent increase in the fair value less costs to sell/distribute the asset or disposal group. If an entity determines that an asset or disposal group no longer meets the criteria to be classified as held-for-distribution, then it ceases held-for-distribution accounting in the same way as it would cease held-for-sale accounting.

- IFRS 7 Financial Instruments: Disclosures has been amended to clarify when servicing arrangements are in the scope of its disclosure requirements on continuing involvement in transferred assets in cases when they are derecognised in their entirety. A servicer is deemed to have continuing involvement if it has an interest in the future performance of the transferred asset -e.g. if the servicing fee is dependent on the amount or timing of the cash flows collected from the transferred financial asset; however, the collection and remittance of cash flows from the transferred asset to the transferee is not, in itself, sufficient to be considered ‘continuing involvement’.

- IFRS 7 has also been amended to clarify that the additional disclosures required by Disclosures: Offsetting Financial Assets and Financial Liabilities (Amendment to IFRS 7) are not specifically required for inclusion in condensed interim financial statements for all interim periods; however, they are required if the general requirements of IAS 34 Interim Financial Reporting, require their inclusion.

- IAS 34 Interim Financial Reporting has been amended to clarify that certain disclosures, if they are not included in the notes to interim financial statements, may be disclosed “elsewhere in the interim financial report”. The interim financial report is incomplete if the interim financial statements and any disclosures incorporated by cross-reference are not made available to users of the interim financial statements on the same terms and at the same time.

Notes to the financial Statement (Continued) JUNE 30, 2016 (Presented in United States dollars)






(cont’d):

• Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in respect of Sale or Contribution of Assets between an Investor and its Associate or Joint venture, are effective for annual reporting periods beginning on or after January 1, 2016. The amendments require that when a parent loses control of a subsidiary in a transaction with an associate or joint venture, the full gain be recognised when the assets transferred meet the definition of a ‘business’ under IFRS 3 Business Combinations.

• Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 28 Investments in Associates and Joint Venturesare effective for annual reporting periods beginning on or after January 1, 2016. The amendments have been amended to introduce clarifications on which subsidiaries of an investment entity are consolidated instead of being measured at fair value through profit or loss. IFRS 10 was amended to confirm that the exemption from preparing consolidated financial statements is available to a parent entity that is a subsidiary of an investment entity. An investment entity shall measure at fair value through profit or loss all of its subsidiaries that are themselves investment entities. IAS 28 was amended to provide an exemption from applying the equity method for investment entities that are subsidiaries and that hold interests in associates and joint ventures. IFRS 12 was amended to clarify that the relevant disclosure requirements in the standard apply to an investment entity in which all of its subsidiaries are measured at fair value through profit or loss.

• Amendments to IAS 1 Presentation of Financial Statements is effective for annual reporting periods beginning on or after January 1, 2016. This has been amended to clarify or state the following:

- specific single disclosures that are not material do not have to be presented even if they are a minimum requirement of a standard.

- the order of notes to the financial statements is not prescribed.

- line items on the statement of financial position and the statement of profit or loss and other comprehensive income (OCI) should be disaggregated if this provides helpful information to users. Line items can be aggregated if they are not material.

- specific criteria is now provided for presenting sub-totals on the statement of financial position and in the statement of profit or loss and OCI, with additional reconciliation requirements for the statement of profit or loss and OCI.

- the presentation in the statement of OCI of items of OCI arising from joint ventures and associates accounted for using the equity method follows IAS 1 approach of splitting items that may, or that will never, be reclassified to profit or loss.







(cont’d):

• Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations, effective for annual reporting periods beginning on or after January 1, 2016. The amendments require business combination accounting to be applied to acquisitions of interests in a joint operation that constitutes a business. Business combination accounting also applies to the additional interests in a joint operation while the joint operator retains joint control. The additional interest acquired will be measured at fair value but previously held interests will not be re-measured.

• Amendments to IAS 27 Equity Method in Separate Financial Statements is effective for annual reporting periods beginning on or after January 1, 2016. The amendments allow the use of the equity method in separate financial statements, and apply to the accounting for subsidiaries, associates, and also joint ventures.

• Amendments to IAS 7 Statement of Cash Flows is effective for annual reportingperiods beginning on or after January 1, 2017 and require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash flows.

• Amendments to IAS 12 Income Taxes is effective for annual reporting periods beginning on or after January 1, 2017 and clarifies the following:

− the existence of a deductible temporary difference depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future changes in the carrying amount or expected manner of recovery of the asset.

− A deferred tax asset can be recognised if the future bottom line of the tax return is expected to be a loss, if certain conditions are met.

− Future taxable profits used to establish whether a deferred tax can be recognised should be the amount calculated before the effect of reversing temporary differences.

− An entity can assume that it will recover an asset for more than its carrying amount if there is sufficient evidence that it is probable that the entity will achieve this.

− Deductible temporary differences related to unrealised losses should be assessed on a combined basis for recognition unless a tax law restricts the use of losses to deductions against income of a specific type.







(cont’d):

• IFRS 9 Financial Instruments is effective for annual reporting periods beginning on or after January 1, 2018. This replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on theclassification and measurement of financial assets and liabilities, including a new expected credit loss model for calculating impairment of financial assets and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. Although the permissible measurement bases for financial assets – amortised cost, fair value through other comprehensive income and fair value though profit or loss - are similar to IAS 39, the criteria for classification into the appropriate measurement category are significantly different. IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ model, which means that a loss event will no longer need to occur before an impairment allowance is recognised.

• IFRS 15 Revenue From Contracts With Customers is effective for annual reporting periods beginning on or after January 1, 2018 and replaces IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers and SIC-31 Revenue – Barter Transactions Involving Advertising Services. It does not apply to insurance contracts, financial instruments or leasecontracts, which fall in the scope of other IFRSs. It also does not apply if two companies in the same line of business exchange non-monetary assets to facilitate sales to other parties.

The group will apply a five-step model to determine when to recognise revenue, and at what amount. The model specifies that revenue should be recognised when (or as) an entity transfers control of goods or services to a customer at the amount to which the entity expects to be entitled. Depending on whether certain criteria are met, revenue is recognised at a point in time, when control of goods or services is transferred to the customer; or over time, in a manner that best reflects the entity’s performance.

There will be new qualitative and quantitative disclosure requirements to describe the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.







(cont’d):

• IFRS 16 Leases is effective for annual reporting periods beginning on or after January 1, 2019. It eliminates the current dual accounting model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease accounting. Companies will be required to bring all major leases on-balance sheet, recognising new assets and liabilities. The on-balance sheet liability will attract interest; the total lease expense will be higher in the early years of a lease even if a lease has fixed regular cash rentals. Optional lessee exemption will apply to short-term leases and for low-value items with value of US$5,000 or less.

Lessor accounting remains similar to current practice as the lessor will continue to classify leases as finance and operating leases. Finance lease accounting will be based on IAS 17 lease accounting, with recognition of net investment in lease comprising lease receivable and residual asset. Operating lease accounting will be based on IAS 17 operating lease accounting.

Early adoption is permitted if IFRS 15 Revenue from Contracts with Customers is also adopted.

Management is evaluating the impact that the foregoing standards and amendments to standards may have on its financial statements when they are adopted.

(b) Basis of preparation:

The financial statements are prepared under the historical cost convention, and are presented in United States dollars (US$), which is the company’s functional currency.

(c) Going concern:

The preparation of the financial statements in accordance with IFRS assumes that the group will continue in operation for the foreseeable future. This means, in part, that the statements of profit or loss and other comprehensive income and the statement of financial position assume no intention or necessity to liquidate or curtail operations. This is commonly referred to as the going concern basis. Management believes that the preparation of the financial statements on the going concern basis continues to be appropriate.

(d) Use of estimates and judgements:

The preparation of the financial statements to conform with IFRS requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, contingent assets and contingent liabilities at the reporting date, and the income and expenses for the year then ended. Actual amounts could differ from those estimates.





(d) Use of estimates and judgements (cont’d):

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised, if the revision affects only that year, or in the year of the revision and future years, if the revision affects both current and future years.

Judgements made by management in the application of IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next financial year are discussed below:

(i) Allowance for impairment losses on receivables:

In determining amounts recorded for impairment losses on receivables in the financial statements, management makes judgements regarding indicators of impairment, that is, whether there are indicators that there may be a measurable decrease in the estimated future cash flows from receivables, caused for example, by default or adverse economic conditions. Management also makes estimates of the likely estimated future cash flows from impaired receivables as well as the timing of such cash flows. Historical loss experience is applied where indicators of impairment are observable on significant receivables with similar characteristics, such as credit risks.

(ii) Net realisable value of inventories:

Estimates of net realisable value are based on the most reliable evidence available, at the time the estimates are made, of the amount the inventories are expected to realise. These estimates take into consideration fluctuations of price or cost directly relating to events occurring after the end of the year to the extent that such events confirm conditions existing at the end of the year.

Estimates of net realisable value also take into consideration the purpose for which the inventory is held.

(iii) Judgement in evaluation of contingencies:

For a contingent liability to qualify for recognition there must be a present obligation and the probability of an outflow of economic benefits to settle that obligation. In recognising contingent liabilities of the group, management determines the possibility of an outflow of resources and makes estimates of expenditure required to settle the present obligation at the reporting date.

No provision is made if management considers the possibility of any outflow in settlement to be remote.

(iv) Residual value and expected useful life of property plant and equipment:

The residual value and the expected useful life of an asset are reviewed at least at each reporting date, and, if expectations differ from previous estimates, the change is accounted for prospectively. The useful life of an asset is defined in terms of the asset’s expected utility to the company and its subsidiaries.





(e) Basis of consolidation:

(i) A “subsidiary” is an enterprise controlled by the company. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of a subsidiary are included in the consolidated financial statements from the date control commences until the date that control ceases.

The consolidated financial statements include the financial statements of the company and its subsidiaries (note 1), made up to June 30, 2016.

(ii) Intra-group balances and transactions, and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

(iii) Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the group.

(iv) The financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances.

(v) Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Changes in the group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests, even if doing so causes the non-controlling interest to have a deficit balance.

(f) Cash and cash equivalents:

This comprises cash and bank balances, and short-term deposits maturing within three months or less from the date of deposit or acquisition that are readily convertible into known amounts of cash and which are not subject to significant risk of changes in value.

Bank overdrafts that form an integral part of the group’s cash management for financing operation are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(g) Accounts receivable:

Trade and other receivables are stated at amortised cost, less impairment losses.

(h) Inventories:

Inventories are valued at the lower of cost, determined on the weighted average basis, and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less selling expenses.

The cost of raw materials, labour and appropriate allocations for overhead expenses are included in manufactured finished goods.





(i) Property, plant and equipment:

(i) Recognition and measurement:

Items of property, plant and equipment are stated at cost, less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

(ii) Subsequent expenditure:

Subsequent expenditure is capitalised only if it is probable that future economic benefits associated with the expenditure will flow to the group.

(iii) Depreciation:

Depreciation is recognised in profit or loss on the straight-line basis at annual rates estimated to write down the assets to their residual values over their expected useful lives. No depreciation is charged on construction in progress. The depreciation rates are as follows:

Leasehold improvements 10% and 20%Furniture, fixtures and equipment 10% and 20%Computer equipment 33.33%Motor vehicles 20%

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(j) Intangible asset:

Intangible asset, which represents computer software, is deemed to have a finite useful life of three years and is measured at cost, less accumulated amortisation and impairment losses, if any.

(k) Accounts payable:

Trade and other payables are stated at amortised cost.





(l) Provisions:

A provision is recognised when the group has a legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and where appropriate, the risk specific to the obligation.

(m) Related parties:

A related party is a person or entity that is related to the entity that is preparing its financial statements (referred to in IAS 24 Related Party Disclosures, as the “reporting entity”, in this case, the group).

(a) A person or a close member of that person’s family is related to the group if that person:

(i) has control or joint control over the group;

(ii) has significant influence over the group; or

(iii) is a member of the key management personnel of the group or of a parent of the group.

(b) An entity is related to the group if any of the following conditions applies:

(i) The entity and the group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) The entity is a post-employment benefit plan for the benefit of employees of either the group or an entity related to the group.

(vi) The entity is controlled, or jointly controlled by a person identified in (a).

(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

(viii) The entity, or any member of a group of which it is a part, provides key management personnel sevices to the group or to the parent of the group.

(c) A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.





(n) Investments:

(i) Interest in subsidiary:

Interest in subsidiary is stated at cost, less provision for impairment, if any.

(ii) Interest in joint venture:

This represents entities or operations over which the company, by virtue of a joint venture agreement, exercises joint control with one or more entities. Interest in joint venture is accounted for using the equity method in accordance with IFRS 11 Joint Arrangements, whereby the investment is recognised initially at cost and thereafter the carrying amount is increased or reduced by the company’s share of profits or losses after the acquisition date.

(iii) Loans and receivables:

Loans and receivables are those that have a fixed or determinable payment and which are not quoted in an active market. Loans and receivables investments are initially measured at cost and subsequently at amortised cost, calculated on the effective interest rate method, less impairment losses.

(o) Share capital and dividends:

Ordinary shares are classified as equity and carried at cost. Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognised as a deduction from equity.

Dividends on ordinary shares are recognised as a liability in the period in which they are declared.

(p) Interest-bearing borrowings:

Interest-bearing borrowings are recognised initially at cost. Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost, with any difference between cost and redemption value recognised in profit or loss over the period of the borrowing on an effective interest basis.

(q) Transaction costs:

(i) Transaction costs of share issue:

Transaction costs on the issue of shares are deducted from the proceeds of the issue of share capital to the extent the costs are directly attributable to the issue of the shares.

(ii) Debt issuance costs:

Debt issuance costs represent financing and certain related fees associated with securing long-term borrowings. Amortisation is charged to profit or loss on the effective interest basis over the life of the related borrowings.





(r) Revenue recognition:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due or material associated costs on the possible return of goods.

(s) Expenses/income:

(i) Expenses:

Expenses are recognised in profit or loss on the accrual basis.

(ii) Finance costs:

Finance costs comprise interest payable on borrowings calculated using the effective interest method and material bank overdraft interest.

(iii) Finance income:

Finance income comprises interest earned on funds invested and is recognised in profit or loss as it accrues, taking into account the effective yield on the asset.

(iv) Operating lease payments:

Payments made under operating leases are recognised in profit or loss on the straight-line basis over the term of the lease.

(v) Employee benefits:

Employee benefits include current or short-term benefits such as salaries, statutory contributions paid, annual vacation leave and non-monetary benefits such as medical care and housing. Short-term employee benefits are recognised as a liability, net of payments made, and charged as expenses as incurred. The expected cost of vacation leave that accumulates is recognised over the period that the employees become entitled to the leave.

(t) Taxation:

Income tax on the profit for the year comprises current and deferred tax. Taxation is recognised in profit or loss, except to the extent that it relates to items recognised directly in equity, in which case it is recognised in other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting date and any adjustment to tax payable in respect of previous years.

Deferred tax is provided for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted at the reporting date.





(t) Taxation (cont’d):

A deferred tax liability is recognised for taxable temporary differences, except to the extent that the group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary differences will not reverse in the foreseeable future.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(u) Impairment:

The carrying amounts of the group’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss.

(i) Calculation of recoverable amount:

The recoverable amount of the group’s receivables is calculated as the present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. Receivables with a short duration are not discounted.

The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

(ii) Reversals of impairment:

An impairment loss in respect of receivables is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.

In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

(v) Operating segments:

An operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the company’s other components and for which discrete financial information is available. An operating segment’s operating results are reviewed regularly by the Board of Directors to make decisions about resources to be allocated to the segment and assess its performance.

Based on the nature of the group’s products, processes, customers and distribution systems, management has determined that disclosure of segment information is not applicable to the group.





(w) Foreign currencies:

Transactions in foreign currencies are converted at the rates of exchange ruling on the dates of those transactions. Monetary assets and liabilities denominated in othercurrencies at the reporting date are translated to United States dollars at the rates ofexchange ruling on that date. Gains and losses arising from fluctuations in exchange rates are included in profit or loss.

For the purpose of the statement of cash flows, all foreign currency gains and losses recognised in profit or loss are treated as cash items and included in cash flows from operating or financing activities along with movements in the principal balances.

(x) Financial instruments:

A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. Financial assets have been determined to include cash and cash equivalents, accounts receivable and investments. Financial liabilities include bank overdraft, short-term loans, accounts payable, short-term and long-term promissory notes, long-term borrowings and amounts due to related company.

(y) Determination of fair value:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market price is used to determine fair value where an active market exists as it is the best evidence of the fair value of a financial instrument. The company’s financial instruments lack an available trading market. Further, the company has no financial instruments that are carried at fair value. The carrying value of the company’s financial instruments approximates their fair value.

3. Cash and cash equivalents

Group Company

2016 2015 2016 2015

Cash 7,264 6,642 6,270 6,054Bank balances 3,974,646 2,536,017 3,641,527 2,371,288Deposits 23,007 506,820 23,007 506,820

4,004,917 3,049,479 3,670,804 2,884,162Bank overdraft - ( 188,047) - ( 188,047)

$4,004,917 2,861,432 3,670,804 2,696,115




3. Cash and cash equivalents (cont’d)

Bank overdraft, in the prior year, represented credit balances on the group’s bank accounts arising from items in transit at the reporting date. The company had an overdraft facility of J$100 million with Sagicor Bank Jamaica Limited, which attracted interest if drawn upon and was secured as detailed in note 16. However, during the year, the group consolidated certain debts with Sagicor Bank Jamaica Limited through credit facilities provided by the Bank of Nova Scotia Jamaica Limited. The group now has an approved multi-purpose operating line of credit in the amount of US$8,500,000 which facilitates an overdraft limit of J$120 million. The overdraft is subject to interest at the bank’s base lending rate less 3% and is secured as disclosed in note 16.

4. Accounts receivable

Group Company

2016 2015 2016 2015

Trade receivables (a) and (b) 10,739,825 9,731,391 9,776,558 9,089,868Other receivables (c) 2,520,428 2,421,201 2,399,628 2,187,039

13,260,253 12,152,592 12,176,186 11,276,907Less: Allowance for impairment

losses (d) ( 100,365) ( 31,397) ( 97,157) ( 30,676)

$13,159,888 12,121,195 12,079,029 11,246,231

(a) Trade receivables include $22,240 (2015: $74,042) for the group and $22,240 (2015:$73,715) for the company due from directors; and $69,122 (2015: $174,615) for the groupand the company due from related companies, which are controlled by directors.

(b) The aging of trade receivables at the reporting date was:

Group

2016 2015Gross Impairment Gross Impairment

Not past due 8,506,897 - 7,449,500 -Past due 31- 60 days 1,598,070 - 1,438,331 -More than 60 days 634,858 100,365 843,560 31,397

$10,739,825 100,365 9,731,391 31,397

Company

2016 2015Gross Impairment Gross Impairment

Not past due 7,614,320 - 6,773,131 -Past due 31- 60 days 1,565,325 - 1,452,049 -More than 60 days 596,913 97,157 864,688 30,676

$9,776,558 97,157 9,089,868 30,676

(c) Other receivables include $27,730 (2015: $43,508) for the group and the company due from directors; and $234,843 (2015: $734,843) for the group and the company due from related companies, which are controlled by directors.




4. Accounts receivable (cont’d)

(d) The movement in allowance for impairment in respect of trade receivables during the year was as follows:

Group Company

2016 2015 2016 2015

Balance at beginning of year 31,397 55,726 30,676 55,726Amounts written off ( 29,260) (52,878) (20,357) (52,878)Amount provided during the year

[note 19(b)] 98,228 28,549 86,838 27,828

Balance at end of year $100,365 31,397 97,157 30,676

5. InventoriesGroup Company

2016 2015 2016 2015

Goods held for resale – duty paid 18,530,397 18,406,564 16,397,231 16,113,448Goods held in bonded warehouse 1,009,007 480,067 603,125 330,753Goods in transit 2,602,479 3,298,536 2,135,350 2,993,729Raw materials 1,578,634 1,309,898 1,569,541 1,303,776Others 545,929 404,019 483,176 367,950

$24,266,446 23,899,084 21,188,423 21,109,656

During the year, expenses relating to inventory write-offs amounted to $1,706,984 (2015:$925,968) for the group and $1,510,654 (2015: $821,356) for the company.

6. Short-term loans

Group and Company

2016 2015

Sagicor Bank Jamaica Limited loans (a) - 4,925,000The Bank of Nova Scotia Jamaica Limited loans (b) 5,100,000 -

$5,100,000 4,925,000

(a) These US$ loans were repaid during the year, bore interest at 6.5% and were secured as disclosed in note 16 (see also note 3).

(b) These are US$ revolving loans that bear interest at 4.25% and are secured as disclosed in note 16.

7. Accounts payableGroup Company

2016 2015 2016 2015

Trade payables (a) 5,219,431 4,415,133 4,240,854 3,629,756Other payables (b) 2,765,501 2,143,186 2,591,359 2,044,717

$7,984,932 6,558,319 6,832,213 5,674,473




7. Accounts payable (cont’d)

(a) Trade payables include:

(i) $4,319 (2015: $2,808) for the group and $4,319 (2015: $1,871) for the companydue to directors; and

(ii) $143,184 (2015: $296,627) for the group and $14,975 (2015: $202,117) for the company due to related companies, which are controlled by directors.

(b) Other payables include $65,119 (2015: $69,308) for the group and the company due to related companies, which are controlled by directors.

8. Short-term promissory notesGroup and Company

2016 2015

8% related company loan 750,000 750,0008% related party loans 1,858,333 1,858,3337% related party loan 1,563,333 1,563,3336% related party loan 146,128 146,1285% related party loan 651,091 -

$4,968,885 4,317,794

(a) These US$ promissory notes are unsecured and repayable with three months notice to the company.

(b) The related company is controlled by directors.

9. Interest in subsidiary

(a) The details of the company’s subsidiaries as at June 30, 2016 are as follows:

Percentage of ordinary Place ofCompany Principal activity shares held by company incorporation

CPJ Investments Limited Holds investment in CPJ (St. Lucia) Limited 100 St. Lucia

CPJ (St. Lucia) Limited See note 1 51 St. Lucia

(b) Interest in subsidiary comprises:Company

2016 2015

Shares, at cost 10,000 10,000Advances (see note below) 2,971,310 2,750,222

$2,981,310 2,760,222

These advances are interest-free, unsecured and have no fixed repayment terms. However, the company’s intent is not to require repayment within 12 months of the reporting date.




10. Interest in joint venture

(a) In the prior year, the group held 50% interest in Caribbean Egg Processors Limited (CEP), a company incorporated to purchase, process and sell eggs, related products and services, comprised as follows:

Shares, at cost 77Additional cost of acquisition 406,977Advances 102,025

509,079Less: Share of accumulated losses (349,893)

$159,186

(b) The group recognised its interest in this joint venture using the equity method and based

on information obtained from the unaudited financial statements of CEP whose reporting

date is June 30. Summary of financial information for CEP as at June 30, 2015 was as

follows:

Non-current assets 28,060Current assets (including cash and cash equivalents $6,471) 87,192Non-current liabilities (113,196)Current liabilities (635,572)

Net liabilities (100%) $(633,516)

Company’s share of net liabilities (50%) $(316,758)

Revenue 62,239Depreciation 26,476Loss and total comprehensive loss (100%) $( 75,304)

Company’s share of loss (50%) $( 37,652)

(c) However, on September 2, 2015, the company entered into an agreement to sell its 50%

interest in CEP for (J$4,500,000) $37,657. In addition to the purchase price, the company

received an additional (J$2,500,000) $20,920 as reimbursement for monies due from CEP

and leasehold improvements valued at approximately (J$14 million) US$117,197. The

completion of the sale of shares was subject to certain conditions, outlined in paragraph 7

of the agreement, which have all been met as at June 30, 2016.

Hence, the company’s interest in the joint venture has been derecognised and the resultant gain on sale of $11,515 recognised in profit or loss, as at June 30, 2016.




11. Deferred tax asset

The deferred tax asset is attributable to differences in tax and financial statement reporting in respect of the following:

Group

Recognised Recognised2014 in income 2015 in income 2016

[note 21(a)] [note 21(a)]

Accounts payable - - - 49,050 49,050Unrealised foriegn exchange gains - - - ( 2,509) ( 2,509)Tax effect of losses carried forward - 250,872 250,872 36,868 287,740Property, plant and equipment 95,508 ( 87,730) 7,778 246,096 253,874

$95,508 163,142 258,650 329,505 588,155

Company

Recognised Recognised2014 in income 2015 in income 2016

[note 21(a)] [note 21(a)]

Accounts payable - - - 49,050 49,050Unrealised foriegn exchange gains - - - ( 2,509) ( 2,509)Property, plant and equipment 95,508 63,549 159,057 285,268 444,325

$95,508 63,549 159,057 331,809 490,86612. Property, plant and equipment

Group Furniture,

Leasehold fixtures and Computer Motor Constructionimprovements equipment equipment vehicles in progress Total

Cost:June 30, 2014 7,645,668 8,689,844 1,481,652 1,631,069 - 19,448,233

Additions 264,943 1,528,481 371,408 480,880 1,119,866 3,765,578Disposals - ( 99,974) ( 9,800) ( 162,061) - ( 271,835)

June 30, 2015 7,910,611 10,118,351 1,843,260 1,949,888 1,119,866 22,941,976

Additions 1,187,397 1,254,570 131,155 298,975 63,205 2,935,302Disposals - ( 11,589) - ( 66,526) - ( 78,115)Transfer 299,772 745,925 - - (1,126,814) ( 81,117)

June 30, 2016 9,397,780 12,107,257 1,974,415 2,182,337 56,257 25,718,046

Depreciation:June 30, 2014 2,771,551 2,969,281 1,021,409 1,034,096 - 7,796,337

Charge for the year 720,163 968,366 270,565 198,264 - 2,157,358Disposals - ( 95,126) ( 9,800) ( 159,221) - ( 264,147)

June 30, 2015 3,491,714 3,842,521 1,282,174 1,073,139 - 9,689,548

Charge for the year 791,535 1,107,373 271,487 269,541 - 2,439,936Disposals - ( 10,459) - ( 66,526) - ( 76,985)

June 30, 2016 4,283,249 4,939,435 1,553,661 1,276,154 - 12,052,499

Net book values:June 30, 2016 $5,114,531 7,167,822 420,754 906,183 56,257 13,665,547

June 30, 2015 $4,418,897 6,275,830 561,086 876,749 1,119,866 13,252,428




12. Property, plant and equipment (cont’d)

CompanyFurniture,

Leasehold fixtures and Computer Motor Constructionimprovements equipment equipment vehicles in progress Total

Cost:June 30, 2014 7,594,136 8,389,362 1,447,861 1,425,832 - 18,857,191

Additions 168,024 456,943 339,022 381,822 917,251 2,263,062Disposals - ( 99,974) ( 9,800) ( 162,061) - ( 271,835)

June 30, 2015 7,762,160 8,746,331 1,777,083 1,645,593 917,251 20,848,418

Additions 867,786 1,161,071 124,862 274,865 63,205 2,491,789Disposals - ( 11,589) - ( 66,526) - ( 78,115)Transfer 97,157 745,925 - - (924,199) ( 81,117)

June 30, 2016 8,727,103 10,641,738 1,901,945 1,853,932 56,257 23,180,975

Depreciation:June 30, 2014 2,771,551 2,955,976 1,021,164 1,025,167 - 7,773,858

Charge for the year 706,372 861,643 260,515 157,217 - 1,985,747Disposals - ( 95,126) ( 9,800) ( 159,221) - ( 264,147)

June 30, 2015 3,477,923 3,722,493 1,271,879 1,023,163 - 9,495,458

Charge for the year 748,933 965,533 257,512 204,992 - 2,176,970Disposals - ( 10,459) - ( 66,526) - ( 76,985)

June 30, 2016 4,226,856 4,677,567 1,529,391 1,161,629 - 11,595,443

Net book values:June 30, 2016 $4,500,247 5,964,171 372,554 692,303 56,257 11,585,532

June 30, 2015 $4,284,237 5,023,838 505,204 622,430 917,251 11,352,960

13. Intangible asset

Computer softwareGroup Company

Cost:June 30, 2014 - -Addition 26,085 -

June 30, 2015 26,085 -Addition 81,117 81,117

June 30, 2016 107,202 81,117

Amortisation:Charge for the year, being balance as at June 30, 2015 7,015 -Charge for the year 8,693 -

June 30, 2016 15,708 -

Carrying amount:June 30, 2016 $ 91,494 81,117

June 30, 2015 $ 19,070 -




14. Share capital

Authorised: 176,000,000,000

ordinary shares of no par valueGroup and Company

2016 2015Stated capital, issued and fully paid:

1,100,000,000 ordinary shares of no par value 5,117,611 5,117,611

Less: Transaction costs of share issue ( 219,181) ( 219,181)

$4,898,430 4,898,430

15. Long-term promissory notesGroup and Company

2016 2015Due to related companies:

6% loan 100,000 100,0008% loan 2,500,000 2,500,0009% loan [see note 16] 6,000,000 6,000,000

Due to related company:

Non-interest bearing loans 650,000 650,000

Due to third party:

8% loan 64,587 74,012

$9,314,587 9,324,012

(a) These US$ loans are unsecured and not repayable before June 30, 2017.

(b) Related companies are controlled by directors.




16. Long-term borrowingsGroup Company

2016 2015 2016 2015

9.5% Bonds (a) 2,674,391 2,889,232 2,674,391 2,889,2327% Sagicor Bank Jamaica Limited (b) - 19,459 - 19,4597% Sagicor Bank Jamaica Limited (c) - 600,000 - 600,0007% Sagicor Bank Jamaica Limited (d) - 1,200,000 - 1,200,00010.5% Sagicor Bank Jamaica Limited

[J$10,085,714 (2015: J$11,608,445)] (e) 80,039 99,524 80,039 99,52411% Sagicor Bank Jamaica Limited

[J$Nil (2015: $148,572,717)] (f) - 1,273,772 - 1,273,77210.9% Sagicor Bank Jamaica Limited

[J$14,329,494 (2015: J$16,289,515)] (g) 113,717 139,656 113,717 139,65610.9% Sagicor Bank Jamaica Limited

[J$5,302,624 (2015: J$6,256,483)] (h) 42,081 53,639 42,081 53,63910.5% Sagicor Bank Jamaica Limited

[J$2,451,814 (2015: J$2,821,986)] (i) 19,457 24,194 19,457 24,1948% Royal Bank of Canada (j) 16,675 21,397 - -8% Royal Bank of Canada (k) 23,460 28,480 - -9.25% Bank of Nova Scotia Jamaica Limited

[J$133,670,958 (2015: J$Nil)] (l) 1,060,796 - 1,060,796 -4.75% Bank of Nova Scotia Jamaica Limited (m) 1,816,658 - 1,816,658 -9.5% Bank of Nova Scotia Jamaica Limited

[J$28,461,584 (2015: J$Nil)] (n) 222,815 - 222,815 -10% Bank of Nova Scotia Jamaica Limited

[J$24,666,664 (2015: J$Nil)] (o) 195,752 - 195,752 -9.5% Bank of Nova Scotia Jamaica Limited

[J$6,898,748 (2015: J$Nil)] (p) 54,748 - 54,748 -9.5% Bank of Nova Scotia Jamaica Limited

[J$4,033,315 (2015: J$Nil)] (q) 32,008 - 32,008 -9% Bank of Nova Scotia Jamaica Limited

[J$6,612,000 (2015: J$Nil)] (r) 52,472 - 52,472 -

6,405,069 6,349,353 6,364,934 6,299,476Less: Current portion ( 464,469) ( 523,444) ( 453,899) ( 513,692)

5,940,600 5,825,909 5,911,035 5,785,784

Debt issuance costs: (s)At beginning of the year ( 154,168) ( 167,279) ( 154,168) ( 167,279)Additional costs incurred in the year ( 63,457) - ( 63,457) -Debt costs amortised during the year 109,081 13,111 109,081 13,111

At the end of the year ( 108,544) ( 154,168) ( 108,544) ( 154,168)

$5,832,056 5,671,741 5,802,491 5,631,616

(a) On April 29, 2013, the company authorised the private placement by way of an exempt distribution under the Guidelines for Exempt Distributions (Guidelines SR-GUID-08/05-0016) of a series of 5-year promissory Bonds (“the Bonds”) denominated in Jamaican dollars (“J$”) for an aggregate principal amount of up to J$500,000,000. At June 30, 2016, bonds totaling J$337,000,000 (2015: J$337,000,000) were subscribed. The bonds are secured by 5 year demand debentures over fixed and floating assets of the company.

(b) This represented the balance due on an initial loan of $200,000. The loan was repayable in sixty monthly instalments of principal and interest of $3,960, and was fully settled during the year.




16. Long-term borrowings (cont’d)

(c) This represented the balance due on an initial loan of $1,000,000. The loan wasrepayable in one hundred and twenty monthly instalments of principal of $8,333, and was fully settled during the year.

(d) This represented the balance of an initial loan of $2,000,000. The loan was repayable in one hundred and twenty monthly instalments of principal of $16,667, and was fully settled during the year.

(e) This represents the balance due on an initial loan of J$13,195,000. The loan is repayable in eighty-four monthly instalments of principal and interest of J$222,477; the final instalment being due in April 2021. This loan is secured by bills of sale over certain motor vehicles purchased by the company.

(f) This represented the balance due on an initial loan of J$162,006,450. The loan wasrepayable in eighty-four monthly instalments of principal and interest of J$2,773,945, and was fully settled during the year.

(g) This represents the balance due on an initial loan of J$17,768,000. The loan wasrepayable in eighty-four monthly instalments of principal and interest of J$303,298; the final instalment being due in August 2021.

(h) This represents the balance due on an initial loan of J$6,976,000. The loan is repayable in seventy-two monthly instalments of principal and interest of J$132,425; the final instalment being due in August 2020.

(i) This represents the balance due on an initial loan of J$2,880,006. The loan is repayable in seventy-two monthly instalments of principal and interest of J$54,084; the final instalment being due in August 2021.

(j) This represents the balance due on an initial loan of XCD$70,000. The loan is repayable in fifty-three monthly instalments of XCD$1,420; the final instalment being due in June 2019. The loan is secured by registered demand bill of sale on a motor vehicle and assignment of comprehensive insurance for XCD$93,000.

(k) This represents the balance due on an initial loan of XCD$90,000. The loan is repayable in sixty-three monthly instalments of XCD$1,614; the final instalment being due in April 2020.

(l) This represents the balance due on an initial loan of J$147,160,689. The applicable rate of interest is 9.25% per annum up to July 16, 2018 and thereafter the 6 months Weighted Average Treasury Bill Yield (WATBY) rate plus 2.5% per annum (with a floor of 9% per annum), reset quarterly. The loan is repayable in sixty months and matures on July 16, 2020.

(m) This represents the balance due on an initial loan of $2,000,000. The applicable rate of interest is 4.75% per annum up to July 16, 2018 and thereafter the 6 months LIBOR rate plus 4.35% per annum, reset quarterly. The loan is repayable in sixty months and matures on July 16, 2020.





(n) This represents the balance due on an initial loan of J$30,000,000, funded by the Development Bank of Jamaica Limited (DBJ). The DBJ’s authorised lending rate for its energy funding line is currently at 6.5% per annum, plus a commission of 3% per annum, gives an effective all-in-one interest rate of 9.5% per annum. The loan is for seven years with a six months moratorium. The principal is repayable in seventy-seven equal monthly payments of J$384,616 and one final payment of J$384,568. The loan matures on August 8, 2022.

(o) This represents the balance due on an initial loan of J$26,000,000, funded by the DBJ.The DBJ’s authorised lending rate for its regular J$ funding line is currently at 7% per annum, plus a commission of 3% per annum, gives an effective all-in-one interest rate of 10% per annum. The principal is repayable in seventy-seven equal monthly payments of J$333,334 and one final payment of J$333,282. The loan matures on August 12, 2022.

(p) This represents the balance due on an initial loan of J$7,625,000. The applicable rate of interest is 9.5% per annum for years 1 to 5 and thereafter the 6 months WATBY plus 3% for years 6 and 7. The loan is repayable in eighty-four months with initial principal payment of J$90,841 followed by eighty-three monthly payments of J$90,773. The loan matures on October 29, 2022.

(q) This represents the balance due on the initial disbursement of J$4,400,000 drawn-down from the J$180,000,000 revolving term loan facility. This initial loan is repayable in fifty-nine monthly payments of J$73,333 and matures January 31, 2021. The interest rate on this initial disbursement is fixed at 9.5% per annum.

(r) This represents the balance due on an initial loan of J$6,960,000 for the purchase of twomotor vehicles. The interest rate of 9% per annum is fixed for the term. The loan is repayable in sixty monthly instalments of J$116,000; the final instalment being due in March 2021.

(s) This represents costs incurred in obtaining certain long-term borrowings. The costs are being written off over the period of the borrowings on the effective interest basis.

The borrowings at (b) to (d), short-term loans [note 6(a)] and overdraft facility (note 3), with Sagicor Bank Jamaica Limited, were secured by:

• Personal guarantee of a director limited to $10,000,000.

• Demand debentures over fixed and floating assets amounting to $14,112,000 and J$50,000,000.

• First demand mortgage by way of a guarantee over commercial property owned by arelated company, located at Montego Bay Freeport for $1,000,000.

• Subordination agreement in the amount of $6,000,000 in respect of a related companyloan (see note 15).

• Corporate guarantee of another related company to cover $2,000,000.

• Acknowledged assignment of insurance policies in the amount of $20,368,802 over commercial properties and other assets.





The borrowings at (e) to (g) to (i) are as are secured as follows:

• In respect of the purchase of motor vehicles; bill of sale to cover the purchase price and assignment of comprehensive insurance over the assets endorsed in favour of the bank.

The borrowings at (j) to (k) are secured by:

• Letter of guarantee and postponement of claims signed a related company (non-controlling interest) totaling XCD$950,000.

• Customs bond – subject for cancellation by the relevant authorities.

Collateral – Guarantee and postponement of claims signed by a related company non-controlling interest) for XCD$750,000.

The borrowings at (l) to (r), overdraft facility (note 3) and short-term loans [note 6(a)] with the Bank of Nova Scotia Jamaica Limited are primarily secured as follows:

• Demand debenture stamped to cover $13,610,000 (equivalent to J$1,571,946,000), with power to upstamp, constituting a charge over assets of the company and:

(i) Limited guarantee of a related company, supported by a first legal mortgage for $1,000,000 over certain commercial properties owned by the said related company.

(ii) Limited guarantee of another related company supported by a first legal mortgage for $2,000,000 over certain commercial properties owned by this related company.

(iii) Limited guarantee by both related companies mentioned in (i) and (ii) supported by a second legal mortgage for J$64,890,278 over commercial properties owned per (i) and (ii).

• Subordination and postponement agreement for $6,000,000 due to a related company (note 15).

• In respect of the purchase of motor vehicles; bill of sale to cover the purchase price and assignment of comprehensive insurance over the assets endorsed in favour of the bank.

17. Related party balances and transactions

(a) The statement of financial position includes balances arising in the ordinary course of business with related parties.

The amounts due to related company are payable to non-controlling interests and areinterest-free, unsecured and have no fixed repayment terms.

Other related party balances are disclosed in notes 4, 7, 8, 9, 10 and 15.




17. Related party balances and transactions (cont’d)

(b) The profit for the year includes the following (income)/expense and transactions with related parties in the ordinary course of business:

Group Company

2016 2015 2016 2015$ $ $ $

Sales to related companies/parties ( 477,756) (719,445) ( 477,756) (719,445)Sales to subsidiary - - ( 458,048) (190,929)Interest expense paid to related

companies/parties 899,626 836,591 899,626 836,591Rent paid to a related company 446,834 391,386 281,604 275,445Agency fee paid to a related company 1,122,000 900,000 1,122,000 900,000Directors’ emoluments:

Fees 13,000 16,000 13,000 16,000Management remumeration 653,233 467,734 653,233 467,734

Compensation for key management:Short-term benefits 479,465 535,047 479,465 535,047

Related companies are controlled by directors.

18. Gross operating revenue

Gross operating revenue represents income from the sale of food, beverages and non-food items for the year.

19. Nature of expenses

(a) Cost of operating revenue:

Cost of operating revenue primarily comprises the costs to purchase or process inventoryitems, such as meats, seafood, dairy products and beverages, which were sold by the group to third parties during the year.




19. Nature of expenses (cont’d)

(b) Selling and administration expenses:

Group Company

2016 2015 2016 2015

Accounting fees 17,735 33,654 17,735 33,654Advertising 1,013,291 907,871 921,093 873,972Audit fees 48,561 40,741 36,969 29,699Bad debts [note 4(d)] 98,228 28,549 86,838 27,828Bank charges 137,277 91,012 120,058 85,077Cleaning and sanitation 90,998 54,923 83,860 51,500Data processing 344,043 236,949 341,521 232,443Donations 2,776 6,696 844 5,518Garbage disposal 56,406 30,608 54,437 29,160Insurance 537,565 580,117 515,809 563,660Miscellaneous 317,462 288,077 249,960 223,198Motor vehicle expenses 1,739,861 1,581,144 1,696,270 1,554,512Penalties and interest 120,473 33,708 120,473 33,684Pest control 15,677 14,346 13,941 13,763Printing, postage and stationery 207,592 221,878 177,394 206,439Professional fees 2,039,078 1,573,782 1,658,408 1,302,685Rates and taxes 157,430 172,334 154,000 115,942Rental of premises (note 23) 984,260 819,676 818,630 703,072Repairs and maintenance 1,045,817 729,697 969,541 676,850Security 385,126 264,293 352,258 233,915Service fees 19,751 14,095 19,751 14,095Staff costs:

Salaries, wages, and otherpayroll costs 7,716,178 6,807,454 7,109,839 6,301,257

Payroll taxes 738,719 650,694 718,609 640,160Staff welfare 628,928 465,085 605,215 460,815

Subscriptions 22,451 21,010 19,270 19,363Travel and entertainment 449,813 527,282 379,361 394,552Utilities 1,301,466 1,394,981 1,118,093 1,309,975

$20,236,962 17,590,656 18,360,177 16,136,788




20. Disclosure of income/(expenses)

Group Company

2016 2015 2016 2015

(a) Other operating income, net:

Foreign exchange gains, net 87,254 304,357 87,254 307,049Gain on disposal of

property, plant and equipment 8,110 19,967 8,110 19,967Others 37,327 37,778 612 13,703

$ 132,691 362,102 95,976 340,719

(b) Finance income:

Interest income - third party $ 12,557 3,609 12,557 3,609

(c) Finance costs:

Interest on promissory notes (1,197,776) (1,080,311) (1,197,776) (1,080,311)Interest on long-term and

short term borrowings ( 649,817) ( 903,705) ( 646,158) ( 899,317)Overdraft interest ( 8,154) ( 42,050) ( 8,154) ( 42,021)

$(1,855,747) (2,026,066) (1,852,088) (2,021,649)

21. Taxation

(a) Taxation is based on the following:Group Company

2016 2015 2016 2015

Deferred tax (note 11):Tax losses ( 36,868) (250,872) - -Origination and reversal of

temporary differences (292,637) 87,730 (331,809) ( 63,549)

Tax credit recognised in profitfor the year $(329,505) ( 163,142) (331,809) ( 63,549)

(b) Reconciliation of actual taxation credit:Profit before taxation $721,480 3,271,390 719,941 3,594,971

Computed “expected” tax charge at 25% 180,370 799,150 179,985 898,743

Tax effect of differences between treatment for financial statement

and taxation purposes:Depreciation and capital

allowances (116,394) 148,045 (116,394) 148,045Other items, net 407,856 240,421 405,937 240,421Tax remission [note (c)] (801,337) (1,350,758) (801,337) (1,350,758)

$(329,505) ( 163,142) (331,809) ( 63,549)




21. Taxation (cont’d)

(c) The company’s shares were listed on the Junior Market of the Jamaica Stock Exchange on July 20, 2011. Consequently, the company is entitled to a remission of taxes for 10 years in the proportions set out below, provided the shares remain listed for at least 15 years:

• Years 2012 to 2016 - 100%

• Years 2017 to 2021 - 50%

(d) In 2014, the Government of Jamaica enacted new tax measures to change the tax incentive regimes applicable to various industries. One such measure is the employment tax credit. Businesses that are tax compliant with respect to statutory contributions (both employer and employee portions) are now able to claim such statutory contributions paid as a credit against and up to 30% of their income tax liability. Unused employment tax credit (ETC) cannot be carried forward or refunded and some or all of the ETC claimed may be clawed back out of future distributions to shareholders.

These new tax measures have resulted in changes in the income tax and capital allowances computations. However, given the current tax position of the company, as disclosed in note (c) above, they will not materially affect the group’s tax position until the end of the tax remission period.

22. Earnings per stock unit

Earnings per stock unit is calculated by dividing the profit for the year by the weighted average number of ordinary shares in issue for the year as follows:

Group Company

2016 2015 2016 2015

Profit for the year attributable to the shareholders of the

company $ 1,048,349 3,543,747 1,051,750 3,658,520

Weighed average number of ordinary stock units held

during the year 1,100,000,000 1,100,000,000 1,100,000,000 1,100,000,000

Earnings per stock unit (expressed in ¢ per share) 0.10¢ 0.32¢ 0.10¢ 0.33¢




23. Lease commitments

At June 30, 2016, there were unexpired operating lease commitments in relation to leasehold property, payable as follows:

Group Company

2016 2015 2016 2015

Within one year 958,534 562,190 792,904 429,686Between one and five years 3,104,214 643,514 2,441,694 113,498After five years 1,517,285 1,214,620 164,640 -

$5,580,033 2,420,324 3,399,238 543,184

During the year, the total operating lease expenses recognised in profit or loss amounted to $984,260 (2015: $819,676) for the group and $818,630 (2015: $703,072) for the company.

24. Contingent liabilities

(a) In 2007, the Valuation Audit Unit of the Jamaica Customs Department conducted an audit relating to 2004 and submitted a claim for Special Consumption Tax (SCT) and General Consumption Tax (GCT) amounting to approximately $226,589 (J$26,436,145) to which the company has objected. The directors are of the opinion that it is unlikely that the Revenue Protection Division will prove any significant portion of this claim. Therefore, no provision has been made in the financial statements.

(b) During the year, Tax Administration Jamaica (TAJ) conducted a GCT audit for the period January 2012 to December 2015 and proposed an adjustment to the returns for the period. No assessment has been raised in this regard. At the date of authorisation of these financial statements, the management and directors were still in discussion with TAJ to review the proposed adjustments.

25. Dividends

(a) On February 8, 2016, the Board of Directors declared an interim dividend of J$0.06 per stock unit payable on March 25, 2016 to shareholders on record as at February 24, 2016,with an ex-dividend date of February 22, 2016.

(b) In respect of prior year:

(i) On August 27, 2014, the directors declared an interim dividend of J$0.04 per sharepayable on October 1, 2014 to shareholders on record as at September 10, 2014,with an ex-dividend date of September 8, 2014.

(ii) On May 11, 2015, the directors declared an interim dividend of J$0.05 per stock unit payable on July 15, 2015 to shareholders on record as at May 28, 2015, with an ex-dividend date of May 26, 2015.




26. Financial instruments

(a) Financial risk management:

The group has exposure to the following risks from its use of financial instruments:

• credit risk;

• liquidity risk; and

• market risk.

This note presents information about the group’s exposure to each of the above risks, the group’s objectives, policies and processes for measuring and managing risk, and the group’s management of capital.

The Board of Directors has overall responsibility for the establishment and oversight of the group’s risk management framework.

The risk management policies are established to identify and analyse the risks faced by the group, to set appropriate risk limits and controls, and to monitor risks and adherenceto limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the group’s activities. The Board of Directors has monitoring oversight of the risk management policies.

(i) Credit risk:

Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The maximum exposure to credit risk at the reporting date was represented by the carrying value of financial assets in the statement of financial position.

Cash and cash equivalents

The group limits its exposure to credit risk by placing cash resources with substantial counterparties who are believed to have minimal risk of default.

Accounts receivable

The group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer base, including the default risk of the industry in which customers operate, has less of an influence on credit risk. The group does not require collateral in respect of trade and other receivables.

Trade receivables mainly consist of balances due from retail and hospitality customers across Jamaica. Apart from the concentration of customers in Jamaica, the group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics.




26. Financial instruments (cont’d)

(a) Financial risk management (cont’d):

(i) Credit risk (cont’d):

Accounts receivable (cont’d)

The group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The allowances for impairment losses are based on the aging of the receivables, with allowance made for balances outstanding for over 180 days that appear to be uncollectable. The group also provides for receivables that are overdue for less than this time period, based on information that the receivable balance is uncollectible.

There were no changes in the group’s approach to managing credit risk during the year.

(ii) Liquidity risk:

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. Liquidity risk may result from an inability to sell afinancial asset at, or close to, its fair value. Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities.

Management of the group manages liquidity risk by maintaining adequate liquid

financial assets with appropriate terms and currencies, together with committed

financing to meet all contractual obligations and operational cash flows, including

the servicing of its long-term liabilities.

The following are the contractual maturities of financial liabilities measured at

amortised cost, including interest payments. The tables show the undiscounted

cash flows of non-derivative financial liabilities based on the earliest date on which

the group can be required to pay.

Group2016

Carrying Contractual 1 year amount cash flows or less 2-9 years

Short-term loans 5,100,000 5,431,500 5,431,500 -Accounts payable 7,984,932 7,984,932 7,984,932 -Short-term promissory notes 4,968,885 5,337,074 5,337,074 -Long-term promissory notes 9,314,587 10,816,920 - 10,816,920Long-term borrowings 6,296,525 7,321,734 714,064 6,607,670Due to related company 2,740,764 2,740,764 - 2,740,764

Total financial liabilities $36,405,693 39,632,924 19,467,570 20,165,354






(ii) Liquidity risk (cont’d):

Group2015


Bank overdraft 188,047 188,047 188,047 -Short-term loans 4,925,000 5,245,125 5,245,125 -Accounts payable 6,558,319 6,558,319 6,558,319 -Short-term promissory notes 4,317,794 4,653,429 4,653,429 -Long-term promissory notes 9,324,012 10,827,854 - 10,827,854Long-term borrowings 6,195,185 7,843,870 692,130 7,151,740Due to related company 2,387,382 2,387,382 - 2,387,382


Company2016


Short-term loans 5,100,000 5,431,500 5,431,500 -Accounts payable 6,832,213 6,832,213 6,832,213 -Short-term promissory notes 4,968,885 5,337,074 5,337,074 -Long-term promissory notes 9,314,587 10,816,920 - 10,816,920Long-term borrowings 6,256,390 7,275,614 700,663 6,574,951


Company2015


Bank overdraft 188,047 188,047 188,047 -Short-term loans 4,925,000 5,245,125 5,245,125 -Accounts payable 5,674,473 5,674,473 5,674,473 -Short-term promissory notes 4,317,794 4,653,428 4,653,428 -Long-term promissory notes 9,324,012 10,827,854 - 10,827,854Long-term borrowings 6,145,308 7,776,351 678,387 7,097,964


There were no changes to the group’s approach to liquidity risk management during the year.






(iii) Market risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of changes in market prices. These arise mainly from changes in interest rates and foreign exchange rates and will affect the group’s income or the value of its holdings of financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on assets. The nature of the group’s exposures to market risk and its objectives, policies and processes for managing these risks have not changed significantly over the prior year. For each of the major components of market risk, the group has policies and procedures in place which detail how the risk is managed and monitored. The management of each of these major components of market risk and the exposure of the group at the reporting date to each major risk are addressed below.

Derivative financial instruments are not used to reduce exposure to fluctuations in interest and foreign exchange rates.

Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The group materially contracts financial liabilities at fixed interest rates. These primarily relate to borrowings which are subject to interest rates fixed in advance, but which may be varied with appropriate notice by the lenders.

Interest-bearing financial assets are primarily represented by cash and cash equivalents, which are contracted at various interest rates.

Financial instruments are subject to interest as follows:

Carrying amount

The Group The Company 2016 2015 2016 2015

Fixed rate instruments:Financial assets 1,814,149 1,749,783 1,814,149 1,749,783Financial liabilities (22,206,338) (24,454,206) (22,166,203) (24,404,329)

$(20,392,189) (22,704,423) (20,352,054) (22,654,546)

Variable rate instruments:Financial assets 578,789 537,555 578,789 537,555Financial liabilities ( 2,932,202) - ( 2,932,202) -

$( 2,353,413) 537,555 ( 2,353,413) 537,555






(iii) Market risk (cont’d):

Interest rate risk (cont’d)

Cash flow sensitivity analysis for variable rate instruments

An increase or decrease in basis points in interest rates at the reporting date would have increased/(decreased) profit for the year by amounts shown below:

The Group and the Company2016 2015

Increase Decrease Increase Decrease 100bp 50bp 100bp 100bp

Effect on profit (decrease)/increase $(23,534) 11,767 5,376 (5,376)

Fair value sensitivity analysis for fixed rate instruments

The group does not account for any fixed rate financial instrument at fair value. Therefore, a change in interest rates at the reporting date would not affect the profit or other comprehensive income recognised for the year.

Foreign currency risk

Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The group incurs foreign currency risk primarily on receivables, purchases and borrowings that are denominated in a currency other than the United States dollar. The principal foreign currency risks of the group are denominated in Jamaica dollar (J$).

The group ensures that the risk is kept to an acceptable level by monitoring its risk exposure and by maintaining funds in J$ as a hedge against adverse fluctuations in exchange rates.

At the reporting date, net foreign currency liabilities of the group and the company are as follows:

Group and Company

2016 2015

Cash and cash equivalents 213,684,111 88,274,949Accounts receivable 53,048,492 46,306,610Bank overdraft - ( 21,878,836)Accounts payable (323,880,280) (234,812,800)Long-term borrowings (595,612,059) (543,053,485)

Net foreign currency liabilities J$(652,759,736) (665,163,562)

Equivalent to $( 5,180,222) ( 5,701,464)






(iii) Market risk (cont’d):

Foreign currency risk (cont’d)

Exchange rates for the J$ in comparison to the United States dollar were as follows:

J$

June 30, 2016: $126.08June 30, 2015: $116.67

Sensitivity analysis

Changes in exchanges rates would have the effects described below:

Group and CompanyIncrease/(decrease) in

profit for the year

2016 2015

1% (2015: 1%) strengthening against the US$ $( 51,802) ( 57,015)

6% (2015: 8%) weakening against the US$ $310,813 456,117

The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is done on the same basis as for 2015.

(b) Capital risk management:

The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders. The directors of the company seek to maintain a strong capital base so as to maintain shareholder and creditor confidence. The group defines capital as total shareholders’ equity.

Management of the group is responsible for monitoring the group’s adherence to loan covenants on a timely basis and also to obtain relevant approvals from the bank before certain decisions are finalised.

There were no changes in the group’s approach to capital management during the year.

(c) Fair value disclosures:

The fair values of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings are assumed to approximate their carrying values due to their relatively short-term nature. Long-term borrowings and promissory notes are carried at their contracted settlement value based on commercial terms. Amounts due to related companies are considered to approximate their carrying value due to their short-term nature, and/or an ability to effect future set-offs in the amounts disclosed.





CARIBBEAN PRODUCERS (JAMAICA) LIMITED 2016 AnnuAl RepoRt

fOrm Of PrOXy

“I/We _______________________________________________________________(insert name)

of _____________________________________________________________________(address)

being a shareholder(s) of the above-named Company, hereby appoint:

____________________________________________________________________ (proxy name)

of ______________________________________________________________________(address)

or failing him, ________________________________ _____________________ (alternate proxy)

of ______________________________________________________________________(address)

Signed this _________________ day of ______________________________________ 2016:

____________________________________________________________________________

Signature of Shareholder

Signed: _______________________________________ (Signature of primary shareholder)

Name: _______________________________________ (Print name of primary shareholder)

Signed: _______________________________________ (Signature of joint shareholder, if any)

Name: _______________________________________ (Print name of joint shareholder, if any)

as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at Sunscape Splash, Sunset Drive,

Freeport, Montego Bay, St. James, on Monday February 13, 2017 at 3:00 p.m. and at any adjournment thereof. I desire this form to be used for/

against the resolutions as follows (unless directed the proxy will vote as he sees fit):

No. Resolution details vote for or against (tick as appropriate)

1. To receive the Reports of the Directors and Auditors and the audited accounts

of the Company for the financial year ended 30 June, 2016. q For q Against

2. To declare the interim dividend paid on 8 February 2016 as final for

the year under review. q For q Against

In accordance with Article 102 of the Company’s Articles of Incorporation, the following Directors having retired from office by rotation and,

being eligible, offer themselves for re-election:

3(a) To re-elect Richard Mark Hall as a Director of the Company. q For q Against

3(b) To re- elect Jan Marie Polack as a Director of the Company. q For q Against

3(c) To re- elect Camille Shields as a Director of the Company. q For q Against

In accordance with Article 110 of the Company’s Articles of Incorporation, the following Directors having been appointed during the year retire

and are eligible for re-election:

4(a) To re- elect Christopher Berry as a Director of the Company. q For q Against

4(b). To appoint Mark Konrad Berry as a Director of the Company. q For q Against

4(c). To appoint David Lowe as a Director of the Company. q For q Against

5. To appoint the Auditors and authorize the Directors to fix the

remuneration of the Auditors q For q Against

6. To approve the remuneration of the Directors, other than the Executive Directors,

for the financial year ended 30 June, 2016. q For q Against

1. To be valid this Proxy must be deposited with the Secretary of the Company at Shop #14 Montego Freeport Shopping Centre, Montego Bay, St. James, not less than 48 hours before the time appointed for holding the meeting. A Proxy need not be a member of the Company.

2. This Form of Proxy should bear stamp duty of $100.00. Adhesive stamps are to be cancelled by the person signing the Proxy.

3. If the appointer is a Corporation, this Form of Proxy must be executed under its Common Seal or under the hand of an officer or attorney duly authorized in writing.

Place Stamp Here

Documents

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