a pmjmzm'pdf X 6 9 0 (D li'ewe/UsersfmmarfDesktoplproject'abzozo'lapdf if {E Z. L. "' Valentine Computer Limited is a fictitious company. Any similarity to any company registered in Jamaica or any company listed on the Jamaica Stock Exchange is entirely coincidental and unintentional. The persons and transactions in this project are fictitious. Any similarity to any person living or dead and to any transaction which has occurred or might occur in the future is entirely coincidental and unintentional. The company is incorporated as a public company under the laws of Jamaica and its shares are quoted on the Jamaica Stock Exchange. The company was incorporated on September 15, 2005 and started operating on November 1, 2005. The initial public offering (IPO) of the company was on December 20, 2013. The principal activities of the company are the sale of computers, the sale of computer parts, and computer repairs. The company maintains its accounts using the historical cost convention, modified for any revaluation. The company's year end is October 31. During its first year of operation the company opened one office in Kingston and one office in Saint Andrew. In the second year of operation the company opened an office in Mandeville and one in Montego Bay, bringing the total number of offices to four (4). In the third year of operation the company opened an office in Ocho Rios and one in Portmore bringing the total number of offices to six (6). The expected expansion of the company to May Pen and Santa Cruz in 2017 did not materialize. This was due to the slow down in growth in new computer sales. This expansion is expected to materialize in summer of the year 2018. Computer repairs increased significantly due to the 'Killer Virus' (2016 computer repairs $655,000). Page 1 a pmjmzm'pdf X 6 9 0 (D li'ewe/UsersfmmarfDesktoplproject'abzozo'lapdf if {E Z. L. "' The auditors Gordon 5 Gray are Willing to continue in office. The auditors have completed their audit and they intend to issue an unqualified audit report. The registered office of the company is located at 00 Harbour Street, Kingston, Jamaica. The annual general meeting of the company is scheduled for Friday the 27'HI March 2010 at 10:30 a.m. at Pegasus Hotel, 81 Knutsford Boulevard, Kingston 5, Jamaica. The notice for the annual general meeting was sent to the shareholders by the Company Secretary, Melissa Williams on February 27, 2018. (A) Audit fees for the financial year ended October 31, 2017 are estimated at $250,000. Under provision of audit fees for the prior year amounted to $15,000. Audit fees are not yet reflected in the accounts. (B) The Directors on December 3, 2017 approved a dividend of 50.20 per share in respect of the financial year ended October 31, 2017. The dividend is payable on December 18, 201?. The dividend is not yet reflected in the accounts. (C) Each year on October 31, $200,000 (principal) is payable in respect of the debenture loans until the debentures are repaid. The amount due for October 31, 2017 was paid on that date and the amount due for October 31, 2016 was paid on time. The interest on the debenture loans is payable on a quarterly basis, on January 31, April 30, July 31, and October 31. The interest for the quarter ended October 31, 2017 was not paid until November 3, 2017. No accrual was made at the year end for the October 31, 2017 outstanding interest. The interest for the October 31, 2016 quarter was paid on Nbvember 4, 2016 and is included in the interest expense account for the current year. The interest for the October 31, 2016 quarter was properly accrued in the prior year accounts. The debentures are unsecured. Interest is calculated on the reducing balance basis. 6 9 0 (D li'awe/UsersomarfDesktoplproject'abzozo'lapdf if" {E Z. Li "' (0} The income tax rate is 25', and the corporation tax rate is as m L (E) The foreign exchange bank account is kept at National Commercial Bank. the salaries bank account is kept at Citibank and the general bank account is kept at Bank of Nova Scotia. (F) Round all calculations to the nearest 51.000. (G) The interest income and the dividend income were received net or income tax. Only the net amounts received were reected in the accounts. (H) The allowance for bad debt is a specitic allowance. (1) The issue price for each ordinary share is 61. The minutes of the last hoard meeting indicated that the board had unanimously agreed to increase the authorized share capital of the company from 10,000,000 ordinary shares to 20,000,000 ordinary shares. The increase is necessary because the company intends to have a 2 to 1 rights issue in June 2013. The additional ordinary shares will rank pari passu with the existing ordinary shares of the comany. (J) The corporation tax for the current year is estimated at $1,403,000 by the tax accountant, atter all adjustments were made. The corporation tax is not yet reflected in the accounts. (K) Corporation tax under provision for the year ended October 31, 2016 amounted to 65,000. The intormation about the under provision was not received until September 2011. The under provision is not yet reected in the accounts. (L) Transactions in foreign currencies have been converted at the rates or exchange ruling at the dates or those transactions and foreign currency bank balances should be translated at the rates of exchange ruling on that date. WWW-W X 6 9 0 (D li'awe/UsersomarfDesktoplproject'abzozo'lapdf if" {E Z. Li "' (M) During the financial year ended October 31, 20\6 9 0 (D li'awe/UsersomarfDesktoplproject'abzozo'lapdf if" {E Z. Li "' (0} Directors' emoluments include 6260.000 for directors" tees. The directors retiring by rotation pursuant to article 90 of the articles 01 Association are Mr. Frank Rose, Miss Dem Jordan, and Miss Monique Sharpe umo being eligible otter themselves for re-election. (R) Deterred taxation tor the income statement should be decreased by $5.000 tor the tinsncial year ended October 31. 2011'. The adjustment is not yet reflected in the accounts. (5} At the October 24. 2017 Board of Directors meeting the directors made a decision to sell some of the company's long term investments. "' 000 0' 000 Unouoted investments 25 Sell Government of. Jamaica securities g Hold (1') Closing stock on October 31: 2017' 2016 "' 000 5' 000 Computer parts 420 379 Computer sch-mare 1,222 1,560 Computers 2,605 1,531 Inventories are stated at the lower or cost and net realissple (U) Ststf Costs 2017 2016 "' 000 0' 000 Salaries and wages 9,116 8,210 Stat! benefits Statutory contributions 165 132 Other 55 26 Average Number of Employees 201'! 2016 Iull time 12 B Part time 6 4 Contractors i their employees is 2 6 9 0 (D Iiiawe/UsersomarfDesktoplproject'abzozo'lapdf if" {E Z. L "' (V) Finance lease obligation future payments for the years ending: $.DDO October 31, 20l 230 October 31., 2019 240 520 Less tuture lnterest payments 120 Net 100 Current portlon 200 The finance lease commenced on November 1, 2015. a lease payment of $320,000 was made on October 31, 20l'7. The lease payment included finance charges amounting to $120,000. The interest rate on the finance lease is 20%. (W) During the current financial year, a lawsuit was filed against the company by a customer. The customer is claiming damaes amounting to $356,000 arlsinq out of an alleged breach of contract by the company to supply computers to the customer. The company's lawyers Crow t Grant are ol' the opinion that the plaintiff's (customer's: claim against the company is unlikely to succeed. (X) The $20,000 donation was allocated to Wolmers Girls School (EM) (Computer Laboratory: and to a Christmas treat :20!) for chlldreh living in Downtown Kingston. (Y) At October 31, 2017 ccmniments for capital expenditure not contracted for and for which no provision has been made in the accounts amounted to $2,600,000. (2) A Mandeville customer made a complaint in writing: on October 25, 2011' about the poor quality of a hard drive replacement. on October El, 2017, the President of Valentine Computer Limited made a verbal commitment to the customer to install a new hard drive at a cost at $104000