Below is a Ratio Analysis Question. I am calculating the Market Value Ratio and Solvency Ratios for a company in 3consecutive years (2013,2014,2015). I have already calculated all the Solvency Ratios and provide a detail description of their performance over the three years. Please I need someone to calculate the Market Value Ratios and provide a detail Description of them. I also need the tutor to check if my Solvency Ratios are correct and make any necessary corrections please.NB The Group Statements are used and not the Company statements. Below are 3 attachments, two of these documents are the financial statements for the company. One statement as 2014 and 2015 while the other as 2013. The word document is the incomplete project I need to be completed. Thank You.

A Three year Detailed Trend Analysis & Ratio Analysis of Broilers Group Ltd Shareholder funds / Market Value Ratios Ratios Names Dividend Yield Dividend per Share Market Price per Share Earnings per Share Profit after Tax - Preference Share Dividend # of Ordinary Shares Dividend Cover Profit after Tax - Preference Share Dividend Ordinary Dividend Price Earnings Market Price per Share Earnings per Share Market to Book Value Market Price per Share Book Value per Share 2013 2014 2015 Solvency Ratios Solvency ratios are used to measure a company's ability to meet its long term obligations by comparing debt levels with equity. In general, a solvency ratio measures the size of a company's profitability and compares it to its obligations. (Fuhrmann, R.C). Solvency Ratios are basically a determination of a company's ability to cover debts. For the solvency ratios, we will be looking at solvency /debt ratios and solvency coverage ratios. Ratios TimesInterestEarned Details/ Formulae Operating Profit/Interes t Charges 2013 2014 2015 1,632,132/ (463,752) =3.52 1,365,084/ (592,076) =2.31 2,120,772/ (704,701) =3.01 590101 + (339954) + (299926) / (339954) =0.15 1,416,115+(468,138) +(131,195) /468,138 = 1.74 2,801,790+ (665643) + (195,420)/665643 = 2.92 Cash Flow to interest Net Cash Flow from Operating Activities + Interest Paid + taxes Paid/ Interest Paid Gearing Ratio = Long-Term Debt/Capital Employed 3711040/13359059 =0.28 4220294/14741512 =0.29 4278439/1567485 3 =0.27 Debt Ratio = Total Debt/Total Assets 7908957/17556976 =0.45 9837533/20358751 =0.48 11171634/ 22568048 =0.50 Debt to Equity = Total Debt/ Common Equity 7908957/ 9703896 =0.82 9837533/ 10557241 =0.93 11171634/ 11432039 =0.98 It can be observed from the figures above that the Times Interest Earned are approximately the same, showing that there is not a vast improvement in how well the company is able to honour its debt payments. However, 2013 was the year in which the company was better able to pay off debts. Jamaica Broilers Group ability to repay its interest were greater in 2013 and 2015 which were 3.52 and 3.01 respectively when compared to 2014 2.31. This shows that in the year of 2014, the company was having more difficulty paying off debts. Although, there was a decline in 2014 the company manage to increase its debt payment from 2.31 to 3.01 in 2015. After computing the Cash Flow to Interest, it is seen that the company as a high risk of default in 2013, therefore unable to cover their interest, with a time of 0.15. The concept is that any company with a Cash Flow to interest less than 1, cannot pay off interest. However, the company's growth steadily increases in 2014 and 2015, with a value of 1.74 and 2.92 respectively. The Gearing Ratio of Broilers is said to be normal because it ranges between 25-50%. A low Gearing Ratio would be classified as anywhere below 25% and a high gearing ratio is anywhere above 50%. The lower the gearing ratio, the more financially stable the company is, therefore the company is more Financially stable in 2015 with a gearing ratio of 27%, in regards to 2013 and 2014 with a gearing ratio of 28% and 29% respectively. Debt Ratio is a ratio that measures a company's total debts to its total assets. It can be further analysed, that it's the portion of the company's asset that is financed by debt. Broilers Group Limited Debt Ratio in 2013,2014,2015 is 0.45, 0.48, 0.50 respectively. This means that as the year's progress, the company is in more leverage. Moreover, Broilers Group has the highest Financial Risk in 2015. The effect of high debt ratio would not be in favour to the company as it would be more expensive to borrow. However, this does not mean Broilers is performing poorly, because it all depends on the industry but both potential and current investors want to know whether or not the company is making enough cash from cash flows and how many times the company will be able to cover the interest paid. Investopedia defines Debt to Equity Ratio as a solvency ratio used to measure a company's financial leverage, calculated by dividing a company's total liabilities by its stockholders' equity. Based on the above table, Boilers Group in 2015, is taking on the most debt. In 2015 their debt to equity was at 98% thus taking on higher risk than in 2013 and 2014 with ratios of 82% and 92% respectively. Solvency/ coverage Ratios Ratios Details/Formulae 2013 2014 2015 Debt coverage = Net Cash Flow from Operating Activities Total debt 590101 /7908957 =0.07 1,416,115/ 9837533 =0.14 2,801,790/ 11432039 = 0.25 Debt payment =Net Cash Flow from Operating Activities Cash paid for long-term assets =Net Cash Flow from Operating Activities Dividends paid 590101/1424684 =0.41 1416115/ 1131891 =1.25 2801790/ 1060948 =2.64 590101/ 167899 =3.51 1416115/191884 = 7.38 2801790/ 203877 =13.74 590101/ 3058325 =0.19 1416115/ 3688330 =0.38 2801790/ 3269609 =0.86 Dividend payment Investing and financing =Net Cash Flow from Operating Activities Cash outflows for investing and financing activities Debt Coverage is a ratio of a company's cash flow from operating activities to its total debt. Investopedia states that, Debt coverage is an estimate of the amount of time it would take a company to repay its debt if it devoted all of its cash flow to debt repayment. Based on the above table, Broilers Group is able to better pay off its debt of 0.25 in 2015, more than all three years. This is showing growth, because 2013 and 2014 was 0.07 and 0.14 respectively. Annual Report 2013 Jamaica Broilers Group - Annual Report & Accounts 2013 Table of Contents 2. Notice of Annual General Meeting 4. Mission Statement 5. Financial Highlights 6. Chairman & President's Overview 8. Directors' Report 9. Corporate Governance 10. Board of Directors 14. Executive Team 16. Management Discussion & Analysis 27. Corporate Social Responsibility 30. Shareholding of Directors & Connected Persons 31. Shareholding of Senior Management & Connected Persons 31. 10 Largest Ordinary Stockholders 32. Directors & Senior Management 33. Operating Divisions & Subsidiaries 35. Audited Accounts 1 2 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the 54th Annual General Meeting of Jamaica Broilers Group Limited will be held at the Jamaica Conference Centre, Ocean Boulevard, Kingston Mall, Kingston on Saturday, November 2, 2013 at 10:00am to transact the following Business: 1. To receive the Audited Accounts for the year ended April 27, 2013, together with the reports of the Directors and Auditors thereon, The Company is asked to consider, and if thought fit, pass the following resolution: Resolution No.1 \"That the Audited Accounts for the year ended April 27, 2013, together with the reports of the Directors and Auditors thereon, be and are hereby adopted\". 2.\tTo elect Directors. (i) The Directors retiring by rotation in accordance with Regulation 89 of the Company's Articles of Incorporation are Messrs. Aubyn Hill, Robert Levy, Ian Parsard and Gregory Shirley, who, being eligible for re-election, offer themselves for re-election. The Company is being asked to consider and, if thought fit, pass the following resolutions: Resolution No. 2 \"That the Directors, retiring by rotation, be re-elected by a Single Resolution.\" Resolution No. 3 \"That Messrs. Aubyn Hill, Robert Levy, Ian Parsard and Gregory Shirley who are the Directors retiring by rotation in accordance with Regulation 89 of the Articles of Incorporation be and are hereby re-elected as Directors of the Company\". (ii) The Director retiring in accordance with Regulation 95 of the Articles of Incorporation is Mr. Omar Azan who, being eligible for re-election, offers himself for re-relection. The Company is being asked to consider and, if thought fit, pass the following resolution:- Resolution No. 4 \"That Mr. Omar Azan, who is retiring in accordance Regulation 95 of the Articles of Incorporation, be and is hereby re-elected as a Director of the company\". Executive Team Jamaica Broilers Group - Annual Report & Accounts 2013 3. To ratify interim dividends The Company is asked to consider, and if thought fit, to pass the following resolution: Resolution No. 5 \"That the two interim dividends of 6 cents and 8 cents paid on December 3, 2012 and March 28, 2013, respectively, be and are hereby ratified and declared final for the financial year ended April 27, 2013\". 4.\tTo Approve the Remuneration of the Directors. The Company is asked to consider, and if thought fit, to pass the following resolution: Resolution No. 6 \"That the amount shown in the Audited Accounts of the Company for the year ended April 27, 2013 as fees of the Directors for their services as Directors, be and is hereby approved.\" 5.\tTo Appoint Auditors and to authorize the Directors to Fix the remuneration of the Auditors. The Company is asked to consider, and if thought fit, pass the following resolution: Resolution No. 7 \"That the remuneration of the Auditors, PricewaterhouseCoopers, who have signified their willingness to continue in office, be such as may be agreed between the Directors of the Company and the Auditors.\" Dated the 24th day of July, 2013 By Order of the Board __________________ PETER A. DePASS Company Secretary Registered Office Content, McCook's Pen, St. Catherine 3 4 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Mission Statement With God's guidance... we shall efficiently manage our Company to fulfill its obligations to our customers, shareholders, employees, contractors and the community at large, with an attitude of service and a commitment to truth, fairness and the building of goodwill. Executive Team 500 0 10 6 4 2 0 2012 2013 4.5 2013 2011 Accounts Board of Directors 1424.7 1023.2 810.4 1500 2012 6.3 335.6 1000 2011 4.7 2010 Operating Divs. & Subs. 7.1 Directors & Snr. Mgmt 2010 Shareholdings 1656.9 CSR 2009 MD&A 4.1 Corporate Governance 1628.1 Directors' Report 2009 2000 1558.4 Chairman & President's Overview 2008 226.2 Financial Highlights 2007 2006 206.4 26.523 23.672 Mission Statement 2008 7.7 2005 300.8 2013 2012 21.295 2011 24.623 20.44 22.447 11.49 20 2010 2009 2008 2007 9.94 2006 Notice of AGM 2007 2006 2005 4.4 8 6.2 12 10.75 2004 1030.5 936.2 1312.8 Investment in Property, Plant & Equipment - J$M 500 7.4 2013 2012 0 Pre-tax Profits as % of Net Sales 1190.9 1114.8 2011 300 2004 2013 2012 2011 956.1 828.1 740.3 1200 1342.8 1597.2 2000 2010 2009 512.1 1500 2010 1500 1003.7 2008 2007 645.3 0 9.15 5 2005 8.17 30 2009 903.5 709.0 2006 721.9 2004 25 2008 2007 756.1 2005 900 2006 938.4 1000 461.3 Net Sales - J$B 15 2005 2004 600 606.3 Net Profit Attributable to Stockholders - J$B 10 2004 Pre-tax Profits J$M Jamaica Broilers Group - Annual Report & Accounts 2013 5 Executive Team Financial Highlights 2013 0 6 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Chairman & President's Overview Board of Directors Executive Team Jamaica Broilers Group - Annual Report & Accounts 2013 FINANCIAL HIGHLIGHTS This financial period began in the leap year of 2012 and our company and our country certainly leapt over many hurdles. We are thankful that we accomplished this successfully despite challenges that required a great deal of repositioning both internally and in our external markets. We experienced significant devaluation of our dollar and the erosion of our customers' purchasing power as a direct result. While very complex, the local economic climate still presented opportunities for growth and profit. Recognition of these opportunities meant that all entities within the Group were able to chart a plan for growth and profitability. Revenue increased from $23.7 billion recorded in 2011/2012 to $26.5 billion in 2012/2013, reflecting a 12% increase of $2.8 billion, while gross profits moved up 5% from $4.8 billion in 2011/2012 to $5.5 billion this financial year. Net profit attributable to shareholders rose by 10% from the $936 million in 2011/2012 to the $1.03 billion realised in 2012/2013. These positive results must be attributed in part to the effectiveness of our Board of Directors who gave guidance and worked with the Executives to steer the company through a difficult year. At the same time we extend our heartfelt gratitude to these remarkable professionals, we say goodbye to Andrew Mahfood, and welcome Omar Azan, CEO of Boss Furniture, as our newest board member. This past year of tremendous challenges and triumphs, has also been a testament of our team's ability to overcome obstacles and realize goals. In a situation compounded by the instability that rapid readjustment creates, our consistent internal efforts to keep our employees efficient and effective paid off. Our staff and contractors kept pace with the changes, working hard and staying focused. While this local economic climate seems like the new normal, we still see great potential in Jamaica. Operating successfully here requires flexibility, speed and a new way of thinking, but we know that the Lord will guide us. The World Food Organization has declared the importance of food security for developing countries and that local food production is a necessity. With the poultry industry being the largest employer in agriculture and with over 15,000 small farmers, the industry obviously has a significant impact on the socio-economic wellbeing of our society. As the largest producer of protein products in Jamaica, we are constantly aware of the economic challenges that we face as a country, and the role we play in ensuring a viable, productive and sustainable poultry sector. We are confident that our industry and our company will continue to have a major positive impact on our great nation. Robert Levy - Chairman Christopher Levy - President and CEO 7 8 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Executive Team Directors' Report The Directors present their annual report with the Financial Statements for the year ended 27 April, 2013. RESULTS OF OPERATIONS TURNOVER The Group's turnover for the year amounted to $26,552,970 as compared with $23,672,341. for the previous year. PROFIT, DIVIDENDS AND APPROPRIATIONS Net Profit Attributable to Stockholders $1,095,064 Profits brought forward from previous years were $6,578,766 To give an amount of $7,673,830 Less Interim Dividends of $167,899 Thereby leaving profits to be carried forward as Retained Earnings of $7,505,931 The Directors are recommending that the two interim dividends of 8 cents and 8 cents paid on the 3rd December, 2012 and the 28th March, 2013, respectively, be ratified and declared final for the financial year ended April 27, 2013 by the shareholders in general meeting, as the Directors do not propose to declare any further dividend(s) from the audited profits realised during the financial year ended April 27, 2013. The Directors retiring in accordance with Regulation 89 of the Articles of Incorporation are Messrs. Aubyn Hill, Robert Levy, Ian Parsard and Gregory Shirley all of whom are eligible for re-election. The Director retiring in accordance with Regulation 95 of the Articles of Incorporation is Mr. Omar Azan who was appointed during the year, and who, being eligible offers himself for re-election. AUDITORS PricewaterhouseCoopers will continue in office as Auditors in accordance with the provisions of Section 154(2) of the Companies Act. Dated the 24th day of July, 2013 __________________ PETER A. DePASS Company Secretary Registered Office Content, McCook's Pen, St. Catherine Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. 9 Accounts Board of Directors Executive Team Corporate Governance Corporate Governance The Board of Directors of Jamaica Broilers Group of Companies is responsible for the effective governance of the Group. They oversee the Group's Corporate Affairs on behalf of our shareholders and act as advisors to our management team in settling vision and strategy to enhance shareholder value. As the demands on and the oversight responsibilities of board members continue to increase and become ever more challenging, we are pleased that our board members are qualified, objective and inquisitive. This includes having members with the right mix of qualifications and background to effectively serve on the various committees of the board. Board Composition As at April 27, 2013 the Board comprised eight non-executive directors and three executive directors. The names of the directors and their qualifications are set out in the Directors Profile section of this report. Attendance at Board and Committee Meetings The following table highlights the attendance of Directors at meetings of the Board of Directors: Board Meetings (10 total) Omar Azan 3 Dr. Claudette Cooke 10 Dr. Trevor Dewdney 10 Aubyn Hill 10 Robert Levy 10 Christopher Levy 10 Andrew Mahfood 4 Malcolm McDonald 9 Ian Parsard 10 Barrington Pryce 10 Gregory Shirley 10 The Hon. R.D Williams 9 Board Committees 1. THE CORPORATE GOVERNANCE COMMITTEE Chairman: Mr. Gregory B. Shirley, MBA Gregory Shirley joined the Boards of Directors of Jamaica Broilers Group in 2006, having retired just prior to that from the position of Partner in Charge of Advisory Services at KPMG in Jamaica, Board Member of KPMG CARICOM and head of Advisory Services for KPMG member firms across CARICOM. Among the major achievements of the Corporate Governance Committee, is the production of a comprehensive Corporate Governance Document. Committee Members: Mr. Gregory Shirley Mr. Malcolm McDonald Mr. Aubyn Hill This Committee met once during the year 2012/2013. 2. THE COMPENSATION COMMITTEE Chairman: Mr. Gregory B. Shirley, MBA Over Gregory B. Shirley's professional career, which has spanned more than 30 years, he has distinguished himself as a sought-after Consultant in the areas of Compensation and Benefits Administration, Performance Management, Corporate and Strategic Planning and Process Improvement. Committee Members: Mr. Gregory Shirley Dr. Trevor Dewdney Mr. Aubyn Hill Mr. Malcolm McDonald The Committee is scheduled to meet once per year: One meeting was held during 2012/2013. 3. THE AUDIT COMMITTEE Chairman: Mr. Aubyn Hill, MBA Aubyn Hill has been a member of the Jamaica Broilers Group Board since June, 2005 and was appointed Chairman of the Company's Audit Committee in November, 2012. He is a Corporate Strategist and CEO of Corporate Strategies Limited and National Growth Micro Finance Limited with over 25 years experience in Banking and Finance. He has conducted business in over 84 countries. The work of the Audit Committee, and the Internal Auditors- KPMG, provides credible informational support for the External Audit function, provides credible informational support, for the External Audit function, which is carried out by PricewaterhouseCoopers. Committee Members: Mr. Gregory Shirley Dr. Trevor Dewdney Mr. Malcolm McDonald The Committee is scheduled to meet quarterly, however, it may hold additional meetings if the Board requests that members convene to authorize financial results and any other matter which may require that Committee's specific attention. During the year under review, four meetings were held. 10 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Executive Team Board of Directors Mr Robert Levy, C.D., Hon. LL.D., M.A. Chairman Mr. Christopher Levy, MBA President & CEO The Hon. R. Danvers Williams, O.J., C.D., Hon. LL.D., J.P, C.L.U. Director Emeritus Mr Levy is a poultry expert with over 50 years' experience acquired at all levels of the poultry industry, in general, and at Jamaica Broilers Group in particular. Especially highly regarded for his knowledge of the industry, his philantrophic endeavors and his strong sense of nationalism, he is the Chairman of the Group. Christopher Levy has worked with Jamaica Broilers Group since 1985 and has substantial experience and in-depth working knowledge of the Company's business. He played a pivotal role in the Group's successful diversification into the area of Ethanol production. Mr Williams is one of Jamaica's most respected businessmen - having enjoyed a distinguished career in excess of 56 years in the life insurance industry, inclusive of founding and serving as President and Chief Executive Officer of Life of Jamaica (now Sagicor Life). \u0003 e H is the immediate Past Chairman of the Jamaica Broilers Group. Jamaica Broilers Group - Annual Report & Accounts 2013 11 Dr. Claudette Cooke, CMT, Ed.D. Executive Director Dr. Trevor Dewdney, D.V.M. Director Mr. Aubyn Hill, MBA Director The Group's Vice President of Human Resource Development & Public Relations and a Certified Master Trainer in the area of Human Performance Improvement (HPI). A well-regarded Veterinary Consultant, Dr. Dewdney is also a devoted farming practitioner. A corporate strategist and CEO of Corporate Strategies Limited, with over 25 years' experience in Banking and Finance. He has conducted business in over 84 countries. 12 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Executive Team Board of Directors Mr Omar Azan, Director One of the island's leading manufacturers, and exporter of furniture for over 20 years. His commitment to nation building has led him to serve for 10 years on the Board of the Jamaica Manufacturers' Association where he currently sits as Immediate Past President. Mr. Malcolm D.L. McDonald, Attorney-at-Law Director Mr. Ian Parsard, MBA (Hons.), A.C.C.A. Executive Director An Attorney-at-Law and a partner in McDonald Millingen - a firm specializing in Banking, Taxation, Commercial Law and Conveyancing - he has extensive experience, inter alia, in commercial transactions. The Group's Senior Vice President for Operations & Finance, he is a Chartered Accountant who distinguished himself by graduating with highest honours from the University of Pennsylvania's Wharton School of Business. Jamaica Broilers Group - Annual Report & Accounts 2013 Mr. Barrington Pryce, Director The General Manager of Jamaica Poultry Breeders Limited, a JBGL subsidiary. Mr. Gregory B. Shirley, MBA Director A Consultant with a wide range of skills - including Corporate and Strategic Planning, Process Improvement and Performance Measurement. 13 14 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Executive Team Christopher E. Levy MBA President & Chief Executive Officer Claudette D. Cooke CMT, Ed.D. Vice President, Human Resource Development & Public Relations Leon O.A. Headley Vice President, Procurement & Trading Ian S. Parsard MBA Senior Vice President, Operations & Finance Board of Directors Executive Team Jamaica Broilers Group - Annual Report & Accounts 2013 Donald A. Patterson MBA, FCA Vice President, Accounting & Information Systems Conley N. Salmon Vice President, Marketing - Feeds & Agricultural Supplies Judy Baugh MSc Asst. Vice President 15 John Carberry MSc, MBA, PMP Asst. Vice President- Energy 16 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Management Discussion & Analysis The high price of our raw materials combined with the weakened dollar has made it necessary for us to review our local businesses with the clear intention of developing product lines that are profitable and discontinuing those which are not. While expanding the Group's more profitable lines, we are simultaneously developing new products for our customers, working with them to improve efficiency. With our new Further Processing Facility, we have seen tremendous growth in our beef and chicken burger business, inclusive of export prospects. had to seek markets outside of Jamaica, deepening the nature of our relationship with entities in Grand Cayman while growing Haiti Broilers. Our business in Haiti, though small, has grown exponentially over the year and we see this trend continuing. JB Ethanol saw record volumes being produced under contract which was a real achievement in an environment of increased competition. We also grew our US based operations by over 100%, through increasing the production of fertile hatching eggs, and working closely with customers in furtherance of becoming a full service provider for them. Wincorp's rate of growth is expected to continue and they show real potential for being a significant segment of the Group. OPERATIONAL HIGHLIGHTS Even as we look to increasing foreign exchange earnings, local economic challenges have demanded that we examine our business model, finding ways to alleviate internal US dollar demand. The corn project is a prime example, the pilot run providing impetus for the creation of local enterprise dedicated toward the growth and production of this much-needed raw material, typically imported from the States. We also BEST DRESSED FOODS DIVISION The Best Dressed Chicken Brand continued to hold its own in a sluggish economy. During the year under review, poultry remained our No. 1 product performer. Sales of imports and further processed products remained steady, as competition heightened. Executive Team Jamaica Broilers Group - Annual Report & Accounts 2013 17 However, we continued to stay close to our customers and broaden our product range in pursuit of our strategy to become a multi-product supplier. This was underpinned by a re-organization of our sales structure, which made us more customer-centric and placed us in a position to better understand our customers' needs and work with them to grow their businesses. We also grew our customer base in the Cayman Islands with our products gaining acceptance among the increasing number of expatriates residing on the island, even as the Best Dressed Chicken remained a favourite with Jamaicans in that country. In fact, we recently welcomed Popeye's in Cayman as a customer and the addition of the Best Dressed Chicken to their menu boards has provided Popeye's with a differentiating product, to which the public has been responding favourably. 18 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Management Discussion & Analysis continued Our further processing arm received a boost with a $300 million investment by the Jamaica Broilers Group in the new Best Dressed Further Processing Facility at our Spring Village location. We also acquired new international and local customers for our further processed products, concurrent with the expansion of our production capacity at that facility. Our Hot Dog Cart Vendors entrepreneurial programme - offered under the Reggae Jammin' brand - is gaining traction. During the fiscal year, we brought new vendors into the program and held workshops with resource personnel to increase their ability to make the hot dog carts a viable business option. Chef Brian Lumley was among the presenters who demonstrated a diversified range of products which can be offered by the cart vendors at reasonable prices. As Jamaica's first provider of poultry products through a structured distribution network across the island over nearly 55 years, we felt it was our civil responsibility to be an official sponsor of Jamaica's 50th Independence celebrations. To this end, we participated in a number of activities, starting with the hosting of the largest ever Best Dressed Fun in the Son Gospel Festival and extending our sponsorship to the Jamaica Military Tattoo and the JAAA National Senior Trials, culminating with the Jamaica Jubilee Village held at Independence Park Limited. We continued our focus on social wellbeing and wellness projects, by supporting programs geared toward assisting the youth and the elderly within the communities where we operate and also island wide. In addition, we sponsored a number of outreach initiatives organized by schools, churches and other institutions aimed at advancing the social well-being of members of the society. Our wellness drive saw us staging the inaugural three-series Best Dressed Chicken 5K Race/Walk at Hope Gardens. Board of Directors Executive Team Jamaica Broilers Group - Annual Report & Accounts 2013 As we close this financial year, we will be placing emphasis on further improving our customer relationships, diversifying our business and widening our footprint in the new fiscal year. HI-PRO ACE DIVISION Hi-Pro Feeds As at the end of the financial year, HiPro Feeds continued to grow despite a challenging period for agriculture, which saw gluts in both the table egg and pork markets. In addition, the broiler industry continued to face competition from cheap imported poultry products, such as chicken and turkey neck and back. The situation was compounded by continuous threats of high grain prices on the world market. In fact, over a nine-month period -July, 2012 and March, 2013 - prices increased across all feed types at an average of 11%. However, we are pleased that during the year under review the nutritional profile of the Hi-Pro broiler and pig feeds was greatly improved, to the benefit of our customers who realized improved production efficiencies and resultant increase in profitability. 19 20 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Management Discussion & Analysis continued Hi-Pro Chicks During the period, the Jamaica Livestock Association exited the broiler chick market and Hi-Pro Chicks used the opportunity to increase its supply of baby chicks to the market. This resulted in the company increasing sales by 14% above last year. alternative sources of fuel, thereby positioning JB Ethanol to hedge against dependence on any single fuel source. During the year under review, JB Ethanol demonstrated its resilience in a very challenging environment and is positioning itself to take advantage of opportunities in the new year. Hi-Pro ACE Supercentre Hi-Pro ACE Supercentre achieved a 10% increase in profits through steady growth in sales of crop and plant care products and veterinary pharmaceuticals. In response to market trends, the store expanded its pet care, fishing and hand and power tools with a number of new and complimentary products. PRODUCTION FACILITIES Our continued drive to increase our customer data base saw a 70% increase year over year in the number of Customer Card members. Hatchery Operations ETHANOL OPERATIONS In spite of a very slow start to the financial year, JB Ethanol closed the period under review with a record quantity of ethanol processed. The volume processed was 130% more than the previous financial year and 28% more than the previous highest year in 2009/2010. It should be noted that this was achieved against the background of the removal of US tariff restrictions which enabled countries outside of the Caribbean Basin to enjoy the same duty-free access to the market. The safety record of the JB Ethanol plant continued to lead among industry players, as at the close of the year the company recorded over 2,100 days with no lost time accidents. Amidst increased competition, the plant continues to focus on improved efficiencies and, in that regard, has made investments to allow the facility to use BEST DRESSED CHICKEN Operating under a new management team, the Hatchery continued its steady improvement in hatchability to reach production levels on par with the top 5% of Agri Stats Inc. - a USA benchmarking company of all hatcheries in that country. The Hatchery was also able to satisfy the demands of its major customers in terms of the quality and quantity of baby chicks required, while focusing on upgrading and modernizing its operations. Field & Feed Operations The Field Operations continued to supply the required quantities and high quality of live birds to the Best Dressed Chicken Processing Plant. In addition, the focus of the team on customer satisfaction, cost containment and improved efficiencies remained a priority throughout the year and the performance efficiency targets of feed conversion, livability and average weights were achieved. Given the challenges being faced by countries outside of this hemisphere, the area of bio-security also came in for renewed attention, resulting in improvement in our systems. Executive Team Jamaica Broilers Group - Annual Report & Accounts 2013 21 We executed a partial first phase of the installation of solar panels to provide alternate energy to tunnel houses operated by a number of contract farms. The project was done in collaboration with the Development Bank of Jamaica and those farmers who participated in the project have begun to realise savings in their energy costs. The second phase of the project is expected to come on stream soon. 22 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Management Discussion & Analysis continued The Field Operations team - including our valued contract growers - will continue to place emphasis on cost containment, while producing the highest quality birds at the varying market sizes required by the next-in-line operations within our integration system. The Best Dressed Feed Mill - a Bureau Veritasapproved, ISO 9001:2008-certified facility for feed manufacturing - completed the year with many positives. Unfortunately, we learnt firsthand how fallible our system could be to human error despite the standards set when our horse feeds were contaminated with an ingredient meant only for chicken feed. It was a distressing time for both our customers who experienced the loss of valuable livestock, and the Group, which moved to address the matter swiftly and amicably. Priority attention was given to the continuous improvement and upgrading of equipment, as well as the training of personnel, to enable the organization to provide full customer satisfaction. Processing Plant During the year under review, the Best Dressed Chicken Processing plant acquired certification in ISO 9001:2008 Quality Management System and gained recertification in ISO 14001 Environmental Management System based on the successful implementation of its Quality Assurance Systems and Good Management Practices. Amidst increased productivity, we were able to reduce the number of accidents year over year by 32%. Best Dressed Further Processing Facility In November 2012, our processing facility was relocated from Content, in Bog Walk to the new 22,000 sq. ft. Best Dressed Further Processing Facility in Spring Village, St. Catherine. This $300 million facility was designed and constructed to industry standards to meet both our needs and those of our business partners. The move has also allowed for a more seamless operation and integration into the other aspects of our business. Within the facility, there are two processing lines that feed two separate Individually Quick Frozen (IQF) freezers that are used in the processing of beef and chicken burgers, battered and breaded items for our Reggae Jammin' line, in addition to a wide range of other custom products. We currently process Executive Team Jamaica Broilers Group - Annual Report & Accounts 2013 company's creative minds will formulate and perfect new ideas. We will also work with our clients to create products based on their specific needs. OTHER OPERATIONS Wincorp International This year marked a significant change in the Group's United States-based operations, with the services of International Poultry Breeders (IPB) - the hatching egg business, Consolidated Freight & Shipping Inc. (CFSI) - the shipping company, and Wincorp Trading - the sourcing and trading business, being brought under the management of Wincorp International. During this period of change, we also achieved improved sales and profit levels, bolstered by the company's participation in the International Poultry Show in Atlanta, Georgia, which generated a number of new customers. As a result Wincorp International now has customers in the Caribbean, Central and South America, Mexico and mainland USA. For 2013-2014, our focus will be on growing the egg and feed ingredient businesses. frankfurters, marinated chicken, pickled products, smoked products and portioned meats; however, there are plans to expand into new products for our clients in both the local and export markets. The facility also houses a new boardroom with amenities for entertaining and meeting with our clients to review new products. A new test kitchen has also been built and a proposed pilot plant is to follow, where the Haiti Operations 2012-2013 represented the first year of production at our feed mill, hatchery and chicken farm in Haiti. Our eggs are marketed in that country under the HB Ouefs brand and our chicken under the Le Chic Poulet brand. During the period, sales increased by 395%; a major contributor to this significant increase 23 24 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Management Discussion & Analysis continued poultry industry and our brands are well recognized and accepted by that market. Although we operate within a niche market, due to the low tariffs on poultry our Le Chic Poulet chicken has done very well in the formal sector, which includes supermarkets, restaurants and hotels. We expect to improve our financial status in the next year, against the background of expected reductions in grain prices. Sales of chicken, as well as table eggs are projected to double, as we increase production on the farm. Co-generation Operations During this year, the Cogeneration Plant faced operational challenges. However, preemptive measures were put in place to minimize the impact on the Group's operations. The plant resumed full operation during the period - with greater efficiencies - to provide electricity and steam to the Best Dressed Chicken Processing Plant and the national grid, resulting in a reduction in operational costs at the plant. In addition, consultations with the Office of Utilities Regulations (OUR) on the prospects of power wheeling continued in earnest, as the cogeneration plant prepared to provide a reliable source of electricity to the Group. in sales was the expansion of our distribution network which moved from 65 to 123 distributors at the end of the financial year. However, in spite of this commendable increase in sales, we were not able to meet our goal to break even by the end of the last quarter, due primarily to the continuous hike in grain prices which we were not able to fully pass onto our customers. Our table egg production has been expanded significantly to take advantage of the opportunities and demand that exist in the egg market in Haiti. In fact, we are currently the major local player in the Executive Team Jamaica Broilers Group - Annual Report & Accounts 2013 HUMAN RESOURCE DEVELOPMENT The Group Human Resources Department supports and facilitates the smooth functioning of the organization's workforce. The team has been committed to the internal development of employees' competences and outcomes, thereby increasing learning opportunities for existing staff; also, promotions for employees who best fit the requirements for a position. communities in which they live. This year the Group employed 116 summer workers across its locations. They were provided with an opportunity to gain real work experience and the skills needed to make important decisions that will determine their future and motivate them for the long term. The Group also facilitated the establishment of a defined individual contribution pension plan for its contracted workforce. Participation in the scheme grew by 25%-as at the end of this financial year. Training & Development The Department worked with Line Managers to improve management effectiveness and utilization of the Group's performance measurement program. Performance measures are implemented to enable growth, the right attitude and behaviours. These measures are linked to employees' daily activities to assure achievement of the organization's objectives and continuous functional improvement. SPORTS Employee Welfare The Group maintained its support of a healthy work environment and through its Wellness Program conducted a number of counseling, financial and motivational/ informational workshops during the year. We strove to keep our workforce abreast of economic changes, providing them with useful tips to prepare for a better future. The Education of the Nation's Children is important, and this year the Group awarded Scholarship Assistance to forty-six (46) children of employees who met its standard of eligibility at a total value of $1 million. The Company's summer job program benefits teenagers, young adults, and the For yet another year, the cricket, netball and football teams went out in June 2012 to represent their company in the Business House League competitions. The football and cricket teams played their way to the semi-finals for their respective competitions, with the football team winning the Business House One Day Rally in 2013. The netball team performed admirably, placing third in both the Open League and Senior League competitions. 25 26 Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Management Discussion & Analysis continued In February 2013, the Group went out for Sigma Corporate Run, represented by a record number of two hundred and eighty-five participants. Team JBG was also present at the annual Jakes Off-Road triathlon winning the First Place Corporate Relay prize in a display of excellent fitness and mental fortitude. increase in our overall borrowings. We continue to focus on debt reduction, and should see the net debt amount lowered in the upcoming financial year 2013/2014. THE WAY FORWARD RISK ASSESSMENT Ethanol Operations Our ethanol operation continues to benefit from tariff free access to the United States under the Caribbean Basin Initiative(CBI), however the US$0.54 per gallon tariff applicable to non-CBI ethanol which expired on December, 31 2011 has not yet been reinstated. While this removes the advantage available to our ethanol operations relative to producers such as Brazil, there still are opportunities available for JB Ethanol to be a part of the value chain by providing dehydration services. Our lobby efforts through the Jamaican Ministry of Foreign Trade, other Caribbean government agencies and the Caribbean Ethanol Producers Association to restore the advantage of CBI ethanol operations continue. Market volatility continues to pose a risk to the viability of our ethanol operations. We continue to mitigate this risk by engaging in Contract Processing (\"tolling\") agreements. It is noteworthy that while the risk is reduced, adverse market conditions can limit the number of tolling contracts we are able to book. Debt Management With the increased funding requirements from the expansion of our operations in Haiti, and our fertile egg operations in the United States, together with increased working capital needs (given the increase in grain prices and devaluation of the Jamaican dollar versus the US dollar) we had a modest Our group remains committed to the development of the local Poultry industry evident from the significant investments that we continue to make in this sector. As we map the way forward for the sustainability of our company, we are fully focused on ensuring that our growth is strategic and measured. We will pursue new opportunities with prudence and embrace viable prospects while making every effort to deploy our resources carefully so that we continue to have a profitable business in Jamaica and our external markets. In order to maintain our profitability, we are tackling head-on the issue of cost containment. The high cost of imported raw materials, energy and security will continue to have our focus as we seek to deploy interventions such as the Best Dressed Chicken Cost Containment Initiative being implemented in conjunction with our poultry farmers. We are committed to innovation as a success strategy. As we enter our new year, we are fully mindful of the role that the Lord has played in directing the affairs of our company. We are also most grateful for the top talent that resides within our group, as well as the skills and savvy we access through our partners across the globe. They are the reason for our success as a Group and for them we are thankful. Christopher Levy - President and CEO Executive Team Jamaica Broilers Group - Annual Report & Accounts 2013 Notice of AGM Mission Statement Financial Highlights Chairman & President's Overview Directors' Report Corporate Governance MD&A CSR Shareholdings Directors & Snr. Mgmt Operating Divs. & Subs. Accounts Board of Directors Corporate Social Responsibility PUBLIC RELATIONS Jamaica Broilers Group remains resolute in its approach to nation building and making a lasting impact on the residents and communities with which it interacts. As a stakeholder in not just the economic, but the social outcomes of this nation, the Group applies a holistic approach to its activities focusing on education, sports, spiritual development, welfare, social outreach and empowerment-driven programs. Our use of sports as a medium for dialogue and discussion, team building, discipline, community development and unity was reflected through our continued sponsorship of community sports teams, and the Hi-Pro Ace Supercentre Tennis Open tournament. Emphasis was placed on welfare and social outreach through support of feeding programs, service clubs, churches and non-profit organizations and the promotion of local agricultural initiatives. In 2012, the Group was nominated for the Jamaica Observer Business Leader Award. Although we do not often publicize the level of our contribution in the area of corporate social responsibility, it is gratifying to know our commitment to nation building has not gone unnoticed. FAIR PLAY AWARDS The 12th staging of the Jamaica Broilers Group's Fair Play Awards Ceremony was held in September, 2012 at the Terra Nova Hotel under the theme: \"Social Media: Redefining Journalism in the Digital Age\". In keeping with the theme, Mr. Saadiq Rodgers King- who created history when he sold his invention, the Hot Potato mobile application, to Facebook for US$10 million - was asked to be the guest presenter. With social media revolutionizing the way information is disseminated across the globe, elements of the event were dedicated to recognition of that purpose. Social media was the primary method of promoting the awards, while \"blog\" discourse on the theme of the event was looped on a large screen at the ceremony. The two major winners of the 2012 Fair Play Awards were TVJ for \"Working in Danger? Asbestos Alert\" in the Television Media category and the Jamaica Observer's H. G. Helps for his series \"Death Postponed\