2020 - jamaica stock exchange
Post on 03-Feb-2022
3 Views
Preview:
TRANSCRIPT
2020
AnnuAl RepoRt 2020 3
We HAve THe RigHT CAR FoR You
INSIDE YOUR REPORT
4 Mission, Vision & Core Values
5 notiCe of annual General MeetinG
6 Corporate Data
7 profile of DireCtors
9 report of DireCtors
11 Corporate GoVernanCe
12 ManaGeMent teaM
13 ManaGeMent DisCussion & analYsis
17 nine Year HistoriCal finanCial Data
18 DisClosure of sHareHolDinGs
19 Corporate soCial responsiBilitY
20 finanCial stateMents
47 forM of proxY
geTTing You on THe RoAd Since 19914
Quality Pre-owned Cars
SinCe 1991
Mission, Vision & Core ValuesMissionTo maximise stakeholder value through the consistent delivery of superior service.
Core Values
VisionTo be the preferred provider of high quality vehicles, parts, accessories and services.
The ‘Jetcon Way’, fashioned after the spirit of founder Andrew Jackson, continues a rich tradition of principles and policies that drive the delivery of a best in class customer service with integrity, empathy and fairness to all stakeholders.
Policiesenterprise - We have a good eye for opportunities.automania - We love and know the car industry.Community - We take care of our community.
PrinciPlesMutual Benefit - We build 2-way relationships, looking beyond self-interests.Quality product - We aim to surpass customers’ expectations.accountability - We believe and invest in what we sell.
Teamwork
Dedication
Innovation
Transparency
AnnuAl RepoRt 2020 5
We HAve THe RigHT CAR FoR You
notiCe of annual General MeetinG
Notice is hereby given that the Annual General Meeting (AGM) of Shareholders of Jetcon Corporation will be held at a later to be determined date for the purpose of transacting the following business:
1. Audited Financial Statements
To receive, consider and if thought fit approve the Audited Financial Statements of the Company for the year ended December 31, 2020, together with the Reports of the Directors and Auditors thereon.
2. Election of Directors
Resolution:
Be it resolved that in accordance with article 99 of the Company’s Articles of Association, Garth McKenzie retires and being eligible, offers himself for re-election and Carl B. Carby, having exceeded the age limitation of 75 years, retires.
The following Director/s who offer themselves for re-election are hereby re-elected:
a. Garth McKenzie
3. To Approve the Remuneration of the Directors
To consider, and if thought fit, pass the following resolution:
That the amount shown in the Audited Financial Statements for the year ended December 31, 2020 Directors fees is hereby approved.
4. To Appoint Auditors
To appoint auditors of the Company for the ensuing year and to authorize the Directors to fix their remuneration.
5. Any Other Business
To transact any other business as may properly be transacted at an Annual General Meeting.
BY orDer of tHe BoarD
29th Day of April, 2021
Andrew Joel Jackson, Corporate Secretary
Jetcon Corporation Limited
Registered Office:2 Lower Sandringham Avenue, Kingston 10
IMportANt NotIce for MeMberS Who Are Not Able to AtteNd:
Any member of the Company entitled to attend and vote at this meeting is also entitled to appoint one or more proxies to attend and vote in his/her or representative/proxy’s stead. Such proxies need not be members
of the Company.
A suitable Form of Proxy is Included (see page 47) for guidelines for appointing a valid proxy).
Form of Proxy must be lodged with the Registrar and Transfer Office: Jamaica Central Securities Depository Limited, 40 Harbour Street, Kingston CSO
not less than forty-eight (48) hours before the time appointed for holding the meeting.
geTTing You on THe RoAd Since 19916
Quality Pre-owned Cars
SinCe 1991
Corporate Data
BoarD of DireCtors
John Jackson, chairmanAndrew b. JacksonGarth Mckenziedr. christine clarke-doughertyAndrew Joel Jacksoncarl carby (retired)Sean Jackson
ManaGeMent teaM
Andrew b. Jackson, Managing directorAndrew Joel Jackson, operations ManagerSean Jackson, logistics and It ManagerKeddine bryce, Accountantcolleen clayton, lead Sales representativeJulian Gordon, Service Supervisor
Corporate seCretarY
Andrew Joel Jackson
reGistereD offiCe
Jetcon corporation limited2 lower Sandringham Avenue, Kingston 10
auDitors
crooks Jackson burnettchartered AccountantsUnit 9a, 2 Seymour Avenue, Kingston 6
attorneYs-at-laW
hart Muirhead fatta2nd floor, Victoria Mutual building53 Knutsford boulevard, Kingston 5
Bankers
CIBC First Caribbean International Bank Jamaica
23-27 Knutsford boulevard, Kingston 5
National Commercial Bank Jamaica Limited
the Atrium, 32 trafalgar road, Kingston 10
Bank of Nova Scotia Jamaica Limited
corner duke & port royal Street, p.o. box 709 Kingston cSo
Sagicor Bank Jamaica Limited
17 dominica drive,Kingston 5
First Global Bank Limited
2 St. lucia Avenue, Kingston 5
Jamaica National Bank
2-4 constant Spring road, Kingston 10
reGistrar & transfer offiCe
Jamaica central Securities depository limited40 harbour Street, Kingston cSo
AnnuAl RepoRt 2020 7
We HAve THe RigHT CAR FoR You
profile of DireCtors
JOHN JACKSONCHAIRMAN
EXPERTISE: Auditing, Management, Finance and Investments.
OTHER APPOINTMENTS: Chairman - Jamaican Teas Limited, KIW International, QWI Investments. Director - Bridgeton Management Services Limited. (Fmr. Chairman - Jamaica Deposit Insurance Corporation, Fmr. Director - Development Bank of Jamaica).
NOTEWORTHY: John is a Chartered Accountant. He brings a wide range of experience in auditing, accounting, finance, investments, economics and management.
EDUCATION: South West London College – United Kingdom.
ANDREW JOEL JACKSONCORPORATE SECRETARY
EXPERTISE: Operations Management and Administration.
OTHER APPOINTMENTS: Fmr. Board Member - Drivers’ Rallysport Club of Jamaica.
NOTEWORTHY: An avid motorsport competitor who began karting at age 7. He holds the distinction of being the only Jamaican driver to have competed in a Formula Series (Formula BMW) and Skip Barber race series in the USA, Canada and Europe. He also has several local and regional championships to his credit.
EDUCATION: University of the West Indies – Jamaica.
GUIDING PRINCIPLE: Strive to be a little better today than yesterday.
SEAN JACKSONDIRECTOR
EXPERTISE: Information and Computer Technology and Logistics.
OTHER APPOINTMENTS: Jetcon Corporation Limited – Race Team Manager.
NOTEWORTHY: He started racing karts at age 8 and Is now a decorated motor sports competitor who Is passionate about cars and competition.
EDUCATION: Miami Dade College – Florida & Florida International University – Florida.
GUIDING PRINCIPLE: Time is very precious, something you can never get back. Don’t put off for tomorrow what can be done today. Do everything to the best of your ability, in a manner that is as efficient and effective as possible.
DR. CHRISTINE CLARKE-DOUGHERTYCHAIRMAN - COMPENSATION COMMITTEE
EXPERTISE: Economics and Special Projects Coordination.
OTHER APPOINTMENTS: Bank of Jamaica – Director & Chair of the Audit Committee.
NOTEWORTHY: A competent, experienced and dynamic University Administrator and Director with more than ten years’ experience in providing leadership, vision and oversight to all aspects of three undergraduate bachelor’s degree programs relating to various aspects of commerce.
EDUCATION: Rice University – Houston, Texas & Mount Holyoke College – Massachusetts.
GUIDING PRINCIPLE: Delay is Danger.
Jamaican
NATIONALITY
Jamaican
NATIONALITY
Jamaican
NATIONALITY
Jamaican
NATIONALITY
geTTing You on THe RoAd Since 19918
Quality Pre-owned Cars
SinCe 1991
ANDREW B. JACKSONMANAGING DIRECTOR
EXPERTISE: Management and Leadership, Engineering and Entrepreneurship.
OTHER APPOINTMENTS: Investor’s Choice Magazine – Manager (1991); Electrical and Electronics Engineers (Jamaica Section) – Chairman; Jamaica Used Car Dealers Association – President (Fmr. President - Jamaica Karting Association).
NOTEWORTHY: A true entrepreneur at heart. Founder of St. Andrew Investments Limited, 1991 which distributed lubricants in the automotive industry. It was this business that led to the establishment of Jetcon in 1994.
EDUCATION: University of the West Indies – Jamaica & Nova Southeastern University – Florida.
GUIDING PRINCIPLE/QUOTE: Whatever your mind can conceive and believe you can achieve.
CARL B. CARBY CHAIRMAN - AUDIT & FINANCE COMMITTEE
EXPERTISE: Management, Finance and Investments.
OTHER APPOINTMENTS: Director - QWI Investments Limited.Executive Chairman - Sangster’s Book Store Limited. . (Fmr. Executive Chairman - Bahama Cement Company. Fmr. Senior Manager - Carlong Publishers (Caribbean) Limited. Colgate Palmolive, T. Geddes Grant Limited/Massy Holdings.)
NOTEWORTHY: During his tenure as Chairman, Carlong was nominated for the Jamaica Observer Business Leader of the Year Award (2007).
EDUCATION: South West London College – United Kingdom.
GUIDING PRINCIPLE: Respect the teachings of your parents; always do what you consider fair and just and keep your eyes open for the many opportunities that the Lord provides.
GARTH MCKENZIEMEMBER - AUDIT & FINANCE COMMITTEE
EXPERTISE: Administration, Engineering, Change Management, Union Negotiation & Renewable Energy.
OTHER APPOINTMENTS: GMc Energy Limited – Managing Director; Engineering Academic Advisory Committee UTECH – Vice Chairman (Fmr. President - Nova Powerspeakers Toastmasters Club. Fmr. President - All Hellshire Leadership Council).
NOTEWORTHY: Since 1999, he has attended many prestigious utility and energy conferences. In 2002 he was a presenter at the CARILEC Engineers and Supply Chain Conference. Since 2016, he has consulted with a range of utilities, NGOs and private sector entities in Africa and the Caribbean.
EDUCATION: University of the West Indies - Jamaica, Nova Southeastern University – Florida & Monash University – Australia.
GUIDING PRINCIPLE: Demonstrate and practice brotherly love, relief and truth in all undertakings.
Jamaican
NATIONALITY
Jamaican
NATIONALITY
Jamaican
NATIONALITY
AnnuAl RepoRt 2020 9
We HAve THe RigHT CAR FoR You
report of DireCtors
A year into the pandemic and with the onset of vaccinations we are starting to see light at the end of the tunnel. Business was hit particularly hard at the initial spread of the virus, and it was hit hard again during the ‘second wave’ towards the end of the year, but we anticipate, as more persons become vaccinated and restrictions begin to ease, business will recover as well.
In the short term, the primary driver for increased earnings will be vehicle unit sales growth and increased revenues from vehicle servicing and sale of parts. We also believe that increased pre-owned vehicle unit sales will drive increased sales of parts, ancillary products and vehicle servicing revenues over time.
Continued demand for pre-owned vehicles is expected to continue to be a major part of the motor industry in Jamaica as the vehicles are well received by the motoring public who have been well served by them. This is based on the government’s commitment to implement policies to generate economic recovery, increase employment and keeping interest rates low. We also believe the pandemic will leave lingering reservations about using public transport and persons will, if they can, lean more toward owning a private vehicle.
To expand our vehicle unit sales, we will need to continue our delivery of an unrivalled customer experience. The hiring and development of team members with the necessary drive to fuel our success will be critical. Managing the risks posed by a competitive environment, ensuring a continued flow of vehicles for sale and exploring new sources of revenue are also crucial in our efforts to maximize cash flow and customer satisfaction.
Jetcon Corporation, to date the only motor vehicle dealership
listed on the Jamaica Stock Exchange, concluded the most
challenging year since we were listed in early 2016. The Company
weathered the storm created by COVID-19 pandemic and ended
2020 with lower sales than in 2019 and a small loss.
geTTing You on THe RoAd Since 199110
Quality Pre-owned Cars
SinCe 1991
report of DireCtors Cont’D
2020 was an unprecedented year for the majority of persons
and businesses and Jetcon was no exception.
Although Jetcon experienced a promising start to 2020 with rising sales in the first two months, all of that came to a sudden halt during March when Jamaica encountered its first case of COVID-19. Business was hit particularly hard during this initial onset of the pandemic, and again in September with the onset of the ‘second wave’. To mitigate losses and to boost sales, Jetcon furloughed staff, reduced prices, and introduced a range of sales and marketing initiatives.
The Company ended 2020 with revenue of $629 million, down 38 percent from that of 2019. Administrative and other expenses were 6 percent lower than that of 2019 and at $65 million resulted in a full year loss of $6.7 million. The loss includes increased depreciation charge based on the new treatment of leases that require lease cost to be booked as an asset and be subject to depreciation.
Jetcon was and continues to be in good financial shape as we decreased inventories of vehicles, reduced outstanding loans during the year and fully repaid the balance after the year ended. Fixed assets grew by $42 million to $178 million as we concluded the purchase of a parcel of land close to our existing headquarters, and inventories decreased from $445 million to $392 million. Shareholders’ equity decreased from $547 million to end the year at $541 million as a result of the loss incurred for the year.
stoCk perforManCe
We take note that the stock price slipped below $1 during the year. The fall no doubt is due to the impact that COVID-19 global pandemic has on our operations resulting in reduced profit. Your Directors are cautiously optimistic that the stock will rebound as we already see an uptick in sales profits in 2021.Notwithstanding the slippage in fortunes the number of shareholders increased, moving from 1,081 shareholders in 2019 to end at 1,177 in 2020.
DiViDenD
In light of the results for 2020 and the uncertainty caused by the COVID 19 development, the directors do not recommend the payment of a dividend for the 2020 financial year.
DireCtors retirinG
Under the articles of the Company, Garth McKenzie retires and being eligible, offers himself for re-election and Carl B. Carby having exceeded the age limitation of 75 years, retires. We thank Carl for his contribution and time and wish him all that is well.
The management of Jetcon would like to thank its staff and shareholders for their hard work, patience and resilience.
AnnuAl RepoRt 2020 11
We HAve THe RigHT CAR FoR You
Corporate GoVernanCeThe Board of Directors of Jetcon Corporation Limited is committed to ensuring the effective
governance of the Company, in order to achieve the highest standard of Corporate Responsibility
and Risk Management. We view the development and achievement of the Company’s strategic
goals as both beneficial to the strength of the Company and the shareholders’ value. The Board holds the belief that prudent governance is integral to the achievement of success and growth.
The Board meets regularly to discuss and review the performance of the Company to ensure that the objectives are being met by the dedicated management team. With special focus on the economic, social and regulatory environment and the risks that may exist in the markets in which the Company operates. The Board established two sub-committees, namely Finance and Audit Committee and Compensation Committee, which continue to meet regularly. Furthermore, Jetcon’s Corporate Governance Guidelines are available on the Jamaica Stock Exchange website, www.jamstockex.com.
For year 2020, due to the ongoing COVID-19 pandemic, members of the Board only met on six (6) occasions. Additionally, the Finance and Audit Committee met on four (4) occasions, and the Compensation Committee did not hold any meetings.
BoarD of DireCtors MeetinG attenDanCe
MeetingS of the BoaRd
# of MeetingS held 6
John Jackson 6
Andrew B Jackson 6
Andrew J Jackson 6
Sean Jackson 5
Christine Clarke 5
Carl Carby (Retired) 6
garth McKenzie 5
finanCe & auDit CoMMittee
The Finance and Audit Committee chaired by Carl B. Carby acts as an advisor to the Board and to provide feedback in the areas of financial reporting, budgeting, auditing, contract review and compliance with legal requirements. The Finance and Audit Committee reviews matters that are considered relevant to the business and ensures the maintenance of statutory and other obligations.
finanCe & auDit CoMMitteee MeetinG attenDanCe
finance & audit coMMitteee
# of MeetingS held 4
Andrew J Jackson 4
Carl Carby (Retired) 4
garth McKenzie 3
CoMpensation CoMMittee
The Compensation Committee chaired by Christine Clarke-Dougherty makes recommendations to the Board, as to the level of compensation for Directors. These recommendations are based on attendance and performance of duties – as well as salaries for the management team and other employees.
The Compensation Committee did not hold any meetings due to the Covid-19 pandemic.
CoMpensation CoMMittee MeetinG attenDanCe
coMpenSation coMMittee
# of MeetingS held 0
Andrew B Jackson 0
Christine Clarke 0
garth McKenzie 0
geTTing You on THe RoAd Since 199112
Quality Pre-owned Cars
SinCe 1991
SEAN JACKSON LOGISTICS & IT MANAGER
Sean is the Company’s logistics manager, which involves overseeing the process of shipment of motor vehicles from suppliers in Japan for delivery to customers in Jamaica and manages all IT related demands within the organization. His prior work experience within the Company includes but is not limited to Motor Vehicle Servicing and Parts Distribution and Management. Coupled with his years of experience, Sean holds an Associate Degree in Computer and Information Systems from Miami Dade College, as well as a Bachelor’s in Information Technology from Florida International University, with a minor in Business.
COLLEEN CLAYTON LEAD SALES REPRESENTATIVE
Colleen prides herself on providing the highest caliber of customer service and is Jetcon’s longest serving team member, having dedicated over 16 years to the Company. Her depth of knowledge gained from accessing technical information on every brand sold by the Company, enables her to seamlessly match a potential customer with the car they desire. Colleen is also adept at encouraging other members of her sales team in applying these and other practices in obtaining similar sales objectives. Colleen has a BSc in Management Studies and in 2012, won the NCB Auto Dealer Award for the Salesperson with Most Improved Sales.
JULIAN GORDONSERVICE SUPERVISOR
By utilizing our 120-point quality assurance system, Julian ensures that all our vehicles are in excellent condition prior to delivering to our customers. Julian is attentive to detail and insists that safety procedures are followed. He ensures that his team understands that accuracy is paramount at each stage of the servicing and delivery process. He is completing a Bachelor’s Degree in Management Studies and is also a member of the Jamaica Marshalling Club, which provides marshalling for all motor sporting events in Jamaica.
KEDDINE BRYCEACCOUNTANT
Keddine has served the Company for over 10 years, with the majority of her tenure in the Accounting Department. Keddine methodically maintains the overall financial obligations of the Company and is supported by a team of three. She is versed in the Company’s operations with prior experience in the Parts and Sales Department.
ANDREW J. JACKSONOPERATIONS MANAGER
Joel has a wealth of experience in the auto industry. Starting by volunteering his holidays at the Company to work in critical areas, Joel has a strong interest in the success of the Company. His primary focus is the sourcing of quality parts needed to execute the servicing of our motor vehicles in a timely fashion. Coupled with superb inventory management, while maintaining superior quality of our products, Joel’s other areas of successful management in the Company include garage operations and administration.
ANDREW B. JACKSONMANAGING DIRECTOR
Jetcon Corporation Limited was founded by Andrew B. Jackson in 1994. Prior to the start of Jetcon, he formed St. Andrew Investments Limited in 1991, which distributed lubricants in the automotive industry. With the increased liberalization of motor vehicle imports, Andrew decided to seize the opportunity of car dealership when he accessed the market of motor vehicle sales. Andrew is the human resources manager and ensures the successful day-to-day operations of the Company. He holds a BSc in Physics and Electronics from the University of the West Indies and an MBA from Nova Southeastern University. Before deciding to explore his entrepreneurial skills, Andrew has served in various capacities at Cable and Wireless and NCR Jamaica.
ManaGeMent teaM
Jamaican
NATIONALITY
2016
APPOINTED
Jamaican
NATIONALITY
2010
APPOINTED
Jamaican
NATIONALITY
2007
APPOINTED
Jamaican
NATIONALITY
2016
APPOINTED
Jamaican
NATIONALITY
2014
APPOINTED
Jamaican
NATIONALITY
1991
APPOINTED
AnnuAl RepoRt 2020 13
We HAve THe RigHT CAR FoR You
ManaGeMent DisCussion & analYsis
ManaGinG DireCtor’s oVerVieW
I wish to express a hearty thank you to the Board, staff, customers, and you our valued
shareholders for the expertise, dedication and confidence that’s pivotal to the continued growth of Jetcon, particularly after a difficult 2020.
Our primary source of revenue and net income is the retail of pre-owned vehicles, sales of parts and motor vehicle servicing. In many ways, our performance in spite of the COVID-19 pandemic, is symbolic of our commitment to the consistent delivery of superior service. This is reflected
in the volume of vehicle sales of over 400 units in 2020, with a large percentage of sales being repeat purchases from satisfied customers. This we achieved by continuing to incorporate valuable feedback, implementing innovative marketing strategies which adhere to COVID-19 protocols and improving our internal processes for a more seamless customer experience. These strategies greatly cushioned the adverse market conditions faced, which caused a decline in operations and share price.
However, working in close collaboration with institutions that provide financing to our customers, we have been able to provide a convenient and holistic approach to motor vehicle ownership. This alliance provides
timely and reliable solutions for customer requirements as the team remains highly focused on driving operational efficiency and synergies, to create enhanced value for our stakeholders.
The future looks bright for Jetcon as COVID-19 vaccinations become more available and the economy slowly bounces back. We are confident that the demand for motor vehicle will continue to climb in 2021 and are strengthening our stocks of inventory, customer experience and sound business principles in order to build a Company that serves our customers well and is profitable and sustainable in the long term.
andrew Jackson, Managing Director
The Management Discussion and Analysis (MD&A), of financial status and results of operations, is provided as a supplement to, and should be read in conjunction with the audited Financial
Statements and their accompanying notes.
Jetcon Corporation Limited is the leading provider of pre-owned motor vehicles. Our primary business is the sale of cars, Sport Utility Vehicles (SUVs) and small
commercial vehicles through imports from Japan, which are supported by licenses granted by the government of Jamaica. Beginning in 2018, these licenses
require the procurement of a Pre-Shipment Inspection Certificate, provided by an independent assessor in the vehicles’ country of origin, prior to importation.
geTTing You on THe RoAd Since 199114
Quality Pre-owned Cars
SinCe 1991
The Company also sells parts and offers standalone motor vehicle servicing, scalable to our
customers’ needs. Organic growth remains our primary source of funding which may be
supplemented by credit funding where necessary.
sales operation
The pre-owned car market accounts for about two thirds of all cars imported into the country. This sector provides an important service to the country by delivering affordable and reliable vehicles to a wide cross-section of persons and businesses. The vehicles sold by Jetcon, are by far, more affordable than new ones and can last a considerably long time if properly maintained.
The acquisition of additional space in 2017 and 2019 enabled us throughout the year to continue to provide storage capacity for the increased inventory of vehicles, which enabled us to briefly halt the purchase of stock while continuing sales at lower levels during the severe months of the pandemic. In addition, with the acquisition of space in the Special Economic Zone at Tinson Pen, easing the process of importation has provided us with the capacity to pursue opportunities that may arise above our current business operations.
reVenues anD profitaBilitY
annual revenue 2015 - 2020
Our primary source of revenue and net income is the retail of pre-owned vehicles, sales of parts and motor vehicle servicing. The Company enjoyed extremely strong annual sales growth between 2015 and 2019. However, as with most
businesses, Jetcon was hit hard in 2020 due to effects of the COVID-19 pandemic. Revenue fell 38 percent to $629m, ending a three-year run of revenues exceeding the billion-dollar mark.
In 2019 revenue fell by 12 percent, in 2018 revenue fell by just 1 percent, in 2017 revenue rose by 37 percent to $1.18 billion and for 2016 revenue amounted to $857 million, a growth of 63 percent over the prior year’s $524 million. The 2015 revenue increased by 50 percent when compared with the $349 million recorded for the 12 months ending December 2014, preceded by moderate declines of 1 percent and 6 percent in 2013 and 2014 respectively.
profit/loss
2020 ended with a loss of $6.7 million, for the first time in nearly a decade, while 2019 ended with profits falling by 34 percent to $60 million when compared to 2018, while a reduction of 40 percent was experienced in 2018, and growths of 49 percent were experienced in 2017, 104 percent in 2016 and 292 percent in 2015.
Gross profit & Gross profit analYsis
In 2020 Gross Profit (GP) fell 40 percent to $80.7 million, following a 16 percent fall in
2019 to $136 million. Cost of Sales (COS) for 2020 fell almost in line with GP, at 38 percent.
Gross Profit Margin, which includes repairs and other costs to ensure vehicles are delivered to customers at the Jetcon brand level of service was in line with the 2019 Gross Profit Margin at 13 percent. However, it was below the Gross Profit Margin in 2017 and 2018 which were 19 percent and 14 percent respectively. For further historical data refer to the 9 Year Historical Financial Data on page 17.
total CoMpreHensiVe inCoMe
total Comprehensive income after tax 2017 - 2020
After Tax Profits decreased from $60 million in 2019 to a $6.7 million loss in 2020. This is coming from profits of $92 million in 2018, an increase from $99 million in 2016 to $154 million in 2017, an increase of 55 percent, while after tax profits increased from $40.3 million in 2015 to $99 million in 2016 partially as a result of the fall in the tax base for the Company. Profit Before Tax increased from $50.6 million in 2015 to $103 million in 2016, a rise of 104 percent. However, this was lower than the 292 percent growth in 2015 over that of 2014.
AnnuAl RepoRt 2020 15
We HAve THe RigHT CAR FoR You
expenses
Total Expenses fell by 6 percent in 2020, with selling and marketing expenses by 5% to $21.5 million. Administrative Expenses fell by 7 percent in 2020, from $46.6 million to $43.5 million, following an 11 percent rise in 2019, a 1 percent rise in 2018, compared to 22 percent increase in 2017 and 33 percent increase in 2016.
Financial Expenses also saw an increase of 64 percent, from $3.7 million in 2019 to $6 million in
2020, following an increase of 32 percent from $2.77 million in 2018 to $3.7 million in 2019 and an increase of 22 percent to $2.8 million in 2018 over 2017, due
to the implementation of IFRS 9; which has resulted in an increase in impairment provision to 19 percent to 2.3 million in 2017, from 1.9 million in 2016.
QuarterlY perforManCe
The following table shows the quarterly performance of the Company in 2020 compared with its performance in 2019.
QuarterlY results
Jan – MaR apR - Jun Jul - Sept oct - dec
$’000 2020 2019 2020 2019 2020 2019 2020 2019
Sales Revenue 227,759 246,067 85,971 221,102 153,430 280,816 162,116 278,680
Year over year change -7% -61% -45% -42%
less Cost of sales 191,129 202,089 71,858 184,712 128,014 235,584 157,478 267,776
Gross profit 36,630 43,978 14,113 36,390 25,417 45,231 4,638 7,903
Gross Profit margin 16% 18% 16% 16% 17% 16% 3% 4%
Pre-tax Profit 10,309 15,219 (6,799) 8,672 2,022 21,557 (12,292) 13,984
Net Profit to Sales 4.5% 6% 8% 4% 1.3% 7% 7.6% 5%
liQuiDitY anD Capital resourCes
Our primary sources of liquidity included funds provided by operations, amounting to $52 million, down from $60 million in 2019.
Our primary ongoing cash requirements are to fund our existing operations, including capital expenditures and inventory purchases. Our primary ongoing sources of liquidity include funds provided by operations and borrowings under our revolving credit facility.
s. riCketts
Colleen is the replica of exceptional customer service. One phone call to her with a question led to me driving out my own car. I am over-joyed. Thanks very much.
geTTing You on THe RoAd Since 199116
Quality Pre-owned Cars
SinCe 1991
In addition to the credit facility, the Company also has guarantees provided by financial institutions to the customs department as security relating to customs duty for our in-bonded warehouse.
We anticipate that we will be able to enter into new funding arrangements to meet our future funding needs if required.
inCoMe tax
The Company is not subjected to Income Tax rate for 5 years starting from April 2016, due to the listing on the Junior Market which allows for a 5-year tax free status, from April 2016 to March 2021.
BalanCe sHeet
Jetcon’s equity capital decreased to $541 million at the end of 2020, from $547 million at the end of 2019, up from $505 million at the end of 2018, from $433 million in 2017 and $294 million, at the end of 2016.
One of the most important items in the Financial Statements is the inventory of motor vehicles. These include landed vehicles and those in transit and not yet in the island. The average inventory turn including goods in transit in 2017, was around 4 months, compared to just 3 months in 2016 and under 2 months in 2015. The increased level of inventories in 2017 onwards facilitates increased
sales. In 2018 and 2019 average inventory turn remained around 4 months, due to the effects of the government’s implementation of the Pre-Shipment Inspection regime introduced in 2018. This also remained steady throughout 2020.
Jetcon has short term credit arrangements with some suppliers and currently has adequate working capital to fund short term requirements.
CurrenCY MoVeMents
Historically, inflation has not had a significant impact on our results. Profitability is primarily affected by our ability to achieve targeted unit sales and Gross Profit per vehicle, rather than by changes in average retail prices. Large currency movements can materially affect sales with prices being pushed out of the reach of some customers.
There continues to be favorable lending policies by financial institutions for the financing of pre-owned vehicles, including low interest rates for car loans.
risks
Interest rates have fallen in Jamaica to the lowest levels ever, but these could rise in 2021 and beyond if demand for loans rise sharply, making borrowing cost greater for the financing of vehicles.
The continued impact of the COVID-19 or Coronavirus global outbreak may affect the supply of vehicles from Japan, as new car factories in China shut down due to the spread of the disease. Indeed, as of February 2020, prices have already begun to Increase in Japan.
l. MalColM
Exceptional customer service. Special mention to my representative Atisha who has portrayed herself to be professional, patient, and reliable.
AnnuAl RepoRt 2020 17
We HAve THe RigHT CAR FoR You
nine Year HistoriCal finanCial Data
Balance Sheet 2020 2019 2018 2017 2016 2015 2014 2013 2012
ShaReS iSSued ‘000 583,500 583,500 583,500 583,500 583,500 450,000 450,000 450,000 450,000
$’000
Shareholders’ equity 540,577 547,339 504,551 433,221 294,014 106,662 66,354 55,888 41,339
Long Term Liability 29,600 29,300 0 12,468 0 3,908 10,726 13,058 5,537
Fixed Assets net 177,808 135,822 81,904 68,724 35,827 30,504 31,146 34,596 32,988
Current Assets 472,134 544,858 480,854 470,203 297,264 113,237 91,140 98,724 83,573
Current liabilities 79,673 104,041 58,311 92,286 294,014 33,490 45,581 55,385 60,787
inventories 391,858 444,682 434,648 393,821 250,827 84,480 71,665 75,439 69,105
Receivables 45,572 87,154 32,813 59,193 35,698 18,286 14,076 10,164 4,362
Cash & equivalent 26,357 10,675 11,046 14,843 3,161 5,594 3,044 2,988 247
inventory Yearly Change (11.88%) 2.31% 10.00% 57.00% 197.00% 18.00% (5.00%) 9.00% 60.00%
pRofit & loSS
Revenues 629,276 1,025,926 1,161,472 1,176,584 857,044 524,256 349,277 373,070 377,953
Yearly Change (38.66%) (11.75%) (1.30%) 37.30% 63.50% 50.10% (6.40%) (1.30%) 142.10%
Gross Profit 80,793 135,673 162,300 221,697 153,188 87,598 53,226 61,363 75,345
Yearly Change (40.45%) (16.40%) (26.79%) 44.72% 74.88% 64.58% (13.26%) (18.56%) 200.93%
Pretax Profit (6,734) 60,303 91,941 153,846 103,169 50,612 12,898 19,964 21,017
Yearly Change (111.17%) (34.4%) (40.24%) 49.12% 103.84% 292.40% (35.39%) (5.01%) 485.76%
Aftertax Profit (6,734) 60,303 91,881 153,786 98,987 40,349 10,466 14,550 13,856
Yearly Change (111.17%) (34.4%) (40.00%) 55.36% 145.33% 285.52% (28.07%) 5.01% 497.50%
iMpoRtant RatioS
Current Asset Ratio 5.93 5.24 8.25 5.10 1.01 3.38 2.00 1.78 1.37
Gross Profit Margin 12.84% 13.20% 14.00% 19.00% 18.00% 17.00% 15.00% 16.00% 20.00%
earnings Per Share (0.01) 0.10 0.16 0.26 0.18 0.09 0.02 0.03 0.03
Year end Stock Price ($) 0.79 1.69 3.00 5.00 2.00 0.75 n/A n/A n/A
W. noaD
The process was quick and seamless. Ms. Graham was very helpful.
o. CaMpBell
Great customer service! Friendly representative.
t. HenrY
love the attentiveness and patience, and always willing to assist.
geTTing You on THe RoAd Since 199118
Quality Pre-owned Cars
SinCe 1991
DisClosure of sHareHolDinGs
top ten sHareHolDers
1 St. andReW inVeStMentS 354,711,298 60.79
2 JuSTine JACKSon 24,523,200 4.20
3 SeAn JACKSon 24,000,000 4.11
4 AndReW Joel JACKSon 23,873,200 4.09
5 CARl CARBY 20,500,000 3.51
6 MAYBeRRY JAMAiCAn eQuiTieS liMiTed
17,573,144 3.01
7 gilliAn JACKSon 15,577,204 2.67
8 JMMB T1 eQuiTY Fund (JMd) 13,190,046 2.26
9 MF&g ASSeT MAnAgeMenT lTd 5,542,398 0.95
10 KARl P. WRigHT 5,415,820 0.93
total 504,906,310 86.53
sHareHolDinGs of DireCtors
no. diRectoR diRect Beneficial total
1 Andrew B Jackson - 354,711,298 354,711,298
2 Sean Jackson 24,000,000 - 24,000,000
3 Andrew Joel Jackson 23,873,200 - 23,873,200
4 Carl Carby 20,500,000 - 20,500,000
5 John Jackson 607,313 6,673,190 7,280,503
6 Christine Clarke- dougherty 10,000 - 10,000
7 garth McKenzie 6,600 - 6,600
total 426,681,357
sHareHolDinGs of senior ManaGers
no. SenioR ManageR total
1 Keddine Bryce 1,180,000
2 Colleen Clayton 463,728
3 Julian gordon 23,000
total 1,666,728
total sHareHolDinGs
total nuMBeR of iSSued ShaReS 583,500,000
total nuMBeR of ShaReholdeRS 1,177
nissan latio
The nissan latio is essentially a sedan version of the nissan note, including all its great features and more. The Latio also encompasses that premium look and feel that most car buyers desire, while still being able to keep its price on the lower end of the scale.
engine Size: 1200cc
Key Features: Start/Stop Technology, Push Button Start, Traction Control
toYota Corolla axio
The name Toyota is synonymous with reliability and it’s sure been tested and proven out here on these Jamaican roads. With its 1.5 litre engine, this car has that “get up and go” feeling while somehow still being able to keep you satisfied at the pumps. The interior of the Corolla Axio draws similarities from the exterior, including a certain level of style whilst still maintaining simplicity and some ultra-comfortable seats.
engine Size: 1500cc
AnnuAl RepoRt 2020 19
We HAve THe RigHT CAR FoR You
Corporate soCial responsiBilitY
at JetCon tHe safetY of our CustoMers anD eMploYees is our prioirtY
2020 was a year filled with widespread sickness, loss, and economic uncertainty due to the worldwide pandemic, COVID-19. Here at Jetcon, providing our customers with the highest
quality service and an environment for both our customers and employees to feel safe, has and
will always be one of our top priorities. In 2020, this became even more important as we strived
to stop the spread of the COVID-19 virus.
Many protocols were put in place in order to facilitate this.
Firstly, all safety measures issued by the Ministry of Health and Wellness were immediately implemented. These included sanitizing frequently touched surfaces such as door handles, switches, and chairs throughout the day. Requiring everyone who entered the compound to wear a mask and sanitize hands. Adhering to limitations placed on the number of persons allowed in a room. Placing employees’ desks at least six (6) feet apart and placing sanitizing stations throughout the compound. Additionally, employees who were experiencing symptoms of the virus, were heavily encouraged to stay home and be tested before returning to work.
Unfortunately, due to the economic impact that COVID-19 had on the Jamaican economy, and in order to protect the financial health of the Company and its Shareholders, ten (10) employees were placed on furlough with the assurance of being rehired once the economy improved. These employees were back at work within approximately four (4) months. Jetcon also looks forward to continuing its partnerships with its many philanthropic programs and motor racing events as the economy gradually improves and regular sporting activities resumes.
21 inDepenDent auDitor’s report to MeMBers
25 stateMent of profit or loss anD otHer CoMpreHensiVe inCoMe
26 stateMent of finanCial position
27 stateMent of CHanGes in sHareHolDers’ eQuitY
28 stateMent of CasH floWs
29 notes to tHe finanCial stateMents
finanCial stateMentsYear enDeD DeCeMBer 31, 2020
inDepenDent auDitor’s report to MeMBers
Independent auditor’s report To the Members of Jetcon Corporation Limited
Report on the audit of the financial statements
Opinion We have audited the financial statements of Jetcon Corporation Limited (the Company) set out on
pages 1 to 22, which comprise statement of financial position as at December 31, 2020, statement of
profit or loss and other comprehensive income, changes in equity and cash flows for the year then
ended, and notes, comprising significant accounting policies and other explanatory information.
In our opinion, the accompanying financial statements give a true and fair view of the financial position
of company as at December 31, 2020, and of its financial performance and cash flows for the year then
ended in accordance with International Financial Reporting Standards (IFRS) and the Jamaican
Companies Act.
Basis of Opinion
We conducted our audit in accordance with International Standards on Auditing (ISA). Our
responsibilities under those standards are further described in the Auditors’ Responsibility for the
Audit of the Financial Statements section of our report. We are independent of the company in
accordance with the International Ethics Standards Board for Accountants Code of Ethics for
Professional Accountants (including International Independence Standards) (IESBA Code) and we
have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. Those matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
ii
Independent auditor’s report
Jetcon Corporation Limited
Key Audit Matters (continued)
1. Carrying value of inventory
- At reporting date, December 31, 2020, inventory amounted to approximately $392
Million, representing 60% of the company’s total assets. Over 97% of inventory
comprise motor vehicles and each vehicle is separately identifiable and traceable. Cost
includes purchase price and all costs specifically relating to bringing the vehicles
to its location and in a condition for sale.
- Inherently, there is risk of misstatement of other associated costs relating to
bringing the vehicles to its location and in a condition for sale.
- The company’s revenue has been adversely affected as a result of the impact of
the COVID-19 pandemic. Accordingly, the carrying value of year-end inventory has
been assessed in relation to ‘net realisable value’.
How our audit addressed the key audit matter.
Our audit procedures in response to this matter, included:
- Reviewed the company’s standard operating procedure in order to assess the
effectiveness of internal controls in respect to recording of all elements of costs.
- Observed stock counts and conducted 100% counts all motor vehicles on hand at
year-end at all several locations where stocks are held.
- Verified the audit stock count results against the company’s inventory records and the
year-end inventory valuation report.
- Performed impairment assessment of inventories by measuring (samples) selling
prices of vehicles sold subsequent to year-end to inventory valuation report.
Based on the procedures conducted, there were no significant adjustments to the year-end
inventory valuation.
Other information
Management is responsible for the other information. The other information comprises the
annual report (but does not include the financial statements and our auditor’s report thereon),
which is expected to be made available to us after the date of this audit report.
Our opinion on the financial statements does not cover the other information and we do not and
will not express any form of assurance conclusion thereon.
iii
Independent auditor’s report
Jetcon Corporation Limited
Other information
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above when it becomes available and, in doing so, consider whether the
other information is materially inconsistent with the financial statements, or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein,
we are required to communicate the matter to the Board of Directors.
Responsibilities of management for the financial statements
Management is responsible for the preparation of financial statements that give a true and fair
view in accordance with IFRS and the Jamaican Companies Act, and for such internal control
as management determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the company’s
ability to continue as a going concern, disclosing as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate
the company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the company’s financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users, taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
iv
Independent auditor’s report
Jetcon Corporation Limited
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the company financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the company’s financial statements,
including the disclosures, and whether the company financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Report on other legal and regulatory requirements
As required by the Jamaican Companies Act, we have obtained all the information and explanation
which, to the best of our knowledge and belief, were necessary for the purposes of our audit.
In our opinion, proper accounting records have been kept, so far as appears from our examination of
those records, and the accompanying financial statements are in agreement therewith and give the
information required by the Jamaican Companies Act, in the manner so required.
The engagement partner on the audit resulting in this independent auditor’s report is Effie Crooks.
Chartered Accountants
April 15, 2021
2 Seymour Avenue, Kingston 6, Jamaica W.I.
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 25
Page 1
The accompanying notes form an integral part of the financial statements.
stateMent of profit or loss anD otHer CoMpreHensiVe inCoMeYear enDeD DeCeMBer 31, 2020
Page 1
Notes 2020 2019
$ $
Revenue 629,276,230 1,025,926,150
Cost of Sales 5 (548,483,052) (890,252,534)
Gross Profit 80,793,178 135,673,616
Other operating income 6 1,187,000 1,141,631
81,980,178 136,815,247
Expenses:
Selling and marketing expenses 5 (21,588,490) (22,713,413)
Administrative expenses 5 (43,535,275) (46,661,388)
Total expenses (65,123,765) (69,374,801)
Profit before depreciation and finance cost 16,856,413 67,440,446
Depreciation 5 & 10{iii} (17,604,086) (3,484,581)
(Loss)/profit before finance costs (747,673) 63,955,865
Finance costs 7 (5,987,176) (3,651,870)
Net (loss)/profit before taxation (6,734,849) 60,303,995
Taxation 8 - -
Net (loss)/profit after taxation (6,734,849) 60,303,995
Other comprehensive income:
Items that will not be reclassified to profit or loss -
Decrease in fair value of available-for-sale
equity investment security 11 (27,174) (11,081)
Total comprehensive (loss)/income (6,762,023) 60,292,914
(Loss)/earnings per stock unit for (loss)/profit attributable to
stockholders of the company during the year 17 (0.012) 0.103
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199126
Page 2
Chairman Director
The accompanying notes form an integral part of the financial statements.
stateMent of finanCial positionas at DeCeMBer 31, 2020
Page 2
Notes 2020 2019
$ $
ASSETS
Non-current assets
Property, plant and equipment 9 137,932,195 135,729,469
Lease right-of-use asset 10 39,810,625 -
Investments 11 66,135 93,309
Total non-current assets 177,808,955 135,822,778
Current assets
Inventories 12 391,858,946 444,682,692
Receivables 13 45,572,477 87,154,925
Cash and bank balances 14 26,357,714 10,675,373
Parent company 15 8,345,639 2,345,638
Total current assets 472,134,776 544,858,628
TOTAL ASSETS 649,943,731 680,681,406
EQUITY
Share capital 16 [a] 88,817,218 88,817,218
Retained earnings 434,983,866 441,718,715
Capital reserves 16 [b] 16,776,645 16,803,819
Total equity attributable to shareholders 540,577,729 547,339,752
LIABILITIES
Non-current liabilities
Long-term liabilities 19 6,879,877 29,300,606
Right-of-use liabilities 10 22,812,707 -
Total non-current liabilities 29,692,584 29,300,606
Current liabilities
Payables 18 53,938,220 94,601,162
Current portion of long-term liabilities 19 10,377,480 9,439,886
Right-of-use liabilities 10 15,357,718 -
Total current liabilities 79,673,418 104,041,048
TOTAL LIABILITIES 109,366,002 133,341,654
TOTAL STOCKHOLDERS' EQUITY AND LIABILITIES 649,943,731 680,681,406
The financial statements on pages 1 to 22 were approved for issue by the Board of Directors on April 15, 2021
and signed its behalf by:
______________________________ Chairman _________________________________ Director
John H. Jackson Andrew Jackson
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 27
Page 3
Share Capital Retained
capital reserves earnings Total
$ $ $ $
Balance as at December 31, 2018
(see note 16 ) 88,817,218 16,814,900 398,919,720 504,551,838
Net profit 60,303,995 60,303,995
Transactions with owners:
Dividend paid (17,505,000) (17,505,000)
Other comprehensive income:
Decrease in fair value of available-for-sale investment security (11,081) (11,081)
Balance as at December 31, 2019 ( see note 16 ) 88,817,218 16,803,819 441,718,715 547,339,752
Net loss (6,734,849) (6,734,849)
Other comprehensive income:
Decrease in fair value of available-for-sale investment security (27,174) - (27,174)
Balance as at December 31, 2020 ( see note 16 ) 88,817,218 16,776,645 434,983,866 540,577,729
The accompanying notes form an integral part of the financial statements.
stateMent of CHanGes in sHareHolDers’ eQuitYYear enDeD DeCeMBer 31, 2020
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199128
Page 4
The accompanying notes form an integral part of the financial statements.
stateMent of CasH floWsYear enDeD DeCeMBer 31, 2020
Page 4
Notes 2020 2019
$ $
CASH FLOWS WERE PROVIDED BY/ (USED IN):
OPERATING ACTIVITIES
Net (loss)/profit after taxation (6,734,849) 60,303,995
Item not affecting cash resources:
Interest on lease liability 7 1,427,374 -
Interest income 6 (876,496) (559,634)
Interest expense 7 3,080,662 1,261,676
Depreciation 5 & 10{iii} 17,604,086 3,484,581
14,500,777 64,490,618
Changes in non-cash working capital components:-
Inventories 52,823,746 (10,034,267)
Receivables 41,582,448 (54,341,337)
Payables (40,662,942) 41,037,034
Rent paid 10{iv} (16,337,782) -
Cash provided by operating activities 51,906,247 41,152,048
Financing activities
New loans received - 41,688,642
Repayment of loans (21,483,135) (2,948,150)
Interest paid (3,080,662) (1,261,676)
Dividend paid - (17,505,000)
Cash (used in)/provided by financing activities (24,563,797) 19,973,816
Investment activities
Parent company (6,000,001) -
Purchase of property, plant and equipment (6,536,604) (57,310,078)
Interest received 876,496 559,634
Cash used in investment activities (11,660,109) (56,750,444)
Increase in cash and cash equivalents 15,682,341 4,375,420
Cash and cash equivalents at the beginning of the year 10,675,373 6,299,953
CASH AND CASH EQUIVALENT - End of year 26,357,714 10,675,373
REPRESENTED BY:
Cash and bank balances 26,357,714 10,675,373
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 29
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
1. Identification
The company is incorporated under the Jamaican Companies Act. It’s a 60.78% subsidiary of
St. Andrew Investments Limited. Jetcon Corporation Limited and its parent company are domiciled
in Jamaica, having their registered offices at 2 Sandringham Avenue, Kingston 10, Jamaica.
The main activities carried out during the year were the importation and sale of motor vehicles, motor
vehicle parts and the servicing of vehicles.
Effective March 24, 2016, the company's shares were listed on the Junior Market of the Jamaica Stock
Exchange.
2. Statement of Compliance and Basis of Preparation
(a) BStatement of Compliance
The financial statements of the company have been prepared in accordance with International
Financial Reporting Standards (IFRS) and their interpretations issued by the International
Accounting Standards Board (IASB), and comply with the provisions of the Jamaican Companies Act.
Standards, Interpretations and Amendments to published Accounting Standards effective in the
current year
During the year, certain new standards, interpretations and amendments to existing standards
became effective. Management has assessed the relevance of all such new standards, interpretations
and amendments that became effective January 1, 2020 and have determined that the following
will affect the amounts and disclosures in these financial statements:
· Amendment to IAS 1, Presentation of the Financial Statements and IAS 8, Accounting Policies, Changes
in Accounting Estimates and Errors [effective for annual periods beginning on or after January 1, 2020].
The standard provides the following definition of 'material' to guide preparers of financial statements,
in making judgements about information to be included in the financial statements.
"Information is material if omitting, misstating or obscuring it could reasonably be expected to
influence the decision that the primary users of general purpose financial statements make on the basis
of those financial statements, which provide financial information about a specific reporting entity".
· Amendments to References to Conceptual Framework in IFRS Standards [effective for annual
periods beginning on or after January 1, 2020]. The revised framework covers all aspects of the
standard setting including the objective of financial reporting.
The main change relates to how and when assets and liabilities are recognised and derecognised in
the financial statements.
- New 'bundle of rights' approach to assets will mean that an entity may recognise a right-to-use
an asset rather than the asset itself.
- A liability will be recognised if a company has no practical ability to avoid it. This may bring liabilities
on balance sheet earlier than at present.
- A new control-based approach to de-recognition will allow an entity to derecognise an asset when it
loses control over all or part of it; the focus will no longer be on the transfer of risks and rewards.
These new amendments have not materially changed the presentation of the 2020 financial statements.
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199130
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
2. Statement of Compliance and Basis of Preparation
(b) Basis of preparation
The financial statements are presented in Jamaican dollars, which is the company's functional and
presentation currency. These statements have been prepared on the historical cost basis, except for
the revaluation of certain items of property, plant and equipment. Those significant accounting policies
stated below conform in all material respects with IFRS.
· Use of estimates and judgements
The preparation of these financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It requires management to exercise its judgement in the process of
applying the company's accounting policies. Although these estimates are based on management's
best knowledge of current events and action, actual results could differ from those estimates. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed under their respective headings.
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 and future years
if the revision affects both current and future periods.
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 as follows:
(i) Judgements:
For the purpose of these financial statements, judgement refers to the informed identification and
analysis of reasonable alternatives, considering all relevant facts and circumstances, and the well-
reasoned, objective and unbiased choice of the alternative that is most consistent with the agreed
principles set out in IFRS. The key relevant judgements are as follows:
Classification of financial assets:
The assessment of the business model within which the assets are held and assessment of whether the
contractual cash flows from a financial asset are solely payments of principal and interest [SPPI] on
the principal amount requires management to make certain judgements on its business operations.
Impairment of financial assets:
Establishing the criteria for determining whether credit risk on a financial asset has increased
significantly since initial recognition, determining methodology for incorporating forward-looking
information into measurement of expected credit loss [ECL] and selection and approval of models
used to measure ECL requires significant judgement.
(ii) Key assumptions concerning the future and other sources of estimations uncertainty:
Allowance for impairment loss of financial assets:
Measurement of the expected credit loss allowance
The measurement of the expected credit loss allowance for financial assets measured at amortised cost
and FVOCI is an area that requires the use of complex models and significant assumptions about
future economic conditions and credit behaviour [e.g. the likelihood of customers defaulting and the
resulting losses], [see notes 13 and 21 ].
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 31
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
2. Statement of Compliance and Basis of Preparation (continued)
(b) BasBasis of preparation (continued)
· Use of estimates and judgements (continued)
(ii) Key assumptions concerning the future and other sources of estimations uncertainty:
A number of significant judgements are also required in applying the accounting requirements for
measuring ECL, such as:
- Determining criteria for significant increase in credit risk;
- Choosing appropriate models and assumptions for the measurement of ECL:
- Establishing the number and relative weightings of forward-looking scenarios for each type of product/
- Market and the associated ECL;
- Establishing groups of similar financial assets for the purpose of measuring ECL.
(iii) Net realisable value of inventories:
Estimates of net-realisable value are based on the most realisable evidence at the time the estimates are
are made, of the amount the inventories are expected to realise. These estimates take into consideration
fluctuation in price or cost directly relating to events occurring after the end of the period to the extent
that such events confirm conditions existing at the end of the period.
Estimates of net realisable value also take into consideration he purpose for which the inventory is held.
3. Changes in significant accounting policies
The company applied IFRS 16 at the beginning of the year using the modified retrospective approach,
under which the cumulative effect of initial application is recognised at January 1, 2020; accordingly, the
comparative information presented in has not been restated.
The company used a mixed approach to the recognition of lease when applying IFRS 16 to lease previously
classified as operating lease under IFRS 17. The following approach was applied:
- the company did not recognise right-of-use assets and liabilities for leases for which the term ends
within twelve months of the date of the initial application
- the company did not recognise right-of-use assets and liabilities lease of low value informal lease
arrangements.
Impact of the transition
On the adoption of IFRS on January 1, 2020 the company recognised additional right-to-use assets and
additional lease liabilities. The company elected to measure the right-to-use asset at an amount equal
to the lease liability. Consequently, there is no impact on the unappropriated profit at the date of
transition.
In measuring lease liabilities for leases that were classified as operating leases, the company
discounted lease payments using its incremental borrowing rate at January 1, 2020, using a discount
rate factor of 6%.
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199132
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 8
4. Significant Accounting Policies
(a) Revenue
Revenue is recognised as performance obligations are satisfied, that is, over time or at a point
in time. Revenue is shown net of General Consumption Tax [GCT]. The company recognises
revenue when the amount of revenue can be reliably measured, it is possible that future
economic benefits will flow to the other party and when the specific criteria have been met
in respect of the company's operating activities.
Type of revenue
Nature and timing of satisfaction
of performance obligations,
including significant payment
terms
Revenue recognition under
IFRS 15
Revenue is derived
from the sale of
motor cars,
accessories, motor
vehicle parts and
allied services
When customers obtain control of
goods when the goods are
delivered (or services performed)
and accepted by them. Invoices
are generated and the revenue is
recognised at that point.
Payment is usually made at that
point, except where there are special
arrangements with management.
Revenue is recognised when
goods ar delivered and have
been accepted by the customer.
Interest income
Interest income is recognised as it accrues on a time basis, by reference to the principal outstanding
and the effective interest rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial assets net carrying amount on initial
recognition
(b) Finance costs
Finance costs are recognised in the profit or loss in the period in which they are accrued using
the effective interest method.
(c) Borrowings
Borrowings are recognised initially at fair value, net of transaction cost incurred and subsequently
at amortised cost using the effective yield method. Interest charges, including direct issue costs
are accounted for on an accrual basis in the statement of profit or loss and are added to the
carrying amount of the loan to the extent that they are not settled in the period in which
they arise.
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 33
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 9
4. Significant Accounting Policies (continued)
(d) Inventories
Inventories are measured at lower of cost and net realisable value, cost being determined on the
weighted average cost method. Net realisable value is the estimated selling price in the ordinary
course of business, less selling expenses.
The cost of inventories comprising purchased goods is based on their cost and expenses incurred
in acquiring and bringing them to their existing location and condition.
(e) Plant, Machinery and Equipment
Plant, machinery and equipment and other assets are carried at cost and valuation less accumulated
depreciation. Depreciation is calculated on a straight line basis, at rates estimated to write-off
the cost of the assets over their expected useful lives. No depreciation is charged on freehold
land.
Annual rates used are as follows:
Freehold buildings 2 1/2%Furniture, fixtures and equipment 10% and 20%
Computer systems and motor vehicles 20%
Gains and losses on disposal of plant, machinery and equipment are determined by comparing
proceeds with the carrying amount and are included in the profit or loss account.
Repairs and maintenance expenditure are charged to the profit or loss account during the financial
period in which they are incurred. The cost of major renovations is included in the carrying amount
of the asset when it is probable that future economic benefits in excess of the originally assessed
standard of performance of the existing asset will flow to the company.
(f) Impairment of Non-Current Assets
Plant, machinery and equipment and other assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment
loss is recognised for the amount by which the carrying amount of the assets exceeds its recoverable
amount, which is the greater of the asset's net selling price and the value in use. For the purpose
of assessing impairment, assets are grouped at the lowest levels for which there are separately identified
cash flows.
(g) Cash and Cash Equivalents
Cash and cash equivalents are carried in the statement of financial position at cost. For the
purposes of the cash flow statement, cash and cash equivalents comprise cash at bank and
in hand and short-term deposits with original maturity of 90 days or less.
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199134
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 10
4. Significant Accounting Policies (continued)
(h) Trade Receivables
Trade receivables are carried at original invoiced amounts less provision for impairment. A provision
for impairment of receivables is established when there is objective evidence that the company
will not be able to collect all amounts due according to the original terms of the receivables.
Provision is the difference between the carrying amount and the recoverable amount. The carrying
amount of the asset is reduced through the use of an allowable account, and the loss is
recognised in the profit or loss. When trade receivable is uncollectible, it is written off against the
allowance account for trade receivables. Subsequent recoverables of amount previously written off
are credited to the profit or loss.
(i) Accounts payable
Accounts payable is measured at amortised cost. A provision is recognised in the statement of
financial position when the company has a legal or constructive obligation as a result of a past event,
and it is probable that an outflow of economic benefit will be required to settle the obligation and the
amount can be estimated reliably. If the effect is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that affects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability.
(j) Investments
These are classified as available-for-sale investments and are stated at fair value. Unrealised gains
and losses arising from changes in the fair value of these securities are recognised in equity
revaluation reserve. When securities classified as available-for-sale are sold or impaired, the
accumulated fair value adjustments are included in the profit or loss account as gains and
losses from investment securities. (see note 10 )
The fair value of available-for sale investments is based on their quoted market bid price at the
balance sheet date. Where the quoted market price is not available, fair value is estimated using
discounted cash flow techniques.
(k) Employee Benefits
Annual leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. At year-
end the company had no liability for annual leave as a result of services rendered by employees.
(l) Taxation
(i) Current taxation
Current tax charges are based on taxable profit for the year, which differs from the profit before tax
reported because it excludes items that are taxable or deductible in other years, and items that are
never taxable or deductible. The company's liability for current tax is calculated at tax rates that
have been enacted at balance sheet date. Current and deferred taxes are recognised as income
tax expense or benefit in the profit or loss account except, to the extent that the tax arises from
a transaction or event which is recognised, in the same or a different period, directly in equity.
(ii) Deferred taxation
A deferred tax charge is provided, using the liability method, on all temporary differences between
the tax bases of assets and liabilities and their carrying amounts for the financial reporting purposes.
The tax rates used in these financial statements are those enacted at balance sheet date.
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 35
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 11
4. Significant Accounting Policies (continued)
(l) Taxation (continued)
(ii) Deferred taxation
Deferred tax charges are recognised for temporary differences between the carrying amounts of
assets and liabilities and the amounts as measured for tax purposes, which will result in taxable
amounts in future periods. The carrying amounts of deferred tax is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient future taxable profits
will be available to allow all or part of the deferred tax to be utilised.
(m) Related party transactions and balances
Parties are considered to be related if one party has the ability to control the other party or exercise
significant influence over the other party in making financial and operating decisions. (referred to in
IAS 24 as the "reporting entity"). Related Party transactions and balances are recognised and disclosed
for the following:
a. A person or a close member of that person's family is related to a reporting entity if that person:
i . has control or joint control over the reporting entity;ii . has significant influence over the reporting entity; oriii . is a member of the key management personnel of the reporting entity or parent of the
reporting entity.
b. A reporting entity, if any of the following conditions applies:
i. the entity and the reporting entity are members of a group (which means that each
parent, subsidiary and fellow subsidiary is related to each other).
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. the 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
reporting entity or an entity related to the reporting entity. If the reporting entity is
itself a plan, the sponsoring employers are also related to the reporting entity.
vi. the entity is controlled or jointly controlled by a person identified in (a) above.
vii. a person identified in (a){i} above has significant influence over the entity (or is a
member of the key management personnel of the entity.
5. Expense by Nature
The following items have been charged in arriving at operating profit:-
2020 2019
$ $
Direct cost of sales:
Cost of Sales - Motor Vehicles 520,382,148 858,238,945
Motor vehicle parts and servicing 23,551,484 24,487,719
Other direct costs 4,549,420 7,525,870
548,483,052 890,252,534
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199136
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 12
5. Expense by Nature (continued)
The following items have been charged in arriving at operating profit:-
2020 2019
$ $
Administrative:
Staff costs 23,650,647 25,577,753
Directors' fees 2,350,000 1,950,000
Security and insurance 5,120,667 8,693,423
Audit fee 1,493,750 1,343,750
Repairs and maintenance 2,797,346 1,341,995
Rent, utility and general office expenses 4,393,189 4,330,735
Travelling, transportation and entertainment 138,927 913,189
Other 3,590,749 2,510,543
43,535,275 46,661,388
Provision:
Depreciation on owned assets 4,333,878 3,484,581
$ $
Sales and marketing:
Salaries and statutory contributions 9,732,445 11,470,388
Advertising, sponsorship and promotion 9,026,082 8,204,359
Annual report 2,829,963 3,038,666
21,588,490 22,713,413
$ $
Staff costs:
Wages and associated costs [included in cost of sales ] 7,007,821 9,006,295
Salaries and statutory contributions - Sales and marketing 9,732,445 11,470,388
Salaries and statutory contributions - Administrative 6,951,274 9,366,183
Directors' remuneration 12,359,920 10,272,482
Staff benefits 4,339,453 5,939,088
23,650,647 25,577,753
40,390,913 46,054,436
The average number of persons employed full-time by the company during the year was 30 [2019 = 35].
6. Other Operating Income
2020 2019
$ $
Interest income 876,496 559,634
Miscellaneous 310,504 581,997
1,187,000 1,141,631
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 37
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 13
7. Financial Expenses
2020 2019
$ $
Bad debt provision - 183,008
Finance charge 223,289 384,936
Loan interest 3,080,662 1,261,676
Bank charges and credit card commission 948,579 1,692,006
Overdraft interest 307,272 130,244
Interest on lease liability 1,427,374 -
5,987,176 3,651,870
8. Taxation
(a) There was no profit tax charge. In the prior year the company's profit was not subject to profits
as a result of 'remission of taxes' granted by Tax Administration Jamaica [see note 8{c} ].
(b) Reconciliation of tax:
2020 2019
$ $
(Loss)/surplus for the year before taxation (6,734,849) 60,303,995
Computed tax (credit)/ expense at 25% (1,683,712) 15,075,999
Tax losses not recognised 1,683,712 -
Remission of income tax (15,075,999)
- -
(c). Remission of income tax:
The company's shares were listed on the Junior Market of the Jamaica stock Exchange [JSE], effective
March 24, 2016. Consequently, the company is entitled to a remission of taxes for ten (10) years
in the proportions set out below, provided it complies with the criteria of the Income Tax (Jamaica
Stock Exchange Junior Market) regulation and its shares remain listed for at least fifteen (15) years:
To obtain the remission of income taxes, the following conditions should be adhered to over the period:
(i) The company remains listed for at least 15 years and is not suspended from the JSE for any breaches
of the rules of the JSE.
(ii) The subscribed participating voting shareholders does not exceed $500 million.
(iii) The company has at least 50 participating voting shareholders.
The financial statement have been prepared on the basis that the company will have the full benefit
of the tax remissions. The period is as follows:
Years 1 to 5 100%
Years 6 to 10 50%
Effective March 24, 2021, the tax rate applicable for the year of assessment 2021 will apply to 50%
of the company's taxable profits.
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199138
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 14
9. Property, plant and equipment
Freehold
Properties
Leasehold
Property
Computer
systems
Motor
Vehicles
Plant,
Machines,
Furniture &
Fixtures Total
$ $ $ $ $ $
At cost/valuation
January 1, 2019 67,235,444 3,950,000 3,591,158 10,336,621 10,246,121 95,359,344
Additions 54,007,502 - 381,233 - 2,921,343 57,310,078
December 31, 2019 121,242,946 3,950,000 3,972,391 10,336,621 13,167,464 152,669,422
Additions 5,267,802 - 123,190 - 1,145,612 6,536,604
December 31, 2020 126,510,748 3,950,000 4,095,581 10,336,621 14,313,076 159,206,026
Accumulated depreciation
January 1, 2019 3,039,977 - 2,163,858 5,087,461 3,164,076 13,455,372
Charge for the year 360,294 - 383,430 1,255,620 1,485,237 3,484,581
December 31, 2019 3,400,271 - 2,547,288 6,343,081 4,649,313 16,939,953
Charge for the year 360,957 - 730,370 1,173,003 2,069,548 4,333,878
December 31, 2020 3,761,228 - 3,277,658 7,516,084 6,718,861 21,273,831
Net book value
December 31, 2020 122,749,520 3,950,000 817,923 2,820,537 7,594,215 137,932,195
December 31, 2019 117,842,675 3,950,000 1,425,103 3,993,540 8,518,151 135,729,469
Freehold properties
Freehold properties include land and buildings, comprising three {3} parcels of land.
The company's freehold land and building were revalued during 2009 by independent valuators, Allison
Pitter & Company. The valuation was done on the basis of open market value and the valuation surplus
was credited to capital reserves. Subsequent to that date, the building was modified and two additional
parcels of land were acquired.
The directors have assessed the values of land and building based on recent sales of similar properties
in the same locations and have determined that the fair value of the sum of the three parcels of
freehold properties described above is One Hundred and Fifty Million dollars {$150,000,000}.
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 39
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
10 Lease right-of-use
The company leases a property to conduct its operations which were previously classified
as operating leases under IAS 17. The lease arrangement relates to the current period; however,
management believes that the existing terms will continue for the next three years. The lease rental
payments over the next three years have been computed based on changes in local price indices.
The current lease arrangement is recognised in the statement of financial position as a right-of-use
asset and the corresponding credit as a lease liability.
Assets and liabilities are initially measured on a present value basis and lease liabilities include net
present value of the fixed payments less any lease incentives receivable. The company has elected
not to recognise right-to-use assets and lease liabilities for short-term [non-renewable leases and/or
leases of low-value items.
Amount recognised in the statement of financial position [IFRS16]:
i. Right-of-use assets
2020
$
Right-of-use assets
Leasehold property [right-to-use upon adoption] 53,080,833
Depreciation charge for the year (13,270,208)
Balance at end of year 39,810,625
ii. Lease liabilities
Lease liability [upon initiation] 53,080,833
Recognised in the year (14,910,408)
38,170,425
Maturity analysis - contractual undiscounted cash flows:
Within one year 15,357,718
Over one year 22,812,707
38,170,425
Amount recognised in the statement of financial position:
iii. Amount recognised in the statement of comprehensive income:
2020
$
Interest on lease liability 1,427,374
Depreciation charge for right-of-use assets 13,270,208
Right-of-use assets are measured at cost based on the amount of the initial measurement of the lease
liability. The asset is subsequently depreciated using the straight-line method from the commencement
date of the lease term.
iv. Amount recognised in the statement of cash flows:
Total cash outflows for leases 16,337,780
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199140
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 16
11. Investments - securities
2020 2019
$ $
These comprise quoted securities:-
Investment securities at the beginning of the year 93,309 104,390
Fair value adjustment to investment instrument [net] (27,174) (11,081)
Market value 66,135 93,309
12. Inventories
Inventories comprise:
2020 2019$ $
Motor vehicles 198,131,487 192,825,397
Motor vehicles - Special Economic Zone * 112,500,256 140,397,746
Motor vehicles - bonded warehouse 18,535,354 18,632,277
Parts 10,767,938 7,590,014
Inventories on hand 339,935,035 359,445,434
Goods-in-transit 51,923,911 85,237,258
391,858,946 444,682,692
* The Special Economic Zone [SEZ] serves as a Logistics Hub, vehicles held at locations designated
SEZ have not yet cleared customs and allows for trans-shipment.
13. Trade, Other receivables and Prepayments
These comprise:-
2020 2019
$ $
Trade receivables 15,393,652 21,813,213
Prepayments 861,535 819,842
Deposits with suppliers 1,888,819 36,697,285
Related party balances 7,631,591 6,420,647
Statutory receivables - GCT 16,579,116 18,197,572
Other receivables 3,217,764 3,206,366
45,572,477 87,154,925
Trade receivables are stated net of provision for impairment. The provision have been computed
in compliance with the provisions under IFRS 9 [see note 21{b}].
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 41
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 17
14. Cash and Bank Balances
Cash and bank balances represent amounts held in saving and current accounts denominated in
Jamaican Dollars and United States Dollars.
For the purpose of the cash flow statement, cash and cash equivalents comprise bank balances and
bank overdraft.
15. Parent Company
This represents amounts due from the parent company at balance sheet date. There were no
trading activities between the companies during the year.
16. Share Capital and Capital Reserves
(a) Share capital
2020 2019
$ $
Authorised -
900,000,000 [2019 = 900,000,000] Ordinary shares
of no par value
Issued and fully paid -
583,500,000 [2019 = 583,500,000] Ordinary shares 97,040,590 97,040,590
of no par value
Less: Transaction costs (8,223,372) (8,223,372)
88,817,218 88,817,218
(b) Capital reserve:
Capital reserve comprise:
$ $
Unrealised surplus arising from revaluation of freehold property and investment security (see notes 9 & 10). 16,776,645 16,803,819
17. Earnings per Stock Unit
Basic earnings per ordinary stock unit is calculated by dividing the net profit attributable to equity
holders by the weighted average number of stock units in issue during the year.
2020 2019
$ $
Net profit attributable to equity holders of the company (6,762,023) 60,292,914
Weighted average number of ordinary stock units in issue 583,500,000 583,500,000
Basic earnings per stock unit (0.012) 0.103
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199142
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 18
18. Trade, Other Payables and Accruals
These comprise:-
2020 2019
$ $
Trade payables 30,659,249 48,219,478
Deposits - other 2,053,043 6,281,888
Statutory payables - 1,098,031
Credit cards 19,406,871 36,736,884
Accruals 1,819,057 2,264,881
53,938,220 94,601,162
19. Long-term Liability
2020 2019
$ $
Jamaica Money Market Brokers:
Loan balance 17,257,357 38,740,492
Less - Current portion (10,377,480) (9,439,886)
6,879,877 29,300,606
Jamaica Money Market Brokers
This loan, in the amount of $42,000,000 was received on the September 2019 and repayable over
Forty-Eight months. Interest is charged at 9.0% per annum over the life of the loan. During the year,
the company made a number of 'bullets payments' on the principal.
The loan is secured by means of the securities outlined below:
i. Registered mortgage on freehold property, registered in the name of the company, together with
freehold property registered in the name of its holding company, St. Andrew Investments Limited.
ii Personal guarantees signed by director and company secretary of St. Andrew Investments Limited.
20. Related Party Transactions
The company had no trading transactions with related parties during the year. Transactions with
parent company were in respect of advances made by the company on behalf of its parent company.
21. Financial Risk management
The company's activities exposes it to a variety of financial risk: (including currency risk, interest rate
risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The company seeks to
manage these by close monitoring of each class of its financial instruments as follows:
(a) Market risk
(i) Currency risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes
in foreign exchange rates. The company is exposed to currency risk due to fluctuations in
exchange rates on transactions and balances that are denominated in currencies other than
Jamaican Dollar. Foreign exchange risk arises from commercial transactions, primarily with
respect to purchases, which are denominated in United States dollars. The company does
not earn foreign currency to counter the effects of the fluctuation in exchange rates.
The company manages this risk by purchasing foreign currency in advance and maintaining
foreign currency accounts to satisfy its foreign creditors.
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 43
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 19
21. Financial Risk management (continued)
(a) Market risk (continued)
(i) Currency risk (continued)
Foreign currency sensitivity
Due to the nature of the company's operations and the very short term nature of balances
denominated in currencies other than the Jamaican dollar, there is no material impact on
its operations as a result of changes in foreign currency rates. The company makes advance
payments on foreign purchases, this serves to counter the long-term effect of changes in the
exchange rates.
At balance sheet date the company had foreign currency assets in the form of deposits at
bank and advances made to foreign suppliers amounting to US$64,632 and foreign currency
liabilities of US$165,841 in respect of amounts due to its foreign suppliers.
The exchange rates applicable at balance sheet date are US$ 1 = J$141.5233 (2019= J$129.7847)
in respect of foreign currency assets and US$ 1 = J$143.3834 (2019 = J$132.56907) in respect of
foreign current liabilities.
(ii) Price risk
Price risk is the risk that the value of a financial instrument will fluctuate due to changes in market
prices, whether those changes are caused by factors specific to the individual instrument or
its issuer or factors affecting all instruments traded on the market. The company's exposure in
relation to financial instrument is minimal as these are recorded at face value and no diminution
in value is expected.
(iii) 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 company's cash and cash equivalents are subject to interest rate risk.
The level of interest bearing deposit is low and the company has not been able to negotiate
the most advantageous interest rates in relation to its overdraft; however, the terms of its long-
term borrowings are considered comparable to market, based on current trends.
Interest rate sensitivity
The company has interest-bearing liabilities in the form of overdraft and is exposed to interest
rate risk and this is affected by movements in market interest rates.
Significant movements in interest rates could affect the company's operations: however, at balance
sheet date its level of borrowings was minimal; therefore, the associated risk level is considered
low.
(b) Credit risk
Credit risk is the risk arising from a counterparty to a financial contract failing to discharge its
obligations, and arises principally from the company's receivables from customers, cash and
investment securities.
The maximum exposure to credit risk at reporting date is represented by the carrying value of its
financial assets. The company's exposure to this risk is influenced by the individual characteristics
of each customer.
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199144
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 20
21. Financial Risk management (continued)
(b) Credit risk (continued)
Trade and other receivables
Trade and other receivables are written off when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, among others, the failure of a
debtor to engage in a repayment plan with the company and a failure to make contractual payments
for a period greater than 120 days past due. The company's trade receivables is relatively low as
it adopts a business model whereby the bank finances its customers rather than the company
granting direct credit.
Impairment losses on trade and other receivables are presented as net impairment losses within based
operating profit. Subsequent recoveries of amounts previously written off are credited against the
same line item.
The maximum exposure to credit risk at reporting date is represented by the carrying value of its
financial assets. The company's exposure to this risk is influenced by the individual characteristics
of each customer.
Computation of net impairment on financial assets in respect of the current and the prior year was
recognised in the profit or loss and adjusted to retained earnings respectively:
December 31, 2020
Weighted
Average
loss rate
Gross carrying
amountLoss
allowance
Credit
impaired
$ $
Current 1.96% 10,055,864 197,095 no
31 to 60 days past due 5.0% - - no
61 to 90 days past due 11.45% 240,183 27,501 no
91 to 120 days past due 16.70% 210,000 35,070 no
Over 120 days 35.00% 7,919,711 2,772,440 no
18,425,758 3,032,106
December 31, 2019
Weighted
Average
loss rate
Gross carrying
amountLoss
allowance
Credit
impaired
$ $
Current 5.00% 11,661,499 583,075 no
31 to 60 days past due 7.75% 2,063,633 159,932 no
61 to 90 days past due 11.45% 5,986,537 685,458 no
91 to 120 days past due 16.70% 1,051,718 175,637 no
Over 120 days 35.00% 4,081,932 1,428,004 no
24,845,319 3,032,106
We HAve THe RigHT CAR FoR You
AnnuAl RepoRt 2020 45
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 21
21. Financial Risk management (continued)
(c) Liquidity risk
Liquidity risk is the risk that the company will encounter difficulty in raising funds to meet
its commitments associated with financial instruments.
The company manages its liquidity risk by maintaining an appropriate level of resources in liquid
or near liquid form. Its financial liability comprise payables and accruals.
The company's financial liabilities at December 31, 2020 and 2019 comprise payables, accruals,
bank loan and lease right-of-use liability..
The table below summarises the maturity profile of the company's financial liabilities at
December 31, 2020 and 2019:
Current Current Non-current Non-current
2020 2019 2020 2019
J$ J$ J$ J$
Bank loan 9,439,886 10,377,480 7,817,471 29,300,606
Payables and accruals 53,938,220 94,601,162 - -
Right-of-use liability 15,357,718 - 22,812,707 -
78,735,824 104,978,642 30,630,178 29,300,606
Assets available to meet all of the above liabilities include receivables and the expected
generation of cash from the normal course of trading. Motor vehicles included in inventories
and/or goods-in-transit will fulfil the company's obligations in respect of its current liabilities.
(d) Capital management
The company's objectives when managing capital are to safeguard the entity's ability to continue
as a going concern and to maintain an optimal capital structure to reduce the cost of capital
as well as to meet its liabilities when they fall due and to provide returns for its shareholders.
The Board of directors monitors the return on capital on a regular basis.
The company is not subjected to any externally imposed capital requirements.
Other than the financial liabilities quantified in these financial statements there are no off balance
sheet items, contingent liabilities or capital commitments.
There were no changes in the company's approach to capital management during the year.
Quality Pre-owned Cars
SinCe 1991
geTTing You on THe RoAd Since 199146
notes to tHe finanCial stateMentsYear enDeD DeCeMBer 31, 2020
Page 22
22. Contingent Liability and Capital Commitment
In the normal course of business, the company is subject to various claims, disputes and legal
proceedings. Provision is made for such matters when, in the opinion of management and its professional
advisors, it is probable that a payment will be made by the company, and the amount can be reasonably
estimated.
At reporting date, the company had no outstanding legal matters being pursued in the Courts. In
addition, the Board, along with the company's attorney have indicated that they are not aware of any
potential liability that may negatively affect the company.
23. Impact of COVID-19 Pandemic
The novel Coronavirus (COVID-19) outbreak was declared a global pandemic in March, 2020 by
the World Health Organisation. The pandemic and the measures to control its human impact have
resulted in disruptions to economic activity, business operations and asset prices. The Government
has implemented a number of measures to reduce the spread of the virus, including nightly curfews,
quarantines and restrictions on large public gatherings. These restrictions have had adverse economic
effects on the financial operations of some stakeholders. This has adversely impacted the company
as it experienced a fall in revenue of almost 40% in the current year over the prior period.
Although, it may take awhile before business activities in the country return to full normalcy,
having regards to all the precautionary measures being taken, management maintain that the
going concern assumption remain appropriate and the company is not expected to be significantly
impacted by the COVID-19 pandemic.
forM of proxYl/We ________________________________________________________________________________________________
of __________________________________________________________________________________________________
being a member/members of Jetcon Corporation Limited hereby appoint
____________________________________________________________________________________________________
____________________________________________________________________________________________________
of __________________________________________________________________________________________________
____________________________________________________________________________________________________
or failing him/her _____________________________________________________________________________________
____________________________________________________________________________________________________
of __________________________________________________________________________________________________
____________________________________________________________________________________________________
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 a later to be determined date and at any adjourned thereof and at any adjourned thereof.
Signed this _____________________________________________ day of _______________________ 20_____
_______________________________________________________ Signature
_______________________________________________________ Signature
NOTE: to be valid:
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a member of the company.
2. If executed by a corporation, this proxy must be sealed. A Corporate shareholder may appoint a representative in accordance to Article of the company’s Articles of Association instead of appointing a proxy.
3. This Form of Proxy must be received by the Registrar of the Company, 2 Lower Sandringham Avenue, Kingston, not less than 48 hours before the time of the meeting.
4. This Form of Proxy should bear stamp duty of $100.00. Adhesive stamps are to be cancelled by the person signing the proxy.
plaCe
$100
staMp Here
notes
JETCON CORPORATION LIMITED
2 Lower Sandringham Avenue, Kingston 10
+1 (876) 920-2277sales@jetconcars.com
http://www.jetconcars.com/
top related