Annual Report 2016

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TableofContents

Table of Contents

Notice of Annual General Meeting 3

Mission, Quality Policy, Vision 5

Chairman's Statement 7

General Manager's Statement 9

Board of Directors 11

Corporate Governance 13

Senior Management 15

Shareholdings 17

Auditor's Report/Financial Statements 21

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Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the 2016 Annual General Meeting of AMG Packaging

& Paper Company Limited will be held at the offices of AMG Packaging & Paper

Company Limited at 10 Retirement Crescent, Kingston 5 on Thursday, January 19,

2017 at 10 a.m. for the purpose of transacting the following business:

1. To receive the Audited Accounts for the year ended August 31, 2016 together

with the reports of the Directors and Auditors thereon,

The Company is asked to consider, and if thought fit, pass the following resolution:

Resolution No. 1

“That the Audited Accounts for the year ended August 31, 2016, together with the

reports of the Directors and Auditors thereon, be and are hereby adopted.”

2. To elect Directors.

(i) The Directors retiring by rotation in accordance with Regulation 102 of the

Company’s Articles of Incorporation are Messrs. Michael Fraser and Peter Chin, who

being eligible for re-election, offer themselves for re-election.

The Company is being asked to consider, and if thought fit, pass the following

resolutions:

Resolution No. 2

“That the Directors, retiring by rotation, be re-elected by a Single Resolution.”

Resolution No. 3

“That Messrs. Michael Fraser and Peter Chin, who are retiring by rotation in

accordance with Regulation 102 of the Articles of Incorporation be and are hereby

re-elected as Directors of the Company.”

(ii) Mrs. Michelle Chin having been appointed a Director since the last Annual

General Meeting, shall retire in accordance with Regulation 108 of the Articles of

Incorporation and, being eligible offer herself for re-election.

The Company is being asked to consider, and if thought fit, pass the following

resolution:

Resolution No. 4

“That Mrs. Michelle Chin be and is hereby elected as a Director of the Company.”

3. To approve the Remuneration of the Directors.

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The Company is asked to consider, and if thought fit, to pass the following

resolution:

Resolution No. 5

“That the amount shown in the Audited Accounts of the Company for the year

ended August 31, 2016 as fees of the Directors for their services as Directors, be

and are hereby approved.”

4. To appoint Auditors and to authorize the Directors to fix the remuneration of the

Auditors.

The Company is asked to consider, and if thought fit, pass the following resolution:

Resolution No. 6

“That the remuneration of the Auditors, Bogle and Company, who have signified

their willingness to continue in office, be such as may be agreed between the

Directors of the Company and the Auditors.”

5. To consider, and if thought fit, pass the ordinary resolution for the subdivision of

shares.

Resolution No. 7

“That each ordinary share of the company be subdivided into five shares resulting

in the Authorized Share Capital of the company increasing from 140,000,000 shares

to 700,000,000 shares of no par value, and the issued and fully paid capital of the

company increasing from 102,378,857 shares to 511,894,285 of no par value.”

Dated the 25th day of November 2016

By Order of the Board

Paul Chin

Company Secretary

Registered Office

9 Retirement Crescent

Kingston 5

NOTE: 1. A member entitled to attend and vote at the meeting may appoint a proxy, who need not also be a member, to

attend and so on a poll, vote on his/her behalf. A suitable form of proxy is enclosed. Forms of proxy must be lodged at the Registrar of The Company, KPMG Regulatory & Compliance, 6 Duke Street, Kingston not less

than 48 hours before the time of the meeting.

2. A Corporate shareholder may (instead of appointing a proxy) appoint a representative in accordance with Regulation 80 of the Company’s Articles of Incorporation. A copy of Regulation 75 is set out on the enclosed

detachable proxy form.

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NoticeofA

Mission

To manufacture packaging materials at the highest standard and to sell at the lowest price and maintain a reputation of being a viable alternative for imported packaging.

Quality Policy

The Management and Staff of AMG Packaging & Paper Company Ltd. is committed to implementing and continually improving the

effectiveness of our Quality Management System through providing products that satisfy our customers' needs and expectations. We

achieve this through our cadre of competent staff, effective communication and team work.

Vision

To be the best manufacturing company of corrugated cardboard boxes who understands

and satisfies the product quality and expectations of our valued clientele.

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Chairman's Statement

2016 was a year of mixed fortunes for AMG. One major occurrence was the

untimely passing of our founding Chairman, Mark Chin. It is a testament to

the strength of the company and his positive contribution that we were still

able to achieve credible results despite this and other challenges. We

continue the drive to make our clients and our staff our priority through

excellent customer service and by satisfying the needs and expectations of

both groups.

Performance Overview

The company showed an overall net improvement on its results from the

previous year, mainly as a result of our strategy of tighter expense control.

The General Manager’s report gives further details.

Outlook for the Coming Year

In the coming year, AMG will be focusing on maintaining international quality

standards, product diversification and plant upgrades. We expect that these

initiatives will position the company to take advantage of positive

developments in the economy.

As you are aware, AMG was ISO9001:2008 certified in January 2015. We are

currently transitioning the company to the new standard, ISO9001:2015

which should conclude January 2018.

We have now added two other brands to our Toilet Paper line, namely

Cottony and Plush. As you were previously informed, our other brand Tishoo

has an exclusive distributor. We are in the process of identifying other

distributors for our new brands.

We also plan to do a major upgrade on our Corrugator at the Box Plant

within the first quarter of the financial year. This upgrade will enable us to

expand our product offering to our customers.

On behalf of the Board I take this opportunity to welcome to the Board

Mrs. Michelle Chin, who brings significant years of management experience.

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General Manager's Statement

AMG Packaging & Paper Company Limited (AMG) is pleased to present our

Audited Financial Statements for the 12-month period ending

August 31, 2016.

AMG has continued its positive performance with an increase in key financial

matrices for the 12-month period. Revenues for the period to August 31,

2016 decreased by .72% to $628.67 million over the prior year period.

Manufacturing Expenses moving from $474.61 million (2015) to $431.59

million (2016), a 9.96% decrease, allowed Gross Profit to improve by

24.27%, moving from $158.58 million (2015) to $197.07 million (2016).

Administrative expenses for the 12-month period increased 43.85 %, $79.76

million, which resulted in AMG producing Net profit of $82.97 million up

4.34% from the corresponding prior year period ($79.51 million).

12 months ending August 31, 2016

12 months ending August 31, 2015

Total Revenues 628,667,865 633,192,733

Gross Profit 197,072,147 158,579,278

Profit 82,971,386 79,500,395

Total Assets 588,949,228 567,611,591

However, it should be noted that our segmented results actually show that

the Box Factory resulted in an increase in net profit of $123.63 million up

55.50%, but the Toilet Paper Factory first year of operation, resulted in

operational loss of $40.65 million. The unfortunate major disaster at our

exclusive distributor of our Tishoo brand contributed heavily to the loss

incurred at the Toilet Paper Factory.

We will be upgrading and doing major repairs to our corrugator within the

first quarter of the new financial year. The issues associated with our

corrugator is what attributed to the decrease in sales shown. The upgrade

will enable us to expand in our abilities for corrugated products, which will

show positive results in our revenues.

Even though the erratic movement of the US dollar continues, and the harsh

economic factors that hinder the manufacturing sector, we are confident of a

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continued

bright future especially with the prudent management of our financials.

The management team remains focused to continue its positive trend.

Continually seeking new strategies to contain costs, providing excellent

customer service and producing high quality products will be the driving

force going into the upcoming year.

We continuously seek support from our local manufacturers, as this is the

key to growth for both AMG and the country’s manufacturing sector. AMG is

committed to building brand Jamaica and we ask everyone to support efforts

in doing so.

Michael P. Chin General Manager

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George Hugh

Managing Director

George Hugh spearheaded the formation of AMG in 2005 after

doing research and surveying the local market. He became

Managing Director in 2009 and is responsible for our strategic

direction and overseeing daily operations, with support from our

management team.

Michelle Chin

Non-Executive Director

Michelle Chin is a Jamaican businesswoman who has contributed

to many local ventures and philanthropic causes. She was

appointed to the Board in 2016. As a Non-Executive Director of

AMG, Michelle brings to the Board over 20 years managerial

experience for our strategic direction and corporate governance.

Board of Directors

Barrington Chisholm

Non-Executive Chairman

Barrington "Barry" Chisholm is a retired banker, who is a Justice

of the Peace of the Island and a member of the Rotary Club of

Spanish Town. He was named Non-Executive Chairman of AMG

in 2016. Barry is responsible for directing Board and

Shareholder meetings, as well as ensuring the good corporate

governance of AMG.

Paul Chin

Non-Executive Director

Paul Chin is a local businessman who has contributed to

numerous construction projects in Jamaica. As a Non-Executive

Director of AMG, Paul brings to the Board his wide business and

project management experience for the purposes of our

strategic direction and corporate governance.

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Michael Fraser

Non-Executive Director and Mentor

Michael Fraser is a Chartered Life Underwriter (CLU), Justice of

the Peace of the Island, and an active alumnus of Jamaica

College. As a Non -Executive Director and Mentor of AMG,

Michael is responsible for ensuring that AMG has adequate

procedures, systems and controls for financial reporting, as well

as compliance with Junior Market Rules and general corporate

governance.

Peter Chin

Non-Executive Director

Peter Chin holds an MBA in Finance and Investments from

George Washington University and a B.Sc. (Hons) in

Management Studies from the University of the West Indies. As

a Non-Executive Director of AMG, Peter brings to the Board his

financial services and management experience for our strategic

direction and corporate governance. He is also Chairman of the

Compensation Committee of AMG.

Antonia Hugh

Non-Executive Director

Antonia Hugh is a Director of Rayton Group and is in the

business over 20 years. He also serves as a Consultant of

Dollars to Dollars Limited. He is an art collector and a keen golf

player.

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Corporate Governance

Board Committees

Audit Committee

Barrington Chisholm (Chairman)

Peter Chin

Michael Fraser

Compensation Committee

Peter Chin (Chairman)

Barrington Chisholm

Michael Fraser

Board Attendance for the 2016 Financial Year

Annual

General

Meeting

Board of

Directors’

Meeting

Audit

Committee

Meeting

Compensation

Committee

Meeting

# Meetings for Year 1 4 5 1

Mark Chin 1 1 3 -

Paul Chin 1 4 - -

Peter Chin 1 4 5 1

Barrington Chisholm 1 4 5 1

Michael Fraser 1 3 5 1

George Hugh 1 4 5 1

Antonia Hugh - 3 - -

Michelle Chin - 2 1 -

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Senior Management

Michael Chin

General Manager

Michael Chin holds a BSc. Degree in Business Management from

Lynn University and has over 20 years management experience.

As General Manager of AMG, he is responsible for supporting

George Hugh (Managing Director) in our day-to-day operations.

Michael joined AMG in 2009 and his leadership was instrumental

in the winning of a "Bold Ones" award from AMG's client

National, the Continental Baking Company, which is given to

outstanding local manufacturers.

Leslie McPherson

Group Accountant

Leslie McPherson has more than 20 years experience in

accounting and audit. He is a Certified Public Accountant (CPA)

and a Fellow of the Association of Chartered Certified

Accountants (ACCA) and the Institute of Chartered Accountants

of Jamaica (CAJ). As the Group Accountant, he is charged with

managing our Finance and Accounting functions. He has been

with AMG since our inception.

Christopher Hendriks

Plant Manager

Christopher Hendriks joined AMG in 2007 as the Production

Manager. He was promoted to Plant Manager for the Toilet

Paper & Hand Towel Division in 2015. He is responsible for

overseeing daily operations, contacting suppliers and

maintaining relationships with distributors.

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Shareholdings

Directors' Shareholdings

Name Shareholding Connected Party

Antonia Hugh 32,351,718 Rankinston

Limited

Paul Chin 24,263,792 Heiss Holdings

Limited

George Hugh 24,263,792 George Hugh

Holdings Limited

Michelle Chin 637,418

Michael Fraser 382,913

Peter Chin 332,370

Barrington Chisholm 76,583

82,308,586

Name Shareholding

Michael Chin 394,487

Leslie McPherson 38,291

432,778

SeniorManagers'Shareholdings

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Top 10 Shareholders at 31 August 2016

Issued

Ordinary Shares

102,378,857

Shareholders Shareholdings %

Rankinston Limited 32,351,718 31.600

George Hugh Holdings Limited 24,263,792 23.700

Heiss Holdings Limited 24,263,792 23.700

JCSD Trustee Services Sigma

Venture Fund 2,562,657 2.503

Harold Soltau 1,361,605 1.330

Cheston Jamaica Limited 1,072,687 1.048

SJLIC For Scotiabridge

Retirement Scheme 860,371 0.840

PAM – Pooled Equity Fund 727,293 0.710

Colin Steele 687,465 0.671

Guardian Life Limited Guardian

Equity Fund 643,896 0.629

88,795,276 86.732

No. of Shareholders at

31/08/2016

JCSD 376

Main Register 2

Total 378

Mark S. Chin

Most people live their lives inside of a box.

Few dare to be different and think outside it.

The true geniuses, the visionaries, are those who create the box.

They are the rare ones that change the world and

make an everlasting mark.

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Auditor’s Report/

Financial Statements