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