Paramount 2013.doc

Paramount Trading (Jamaica) Limited Financial Statements31 May 2013

Paramount Trading (Jamaica) Limited Financial Statements31 May 2013

Page

INDEX

Independent Auditors' Report to the Members

Financial Statements

Statement of Comprehensive Income 1

Statement of Financial Position 2

Statement of Cash Flows 3

Statement of Changes in Equity 4

Notes to the Financial Statements 5 - 37

To the Members ofParamount Trading (Jamaica) Limited

Independent Auditors' Report

We have audited the accompanying financial statements of Paramount Trading (Jamaica) Limited (the Company) which comprise the Companys Statement of Financial Position as at 31 May 2013 and the statement of comprehensive income, statement of changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and with the requirements of the Jamaican Companies Act. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards of Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether or not the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

To the Members of Paramount Trading (Jamaica) Limited

Independent Auditors Report

Opinion

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as of 31 May 2013, and of the financial performance and cash flows of the Company for the year then ended, so far as concerns the members of the Company, in accordance with International Financial Reporting Standards and the requirements of the Jamaican Companies Act.

Report on Other Legal and Regulatory Requirements

As required by the Jamaican Companies Act, we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose 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 Act, in the manner so required.

Chartered Accountants

23 July 2013Kingston, Jamaica

Page 1Paramount Trading (Jamaica) Limited Statement of Comprehensive Income31 May 2013

Note 31 May 2013 31 May 2012$ $

Revenue 3(i) 642,128,641 613,809,228

Direct expenses 445,544,075 414,244,595

Gross profit 196,584,566 199,564,633

Other operating income 8 40,553,548 14,179,987

237,138,114 213,744,620

Less operating expenses:

Administrative 125,639,363 111,116,871

Selling & distribution 4,129,929 2,611,668

129,769,292 113,728,539

Operating profit before finance costs and taxation 107,368,822 100,016,081

Finance costs 10 (23,828,282) (15,889,379)

Profit before taxation 83,540,540 84,126,702

Taxation 11 (10,192,184) (30,752,062)

Net profit for the year,

being total comprehensive income 73,348,356 53,374,640

$ $

Earnings per share 12 0.54 *0.43

*Restated for comparative purposes

Page 2Paramount Trading (Jamaica) Limited Statement of Financial Position31 May 2013

Note 2013 2012$ $

Non-current assets: Property, plant and equipment 14 83,350,857 92,027,485 Investments 15 3,467,686 763,480Current assets: Inventories 16 172,450,248 185,796,815 Receivables 17 146,238,460 98,692,742 Cash and cash equivalents 18 60,318,395 7,647,990

379,007,103 292,137,547Current liabilities: Payables 19 110,253,245 108,966,998

Taxation payable 12,159,063 32,104,263Current portion of directors loan 20 1,290,000 1,339,808Current portion of long term borrowings 21 19,675,276 20,541,540

143,377,584

162,952,609Net current assets 235,629,519 129,184,938Total assets less current liabilities 322,448,062 221,975,903

Equity: Issued capital 22 77,492,243 10,283,059 Retained earnings 195,102,765 121,754,409

272,595,008 132,037,468Non-current liabilities: Shareholders loans 23 - 4,235,527 Related company 24 - 11,733,883 Directors loan 20 12,934,128 15,813,707 Long term borrowings 21 36,918,926 56,457,349

49,853,054 88,240,466 Deferred income taxes - 1,697,969Total equity and non-current liabilities 322,448,062 221,975,903

Approved for issue by the Board of Directors on 23 July 2013 and signed on its behalf by:

. .Hugh Graham Chief Executive Officer James Lechler Director

Page 3Paramount Trading (Jamaica) Limited Statement of Cash Flows31 May 2013

31 May 2013 31 May 2012

$ $

Cash flows from operating activities

Net profit after taxation 73,348,356 53,374,640

Adjustments for:

(Gain)/Loss on disposal of property, plant & equipment (126,001) 581,900

Deferred tax asset/(liability) (1,697,969) 1,885,842

Depreciation 12,969,865 12,800,285

Operating cash flows before movements in working capital 84,494,251 68,642,667

Changes in operating assets and liabilities:

(Increase)/decrease

Inventories 13,346,567 (33,696,798)

Receivables (47,545,718) (12,615,176)

Increase/(decrease)

Payables 1,286,247 (30,091,677)

Taxation (19,945,200) 12,848,334

(52,858,104) (63,555,317)

Net cash provided by operating activities 31,636,147 5,087,350

Cash Flows from Investing Activities:

Purchase of property, plant & equipment (5,017,236) (17,088,743)

Proceeds from disposal of property, plant & equipment 850,000 700,000

Net cash used in investing activities (4,167,236) (16,388,743)

Cash Flows from Financing Activities:

Net proceeds from issue of shares 67,209,184 -

Loans received - 12,090,558

Loans repaid (39,303,484) (43,050,330)

Net cash provided by/ (used in) financing activities 27,905,700 (30,959,772)

NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS 55,374,611 (42,261,165)

Cash and cash equivalents at beginning of year 8,411,470 50,672,635

CASH AND CASH EQUIVALENTS AT END OF YEAR 63,786,081 8,411,470

REPRESENTED BY:

Cash and cash equivalents 60,318,395 7,647,990

Investments 3,467,686 763,480

63,786,081 8,411,470

Page 4Paramount Trading (Jamaica) Limited Statement of Changes in Equity31 May 2013

.

Note No. of Shares

Share Capital Retained Earnings

Total

$ $ $

Balances at 31 May 2011 10,283,059 10,283,059 68,379,769 78,662,828

Net profit for the year, being total comprehensive income - - 53,374,640 53,374,640Balances at 31 May 2012 10,283,059 10,283,059 121,754,409 132,037,468Stock Split (1 to 12) 22 113,113,649 - - -Issue of shares, net of transaction costs 30,850,000 67,209,184 - 67,209,184Net profit for the year, being total comprehensive income - - 73,348,356 73,348,356Balances at 31 May 2013 154,246,708 77,492,243 195,102,765 272,595,008

Page 5Paramount Trading (Jamaica) Limited Notes to the Financial Statements31 May 2013

1. IDENTIFICATION AND PRINCIPAL ACTIVITIES

Paramount Trading (Jamaica) Limited is a private company limited by shares, incorporated in 1991 and domiciled in Jamaica. Its registered office is located at 39 Waltham