LDL Annual Report 2016
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2 2016 ANNUAL REPORT ANNUAL REPORT 2016 3 2 2016 ANNUAL REPORT ANNUAL REPORT 2016 3 VISION To become a global corporate leader, through innovation and entrepreneuriship. Driven by a passion for excellence and compassion for our fellowman, we will make LASCO a world name, synonymous with integrity, value and service. MISSION To provide quality products and services to our customers, ensure profitability and promote employee development. Being the best...Always. 4 2016 ANNUAL REPORT ANNUAL REPORT 2016 5 4 2016 ANNUAL REPORT ANNUAL REPORT 2016 5 CONTENTS COMPANY INFORMATION NOTICE OF ANNUAL GENERAL MEETING 6 To adopt, receive and consider resolutions CORPORATE DATA 8 LASCO divisions and their locations SHAREHOLDERS' PROFILE 9 A report on the volume & percentage shareholdings in the Company STATEMENTS FIVE YEAR FINANCIAL REVIEW 10 CHAIRMAN'S STATEMENT 12 DIRECTORS' PROFILES 14 REPORTS CORPORATE GOVERNANCE 19 An outline of the responsibilities of the committees DIRECTORS' REPORT 21 MANAGING DIRECTOR’S REPORT 22 EXECUTIVE MANAGEMENT TEAM 24 MANAGEMENT DISCUSSION & ANALYSIS 26 Company Overview, Financial Performance, Analysis by Division FEATURES CORPORATE SOCIAL RESPONSIBILITY 35 MARKETING HIGHLIGHTS 43 NEW PRODUCTS 47 FINANCIAL REPORT FINANCIAL STATEMENTS 51 OTHER INFORMATION PROXY FORM 93 6 2016 ANNUAL REPORT ANNUAL REPORT 2016 7 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Sixth Annual General Meeting of LASCO DISTRIBUTORS LIMITED will be held at the Knutsford Court Hotel on Tuesday, September 27, 2016 at 12:30pm for the following purposes: Ordinary Resolutions 1. Audited Accounts To consider and if thought fit, pass the following resolution: “THAT the Audited Accounts for the year ended March 31, 2016 and the Reports of the Directors and Auditors, circulated with notice convening the meeting, be and are hereby received and adopted.” 2. Ratification of Dividend To consider and if thought fit, pass the following resolution: “THAT the Interim Dividend of $0.0275 cents per stock unit was paid on November 18, 2015 to shareholders on record at the close of business on September 17, 2015, is declared final for the year 2015, be and is hereby ratified.” 3. Election of Directors (3A) Article 97 of the Company’s Articles of Incorporation provides that one-third of the Directors, if their number is not three (3) or a multiple of three (3), the number nearest one-third (1/3), shall retire from office at each Annual General Meeting. Article 98 of the Company’s Articles of Incorporation provides that the Directors to retire in every year shall be those who have been longest in office since their last election. The Directors retiring under these Articles are Hon. Lascelles Chin, Mr. Gary Peart and Dr. Eileen Chin and being eligible, offer themselves for re-election. To consider and if thought fit pass the following resolution: (i) “THAT retiring Director, Hon. Lascelles Chin, be and is hereby re-elected a Director of the Company.” To consider and if thought fit pass the following resolution: (ii) “THAT retiring Director, Mr. Gary Peart, be and is hereby re-elected a Director of the Company.” To consider and if thought fit pass the following resolution: (iii) “THAT retiring Director, Dr. Eileen Chin, be and is hereby re-elected a Director of the Company.” (3B) Article 93 of the Company’s Articles of Incorporation empowers the directors at any time to appoint any other person to be a director of the Company, either to fill a casual vacancy or as an addition to the Board, but so that the total number of directors shall not at any time exceed the maximum number fixed as hereinbefore mentioned. Any director so appointed shall hold office only until the next following annual general meeting, when he shall retire but shall be eligible for re-election. 6 2016 ANNUAL REPORT ANNUAL REPORT 2016 7 The Directors retiring under this Article are Mr. Vincent Chen and Mr. Robert Parkins, who were appointed on February 1, 2016, and being eligible offer themselves for re-election. To consider and if thought fit pass the following resolution: (iii) “THAT retiring Director Mr. Vincent Chen, be and is hereby re-elected a Director of the Company.” To consider and if thought fit pass the following resolution: (iv) “THAT retiring Director Mr. Robert Parkins, be and is hereby re-elected a Director of the Company.” 4. Directors Remuneration Article 77 of the Articles of Incorporation empowers the Directors or any appropriate Committee of the Board of Directors to fix the remuneration of the Directors. Article 111 empowers the Directors, or any appropriate Committee of the Board of Directors, to determine, the remuneration of the Managing Director.” 5. Appointment of Auditors and their Remuneration To consider and if thought fit, pass the following ordinary resolution: “That the remuneration of the Auditors, BDO, who have signified their willingness to continue in office, be fixed by the Directors of the Company.” Dated this 15th day of June 2016 BY ORDER OF THE BOARD Vincent A. Chen COMPANY SECRETARY NOTE: 1. A Member of the Company entitled to attend and vote at this meeting is entitled to appoint another person as his/her Proxy to attend and vote in his/her stead, and a Proxy need not be a Member of the Company. 2. All Members are entitled to attend and vote at the meeting. 3. Enclosed is a form of Proxy which must be deposited with the Secretary at the registered office of the Company not less than 48 hours before the time appointed for holding the meeting. 8 2016 ANNUAL REPORT ANNUAL REPORT 2016 9 CORPORATE DATA As at March 31, 2016 REGISTERED OFFICE Mr. Alex Balogun LASCO Distributors Limited Financial Controller 27 Red Hills Road Kingston 10 Mr. Vincent Chen Jamaica, W.I. Company Secretary Tel: (876) 749-5272 Fax: (876) 749-2966 Website: www.lascojamaica.com ATTORNEYS-AT-LAW Chen Green & Company SEGMENT LOCATION 6 Haining Road LASCO Pharmaceutical Division Kingston 5 Jamaica, W.I. 27 Red Hills Road Kingston 10 BANKERS Jamaica, W.I. First Caribbean International Bank Jamaica Limited Tel: (876) 968-3456-65; 23-27 Knutsford Boulevard (876) 929-7633 Kingston 5 Fax: (876) 929-7622 Jamaica, W.I. LASCO Consumer Division Bank of Nova Scotia Jamaica Limited White Marl, St. Catherine Cnr. Duke & Port Royal Streets Tel: (876) 749-2967-9; Kingston Jamaica, W.I. (876) 749-5272 Fax: (876) 749-2966 National Commercial Bank Jamaica Limited 94 Half Way Tree Road BOARD OF DIRECTORS Kingston 10 Jamaica, W.I. Executive Directors Hon. Lascelles Chin, O.J, C.D, LLD (Hon. Causa) AUDITORS Executive Chairman BDO 26 Beechwood Avenue Mr. Peter Chin Kingston 5 Managing Director Jamaica, West Indies REGISTRAR AND TRANSFER AGENTS Non-Executive Directors Jamaica Central Securities Depository Limited Mr. J.A. Lester Spaulding, C.D., J.P. 40 Harbour Street Dr. Eileen Chin, MBA Kingston Mr. Robert Parkins, MBA Jamaica, W.I. Sir Kenneth Hall O.N., G.C.M.G., O.J. Mrs. Jacinth Hall-Tracey, MBA Mr. Gary Peart, MBA Mr. Vincent Chen 8 2016 ANNUAL REPORT ANNUAL REPORT 2016 9 SHAREHOLDERS' PROFILE Top Ten Shareholders as at March 31, 2016 Name Volumes Percentages East West (St. Lucia) Limited 1,649,551,260 49.00 Lascelles Chin 1,019,337,780 30.28 Mayberry West Indies Limited 81,355,166 2.41 Yuan Liao 30,160,300 0.90 JCSD Trustee Services Ltd - 22,082,600 0.66 Sigma Venture Catherine Adella Peart 21,719,250 0.62 Wayne M. Chin 21,116,860 0.62 Joel Izquierrdo Gonzales 20,003,000 0.59 Hilda Gonzalez Rosales 17,118,600 0.51 Mayberry Managed Clients 15,299,020 0.46 Account Shareholdings of Directors and Connected Parties as at March 31, 2016 Position Percentages Name Primary Holder *Connected Party Units Lascelles Chin 1,019,337,780 30.2800 *Eileen Chin - Direct {14,014,600} 0.4120 *East West (St. Lucia) Ltd. 1,649,551,260 49.000 Eileen Chin 14,014,600 0.4120 *Lascelles Chin - Direct {1,019,337,780} 30.2800 J. A. Lester Spaulding 4,003,000 0.1202 Kenneth Hall 2,753,000 0.0818 Peter Chin 14,000,000 0.4120 Gary Peart 1,397,000 0.0410 Vincent Chen 1,000,000 0.0294 Jacinth Hall-Tracey 0.00 0.0000 Robert Parkins 0.00 0.0000 *Connected Party Shareholdings of Senior Managers and Connected Parties as at March 31, 2016 Position Percentages Name Primary Holder *Connected Party Units Peter Chin 14,000,000 0.4120 Alex Balogun 176,400 0.0052 Paul Shoucair 0.00 0.0000 10 2016 ANNUAL REPORT FIVE YEAR FINANCIAL REVIEW FIRST CALENDAR YEAR OF DATA 2012 NUMBER OF YEARS OF DATA 5 REPORTING VALUES $’000 2016 2015 2014 2013 2012 Number of Shares Issued ($’000) 3,400,429 3,373,931 3,366,431 3,366,431 3,366,431 Stock Holders Equity ($’000) $3,588,044 $2,882,961 $2,397,137 $1,887,101 $1,464,428 Percentage increase over prior year 23.4% 20.3% 27.0% 28.9% 52.4% Market Capitalisation $19,552,466 $4,655,200 $5,049,647 $3,534,753 $4,039,717 Total Borrowings $207,708 $2,182 $0 $45,778 $0 INCOME STATEMENT 2016 2015 2014 2013 2012 Turnover ($’000) $14,549,098 $11,146,892 $9,464,744 $8,255,354 $7,460,509 Percentage increase over prior year 30.5% 17.77% 14.65% 10.65% 10.42% Profit before Taxation ($’000) $757,495 $546,730 $587,464 $506,833 $570,711 Percentage (decrease)/increase over prior year 38.6% -6.9% 15.9% -11.2% 40.5% Net Profit for the year ($’000) $716,751 $546,730 $587,464 $506,833 $550,377 Percentage (decrease)/increase over prior year 31.1% -6.9% 15.9% -7.9% 79.6% Net Profit Attributable to Stockholders ($’000) $716,751 $546,730 $587,464 $506,833 $550,377 Percentage (decrease)/increase over prior year 31.1% -6.9% 15.9% -7.9% 79.6% Total Comprehensive Income $740,768 $579,541 $587,464 $506,833 $550,377 Percentage