2020 - Jamaica Stock Exchange

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



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.



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



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



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



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.



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.



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


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


Andrew B Jackson 0

Christine Clarke 0

garth McKenzie 0



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



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.



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.



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.



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.



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.



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



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


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



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



• 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.



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


SinCe 1991


Page 2

Chairman Director


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



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)


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)


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


stateMent of CHanGes in sHareHolDers’ eQuitYYear enDeD DeCeMBer 31, 2020


SinCe 1991


Page 4


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



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.


SinCe 1991



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 ].




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%.


SinCe 1991



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.




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.


SinCe 1991



Page 10


(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.




Page 11


(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


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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




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.


SinCe 1991



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}.




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


SinCe 1991



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}].




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


SinCe 1991



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.




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.


SinCe 1991



Page 20


(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



Over 120 days 35.00% 4,081,932 1,428,004 no

24,845,319 3,032,106




Page 21


(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.


SinCe 1991



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) [email protected]

http://www.jetconcars.com/

Documents

2020 - Jamaica Stock Exchange