Mission - Homepage - Jamaica Stock Exchange€¦ · Media Corporation (CMC). At CMC he rose to the...
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Mission Statement
To be the most trusted broadcast medium by having a
commitment to truth, accuracy and fairness.
To inform, educate and entertain audiences with credible, balanced
and innovative programming supported by nationwide coverage and a
skilled and motivated workforce.
To further provide advertisers with quality service and a cost-effective
medium, thus enhancing our competitive advantage and ensuring
profitability.
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ontentsCRadio Jamaica Limited Annual Report
Directors andCorporate Data
Directors Profile
2015 SeniorManagement Team
Notice ofMeeting
Chairman’s Statement
Directors’ Report
Shareholders as atMarch 31, 2015
Managing Director’s Statement
Management Discussion & Analysis
Pictorial Highlights
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Consolidated statement of comprehensive income
Company balance sheet
Consolidated balance sheet
Company statement of changes in equity
Consolidated statement of changes in equity
Company statement of cash flows
Consolidated statement of cash flows
Notes to the financial statements
Company statement of comprehensive income
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Financial Statements
Five Year Summary Form of Proxy
95 99
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Radio Jamaica Limited Annual Report 2015
DIRECTORS
J.A. Lester Spaulding, C.D., J.P. – Chairman
Executive
Gary Allen, Dip. Media & Comm. (Hons.), E.M.B.A., J.P. – Managing Director
Non-Executive
Carl Domville, B.Sc. (Hons), F.C.C.A., F.C.A.
Glenworth Francis, B.Sc., E.M.B.A.
Andrew Leo-Rhynie, B.Sc., M.B.A.
Minna Israel, B.Sc. (Hons.), M.B.A., J.P.
Nadine Molloy, B.A. (Hons.), M.A., M.L.S., J.P.
Peter Chin, B.Sc., M.B.A.
Lawrence Nicholson, B.Sc., M.Sc., Ph.D.
SECRETARY
Stephen Greig, LL.B.
SENIOR MANAGEMENT TEAM
Gary Allen, Dip. Media & Comm. (Hons.), E.M.B.A., J.P. – Managing Director
Stephen Greig, LL.B. – Company Secretary/Attorney-at-Law
Gary Cole – Director of Marketing
Andrea Wilson-Messam, F.C.C.A., F.C.A. – Director of Finance
Claire Grant, B.Sc. (Hons.), M.A., M.B.A. (Distinction) – General Manager, Television Jamaica Limited
Francois St. Juste, B.Sc. (Hons.) – General Manager, Radio Services
Trevor Johnson, Dip. Bus. Admin., E.M.B.A. –Deputy General Manager TVJ & Outside Broadcast
Production Manager
Yvonne Wilks, Dip. Cam., B.A. (Hons.) – Director of Corporate & Commercial Strategy/Acting
General Manager, Multi-Media Jamaica Limited
GROUP OFFICERS
Marcha Christie, A.C.C.A., Dip. Bus. Admin. – Group Financial Controller
Milton Walker, B.A. – Group Head of News
Tanya Smith, Dip. Insurance, B.Sc., M.B.A. (HRM) – Group Human Resource Manager
Patrick Anderson – Acting Group Head of Sports
Melvis Cummings – Chief Engineer, Operations
TELEVISION OPERATIONS
Claire Grant, B.Sc. (Hons.), M.A., M.B.A. (Distinction) –General Manager, Television Jamaica Limited
Trevor Johnson, Dip. Bus. Admin., E.M.B.A. – Deputy General Manager TVJ & Outside Broadcast
Production Manager
Allea McDonald, B.A., M.A. – Studio Production Manager
Judith Alberga, B.A. (Hons.) Programmes Manager
Debbie Powell-Harris, Dip. Graphic Design, B.Sc. (Hons.) – Senior Art Director
Directors and
CORPORATE DATA
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Radio Jamaica Limited Annual Report 2015
SUBSIDIARIES
Television Jamaica Limited
Lawrence Nicholson, Ph.D, M.Sc., B.Sc. – Chairman
J.A. Lester Spaulding, C.D., J.P. - Director
Gary Allen, Dip. Media & Comm. (Hons.), E.M.B.A.,
J.P. – Director
Gregory Pullen
Stephen Greig, LL.B. – Company Secretary
Multi-Media Jamaica Limited
Gary Allen, Dip. Media & Comm. (Hons.), E.M.B.A.,
J.P. – Chairman
J.A. Lester Spaulding, C.D., J.P. – Director
Richard McCreath – Director
Rupert Hartley – Director
Andrea Wilson-Messam – F.C.A., F.C.C.A. – Director
Carlette DeLeon - Director
Stephen Greig, LL.B. – Director/Company
Secretary
Reggae Entertainment Television Limited
J.A. Lester Spaulding, C.D., J.P. – Acting
Chairman
Gary Allen, Gary Allen, Dip. Media &
Comm. (Hons.), E.M.B.A., J.P. – Director
Dennis Howard, Ph.D. – Director
David Geddes, M.B.A. – Director
Angela Patterson, B.Sc., M.B.A. - Director
Stephen Greig, LL.B. – Company Secretary
Jamaica News Network Limited
J.A. Lester Spaulding, C.D., J.P. – Acting
Chairman
Gary Allen, Gary Allen, Dip. Media &
Comm. (Hons.), E.M.B.A., J.P. – Director
Dennis Howard, Ph.D. – Director
David Geddes, M.B.A. – Director
Angela Patterson, B.Sc., M.B.A. - Director
Stephen Greig, LL.B. – Company Secretary
AUDIT COMMITTEE
Carl Domville
Glenworth Francis
J.A. Lester Spaulding
AUDITORS
PricewaterhouseCoopers
BANKERS
First Global Bank
National Commercial Bank Jamaica Limited
RBTT Bank Jamaica Limited
REGISTRAR AND TRANSFER AGENTS
Jamaica Central Securities Depository
40 Harbour Street
Kingston
REGISTERED OFFICE
Broadcasting House
32 Lyndhurst Road
Kingston 5, Jamaica W.I.
Directors and
CORPORATE DATA
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Radio Jamaica Limited Annual Report 2015
To receive the Accounts for the year ended
March 31, 2015 and the reports of the
Directors and Auditors thereon.
To consider and (if thought fit) pass the
following Resolution:
“THAT the Audited Accounts for the year
ended March 31, 2015 together with the
Reports of the Directors and Auditors thereon
be and are hereby adopted.
To elect Directors:
Pursuant to Article 90 of the Company’s
Articles of Incorporation, the retiring Director
who is eligible for re-election is:
J.A. Lester Spaulding
To consider and (if thought fit) pass the
following Resolution:
“THAT retiring director J.A. Lester Spaulding
be and is hereby elected a director of the
company”.
Pursuant to Article 98 of the Company’s
Articles of Incorporation, the retiring Directors
all of whom are eligible for re election are:
Carl Domville, Glenworth Francis, Andrew
Leo-Rhynie, Lawrence Nicholson
To consider and (if thought fit) pass the
following Resolutions:
“THAT retiring director Carl
Domville be and is hereby
elected a director of the company”.
“THAT retiring director Glenworth
Francis be and is hereby elected a
director of the company”.
“THAT retiring director Andrew
Leo-Rhynie be and is hereby
elected a director of the company”.
“THAT retiring director Lawrence
Nicholson be and is hereby
electeda director of the company”.
To re-appoint the Auditors and to authorize
the Directors to fix their remuneration.
To consider and (if thought fit) pass the
following Resolution:
“THAT Messrs. PricewaterhouseCoopers
having agreed to continue in office as
Auditors, the Directors be and are hereby
authorized to agree to their remuneration
in respect of the period ending with the
conclusion of the next Annual General
Meeting.”
A member entitled to attend and vote at
this meeting may appoint another person as
his proxy to attend and vote instead of him
and such proxy need not be a member of
the company. An appropriate form of proxy
is enclosed.
Dated this 24th day of June 2015.
BY ORDER OF THE BOARD
Stephen Greig, LL.B.
Secretary
Broadcasting House
32 Lyndhurst Road
Kingston 5, JAMAICA, W.I.
NOTICE IS HEREBY GIVEN that the Sixty-seventh Annual General Meeting of Radio Jamaica Limited will be held at the Jamaica Pegasus Hotel, 81 Knutsford Boulevard, Kingston 5, on Tuesday, September 15, 2015 commencing at 10:00 a.m. for the following purposes:
(i)
(ii)
(iii)
(iv)
1.
2.
a)
b)
3.
Notice of
MEETING
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Radio Jamaica Limited Annual Report 2015
PAM/JPS Employees Superannuation Fund 30,166,566
NCB Jamaica Limited 28,064,400
Ideal Portfolio Services 27,644,594
Mayberry West Indies Bank Limited 25,434,044
Grace Kennedy Limited Pension Scheme 16,757,994
Jamaica Co-operative Credit Union League 13,674,833
L.P. Azar Limited 12,937,688
Marlon C. Blake 11,000,000
King Alarm Systems 9,822,401
1VMBS A/C Contributory Pension Scheme 9,621,620
Gary Allen 12,025
Francois St. Juste 362,000
Stephen Greig 6,000
Yvonne Wilks 474,786
Gary Cole 0
Andrea Messam 23,422
Marcha Christie 0
Trevor Johnson 6,000
Claire Grant 120,289
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10
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TEN LARGEST No. of Units
DIRECTORS
SENIOR MANAGEMENT
J.A. Lester Spaulding 7,870,350
Carl Domville 317,607
Peter Chin 0
Minna Israel 0
Lawrence Nicholson 0
3,000
Gary Allen 12,025
Nadine Molloy 0
Andrew Leo-Rhynie 0
Glenworth Francis
Shareholders as at
MARCH 31 , 2015
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Radio Jamaica Limited Annual Report 2015
J.A. LESTER SPAULDING, C.D., J.P.Chairman
Appointed Managing Director 1978, Retired 2008, Chairman since 1994. Mr. Spaulding also
serves as Chairman on two and director on two other subsidiary boards in the Group, Chairman/Trustee for the Group Pension Fund and Co-Chair of the Digital Switchover Committee. Mr. Spaulding also serves as Director/Mentor on the boards of Lasco Distributors Ltd. and Lasco Manufacturing Ltd., Director of Guardsman Alarms Limited, JN Money Services Ltd and GV Media Group in London. He is a director of PALS Jamaica Limited, Caribbean Community of Retired Persons, JSPCA and Hope Zoo Preservation Boards.
GARY ALLEN, E.M.B.A., J.P. Managing Director
(Appointed June 2006) Managing Director (October 1, 2008). Mr. Allen is a career
journalist and Media Manager with experience in local, regional and international media. He has served RJR as a journalist and now in a management capacity for twelve years. At the regional level he served the Caribbean Broadcasting Union, (CBU), the Caribbean News Agency, (CANA) and the Caribbean Media Corporation (CMC). At CMC he rose to the position of Chief Operating Officer. He is a graduate of the Caribbean Institute of Media and Communications (CARIMAC), and the Mona School of Business (MSB) at the UWI, is a past chairman of the Media Association Jamaica Limited and is also past chairman of the Jamaica Debates Commission. He is Vice President of the CBU and Vice President of the Commonwealth Broadcasters’ Association.
CARL DOMVILLE, B.Sc. (Hons.), F.C.C.A., F.C.A. (Appointed June 1990) Mr. Domville was the Chief Operating Officer and Group
Treasurer of the Seprod Group of Companies (Retired October 2013). He serves on the Board of Directors of Barita Investments Ltd., is a Trustee of the Superannuation Fund for Employees of Seprod Ltd. and Approved Organizations and a member of The Teachers Services Commission.
GLENWORTH FRANCIS, B.Sc., E.M.B.A (Appointed April 2006) Mr. Francis is the Group Chief Executive Officer of the Jamaica Co-operative League. He serves
as a member of the Board of J.E.T.S. Limited (operator of the Multi Link debit card network), Credit Union Fund Management Company Ltd., Centralized Strategic Services Company and Quality Network Co-operative.
ANDREW LEO-RHYNIE, B.Sc. (Acctg.), M.B.A.
(Finance), Chartered Business Valuator (Appointed December 2011) Mr. Leo-Rhynie is the General
Manager at GK General Insurance Company Limited. Prior to joining the GraceKennedy Group in 2009, he was a Management Consultant at Sierra Associates Limited for 13 years where he provided management consulting and business valuation services to corporate clients.
MINNA ISRAEL, C.D., B.Sc.
(Management Studies), M.B.A. (Finance & General Management), J.P. (Appointed September 26, 2012)
Ms. Israel is currently Special Advisor to the Vice Chancellor on Resource Development at The University of the West Indies, with focus on philanthropy. A former banker for over 30 years, Ms. Israel served as President & Country Head of RBC Royal Bank Jamaica and Managing Director of Scotiabank (Bahamas) Limited. She serves on a number of boards
Directors’
PROFILES
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Radio Jamaica Limited Annual Report 2015
and organizations including First Global Bank, Cari-Med Limited, the Public Accountancy Board and is Chairperson of the Mona School of Business & Management. Minna is also the President of the International Women’s Forum, Jamaica.
PETER D. CHIN,B.Sc., M.B.A
(Appointed September 26, 2012) Mr. Chin is the President of Alliance Investment Management Limited, an
investment management company and licensed securities dealer. He is also President of Alliance Financial Services, a licensed Cambio and an Agent of MoneyGram International.
He has over thirty years’ experience in the fields of investment and financial management, commercial lending and project finance, providing services to major institutions.
Mr. Chin is also the Company Director of AMG Packaging and Paper Company Limited, a company listed on the Jamaica Stock Exchange Junior Market and is also a Director of Supreme Ventures Limited.
He is past president of the Munro College Old Boys’ Association and the first President of the Jamaica Securities Dealers Association.
An ardent sportsman, he is a member of the Caymanas Golf and Country Club, Constant Spring Golf Club and Kingston Cricket Club. He is also the Vice President of the Jamaica Golf Association.
NADINE A. MOLLOY, B.A. (Hons), M.A., M.L.S., J.P.
(Appointed September 26, 2012) Ms. Molloy is a secondary school principal with more than fourteen years’ service
and is currently the principal of Ardenne High School. She is a former president of
the Jamaica Teachers’ Association (JTA) and the Jamaica Association of Principals of Secondary Schools (JAPSS). She remains on the General Council of the Jamaica Teachers’ Association and is a member of the Caribbean Union of Teachers (CUT), as well as a director of the JTA’s Jamaica Publishing House Ltd.
A trained librarian, she has worked at the Brown’s Town Community College as a Senior Lecturer Librarian.
Miss Molloy is now a certified school inspector with the National Education Inspectorate.
Having served on several boards, she is also a member of the National Parenting Support Commission and Heritage Clubs of Jamaica.
Recently she was appointed a member of the Charities Appeal Tribunal.
Ms. Molloy was named LASCO/MoE Principal of the Year 2009.
LAWRENCE NICHOLSON, B.Sc., M.Sc., Ph. D.
Dr. Nicholson is a Lecturer in the Faculty of Social Sciences, Mona School of Business and Management, with over a
decade of experience in Decision Sciences. Among the courses he has taught are Business Statistics, Quantitative Methods and Operations Management He is also the head of the Decision Sciences and Information System Unit.
Dr. Nicholson is the Chairman of the Mona High School and the Steering Committee of the Poverty Reduction Programme (PRP).
He is a committed Christian and elder at Bethany Fellowship.
Directors’
PROFILES
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Radio Jamaica Limited Annual Report 2015
The Group enjoyed the
support of advertisers,
customers, clients
and staff for another
year for which on behalf of the
Board of Directors full gratitude
is extended. During the year, the
Group’s revenues exceeded two
billion dollars for the first time. The
management and especially the
advertising community must be
thanked for this.
The economic climate in which
the Group continues to operate is
lacking in growth and buoyancy,
both of which are requirements
for the company to accelerate its
growth and expansion. Without
growth we concentrate almost
exclusively on cost-cutting, which
in turn limits our capacity to invest
and expand creatively with self-
generated capital. Therefore,
while we made good progress;
increasing our revenues; held our
costs and improved our profitability
by 90%, it is a recovery from last year
and has come at a cost of timely
and adequate expansion. We wish
we could have done more.
The challenges are aggravated by
an electronic media which is not
being fairly regulated. Examples
abound of local advertising which
is not legal being broadcast
on foreign cable channels,
without regulatory or official
public comment. This “informal”
approach undermines the
CHAIRMAN’SSTATEMENT
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Radio Jamaica Limited Annual Report 2015
J.A. Lester Spaulding, C.D, J.P
electronic media sector but especially
Radio. We see the widespread use of
illegally obtained television content and
channels, unfairly competing with our
stations while we are required to defend
our acquisitions when we seek to abide
by the copyright laws and do the right
thing.
Our future requires more certainty and
support in policy application, regulation
and compliance monitoring.
Yet, we have continued to serve the
community in extraordinary ways,
through our outreach, partnering
and civic contributions. This was
demonstrated in the heights of the
Chick V health crisis and through our
support for the young and the elderly in
our projects and more.
We continue to build the business by
embracing new technological platforms
and have embarked on the exciting
ubiquitous “1spotmedia” innovation. This
will expand our local video and audio
reach to new media platforms, while
introducing into the Group, our ability to
expand our reach globally on all mobile
platforms connected to the internet.
This revenue generating addition to
the group will build foreign currency
earnings from overseas markets.
The Board of Radio Jamaica Limited and
its subsidiary Boards met 52 times during
the year under review with over 96%
attendance by Directors. The Boards
received and analysed management
reports, including Accounts, Budgets,
Technology and Marketing plans
and were satisfied that appropriate
management practices are being
maintained throughout the Group.
The Finance and Compliance
Committee met quarterly and the Audit
Committee with internal auditors Ernst &
Young, monitored the implementation
of policies and their appropriate
application. The Committee assisted us
to strengthen internal controls and stay
in step with contemporary corporate
governance practices and generally
maintain the best operational positions
for stakeholders.
Your Board participated in a formal
Corporate Governance Seminar and
further achieved the creation and
formal approval of the following;
a. Corporate Governance Policy
– available on our website,
www.rjrgroup.com
and
b. Revised Charters for Audit and
Finance & Compliance
Committees.
With credibility, business and civic
integrity continuing to be the mantra
in what we do every day, we thank all
those who enabled us to give another
year of service to shareholders and
stakeholders alike.
CHAIRMAN’S Statement
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lthough the national
economy performed
sluggishly, parent
company Radio Jamaica
Limited and the companies in the RJR
Communications Group improved
their performances during the
financial year 2014-2015, ending the
period with Net Profit After Taxes of
$113.3M, a 90% improvement over the
previous year.
The $53.8M improvement in profits
was driven by growth in revenues and
containment of costs.
Expense management was within
budget and flowed to the bottom-
line.
The Group’s five year strategy of
“Going Global for Growth and
Profitability”, now in its third year,
gained more traction, especially in
television programme sales, some
broadcast rights sales and improved
new media service earnings through
an innovative new technology.
TVJ AND TVJ-SN
Television Jamaica introduced the
region’s first Over the Top Technology
(OTT), a new media platform on
which we place radio and television
live and delayed content, that can
be accessed anywhere in the world
by anyone with access to the internet.
This technology allows reliable and
MANAGINGDIRECTOR’S STATEMENT
A
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enhanced access at lower than usual
internet bandwidth speeds.
However, its true value is how it grows
our revenue options and streams from
hard currency markets. Branded as
“1spotmedia”, the Group’s new OTT
platform allows for our radio and
television stations to be streamed
in Jamaica free of cost, but at the
same time allows earnings from both
advertising and subscription revenues
overseas. Simultaneously it allows
us to expand our clientele and offer
advertising opportunities for Jamaican
companies with products directed at
the Diaspora or International markets.
Also released in the last month of
the financial year was the portal
“1spotevents” which adds a pay-per-
view component to the platform that
is used for special events to tap into
global audience interests in Jamaican
content. The ISSA Boys and Girls Champs
product 2015 was the first event tried on
this portal and it was successful based
on the investment and promotion that
was done.
It is important to note that global media
analysts see the OTT platform as the
strongest media business addition for the
future of broadcasters and they see that
when combined with traditional media
of radio and television it is the best way
to extend business life or transform and
transition traditional advertising driven
business to a viable digital media
business. It was also announced in June
(2015) that in the United States earnings
from OTT services for last year have
outstripped TV earnings.
Besides our investment in the OTT
platform and services in the year under
review, we also invested in a significantly
upgraded transmitter network for TV
in Eastern Jamaica to be located in
Yallahs Hills, St. Thomas. Commissioning
into service of that transmitter, which
also has digital transmission capabilities,
will vastly improve television reach and
quality in St. Thomas, St. Andrew and
possibly sections Portland.
The commissioning will be done
between first and second quarter of the
2015-2016 financial year.
Overall TVJ dominated the media
market. Its strong management team
recorded many successes.
The brand has been able to find strength
and success in its position in the market
place along with improved systems
and functioning of the marketing,
programming and production functions.
Top line special programmes for the
year included:
1. The World Cup counter
programming (June – July)
2. The Caribbean Premier League
(July - August)
3. Empire television series season
1 (January – March)
4. Commonwealth Games (July -
August)
5. Red Stripe Premier League
MANAGING Director’s Statement
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(September – April)
6. Jazz and Blues (January)
7. Miss Universe (January)
8. Schoolboy Football
(September – March)
9. ISSA Boys and Girls Champs
(March)
10. ISSA Boys and Girls Champs
pay per view
11. TVJ’s Junior Schools’ Challenge
Quiz
12. TVJ’s Schools’ Challenge Quiz
This list of programmes gave TVJ
extraordinary outcomes in audience
interaction, revenue generation,
infrastructure expansion and brand
equity value.
TVJ was again blessed with success
from strategic choices made in foreign
content acquisitions in a big way adding
to the brand mantra of being the
Nation’s Station. Miss Universe had the
nation up all night on Sunday January
25th as Jamaica’s Kaci Fennell turned
heads in the run up to the competition
and on the night made it to the top 5.
This was quickly followed by the start of
Empire a new series with a predominantly
black cast that turned out to be the
biggest series released from the United
States in ten years.
TVJ moved the Free to Air Broadcast of
foreign series content to another level
as it was being shown in Jamaica within
the week that it aired in the US which has
never done before in Jamaica. Cable
providers were notified of the potential
breach of TVJ rights if they did not block
the content on their platforms.
TVJ was again the home of the
Caribbean Premier League cricket
competition with airing supported on
TVJ SN. This property along with the
Commonwealth Games, were strategic
acquisitions since we did not have the
rights to air the Football World Cup.
At the end of the World Cup counter
programming we also announced that
the 2018 World Cup would return home
to TVJ.
The 2015 winner of TVJ’s Schools’
Challenge Quiz was Ardenne High,
winning their sixth title. They beat St. Jago
High which was playing its seventh final.
In TVJ’s Junior Schools’ Challenge Quiz
St. Richards Primary were the winners
over Mona Preparatory in the 2014
edition, while in TVJ’s All Together Sing
top spot for 2014 went to Meadowbrook
High, ahead of Titchfield and St Andrew
Technical High Schools.
TVJ-SN continues to provide able support
to the flagship brand with sporting
coverage.
RADIO SERVICES
The radio segment of the media industry
is the most challenging at present. There
are now well over 30 radio stations,
some internet radio stations and other
new media streams and services
seeking advertising support, which in the
process have taken significant revenues
MANAGING Director’s Statement
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from earlier radio stations.
This is forcing more innovation in radio,
and caused us to seek to refresh and
change aspects of radio, in order to be
attractive to an audience that is now
choosing between a greater number of
stations and a greater number of media
options. While we made progress during
the financial year, the benefits will
take some time to flow through to the
improvement in profitability in radio.
Still, RJR 94 FM, FAME 95 FM and Hitz 92
FM which each has a separate niche in
the market are filling needs. RJR 94 FM
continues to be the flagship provider of
news and information with regular news
bulletins throughout the day. The station
mirrors that rich culture of the society
and addresses the issues of the people.
Interaction with the public is a mainstay
that has expanded with the staples
of calls and texts now expanded with
social media communication and the
diaspora ‘call-in and listen’ lines features
in the USA and the UK.
FAME 95 FM – The Entertainment Capitol
of Jamaican Radio has made strides
with the tertiary market of young adults.
The station continues to derive revenues
from event marketing with another
successful series of Road and Property
Parties. The station has a very strong and
growing presence on social media.
Hitz 92 FM boasts the best coverage of
live sports in Jamaica as well as sports
information and talk shows. All this, while
delivering a steady staple of Jamaican
music every day. The Hitz Squad is a
tightly knitted group of personalities that
is easy to identify with the HITZ Squad
which has become deeply embedded
in our country’s culture.
NEWS AND SPORTS
The commitment of our Group to
credible news continued during
the year with a steady focus on
maintaining credibility rather than being
sensational. The news team achieved
this with significantly increased original
and exclusive stories and Access To
Information researched material. This
resulted in the Newscentre breaking
several major stories including the high
cost of the West Kingston Commission
of Enquiry and an assessment of the
potential value for money. The high cost
of Ministerial mobile phone bills was also
a major story that our newsroom broke.
The RJR News Centre also pulled off a
major coup, securing the only interview
with IMF Managing Director Christine
Lagarde during her visit to Jamaica. We
also covered the major US Caribbean
Energy Summit in Washington D.C.
involving Caribbean Heads of
Government while our newsroom
was the only Jamaican newsroom to
cover the Annual General Meeting of
the Caribbean Development Bank in
Barbados.
RJR News led the way in its coverage of
the outbreak of the Chikungunya Virus in
Jamaica even the impact on the team
was extensive. We collaborated with
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the Medical Association of Jamaica
to stage a public forum on Chik V and
played our civic role by producing the
first public awareness campaign on air
during the crisis.
We also covered the death and funeral
of former Governor General Sir Howard
Cooke.
TVJ’s All Angles with Dionne Jackson
Miller won the CBU Best Investigative
Award for the documentary “the
bleaching phenomenon.” RJR News’
Marilyn Facey copped two awards at
the CBU Awards for best documentary
radio, and best children and youth
issues. We also won eight awards at the
Press Association of Jamaica, National
Awards Ceremony, in November. The
awards went to Nadine McLeod,
Marilyn Facey, Dashan Hendricks, Andre
Jebbinson, and Kirk Wright.
The News Centre also commenced using
other new technology in presentations,
including a mobile on the spot reporting
unit demonstrated in numerous live
reports during the Riverton City fire, the
JLP internal issues, among other stories.
In sports the department championed
in many areas, including providing the
most incisive analysis of World Cup
Football finals in 2014 on TVJ to add to
the live coverage and radio analysis on
HITZ 92FM.
We also sent Oral Tracey to Brazil to do
his unique brand of sports commentary
and reporting on the World Cup Finals.
Our well received coverage of the
ISSA Grace Kennedy Boys’ and Girls’
Championships was another blast on
TVJ and Hitz 92FM, as we also executed
excellent coverage of the Jamaica
International invitational Meet; through
Adrian Brown we provided coverage
of the CARIFTA Games from Martinique
and had our Ricardo Chambers from
Philadelphia providing coverage of
the Penn Relays on HITZ92FM before
he went to cover the Youth Olympics
from Nanjing, China. We also showed
one hour highlights of the World
Junior Athletics Championships where
Jaheel Hyde excelled; in addition
we had LIVE coverage of another
successful campaign by Jamaica from
Commonwealth Games in Glasgow,
Scotland.
RETV- REAL JAMAICAN TV
RETV continued to build on its expanded
identity beyond just reggae music
videos to become a truly Jamaican
lifestyle station. This was propelled by its
new tag line “ Real Jamaican Television”
which showcased the best in Jamaican
culture.
New programming drove this identity
with engaging new content including
Wedding Dreams, a showcase on
the best in Jamaican weddings and
bridal traditions, Real Extreme Sports
a programme with non-traditional
sports being enjoyed in Jamaica like
paragliding, surfing and drift racing.
This with complimented with staple
entertainment programmes like 876 Real,
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Entertain Squeeze and Best of Videos.
The station was the preferred choice for
all the major parties and events such as
Dream Weekend, Reggae Sumfest, Jazz
and Blues, as well as being the station of
choice for video premieres by Koshens,
Voicemail, I- Octane among others.
JNN - JAMAICA NEWS NETWORK NEWS WORTH WATCHING
JNN is the only local 24 hour all news
station in Jamaica and is driven by a
strategy to be identified as the source
for current affairs, news headlines
and health related programming.
The station enjoyed another year of
engaging content following breaking
news and current socio political events
. The highlights included gavel to
gavel coverage of the West Kingston
Commission of Enquiry, together with
updates and live recaps in between
sessions. The station also continued its
documentary series with features on
Marijuana Medicine and Money, Living
Below the Poverty Line, Reggae Music-
the Evolution of Jamaican Music and
Tivoli Gardens for a better tomorrow,
among others.
Programming on the station includes
Live Coverage of Parliament and of Post
Cabinet Press Briefings.
The recently achieved profitability in our
cable channels was supported by those
activities during the financial year under
review.
COMMERCIAL AND MULTI-MEDIA STRATEGY
Multi-Media Jamaica Limited ended
this financial year stronger and better
focused than it started. In all areas
of the business, with the exception of
Background Music Services, the business
grew. MMJ also added two new
revenue streams, magazine publishing
and obituaries-on-line.
The period under review was therefore,
very productive, driven by a number
of strategic imperatives which were
underpinned by another Group
corporate objective of increasing our
overall on-line engagement with our
diverse audiences.
Multi-Media functions of managing Web
Services; Graphic Design; Background
Music; AV Rental was infused with a new
Commercial Strategy. This essentially
means that our entry into magazine
publishing will be managed through
MMJ, that has the leadership position in
marketing our nine (9) websites.
Point of focus began with strengthening
our RJR News Online product. Then our
News On The Go product benefitted
from a redesigned format and more
frequent alerts being sent to our
thousands of customers.
Importantly our graphic design expertise
has allowed us to successfully carve
out a profitable niche in the magazine
segment.
MANAGING Director’s Statement
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The 54th National Sportsman and
Sportswoman of The Year awards, is the
oldest sports awards in the Caribbean
and in our tenth year of staging it has
shown growth beyond recognition
to take it rightful place as the “Sport
Oscars” of the Caribbean.
The RJR Sports Foundation continues
to host these prestigious awards
celebrating the triumphs from the
preceding year. The awards ceremony
is televised live on Television Jamaica,
TVJ Sports Network and Hitz FM. Over
the past three (3) years we have been
broadcasting in 22 Caribbean countries
as well.
The recipient of the 54th Sportsman
of the Year 2014 was boxer Nicholas
“Axeman” Walters; Sportswoman of
the Year 2014 was Alia Atkinson. The
Sagicor Iconic Award went to Donald
Quarrie while Alicia Ashley copped the
Chairman’s Award.
ENGINEERING
In support of all the content
developments, our technology services
unit did well. The Department efficiently
undertook several major projects for the
Group, including the procurement and
installation of three new digital radio
transmitters deployed at Mount Airy in
Westmoreland, Spur Tree and Huntley
in Manchester. They replaced obsolete
units.
Coverage improvement was provided
for radio in Clarendon, Manchester,
Hanover, Westmorland St. Elizabeth, St.
Catherine and parts of Trelawny.
HUMAN RESOURCES
The HR Department hosted its annual
staff health fair with three new additions
in the delivery of services this year
including a chiropractor, a beautician,
and a team of lifestyle experts.
Training and certification of staff
continued in Information Technology,
Report Writing, Project Management,
Occupational Safety and Health, and
Leadership.
For two quarters in the year under
review the Group’s productivity level
was severely compromised by the
impact of the Chikungunya virus (Chic
V). The area of greatest impact was on
our initiaves to reduce accumulated
vacation leave. Many staffers who were
due to proceed on vacation, went on
sick leave instead; and some of those
who were to take vacation leave had
to defer without penalty, as they were
unwell.
The Group continued to use many
short term contracts to undertake
programmes and events as projects.
As a result, the full time staffing levels
remained stable, though changes were
seen in the freelance and contract
numbers.
CUSTOMER SERVICE
Our approach to ensuring profitability
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through innovation and the use of
new technologies requires having a
continuously trained workforce with
stronger customer service skills. Our
conviction is that a commitment to
those professional ideals will result in an
increased competitive advantage as a
credible information source, a credible
source of providing the best value in
media and a credible technology
source to continue our global growth
objectives.
SOCIAL OUTREACH
While not departing from our core value
of being a good corporate citizen we
continued to work with the Golden
Age Home, the St. Andrew C.A.R.E
Centre fundraising project with the St.
Andrew Parish Church, to help street
boys; the RJR/Citizens’ Advice Bureau
Basic School. This year we contributed
to the Muirton Boys Home in Portland,
the Manning Boys Home in St. Elizabeth
and the Savana la mar Infirmary in
Westmorland during our annual Cross
Country promotion.
Golden Age Home – Cluster C
For the over seventy senior citizens of
Cluster C, RJR again rose to the occasion
and provided several special days of
care for the male and female residents.
In observation of Independence
celebrations in 2014, twenty of the
residents were in attendance at
the Independence service, at the
Swallowfield Chapel. Additionally, other
residents were taken to the Little Theatre
to enjoy the Princess Boonoonoonous
Pantomime.
Citizens Advice Bureau/RJR Basic
School
For our cherished little ones aged 3 - 6
years at the Citizens Advice Bureau/
RJR Basic School, the Group continued
to support their Career Day activities,
Spelling Bee competition and Sports
Day. The red team named for Chairman,
Mr. J.A. Lester Spaulding was the overall
winner. The children were also treated to
educational tours of great interest, and
the Group’s participated in repairs to
the school campus.
As we commit to live by our mission
statement, it is clear that the road
ahead has many challenges, but it also
has some exciting opportunities. Many
of them are already being embraced
by the company. On the horizon, the
company needs the support of a fair
and equitable regulatory framework
and fair regulation, especially of the
content is aired. Once we have that
fairly regulated framework we are
confident of reaping more and more
success in the years to come.
Gary Allen, J.P
MANAGING Director’s Statement
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24
Radio Jamaica Limited Annual Report 2015
The Sixty-Seventh Annual Report of Radio Jamaica LimitedThe Directors are pleased to present their report for the financial year ended March 31, 2015.
Financial Results
The Directors as at March 31, 2015 were as follows:
J.A. Lester Spaulding – Chairman Minna IsraelGary Allen Peter Chin Carl Domville Nadine MolloyGlenworth Francis Andrew Leo-RhynieLawrence Nicholson
In accordance with Article 90 of the Company’s Articles of Incorporation, Mr. J.A. Lester Spaulding, having attained the age of 70 years since the last Annual General Meeting will retire but is eligible for re-election up to but not exceeding the age of 75 years or until the next Annual General Meeting when he can offer himself for re-election.
In accordance with Article 98 of the Company’s Articles of Incorporation, Messrs. Carl Domville, Glenworth Francis, Andrew Leo-Rhynie and Lawrence Nicholson will retire by rotation and being eligible offer themselves for re-election.
The company auditors, PricewaterhouseCoopers have indicated a willingness to continue in office pursuant with the provisions of Section 153 of the Companies Act.
The Directors wish to place on record their appreciation and recognition of the dedicated efforts and hard work given by the officers and staff of the company and its subsidiaries.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
………………………………………………..J.A. Lester Spaulding, Chairman
Directors’
REPORT
$’000
Profit before Taxation $138,969Taxation ($25,695)
Net Profit $113,274
Retained Earnings at beginning of the year $736,399 Retained Earnings at the end of the year $842,810
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25
Radio Jamaica Limited Annual Report 2015
Management
DISCUSSION AND ANALYSISThe financial year 2014-2015 was another
difficult year for the Media Industry as
the industry continued to be impacted
by the economic environment of the
sluggish local economy. Notwithstanding
the economic conditions, Radio
Jamaica Limited Consolidated Financial
Statement reflected a Net Profit After
Taxes of $113.3 million compared with
a Net Profit After Taxes of $59.5 million
in the previous year. The 90% or $53.8
million improvement resulted from
the company’s success in increasing
its revenues from sporting events,
special events and online services and
containing its expenses within budget.
The managements’ contined focus
on the five year strategic plan of
Going Global for Greater Profitability
has resulted in the introduction of our
online new media technology service
“One Spot Media”. With a soft launch
in March 2015, the service which is the
first of its kind in Jamaica has already
garnered over twenty-seven thousaad
subscribers across the United States of
America the United Kingdom, Canada,
the Caribbean, Africa, Austrialia, Asia,
Malaysia, Chile, Argentian, India, Israel,
Uruguay, and Saudi Arabia.
One Spot Media is an online platform
that is available to anyone, anywhere in
the world who has access to the internet
via any device, including phones,
tablets, laptop, and desktop computers
as well as set top boxes used with various
digital media devices.
For the first time in its history the Group
reported total revenues of over $2 billion. The
$2.05 billion for the period ending March 2015
was $204.9 million or 11% more than that of the
previous year . This was achieved by strategic
programming to include the acquisition of
local sporting broadcast rights, expansion of
online services to include the launch of “One
Spot Media” and the continuation of low
cost but high qualtiy commericals revenues.
Direct Expenses increased by 6.4% or $53.3
over prior year largely due to additional
costs associated with broadcast rights for
FINANCIAL HIGHLIGHTS
new sporting properties acquired across the
group and additional foreign programming
on Television Jamaica Ltd.
Other Operating Income increased by $2.5
million on prior year driven mainly by the
net effect of increases in foreign exchange
gains during the year and reduction in
compensation for damages and new site
rental in the prior year.
Selling Expenses of $332 million were higher
than prior year by $25 million or 8.2%. The
J$60,000
J$80,000
J$100,000
-J$40,000
J$40,000
-J$20,000
J$20,000
J$0
-29,845
87,407
$59,476
2011 2012 2013 2014 2015
J$120,000
J$140,000
132,828
$113,274
Net Profit/(Loss) After Taxes (2009-2013)
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26
Radio Jamaica Limited Annual Report 2015
increase in this cost is commensurate with
that of revenue increases of the Group.
The Group’s Administrative Expenses of $469
million reflected an increased by 15.6% on
prior year as a result of high depreciation
costs associated with the acquisition of digital
assets aimed at improving transmissions and
operating systems, salary increases and
higher general insurance cost
There was a less than 1% increase in the
Group’s Other Operating Expenses of
$333 million during the financial year. The
minor increase was achieved through the
management of electricity usage, internet
and other information telecommunication
Management
DISCUSSION AND ANALYSIS
2011 2012 2013 2014 2015
J$1,700,000
J$1,650,000
J$1,750,000
J$1,800,000
J$1,850,000
J$1,900,000
J$1,950,000
J$2,000,000
J$2,050,000
J$2,100,000
$1,944,590
$1,828,840
$1,783,997
$1,844,190
$2,049,050
Gross Revenues
(2009-2013)
600,000
700,000
800,000
900,000
500,000
400,000
300,000
200,000
100,000
2014
Operating Expenses
2014 vs 2015
Direct
Expenses
Selling
ExpensesAdministration
Expenses
Other
Operating
Expenses
J$8
11
,32
6
J$8
63
,61
5
J$3
06
,75
0
J$3
31
,82
4
J$4
05
,39
0
J$4
68
,81
7
J$3
30
,95
9
J$3
33
,54
7
2013
costs as well as staff overtime costs.
Finance Costs of $25.7 million decreased by
$2 million due to the expiration of a loan.
At March 2015, the Group’s Pre-Tax Profits of
$164.7million represented an improvement of
64% or $63.9 million on that of March 2014.This
was achieved on the back of a $149.5 million
turnaround in the financial year 2013-2014.
Intangible Assets reduced by $155.8 million
largely due to the third party termination of
the original FIFA World Cup broadcast rights
for 2015-2022. The company recovered the
full amounts in cash that contributed to our
improved cash and short term investments
of $457.8 million compared to $155 million for
the corresponding period in the prior year.
Subsequent to year-end the Group secured
the broadcast rights for the 2015-2018 FIFA
events
The Group’s Total Assets increased by $90.7
million or 5.8% during the financial year and
the Shareholders’ Equity rose by 8.8% or
$106.4 million
Long term loans reduced by $36.5 million
during the year as the loan portofolio is paid
down and one loan expired.
$150,000
$200,000
$(100,000)
$100,000
$(50,000)
$50,000
$-
-J$76,628
J$146,521
J$72,905
J$186,265
2009 2010 2011 2012 20132011 2012 2013 2014 2015
J$164,693
Total Assets ($000)2011 - 2015
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27
Radio Jamaica Limited Annual Report 2015
The Group’s business segments are based on
the reports reviewed by the company’s Board
of Directors that are used in making strategic
business decisions. The Group is organised
in two main business segments based on its
business activities. Operating results for each
segment are used to measure performance,
as management deems that information to
be the most relevant in evaluating segments
relative to other entities that operate within
these industries. The designated segments
are:-
1. Audio Visual, comprising the
operations of the group’s
free-to-air television station and its
cable stations; and
2. Radio and Other, comprising the
operations of the group’s radio
stations and radio infrastructure
At the March 31, 2015 the Company’s shares
traded at $1.36 cents up 7 cents on the $1.29
cents at March 2014. Earnings per share
improved by 88.2% on 2014 from (17 cents)
to 32 cents.
ONE Caribbean Media Limited (Formerly,
Caribbean Communications Network (CCN)
The Company currently holds 48,254 shares
in OCM with fair value of $19.3 million up
from $16.3 million at March 31, 2014. OCM
is a multi media company which operates
in Trinidad & Tobago, Barbados, Grenada,
Guyana, Antigua and St.Lucia. Shares of the
OCM are listed on the Trinidad & Tobago
Stock Exchange and traded at TT22.3 at the
end of March 2015 compared to TT20 at the
end of March 2014 reflecting an increase of
TT2.3 or 11.5%
Management
DISCUSSION AND ANALYSISBUSINESS SEGMENTS
STOCK PRICE
INVESTMENTS
2011 2012 2013 2014 2015
5
0
10
10
5
15
20
25
30
35
40
24
17
32
37
-9
Earnings (Cents)2011 - 2015
2011 2012 2013 2014 2015
J$1,300,000
J$1,250,000
J$1,350,000
J$1,400,000
J$1,450,000
J$1,500,000
J$1,550,000
J$1,600,000
J$1,650,000
J$1,700,000
$1,415,499$1,436,583
$1,496,651
$1,573,087
$1,663,838
Total Assets ($000)2011 - 2015
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radio jamaica limitedFinancial Statements | March 31, 2015
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In d ep en d en t Au d it o r ’s R ep o r t
To the Members of Radio J amaica Limited
Re po rt o n th e Co n s o lidate d an d Co m pan y Stan d-Alo n e Fin an cial State m e n tsWe have audited the accompanying consolidated financial statements of Radio Jamaica Limited and its
subsidiaries, set out on pages 1 to 55, which comprise the consolidated balance sheet as at 31 March 2015, and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory
information, and the accompanying financial statements of Radio J amaica Limited standing alone, which comprise the balance sheet as at 31 March 2015, and the statements of comprehensive income, changes in
equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.
M a n a g em en t ’s R es p o n s ib ili t y fo r t he Co n s o lid a t ed a n d
Co m p a n y St a n d -Alo n e Fin a n cia l St a t em en t s
Management is responsible for the preparation of consolidated and company stand-alone financial
statements that give a true and fair view in accordance with International Financial Reporting Standards and with the requirements of the J amaican Companies Act, and for such internal control as management
determines is necessary to enable the preparation of consolidated and company stand-alone financial statements that are free from material misstatement, whether due to fraud or error.
Au d it o r ’s R es p o n s ib ili t y
Our responsibility is to express an opinion on these consolidated and company stand-alone financial statements based on our audit. We conducted our audit in accordance with International Standards on
Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and company stand-alone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated and company stand-alone financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated and company stand-alone financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation of consolidated and company stand-alone financial statements that give a true and fair view 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated and company stand-alone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Pricew aterhouseCoopers, Scotiabank Centre, Duke Street, Box 372, Kingston, Jam aica
T: (876) 922 6230 , F: (876) 922 7581, w w w .pw c.com / jm
C.D.W. Maxwell E.A. Crawford P.E. Williams L.A. McKnight L.E. Augier A.K. Jain B.L. Scott B.J. Denning G.A. Reece P.A. Williams R.S. Nathan
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Me m be rs o f Radio Jam aica Lim ite d In de pe n de n t Audito r’s Re po rt Page 2
Op in io n
In our opinion, the consolidated financial statements Radio J amaica Limited and its subsidiaries, and the
financial statements of Radio J amaica Limited standing alone give a true and fair view of the financial position of Radio J amaica Limited and its subsidiaries and the Radio J amaica Limited standing alone as at
31 March 2015, and of their financial performance and cash flows for the year then ended, so far as concerns the members of Radio J amaica Limited, in accordance with International Financial Reporting Standards and the requirements of the J amaican Companies Act.
Re po rt o n Oth e r Le gal an d Re gulato ry Re quire m e n tsAs required by the J amaican Companies Act, we have obtained all the information and explanations 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 J amaican Companies Act, in the manner so required.
Chartered Accountants 1 J une 2015 Kingston, J amaica
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40Radio Jamaica Limited Annual Report 2015
Radio Jamaica Limited
Consolidated Statement of Comprehensive Income
Year ended 31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Note2015
$’000
2014
$’000
Revenue 2,049,050 1,844,190
Direct expenses (863,615) (811,326)
Gross Profit 1,185,435 1,032,864
Other operating income 5 113,446 110,940
Selling expenses (331,824) (306,750)
Administration expenses (468,817) (405,390)
Other operating expenses (333,547) (330,959)
Operating Profit 164,693 100,705
Finance costs 8 (25,724) (27,800)
Profit before Taxation 138,969 72,905
Taxation 9 (25,695) (13,429)
Net Profit 113,274 59,476
Other Comprehensive Income, net of taxes -
Item that will not be reclassified to profit or loss -
Re-measurements of post-employment benefits 9 10,699 (42,307)
TOTAL COMPREHENSIVE INCOME 123,973 17,169
Earnings per Ordinary Stock Unit Attributable to Stockholders of the Company 12 $0.32 $0.17
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41Radio Jamaica Limited Annual Report 2015
Radio Jamaica Limited
Consolidated Balance Sheet
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Note2015$’000
2014$’000
Non-Current Assets
Fixed assets 13 839,480 912,914
Intangible assets 14 22,404 178,112
Retirement benefit assets 15 226,432 189,802
Investment securities 18 19,353 16,356
Current Assets
Inventories 19 25,485 40,658
Receivables 22 379,046 369,923
Taxation recoverable 8,898 5,140
Cash and short term investments 23 457,849 155,075
871,278 570,796
Current Liabilities
Payables 24 282,641 275,290
Taxation payable 32,468 19,603
315,109 294,893
Net Current Assets 556,169 275,903
1,663,838 1,573,087
Stockholders’ Equity
Share capital 25 467,656 467,656
Retained earnings 842,810 736,399
1,310,466 1,204,055
Non-Current Liabilities
Finance lease obligations 26 25,545 25,193
Long term loans 26 194,637 231,161
Deferred tax liabilities 16 65,187 59,597
Retirement benefit obligations 15 68,003 53,081
1,663,838 1,573,087
Approved for issue by the Board of Directors on 29 May 2015 and signed on its behalf by:
J.A. Lester Spaulding Director Gary Allen Director
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42Radio Jamaica Limited Annual Report 2015
Radio Jamaica Limited
Consolidated Statement of Changes in Equity
Year ended 31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Number of Shares
ShareCapital
Retained Earnings Total
Note ’000 $’000 $’000 $’000
Balance at 1 April 2013 350,154 467,656 719,230 1,186,886
Total comprehensive income - - 17,169 17,169
Balance at 31 March 2014 350,154 467,656 736,399 1,204,055
Total comprehensive income - - 123,973 123,973
Ordinary dividends 11 - - (17,562) (17,562)
Balance at 31 March 2015 350,154 467,656 842,810 1,310,466
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43Radio Jamaica Limited Annual Report 2015
Radio Jamaica Limited
Consolidated Statement of Cash Flows
Year ended 31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
2015$’000
2014$’000
Cash Flows from Operating Activities
Net profit 113,274 59,476
Items not affecting cash:
Depreciation and amortisation 129,690 102,616
Fixed assets adjustment - 72
Gain on disposal of fixed assets (5,192) (1,705)
Spares utilised 3,748 5,048
Interest income (6,223) (8,056)
Dividend income - (545)
Interest expense 25,724 22,326
Income tax charge 25,695 13,429
Exchange gain on foreign currency balances (41,813) (3,369)
Retirement benefits (11,009) (22,719)
Revaluation of investment securities (2,997) (4,940)
230,897 161,633
Changes in operating assets and liabilities:
Inventories 15,173 10,175
Receivables (9,123) 49,618
Payables 1,654 (18,379)
238,601 203,047
Income tax paid (10,998) (4,576)
Net cash provided by operating activities 227,603 198,471
Cash Flows from Investing Activities
Proceeds from disposal of fixed assets 5,312 2,230
Purchase of fixed assets and intangibles(1) (71,945) (306,643)
Refund of/Part payment on broadcast rights 216,827 (94,559)
Interest received 6,223 8,056
Dividends received - 545
Net cash provided by/(used in) investing activities 156,417 (390,371)
Cash Flows from Financing Activities
Loans received - 75,000
Loans repaid (35,348) (24,300)
Principal lease repayments (6,957) (1,446)
Interest paid (24,477) (22,326)
Dividends paid (17,562) -
Net cash (used in)/provided by financing activities (84,344) 26,928
Increase/(decrease) in cash and cash equivalents 299,676 (164,972)
Exchange gains on cash and cash equivalents 3,098 3,369
Cash and cash equivalents at beginning of year 155,075 316,678
Cash and Cash Equivalents at End of Year (Note 23) 457,849 155,075
The principal non-cash transaction was the acquisition of fixed assets under finance lease of $10,583,000.
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44Radio Jamaica Limited Annual Report 2015
Radio Jamaica Limited
Company Statement of Comprehensive Income
Year ended 31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Note2015
$’0002014
$’000
Revenue 554,065 552,075
Direct expenses (238,924) (223,768)
Gross Profit 315,141 328,307
Other operating income 5 122,317 117,987
Selling expenses (124,047) (119,523)
Administration expenses (192,061) (181,518)
Other operating expenses (124,032) (150,293)
Operating Loss (2,682) (5,040)
Finance costs 8 (18,958) (19,247)
Loss before Taxation (21,640) (24,287)
Taxation 9 8,476 10,293
Net Loss (13,164) (13,994)
Other Comprehensive Income, net of taxes -
Item that will not be reclassified to profit or loss -
Re-measurements of post-employment benefits 9 9,570 (36,138)
TOTAL COMPREHENSIVE INCOME (3,594) (50,132)
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45Radio Jamaica Limited Annual Report 2015
Radio Jamaica Limited
Company Balance Sheet
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Note2015
$’0002014
$’000
Non-Current Assets
Fixed assets 13 269,201 283,943
Intangible assets 14 9,158 -
Retirement benefit asset 15 185,565 157,757
Investment in subsidiaries 17 431,924 431,924
Investment securities 18 19,353 16,356
Current Assets
Inventories 19 5,674 10,558
Due from subsidiaries 20 782 275,591
Receivables 22 122,346 123,138
Taxation recoverable 5,785 4,632
Cash and short term investments 23 457,540 154,742
592,127 568,661
Current Liabilities
Payables 24 133,440 134,945
Due to subsidiaries 20 88,003 -
221,443 134,945
Net Current Assets 370,684 433,716
1,285,885 1,323,696
Equity
Share capital 25 467,656 467,656
Retained earnings 592,468 613,624
1,060,124 1,081,280
Non-Current Liabilities
Finance lease obligations 26 10,182 12,860
Long term loans 26 161,193 179,195
Deferred tax liabilities 16 8,038 13,324
Retirement benefit obligations 15 46,348 37,037
1,285,885 1,323,696
Approved for issue by the Board of Directors on 29 May 2015 and signed on its behalf by:
J.A. Lester Spaulding Director Gary Allen Director
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46Radio Jamaica Limited Annual Report 2015
Radio Jamaica Limited
Company Statement of Changes in Equity
Year ended 31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Number of Shares
ShareCapital
Retained Earnings Total
Note ’000 $’000 $’000 $’000
Balance at 1 April 2013 350,154 467,656 663,756 1,131,412
Total comprehensive income - - (50,132) (50,132)
Balance at 31 March 2014 350,154 467,656 613,624 1,081,280
Total comprehensive income - - (3,594) (3,594)
Ordinary dividends 11 - - (17,562) (17,562)
Balance at 31 March 2015 350,154 467,656 592.468 1,060,124
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47Radio Jamaica Limited Annual Report 2015
Radio Jamaica Limited
Company Statement of Cash Flows
Year ended 31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
2015$’000
2014$’000
Cash Flows from Operating Activities
Net loss (13,164) (13,994)
Items not affecting cash:
Depreciation and amortisation 32,116 31,708
Fixed assets adjustment - 72
Gain on disposal of fixed assets (3) (1,705)
Spares utilised 1,005 1,635
Interest income (5,008) (6,758)
Dividend income - (545)
Interest expense 18,563 19,247
Income tax (8,476) (10,293)
Exchange gain on foreign currency balances (41,813) (3,369)
Retirement benefits (8,927) (16,933)
Revaluation of investment securities (2,997) (4,940)
(28,704) (5,875)
Changes in operating assets and liabilities:
Inventories 4,884 (3,369)
Due from subsidiaries 401,527 (110,011)
Receivables 792 8,487
Payables (3,128) (4,581)
375,371 (115,349)
Income tax paid/recoverable 2,037 (1,561)
Net cash provided by/( used in) operating activities 377,408 (116,910)
Cash Flows from Investing Activities
Proceeds from disposal of fixed assets 124 2,230
Purchase of fixed assets (27,658) (21,404)
Interest received 5,008 6,758
Dividends received - 545
Net cash used in investing activities (22,526) (11,871)
Cash Flows from Financing Activities
Loans repaid (17,902) (16,671)
Principal lease repayments (2,402) (198)
Interest paid (17,316) (19,247)
Dividends paid (17,562) -
Net cash used in financing activities (55,182) (36,116)
Increase/(decrease) in cash and cash equivalents 299,700 (164,897)
Exchange gains on cash and cash equivalents 3,098 3,369
Cash and cash equivalents at beginning of year 154,742 316,270
Cash and Cash Equivalents at End of Year (Note 23) 457,540 154,742
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48Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
1. Identification and Principal Activities
Radio Jamaica Limited (“the company”) is incorporated and domiciled in Jamaica. The company is listed on the Jamaica Stock Exchange, and has its registered office at 32 Lyndhurst Road, Kingston 5.
These financial statements present the results of operations and financial position of the company and its subsidiaries, which are collectively referred to as “the group”.
The group’s primary activities are the operation of a ‘free-to-air’ television station, cable television stations and radio stations.
All subsidiaries are wholly owned. The company’s subsidiaries are as follows:
Television Jamaica Limited
Multi-Media Jamaica Limited
Media Plus Limited, and its subsidiaries –
Reggae Entertainment Television Limited
Jamaica News Network Limited
The subsidiaries are incorporated and domiciled in Jamaica, with the exception of Media Plus Limited, which is incorporated and domiciled in St. Lucia.
2. Summary of Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), and have been prepared under the historical cost convention, as modified by the revaluation of fair value through profit or loss investment securities.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. Although these estimates are based on managements’ 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 in Note 4.
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49Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
2. Summary of Accounting Policies (Continued)
(a) Basis of preparation (continued)
Standards, interpretations and amendments to published standards effective in the current yearCertain new standards, interpretations and amendments to existing standards that have been published, became effective during the current financial year. The group has assessed the relevance of all such new standards, interpretations and amendments and has put into effect the following IFRS, which are immediately relevant to its operations.
Amendment to IAS 32, ‘Financial instruments: Presentation’, on offsetting financial assets and financial liabilities (effective for annual periods beginning on or after 1 January 2014). This amendment updates the application guidance in IAS 32, ‘Financial instruments: Presentation’, to clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet. The amendments clarify that the right of set-off must be available today – that is, it is not contingent on a future event. It also must be legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency or bankruptcy. Master netting agreements where the legal right of offset is only enforceable on the occurrence of some future event, such as default of the counterparty, continue not to meet the offsetting requirements. This amendment is not expected to have an impact on the Group’s financial statements
Amendments to IAS 36, ‘Impairment of assets’ (effective for annual periods beginning on or after 1 January 2014). These amendments address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. The IASB has amended IAS 36 as follows:
• to remove the requirement to disclose recoverable amount when a cash generating unit (CGU) contains goodwill or indefinite lived intangible assets but there has been no impairment;
• to require disclosure of the recoverable amount of an asset or CGU when an impairment loss has been recognised or reversed; and
• to require detailed disclosure of how the fair value less costs of disposal has been measured when an impairment loss has been recognised or reversed.
This amendment is not expected to have an impact on the Group’s financial statements.
IFRIC 21, ‘Levies’, sets out the accounting for an obligation to pay a levy that is not income tax. The interpretation addresses what the obligating event is that gives rise to pay a levy and when should a liability be recognised. This would impact the company in relation to asset tax.
There were no other new standards, amendments to and interpretations of existing standards that have been published that became effective during the Group’s current financial year.
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50Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
2. Summary of Accounting Policies (Continued)
(a) Basis of preparation (continued)
Standards, interpretations and amendments to published standards that are not yet effective and have not been early adopted by the Group
The following standards and amendments to existing standards have been published and are mandatory for the Group’s accounting periods beginning after 1 April 2015 or later periods, but the Group has not early adopted them:
• IFRS 9, ‘Financial Instruments’ (effective for annual periods beginning on or after 1 January 2018). This standard specifies how an entity should classify and measure financial instruments, including some hybrid contracts. It requires all financial assets to be classified on the basis of the entity's business model for managing the financial assets and the contractual cash flow characteristics of the financial asset; initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, particular transaction costs; and subsequently measured at amortised cost or fair value. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of IAS 39. They apply a consistent approach to classifying financial assets and replace the four categories of financial assets in IAS 39, each of which had its own classification criteria. They also result in one impairment method, replacing the two impairment methods in IAS 39 that arise from the different classification categories. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. There has been no significant change in the recognition and measurement of financial liabilities carried at amortised cost from what obtained under IAS 39.
While adoption of IFRS 9 is mandatory from 1 January 2018, earlier adoption is permitted. The Group is considering the implications of the standard, the impact on the Group and the timing of its adoption by the Group.
IFRS 15, 'Revenue from Contracts with Customers'. The IASB has published its new revenue standard, IFRS 15 'Revenue from Contracts with Customers'. The U.S. Financial Accounting Standards Board (FASB) has concurrently published its equivalent revenue standard which is the result of a convergence project between the two Boards. IFRS 15 applies to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts. It specifies how and when an entity will recognise revenue as well as requiring entities to provide more informative, relevant disclosures. The standard supersedes IAS 18, 'Revenue', IAS 11, 'Construction Contracts' and a number of revenue-related interpretations. Application of the standard is mandatory for accounting periods beginning on or after 1 January 2017. The Group is assessing the impact of future adoption of the standard.
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51Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
2. Summary of Accounting Policies (Continued)
(b) Basis of consolidation
Subsidiaries are all entities (including special purpose entities) over which the group has power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date ofacquisition plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the fair value of the net assets of the subsidiary acquired is recorded as goodwill. Intercompany transactions, balances and unrealised gains and losses on transactions between group companies are eliminated.
Investments in subsidiaries are stated in the company’s financial statements at cost.
(c) Foreign currency translation
Functional and presentation currencyItems included in the financial statements of each of the group’s entities are measured using the currency of primary economic environment in which the entity operates, referred to as the functional currency. The functional currency of each entity is the same as its presentation currency. The consolidated financial statements are presented in Jamaican dollars, which is the company’s functional and presentation currency.
Transactions and balancesForeign currency transactions are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from such transactions and from the translation of foreign currency monetary assets and liabilities at the year-end exchange rates are recognised in arriving at net profit or loss.
(d) Revenue and income recognition
Revenue comprises the sale of airtime, programme material, and the rental of studios and equipment, net of General Consumption Tax. Revenue in respect of airtime and programming is recognised on performance of the underlying service. Rental income is recognised as it accrues.
Interest income is recognised as it accrues unless collectibility is in doubt.
Dividend income is recognised when the right to receive payment is established.
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52Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
2. Summary of Accounting Policies (Continued)
(e) Financial instruments
A financial instrument is any contract that gives rise to both a financial asset in one entity and a financial liability or equity of another entity.
Financial assets
The group classifies its financial assets in the following categories: loans and receivables, available-for-sale, and at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this designation at every reporting date. At reporting date, trade receivables were classified as loans and receivables; cash and bank balances, short term investments and quoted investment securities were classified as financial assets at fair value through profit or loss; and unquoted investment securities were classified as available-for-sale.
Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.
Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets.
Available-for-saleAvailable-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.
Financial liabilities
The group’s financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost using the effective interest method. At the balance sheet date, the following items were classified as financial liabilities: bank overdraft, finance lease obligations, long term loans and trade payables.
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53Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
2. Summary of Accounting Policies (Continued)
(f) Income taxes
Taxation expense in the statement of comprehensive income comprises current and deferred tax charges.
Current tax charges are based on taxable profits for the year, which differ 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 group’s liability for current tax is calculated at tax rates that have been enacted at reporting date.
Deferred tax is the tax expected to be paid or recovered on differences between the carrying amounts of assets and liabilities and the corresponding tax bases. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Currently enacted tax rates are used in the determination of deferred income tax.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference can be controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is charged or credited to profit or loss and other comprehensive income, except where it relates to items charged or credited to equity, in which case, deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when deferred tax assets and liabilities relate to income taxes levied by the same taxation authority.
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54Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
2. Summary of Accounting Policies (Continued)
(g) Fixed assets
Freehold land and buildings are stated at deemed cost less subsequent depreciation for buildings. All other fixed assets are carried at historical cost less accumulated depreciation. Historical costs include expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be reliably measured. All other repairs and maintenance are charged to profit or loss during the financial period in which they were incurred.
Depreciation is calculated on the straight-line basis at rates estimated to write off the cost of the assets over their expected useful lives. Annual rates used are as follows:
Freehold buildings 2.5%
Improvements to leasehold property 2.5%
Furniture, fixtures & equipment 10 - 33⅓%
Motor vehicles 10 - 25%
Spares 20%
Land is not depreciated as it deemed to have an indefinite life.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amounts is greater than its estimated recoverable amount.
Gains and losses on disposal of fixed assets are determined by reference to their carrying amount and are taken into account in determining profit or loss.
(h) Intangible assets
Broadcast rights
Broadcast rights acquired are recognised at fair value at the acquisition date and are subsequently measured at cost. These represent the exclusive rights to broadcast FIFA events for the period 2015 to 2022. Broadcast rights have a finite useful life. Amortisation is calculated using the straight-line method to allocate the cost of the rights over their estimated contractual lives. Amortisation will commence once the first event under the rights have been broadcast.
Computer software
This represents acquired computer software licences, which are capitalised on the basis of costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives of three years.
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55Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
2. Summary of Accounting Policies (Continued)
(i) Investment securities
Investment securities classified as financial assets at fair value through profit or loss and available-for-sale are carried at fair value. Realised and unrealised gains and losses arising from changes in the fair value of investments classified as financial assets at fair value through profit or loss are included in the determination of profit or loss in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of investments classified as available-for-sale are recognised in other comprehensive income. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in profit or loss.
The fair values of quoted investments are based on current bid prices. If the market for an investment is not active, the group establishes fair value by using valuation techniques. Where fair values cannot be reliably measured, the group carries the investment at cost.
(j) Retirement benefits
Pension plans
The group operates defined benefit plans, the assets of which are generally held in separate trustee-administered funds. A defined benefit plan is one that defines an amount of benefit to be provided, usually as a function of one or more factors such as age, years of service or compensation. The asset or liability in respect of defined benefit plans is the difference between present value of the defined benefit obligation at the reporting date and the fair value of plan assets. Where a pension asset arises, the amount recognised is limited to the present value of any economic benefits available in the form of refunds from the plan or reduction in future contributions to the plan. The pension costs are assessed using the Projected Unit Credit Method. Under this method, the cost of providing pensions is charged in arriving at profit or loss so as to spread the regular cost over the service lives of the employees in accordance with the advice of the actuaries, who carry out a full valuation of the plans every year. The pension obligation is measured at the present value of the estimated future cash outflows using discount estimated rates based on market yields on government securities which have terms to maturity approximating the terms of the related liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.
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56Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
2. Summary of Accounting Policies (Continued)
(j) Retirement benefits (continued)
Other retirement benefits
The group provides retirement health care and life insurance to its retirees. The entitlement for these benefits is usually based on the employee remaining in services up to retirement age and the completion of a minimum period. The expected costs of these benefits are accrued over the period of employment, using a methodology similar to that for defined benefit pension plans. Valuations for these benefits are carried out annually by independent qualified actuaries.
(k) Impairment of non-financial assetsAssets that have an indefinite useful life – for example, goodwill or intangible assets not ready to use – are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation 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 asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
(l) Inventories
Inventories are stated at the lower of cost and net realisable value, cost being determined as follows:
Film, other - actual cost
Net realisable value is the estimated proceeds of disposal in the ordinary course of business, less applicable expenses.
(m) Trade receivables
Trade receivables are carried at original invoice amount less provision for impairment of these receivables. A provision for impairment of trade receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the carrying amount and the recoverable amount, being the present value of expected cash flows, discounted at the market rate of interest for similar borrowers.
(n) Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost and comprise balances which mature within 90 days of the date of acquisition, including cash and bank balances, net of bank overdrafts.
(o) Trade payables
Trade payables are stated at historical cost.
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57Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
2. Summary of Accounting Policies (Continued)
(p) Leases
Leases of fixed assets where the group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased asset or the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term liabilities. The interest element of the finance cost is charged in arriving at profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The fixed asset acquired under a finance lease is depreciated over the shorter of the useful life of the asset or the lease term.
(q) Borrowings
Borrowings are recognised initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective yield method. Any difference between proceeds (net of transaction costs) and the redemption value is recognised in arriving at profit or loss over the period of the borrowings.
(r) Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Where any group entity purchases the company’s equity (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the company’s equity holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received (net of any directly attributable transaction costs and income taxes) is included in equity attributable to the company’s equity holders.
(s) Dividends
Dividends are recorded as a liability in the financial statements in the period in which they have been approved by shareholders.
(t) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is the company’s Board of Directors.
3. Financial Risk Management
The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the group’s financial performance.
The group’s risk management policies are designed to identify and analyse these risks, to set appropriate risk limits and controls, and to monitor the risks and adherence to limits by means of reliable and up-to-date information systems. There has been no change to the group’s exposure to financial risks or the manner in which it manages and measures the risks.
The Board of Directors is ultimately responsible for the establishment and oversight of the group’s risk management framework. The Board has established committees/departments for managing and monitoring risks, as follows:
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58Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
3. Financial Risk Management (Continued)
Department of Finance and Administration
The Department of Finance and Administration is responsible for managing the group’s assets and liabilities and the overall financial structure. It is also primarily responsible for the funding and liquidity risks of the group. The department identifies, evaluates and hedges financial risks in close co-operation with the group’s operating units. The credit department is primarily responsible for managing the group’s credit risk. It evaluates monitors and manages credit risks through the close assessment of potential and present clients.
(a) Credit risk
Finance Committee
The Finance Committee oversees how management monitors compliance with the group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the group.
An important risk for the group is credit risk.Other significant risks include liquidity risk, market risk and other operational risk. Market risk includes currency risk, interest rate and other price risk.
The group takes on exposure to credit risk, which is the risk that its customers, clients or counterparties will cause a financial loss for the group by failing to discharge their contractual obligations. Credit risk is the most important financial risk for the group’s business; management therefore carefully manages its exposure to credit risk. Credit exposures arise principally from the group’s receivables from customers and investment activities. The group structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation to a single counterparty or groups of related counterparties and to industry segments.
Credit review process
The Department of Finance and Administration has overall responsibility for the ongoing analysis of the ability of customers and other counterparties to meet repayment obligations.
(i) Trade and other receivables
Trade and other receivables relate mainly to the group’s direct customers and advertising agencies. The group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Finance Committee reviews monthly all material direct client accounts with balances over 90 days. The Department of Finance and Administration has established a credit policy under which each customer is analysed individually for creditworthiness prior to the group offering them a credit facility. Credit limits are assigned to each customer and approval is required from the Credit Manager for all direct customer transactions. The group has procedures in place to restrict customer orders if the order will exceed their credit limits. Customers that fail to meet the group’s benchmark creditworthiness may transact with the group on a prepayment basis.
Customer’s credit risks are monitored according to their credit characteristics, such as whether it is an individual or company, geographic location, industry, aging profile, and previous financial difficulties.
The group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The group addresses impairment assessment in two areas: individually assessed allowances and collectively assessed allowances.
The group’s average credit period for airing advertisements is 30 days for direct customers and 60 days for advertising agencies. The group has provided for most receivables over 90 days based on historical experience which indicates that amounts past due beyond 90 days are generally not recoverable.
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59Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
3. Financial Risk Management (Continued)
(a) Credit risk (continued)
(i) Trade and other receivables (continued)Trade receivables between 60 and 90 days are provided for based on an estimate of amounts that would be irrecoverable, determined by taking into consideration past default experience, current economic conditions and expected receipts and recoveries once impaired.
(ii) Cash, deposits and investmentsThe group limits its exposure to credit risk by maintaining cash, deposits and monetary investments with counterparties that have high credit quality. Accordingly, management does not expect any counterparty to fail to meet its obligations. The Finance Committee performs monthly reviews of the investments and securities held as part of their assessment of the group’s credit risk.
Trade receivables are primarily receivable from customers in Jamaica. The credit exposure for trade receivables at their carrying amounts, as categorised by the customer sector, is as follows:
The Group The Company
2015 2014 2015 2014
$’000 $’000 $’000 $’000
Advertising agencies 149,784 154,372 33,856 36,904
Direct customers 179,780 168,350 58,389 38,896
329,564 322,722 92,245 75,800
Less: Provision for impairment (22,610) (19,889) (8,200) (10,145)
306,954 302,833 84,045 65,655
Ageing analysis of trade receivables that are past due but not impaired
Trade receivables that are less than three months past due are not considered impaired. At reporting dates trade receivables relating to the group and the company
ot gnitnuoma $43,066,000(2014 – $73,827,000) and $12,670,000 (2014 – $18,372,000), respectively, were past due but not impaired. Trade receivables that are past due relate to a number of independent customers and advertising agencies for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:
The Group The Company
2015 2014 2015 2014
$’000 $’000 $’000 $’000
30 – 60 days 2,600 21,918 - 5,805
60 – 90 days 4,381 9,574 805 2,236
Greater than 90 days 36,085 42,335 11,865 10,331
43,066 73,827 12,670 18,372
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60Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
3. . Financial Risk Management (Continued)
(a) Credit risk (continued)
Ageing analysis of trade and other receivables that are impaired
At reporting dates, trade receivables and other receivables of $32,930,000 (2014 –$31,224,000) for the group and $18,520,000 (2014 – $21,480,000) for the company were considered impaired. These receivables are all aged over 90 days and were fully provided for. The individually impaired receivables mainly relate to direct customers and agencies that are in unexpected difficult economic situations. The creation and release of provision for impaired receivables have been included in administration expenses in the profit and loss account. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.
The movement on the provision for impairment was as follows:
The Group The Company
2015 2014 2015 2014
$’000 $’000 $’000 $’000
At 1 April 31,224 30,543 21,480 23,233
Provision for receivables impairment
13,195 11,662 5,203 6,474
Receivables written off during the year as uncollectible (1,696) (524) (696) (292)
Unused amounts reversed/recovered
(9,793) (10,457) (7,467) (7,935)
At 31 March 32,930 31,224 18,520 21,480
The provision includes amount relating to other receivables of $10,320,000 (2014 –$11,335,000) for the group and the company.
(b) Liquidity risk
Liquidity risk is the risk that the group is unable to meet its payment obligations associated with its financial liabilities when they fall due. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities.
Liquidity risk management process
The group’s liquidity management process, as carried out within the group and monitored by the Department of Finance and Administration, includes:
(i) Monitoring future cash flows and liquidity on an ongoing basis. This incorporates an assessment of expected cash flows and the availability of high grade collateral which could be used to secure funding if required.
(ii) Maintaining a portfolio of highly marketable and diverse assets that can easily be liquidated as protection against any unforeseen interruption to cash flow;
(iii) Maintaining committed lines of credit;
(iv) Optimising cash returns on investment.
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61Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
3. Financial Risk Management (Continued)
(b) Liquidity risk (continued)
Cash flows of financial liabilitiesTrade payables and balances due to subsidiaries are due within one month.
The maturity profile of long term liabilities at year end based on contractual undiscounted payments was as follows:
The Group
Within 1 Year
1 to 5 Years
Over 5 Years Total
$’000 $’000 $’000 $’000
2015
Finance lease obligations 11,803 26,884 - 38,687
Long term loans 55,752 160,516 89,338 305,606
67,555 187,400 89,338 344,293
2014
Finance lease obligations 8,264 30,604 - 38,868
Long term loans 51,760 178,885 119,955 350,600
60,024 209,489 119,955 389,468
The Company
Within 1Year
1 to 5 Years
Over 5 Years Total
$’000 $’000 $’000 $’000
2015
Finance lease obligations 4,014 12,226 - 16,240
Long term loans 34,615 125,288 89,338 249,241
38,629 137,514 89,338 265,481
2014
Finance lease obligations 4,014 15,722 - 19,736
Long term loans 30,624 122,521 119,955 273,100
34,648 138,243 119,955 292,836
Assets available to meet all liabilities, including financial liabilities, include cash and short term deposits.
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62Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
3. Financial Risk Management (Continued)
(c) Market risk
The group takes on exposure to market risks, which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks mainly arise from changes in foreigncurrency exchange rates and interest rates. Market risk is monitored by the Department of Finance and Administration which seeks to minimise potential adverse effects on the performance of the group by applying procedures to identify, evaluate and manage this risks, based on guidelines set by the Board of Directors.
Price risk
Price risk is the risk that the value of a financial instrument will fluctuate as a result of 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 in the market. The movements in market prices are not expected to have a significant impact on the net results or stockholders’ equity as the group does not hold significant equity securities.
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The group is exposed to foreign exchange risk, arising primarily with respect to the US dollar, from commercial transactions such as the purchase of investment securities and station equipment, and the recognised assets and liabilities arising therefrom. The group manages its foreign exchange risk by ensuring that the net exposure in foreign assets and liabilities is kept to an acceptable level by monitoring currency positions.
At 31 March 2015, the group and company had net USD dominated monetary assets carried at a Jamaican Dollar equivalent of $281,168,000 (2014 – $18,474,000) and $268,832,000 (2014 – $38,693,000) respectively.
Foreign currency sensitivity
The sensitivity analysis represents the impact on the profit or loss due to the movement in the US dollar exchange rate. If the rate adjusts for a 1% revaluation and 10% devaluation (2014 – 1% revaluation and 10% devaluation), the pre-tax impact on the profit or loss would amount to ($2,812,000) – revaluation, $28,117,000 –devaluation (2014 – ($185,000)/ $2,771,000) and ($2,688,000) – revaluation and $26,883,000 – devaluation (2014 – ($387,000)/ $5,804,000) for the group and the company respectively.
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63Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
3. Financial Risk Management (Continued)
(c) Market risk (continued)
Interest rate risk
Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Floating rate instruments expose the group to cash flow interest risk, whereas fixed interest rate instruments expose the group to fair value interest risk.
The group earns interest on its short term deposits disclosed in Note 23. As these deposits have a short term to maturity and are constantly reinvested at current market rates, they are not significantly exposed to interest rate risk.
The group incurs interest on its borrowings disclosed in Note 26. These borrowings are at fixed rates, and expose the group to fair value interest rate risk. Interest rate fluctuations are not expected to have a material effect on the net results or stockholders’ equity. The group analyses its interest rate exposure arising from borrowings on an ongoing basis, taking into consideration the options of refinancing, renewal of existing positions and alternative financing.
(d) Capital management
The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for stockholders and benefits for other stakeholders. The Board of Directors monitors the return on capital, which the group defines as net operating income divided by total stockholders’ equity. The Board of Directors also monitors the level of dividends to ordinary shareholders.
No company within the group is subject to externally imposed capital requirements.
(e) Fair value estimation
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Financial instruments that, subsequent to initial recognition, are measured at fair value are grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical instruments. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets is the current bid price. At 31 March 2015, these instruments are quoted investment securities (Note 18), which are grouped in Level 1. The group has no financial assets group in Levels 2 and 3.
The following methods and assumptions have been used in determining fair values:
(i) The face value, less any estimated credit adjustments, for financial assets and liabilities with a maturity of less than one year are estimated to approximate their fair values. These financial assets and liabilities include cash and bank balances, short term investments, and trade receivables and payables.
(ii) The carrying values of long term loans, approximate their fair values, as these loans are carried at amortised cost reflecting their contractual obligations and the interest rates are reflective of current market rates for similar transactions.
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64Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty
Judgements and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
(a) Critical judgements in applying the company’s accounting policies
In the process of applying the group’s accounting policies, management has not made any judgements that it believes would cause a significant impact on the amounts recognised in the financial statements.
(b) Key sources of estimation uncertainty
The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Retirement benefit obligations
The cost of these benefits and the present value of the future obligations depend on a number of factors that are determined by actuaries using a number of assumptions. The assumptions used in determining the net periodic cost or income for retirement benefits include the expected long-term rate of return on the relevant plan assets, the discount rate, and, in the case of health benefits, the expected rate of increase in health costs. Any changes in these assumptions will impact the net periodic cost or income recorded for retirement benefits and may affect planned funding of the pension plan. The expected return on plan assets assumption is determined on a uniform basis, considering long-term historical returns, asset allocation and future estimates of long-term investment returns.
The group determines the appropriate discount rate at the end of each year, which represents the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the retirement benefit obligations. In determining the appropriate discount rate, the group considered interest rate of high-quality Government of Jamaica bonds that are denominated in the currency in which the benefits will be paid, and have terms to maturity approximating the terms of the related obligations. The expected rate of increase of health costs has been determined by comparing the historical relationship of the actual health cost increases with the rate of inflation. Other key assumptions for the retirement benefits are based on current market conditions.
The principal actuarial assumptions used in valuing retirement benefits are disclosed in Note 15.
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65Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty (Continued)
(b) Key sources of estimation uncertainty (continued)
Income taxes
Estimates are required in determining the provision for income taxes. There are some transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for possible tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
Recognition of deferred tax assets
Deferred tax assets have not been recognised on tax losses carried forward in respect of certain subsidiaries based on management’s expectation that the subsidiaries will not generate sufficient taxable profits to utilise the tax losses carried forward (Note 16). At 31 March 2015, unrecognised deferred tax assets in respect of tax losses carried forward amounted to $66,172,000 (2014 – $66,740,000).
5. Other Operating Income
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Interest income 6,223 8,056 5,008 6,758
Dividend income - 545 - 545
Net foreign exchange gains 38,953 7,127 41,805 6,967
Unrealised gain on revaluation of investment securities classified as financial assets at fair value through profit or loss 2,997 4,940 2,997 4,940
Gain on disposal of fixed assets 5,192 1,705 3 1,705
Rental income 49,473 55,180 64,382 70,159
Compensation for damages 3,779 5,736 3,779 5,737
Other income 6,829 27,651 4,343 21,176
113,446 110,940 122,317 117,987
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66Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
6. Expenses by Nature
Total direct, selling, administration and other operating expenses:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Auditors' remuneration 7,174 7,288 3,571 3,607
Commissions 163,116 159,838 38,471 47,782
Depreciation 129,690 102,616 32,116 31,708
Distribution costs 1,266 1,160 - -
Insurance 58,674 57,983 19,120 23,442
Programming expenses 88,191 63,409 19,550 18,518
Publicity 40,019 24,958 20,195 14,579
Repairs and maintenance 93,052 88,422 30,482 36,776
Special events 143,393 166,450 7,747 4,066
Staff costs (Note 7) 857,126 744,711 336,854 304,709
Utilities 176,845 168,121 52,516 70,082
Other 239,257 269,469 118,442 119,833
1,997,803 1,854,425 679,064 675,102
7. Staff Costs
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Wages and salaries 736,291 650,548 275,558 258,565
Statutory contributions 67,465 63,153 34,967 33,243
Pension benefits (Note 15) 10,446 (131) 5,124 (3,014)
Other retirement benefits (Note 15) 8,639 6,093 6,086 4,165
Redundancy costs 745 - - -
Other 33,540 25,048 15,119 11,750
857,126 744,711 336,854 304,709
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67Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
8. Finance Costs
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Interest expense –
Bank borrowings 20,820 20,106 17,130 18,620
Finance leases 3,685 1,014 1,433 136
Other 1,219 1,206 395 491
25,724 22,326 18,958 19,247
Foreign exchange losses - 5,474 - -
25,724 27,800 18,958 19,247
9. Taxation Expense
Taxation is computed on the profit or loss for the year adjusted for tax purposes. The charge for taxation comprises income tax at 25%:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Current tax 36,945 21,282 - -
Prior year over accrual (13,274) (4,262) - (4,262)
Deferred tax (Note 16) 2,023 (3,591) (8,476) (6,031)
25,695 13,429 (8,476) (10,293)
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68Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
9. Taxation Expense (Continued)
The tax on the group and the company’s profit was derived as follows. Deferred tax was derived as detailed in Note 16.
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Profit/(loss) before taxation 138,969 72,905 (21,640) (24,287)
Tax calculated at a tax rate of 25% 34,742 18,226 (5,410) (6,071)
Adjusted for the effects of :
Effect of change in the income tax rate - 324 - -
Effect of different tax rates - 2,305 -
Prior year over accrual - (4,262) - (4,262)
Income not subject to tax (749) (1,008) (749) (1,008)
Expenses not deductible for tax purposes 411 3,891 245 506
Recognition of previously unrecognised deferred taxes - (1,095) - (211)
Tax losses utilised - (5,365) - -
Other (8,709) 413 (2,562) 753
25,695 13,429 (8,476) (10,293)
Tax (charge)/credit relating to components of other comprehensive income are as follows:
Group
BeforeTax
TaxEffect
AfterTax
$'000 $'000 $'000
Remeasurements of post-employment benefit liabilities
2015 14,266 (3,567) 10,699
Remeasurements of post-employment benefit liabilities
2014 (56,409) 14,102 (42,307)
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69Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
9. Taxation Expense (Continued)
Tax (charge)/credit relating to components of other comprehensive income are as follows:
Company
BeforeTax
Tax Effect
AfterTax
$'000 $'000 $'000
Remeasurements of post-employment benefit liabilities 2015 12,760 (3,190) 9,570
Remeasurements of post-employment benefit liabilities 2014 (48,184) 12,046 (36,138)
10. Net Profit and Retained Earnings Attributable to Stockholders of the Company
(a) The net (loss)/profit attributable to stockholders of the company is dealt with in the financial statements as follows:
2015$’000
2014$’000
The company (13,164) (13,994)
The subsidiaries 126,438 73,470
113,274 59,476
(b) Retained earnings are dealt with in the financial statements as follows:
2015$’000
2014$’000
The company 592,468 613,624
The subsidiaries 250,342 122,775
842,810 736,399
11. Ordinary Dividends
Interim dividends – 5 cents (2014 – nil) per stock unit
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70Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
12. Earnings per Ordinary Stock Unit
Basic earnings per stock unit is calculated by dividing the net profit attributable to stockholders by the weighted average number of ordinary stock units in issue during the year.
2015 2014
Net profit/(loss) attributable to stockholders $’000 113,274 59,476
Weighted average number of ordinary stock units in issue (‘000) 350,154 350,154
Basic earnings per ordinary stock unit $0.32 $0.17
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71Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
13. Fixed Assets
The Group
Freehold Land
Freehold
Buildings
Improvements to
Leasehold Property
Furniture, Fixtures & Equipment
Motor Vehicles Spares
Work in Progress Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost -
1 April 2013 5,516 341,485 16,901 1,156,659 86,552 23,470 77,448 1,708,031
Additions - 4,668 - 42,852 32,596 4,836 253,546 338,498
Disposals - - - (550) (7,246) (5,048) - (12,844)
Adjustment - - - - - - (72) (72)
Transfers - - 100,615 107,605 - - (208,220) -
31 March 2014 5,516 346,153 117,516 1,306,566 111,902 23,258 122,702 2,033,613
Additions -
-
-
54,526
10,584
7,861 9,557
82,528
Disposals -
-
-
(544)
(7,210)
-
- (7,754)
Utilisation -
-
-
-
(5,198)
-
(5,198)
Transfers -
- -
108,812
-
- (131,687)
(22,875)
31 March 2015 5,516 346,153 117,516 1,469,360 115,276 25,921 572 2,080,314
Depreciation -
1 April 2013 - 83,401 10,452 863,406 60,656 7,439 - 1,025,354
Charge for the year - 8,356 742 80,122 9,172 4,224 - 102,616
Relieved on disposals/utilisation - - - (24) (7,247) - - (7,271)
31 March 2014 - 91,757 11,194 943,504 62,581 11,663 - 1,120,699
Charge for the year - 8,411 630 101,925 13,997 4,256 - 129,219
Relieved on disposals/utilisation - - - (424) (7,210) (1,450) - (9,084)
31 March 2015 - 100,168 11,824 1,045,005 69,368 14,469 - 1,240,834
Net Book Value -
31 March 2015 5,516 245,985 34,198 495,849 45,908 11,452 572 839,480
31 March 2014 5,516 254,396 106,322 363,062 49,321 11,595 122,702 912,914
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72Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
13. Fixed Assets (Continued)
The Company
Freehold Land
Freehold Buildings
Furniture, Fixtures & Equipment
Motor Vehicles Spares
Work in Progres
s Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost -
1 April 2013 5,516 287,892 333,55827,247 10,889 2,376
667,478
Additions - 1,468 9,38516,309
1,2818,528
36,971
Disposals - - (550)(7,246)
(1,635)-
(9,431)
Transfers - - 2,014-
-(2,014)
-
Adjustments - - --
-(72)
(72)
31 March 2014 5,516 289,360 344,40736,310
10,5358,818
694,946
Additions - - 24,940-
1,995723
27,658
Disposals - - (291)-
--
(291)
Transfers - - --
-(9,251)
(9,251)
Utilisation - - --
(1,493)-
(1,493)
31 March 2015 5,516 289,360 369,05636,310
11,037290
711,569
Depreciation -
1 April 2012 - 71,997 286,45324,611
3,505-
386,566
Charge for the year
- 6,983 21,5271,091
2,107-
31,708
Relieved on disposals/utilisation - - (25) (7,246) - - (7,271)
31 March 2014 - 78,980 307,95518,456
5,612-
411,003
Charge for the year
- 6,993 18,0195,168
1,843-
32,023
Relieved on disposals/utilisation
- - (171)-
(487)
-(658)
31 March 2015 - 85,973 325,80323,624
6,968-
442,368
Net Book Value -
31 March 2015 5,516 203,387 43,25312,686
4,069290
269,201
31 March 2014 5,516 210,380 36,45217,854
4,9238,818
283,943
The tables above include carrying values of $32,103,000 (2014: $30,561,000) and $19,871,000 (2014: 16,309,000) for the Group and the company, respectively, representing assets being acquired under finance leases. All amounts related to finance leases are shown in the ‘Motor Vehicles’ category of fixed assets.
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73Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
14. Intangible Assets
Intangible assets in the balance sheet were determined as follows:
Broadcast
Rights Total
$'000 $'000
2015
Cost and net book value at 31 March 2015 - - - -
2014
Cost and net book value at 31 March 2014 - - 178,112 178,112
The movement in intangible assets was due to the following:
Broadcast Rights Total
$'000 $'000
Net book value at 31 March 2013 and 2014 178,112 178,112
Reversal (178,112) (178,112)
Net book value at 31 March 2015 - -
Broadcast rightsThe amount of $178,112,000 in prior year represented the exclusive rights to broadcast FIFA events for the period 2015 to 2022. However, the owner of the broadcast rights defaulted on the contract with FIFA which automatically cancelled the Group’s broadcast rights to those FIFA events. The progress payments by the Group of US$1.9M was returned in full prior to 31 March 2015.
Computer Software
Group Company
$'000 $'000
Cost -
31 March 2013 and 2014 - -
Transfer from Fixed Assets 22,875 9,251
31 March 2015 22,875 9,251
Amortisation -
31 March 2013 and 2014 - -
Charge for the year 471 93
31 March 2015 471 93
Net book value at 31 March 2015 22,404 9,158
Net book value at 31 March 2014 - -
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74Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Amounts recognised in the balance sheet –
Pension schemes 226,432 189,802 185,565 157,757
Other retirement benefits (68,003) (53,081) (46,348) (37,037)
Amounts recognised in profit or loss –
Pension schemes 10,446 (131) 5,124 (3,014)
Other retirement benefits 8,639 6,093 6,086 4,165
Pension schemes
The company operates a defined benefit pension scheme covering all permanent employees of Radio Jamaica Limited, Multi-Media Jamaica Limited and Television Jamaica Limited.
The scheme is managed by an outside agency under a management contract, and by Trustees. The scheme is funded at 15% of pensionable salaries, being 5% by members and 10% by the sponsoring entity. Members may contribute up to an additional 5%.
The scheme is valued tri-annually by independent actuaries. The latest actuarial valuation was done as at 31 December 2013.
The Board of the pension fund is required by law and its articles and association to act in the interest of the fund and all relevant stakeholders. The Board of the fund is responsible for the investment policy with regard to the assets of the fund. The funds are managed by Proven Wealth Limited who has responsibilities for the general management of the portfolio of investments and the administration of the fund.
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75Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits (Continued)
Pension schemes (continued)
The amounts recognised in the balance sheet were determined as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Fair value of plan assets 826,373 738,071 654,819 598,323
Present value of funded obligation
(599,941) (548,269) (469,254) (440,566)
Asset in the balance sheet 226,432 189,802 185,565 157,757
The movement in the present value of the funded obligation was as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Balance at start of year 548,269 460,391 440,566 378,065
Current service cost 22,956 16,666 15,571 11,400
Interest cost 51,819 48,170 41,275 39,237
623,044 525,227 497,412 428,702
Remeasurements -
Experience gains (13,362) (7,508) (12,333) (1,803)
Losses from change in financial assumptions - 45,790 - 35,003
(13,362) 38,282 (12,333) 33,200
Employee contributions 22,578 20,981 14,380 13,081
Benefits paid (32,319) (36,221) (30,205) (34,417)
599,941 548,269 469,254 440,566
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76Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits (Continued)
Pension schemes (continued)
The movement in the fair value of plan assets was as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Balance at start of year 738,071 666,182 598,323 554,616
Employee contributions 22,578 20,981 14,380 13,081
Employer contributions 25,392 27,648 16,006 17,245
Interest income on plan assets 70,958 71,008 56,907 58,505
Benefits paid (32,319) (36,221) (30,205) (34,417)
Administrative fees (6,629) (6,041) (5,185) (4,854)
Remeasurements of the plan assets 8,322 (5,486) 4,593 (5,853)
Balance at end of year 826,373 738,071 654,819 598,323
The amounts recognised in arriving at profit or loss were determined as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Current service cost22,956 16,666 15,571 11,400
Interest cost51,819 48,170 41,275 39,237
Interest income on plan assets(70,958) (71,008)
(56,907)(58,505)
Administrative fees6,629 6,041 5,185 4,854
Total included in staff costs (Note 7) 10,446 (131) 5,124 (3,014)
The amounts recognised in other comprehensive income were determined as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Remeasurements of the defined benefit obligation (13,362) 38,282 (12,333) 33,200
Remeasurements of the plan assets (8,322) 5,486 (4,593) 5,853
Total (21,684) 43,768 (16,926) 39,053
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77Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits (Continued)
Pension schemes (continued)
At the last valuation date, the present value of the defined benefit obligation was comprised of approximately $385,542,000 and $258,539,000 relating to active members, $2,151,000 relating to deferred members and $212,247,000 and $208,563,000 relating to the members in retirement for the group and the company respectively.
Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date. Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective markets.
Expected employer contributions to the plan for the year ended 31 March 2015 amount to $14,710,000 for the group and $3,960,000 for the company.
The distribution of plan assets was as follows:
The Group & Company
2015 2014
% %
Equities 21 19
Government of Jamaica securities
37 54
Repurchase agreements 24 13
Corporate bonds 12 4
Other 6 10
100 100
Plan assets include the company’s ordinary shares with a fair value of $968,000 (2014 - $896,000). The sensitivity of the defined benefit obligation to changes in the principal assumptions is:
The Group
2015
Impact on post-employment obligations
Change in assumption
Increase in assumption
Decrease in assumption
$’000 $’000
Discount rate 1% (72,925) 92,320
Future salary increases 1% 39,112 (33,631)
Pension increases 1% 44,904 (39,410)
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78Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits (Continued)
Pension schemes (continued)
The Group
2014
Impact on post-employment obligations
Change in assumption
Increase in assumption
Decrease in assumption
$’000 $’000
Discount rate 1% (66,770) 84,705
Future salary increases 1% 34,800 (29,854)
Pension increases 1% 42,271 (37,153)
The sensitivity of the defined benefit obligation to changes in the principal assumptions is:
The Company
2015
Impact on post-employment obligations
Change in assumption
Increase inassumption
Decrease inassumption
$’000 $’000
Discount rate 1% (53,217) 66,356
Future salary increases 1% 25,514 (22,206)
Pension increases 1% 35,084 (30,999)
The Company
2014
Impact on post-employment obligations
Change in assumption
Increase in assumption
Decrease in assumption
$’000 $’000
Discount rate 1% (49,988) 62,477
Future salary increases 1% 22,857 (19,853)
Pension increases 1% 34,293 (30,175)
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79Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits (Continued)
Other retirement benefits
The Group
Increase Assumption by
One Year
Decrease Assumption by
One Year
$’000 $’000
Life expectancy 15,870 (15,870)
The Company
Increase Assumption by
One Year
Decrease Assumption by
One Year
$’000 $’000
Life expectancy 2,670 (2,670)
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the pension liability recognised within the statement of financial position.
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80Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits (Continued)
Other retirement benefits
In addition to pension benefits, the group offers retiree medical and life insurance benefits that contribute to the health care and life insurance coverage of employees after retirement. The method of accounting and frequency of valuations are similar to those used for defined benefit pension schemes.
The amounts recognised in the balance sheet were determined as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Present value of unfunded obligations 68,003 53,081 46,348 37,037
The movement in the present value of unfunded obligations was as follows:
The Group The Company
2014$’000
2014$’000
2015$’000
2014$’000
Balance at start of year 53,081 35,378 37,037 24,579
Current service cost 3,651 2,433 2,613 1,629
Interest cost 4,988 3,660 3,473 2,536
61,720 41,471 43,123 28,744
Remeasurements -
Experience losses 2,369 8,750 849 6,522
Losses from change in financial assumptions
5,049 3,893 3,317 2,610
7,418 12,643 4,166 9,132
Benefits paid (1,135) (1,033) (941) (839)
Balance at end of year 68,003 53,081 46,348 37,037
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81Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits (Continued)
Other retirement benefits
The amounts recognised in arriving at net profit or loss were as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Current service cost 3,651 2,433 2,613 1,629
Interest cost 4,988 3,660 3,473 2,536
Total included in staff costs (Note 7) 8,639 6,093 6,086 4,165
The amounts recognised in other comprehensive income were determined as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Remeasurements of the defined benefit obligation 7,418 12,643 4,166 9,132
At the last valuation date, the present value of the defined benefit obligation was comprised of approximately $42,977,000 and $24,941,000 relating to active members and $25,025,000 and $21,406,000 relating to the members in retirement for the group and the company respectively.
The sensitivity of the defined benefit obligation to changes in the principal assumptions is:
The Group
Impact on post-employment obligations
Change in assumption
Increase in assumption
Decrease in assumption
$’000 $’000
Discount rate 1% 9,717 12,254
Future salary increases 1% 222 186
Health inflation rate 1% 11,731 9,457
The Company
Impact on post-employment obligations
Change in assumption
Increase in assumption
Decrease in assumption
$’000 $’000
Discount rate 1% 63,92 8,046
Future salary increases 1% 132 111
Health inflation rate 1% 7,701 6,216
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82Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits (Continued)
Other retirement benefits
The Group
Increase Assumption by One Year
Decrease Assumption by One Year
$’000 $’000
Life expectancy 2,860 73
The Company
Increase Assumption by
One Year
Decrease Assumption by
One Year
$’000 $’000
Life expectancy 1,830 14
Principal actuarial assumptions used in valuing retirement benefits
The principal actuarial assumptions used were as follows:
The Group & The Company
2015 2014
Discount rate 9.5% 9.5%
Inflation rate 6.0% 5.5%
Future salary increases 6.5% 6.5%
Future pension increases 2.75% 2.75%
Long term increase in health cost 7.5% 7%
Expected remaining working lives (years) 25 24
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83Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
15. Retirement Benefits (Continued)
Risks associated with pension plans and post-employment plans
Through its defined benefit pension plans and post-employment medical plans, the Group is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility
The plan liabilities are calculated using a discount rate set with reference to Government of Jamaica bond yields; if plan assets underperform this yield, this will create a deficit.
As the plan matures, the Group intends to reduce the level of investment risk by investing more in assets that better match the liabilities. The Government bonds represent investments in Government of Jamaica securities.
The Group believes that due to the long-term nature of the plan liabilities, a level of continuing equity investment is an appropriate element of the Group’s long term strategy to manage the plans efficiently. See below for more details on the Group’s asset-liability matching strategy.
Changes in bond yields
A decrease in Government of Jamaica bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.
Inflation risk
Higher inflation will lead to higher liabilities. The majority of the plan’s assets are either unaffected by fixed interest bonds meaning that an increase in inflation will reduce the surplus or create a deficit.
Life expectancy
The majority of the plan’s obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan’s liabilities. This is particularly significant, where inflationary increases result in higher sensitivity to changes in life expectancy.
The Group ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the pension scheme. Within this framework, the company’s ALM objective is to match assets to the pension obligations by investing in long-term fixed interest securities with maturities that match the benefit payments as they fall due. The Group actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the pension obligations. The Group has not changed the processes used to manage its risks from previous periods. The Group does not use derivatives to manage its risk. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large portion of assets in 2015 consists of bonds and equities.
Funding levels are monitored on an annual basis and the current agreed contribution rate is 10% of pensionable salaries. The next triennial valuation is due to be completed as at 31 December 2015. The Group considers that the contribution rates set at the last valuation date to be sufficient to prevent a deficit and that regular contributions, which are based on service costs, will not increase significantly.
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84Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
16. Deferred Taxation
Deferred income taxes are calculated in full on all temporary differences under the liability method using a principal rate of 25%.
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Deferred income tax assets 55,903 45,684 42,170 34,742
Deferred income tax liabilities (121,090) (105,281) (50,208) (48,066)
(65,187) (59,597) (8,038) (13,324)
The movement on the deferred income tax account is as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Balance as at 1 April (59,597) (77,290) (13,324) (31,401)
(Charged)/credited in arriving at profit or loss (2,023) 3,591 8,476 6,031
(Charged)/credited to other comprehensive income (3,567) 14,102 (3,190) 12,046
Balance as at 31 March (65,187) (59,597) (8,038) (13,324)
The movement in the deferred tax assets and liabilities (prior to appropriate offsetting of balances) during the year is as follows:
Group
Deferred tax liabilitiesAccelerated Tax
Depreciation
Retirement BenefitAssets
UnrealisedForeign
ExchangeGains
InterestReceivable Total
$’000 $’000 $’000 $’000 $’000
At 1 April 2013 52,396 51,448 161 202 104,207
Charged to profit or loss 4,892 6,943 85 95 12,015Credited to other comprehensive income - (10,941) - - (10,941)
At 31 March 2014 57,288 47,450 246 297 105,281Charged/(credited) to profit or loss 7,005 3,737 19 (373) 10,388Charged to other comprehensive income - 5,421 - - 5,421
At 31 March 2015 64,293 56,608 265 (76) 121,090
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85Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
16. Deferred Taxation (Continued)The movement in the deferred tax assets and liabilities (prior to appropriate offsetting of balances) during the year is as follows:
Group
Deferred tax assets
Retirement Benefit
ObligationAccrued Vacation
Taxlosses Other Total
$’000 $’000 $’000 $’000 $’000
At 1 April 2013 8,845 9,510 8,331 231 26,917
Credited/(charged) to profit or loss 1,264 (1,664) 8,355 7,651 15,606
Credited to other comprehensive income 3,161 - - - 3,161
At 31 March 2014 13,270 7,846 16,686 7,882 45,684
Credited/(charged) to profit or loss 1,877 17,361 (11,537) 663 8,365
Credited to the statement of comprehensive income 1,854 - - - 1,854
At 31 March 2015 17,001 25,208 5,149 8,545 55,903
Company
Deferred tax liabilities
Accelerated Tax
Depreciation
Retirement Benefit Assets
Interest Receivable Total
$’000 $’000 $’000 $’000
At 1 April 2013 7,801 44,138 202 52,141
Credited to profit or loss - (9,763) - (9,763
Charged to other comprehensive income 524 5,064 100 5,688
At 31 March 2014 8,325 39,439 302 48,066(Credited)/charged to profit or loss (4,697) 2,721 (113) 2,089
Charged to other comprehensive income - 4,231 - 4,231
At 31 March 2015 3,628 46,391 189 50,208
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86Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
16. Deferred Taxation (Continued)The movement in the deferred tax assets (prior to appropriate offsetting of balances) during the year is as follows:
Company
Deferred tax assets
Retirement Benefit
ObligationTax
LossesAccrued Vacation Other Total
$’000 $’000 $’000 $’000 $’000
At 1 April 2013 6,145 8,331 6,033 231 20,740Credited/(charged) to profit or loss 831 8,355 (1,078) 3,611 11,719
Credited to other comprehensive income 2,283 - - - 2,283
At 31 March 2014 9,259 16,686 4,955 3,842 34,742Credited/(charged) to profit or loss 1,287 5,506 194 (600) 6,387
Credited to other comprehensive income 1,041 - - - 1,041
At 31 March 2015 11,587 22,192 5,149 3,242 42,170
Deferred income tax assets/liabilities amounts which are expected to be recovered/settled within one year:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Deferred income tax assets - -
Deferred income tax liabilities 189 543 189 302
Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefit through the future taxable profits is probable. Subject to agreement with the Taxpayer Audit and Assessment Department, tax losses available for offset against future taxable profits amounted to $353,458,000 (2014 – $333,702,000) for the group and $88,769,000 (2014 – $66,743,000) for the company, and these losses may be carried forward indefinitely. Deferred income tax assets have not been recognised for tax losses carried forward in respect of certain subsidiaries. These tax losses amounted to $264,689,000 (2014 – $266,958,000).
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87Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
17. Investment in Subsidiaries
2015$’000
2014$’000
Multimedia Jamaica Limited 50 50
Television Jamaica Limited 20,002 20,002
Media Plus Limited –
Reggae Entertainment Television Limited 174,930 174,930
Jamaica News Network Limited 236,942 236,942
431,924 431,924
18. Investment Securities
The Group & The Company
2015$’000
2014$’000
At fair value through profit or loss –
One Caribbean Media Limited, quoted 19,346 16,349
Available-for-sale –
Caribbean News Agency, unquoted 7 7
19,353 16,356
19. Inventories
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Spares 1,837 3,055 1,210 1,049
Film 11,115 18,119 - -
Goods in transit 3,019 11,434 - 3,606
Other 9,514 8,050 4,464 5,903
25,485 40,658 5,674 10,558
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88Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
20. Due from Subsidiaries
2015$’000
2014$’000
Multi-Media Jamaica Limited 698 83,633
Television Jamaica Limited - 144,615
Reggae Entertainment Television Limited - 8,259
Jamaica News Network Limited 84 39,084
782 275,591
Due to subsidiaries
Television Jamaica Limited 88,003 -
21. Related Party Transaction Balances
(a) Sale of servicesThe company did not have any sale of services to its subsidiaries.
(b) Purchase of services
2015$’000
2014$’000
Multi-Media Jamaica Limited 33,528 26,658
Jamaica News Network Limited 6,469 10,220
39,997 36,878
(c) Rental income – The company has rental income with its subsidiaries as follows
2015$’000
2014$’000
Television Jamaica Limited 14,315 14,315
Multi-Media Jamaica Limited 245 245
Reggae Entertainment Television Limited 240 240
Jamaica News Network Limited 240 240
15,040 15,040
(d) Rental expense – The company has rental expense with its subsidiaries as follows
2015$’000
2014$’000
Jamaica News Network 7,812 -
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89Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
21. Related Party Transaction Balances (Continued)
(e) Key management compensation for the group was as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Wages and salaries 40,633 35,509 40,633 35,509
Statutory contributions 2,471 2,178 2,471 2,178
Other 3,741 3,251 3,741 3,251
46,845 40,938 46,845 40,938
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Directors' emoluments –
Fees 4,743 4,284 1,822 2,324
Management remuneration (included in staff costs) 17,979 13,230 17,979 13,230
22. Receivables
The Group The Company
2015$’000
2014$’000
2015$’000
2014 $’000
Trade receivables 329,564 322,722 92,245 75,800
Prepayments 29,894 14,286 7,162 7,299
Other 52,518 64,139 41,459 61,519
411,976 401,147 140,866 144,618
Less: Provision for impairment (32,930) (31,224) (18,520) (21,480)
379,046 369,923 122,346 123,138
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90Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
23. Cash and Cash Equivalents
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Cash 93,196 57,591 92,887 57,258
Short term investments 364,653 97,484 364,653 97,484
457,849 155,075 457,540 154,742
(a) Cash comprises amounts held in current accounts, which currently attract interest at arate of 1% per annum.
(b) Short term investments comprise securities purchased under resale agreements and areclassified as financial assets at fair value through profit or loss.
The weighted average effective interest rate on these instruments was as follows:
The Group & Company
2015
%
2014
%
United States dollar 3.28 3.46
Jamaican dollar 6.1 6.68
(c) The group has unsecured bank overdraft facilities. The effective interest rate on accountoverrun is between 24.75% - 48%.
24. Payables
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Trade 99,245 121,747 33,584 46,158
Accrued vacation leave 32,998 32,055 20,597 19,819
Other accruals 27,400 20,645 12,939 13,115
Current portion of finance leases (Note 26)
8,490 5,216 2,785 2,509
Current portion of long term loans (Note 26)
37,770 35,347 19,248 17,901
Statutory deductions 19,956 17,554 10,023 9,294
Other 56,782 42,726 34,264 26,149
282,641 275,290 133,440 134,945
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91Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
25. Share Capital
Authorised –
50,000 5% Cumulative participating preference shares
378,000,000 Ordinary shares2015
$’0002014
$’000
Issued and fully paid –
357,467,991 (2012 – 357,476,991) Ordinary shares of no par value 472,695 472,695
7,323,100 Treasury shares (2012 – 7,323,100) Ordinary shares of no par value
(5,039) (5,039)
467,656 467,656
The treasury shares are held by the RJR Employee Share Scheme.
26. Long Term Loans & Finance Leases
Long term loans
The Group The Company
2015$’000
2014$’000
2014$’000
2012$’000
(a) RBC Bank Jamaica Limited 6,210 9,759 6,210 9,759
(b) RBC Bank Jamaica Limited 174,231 187,337 174,231 187,337
(c) Prime Sports Limited 51,966 69,412 - -
232,407 266,508 180,441 197,096
Less: Current portion (Note 24) (37,770) (35,347) (19,248) (17,901)
194,637 231,161 161,193 179,195
(a) This loan is repayable on a monthly basis, maturing in December 2016 and attracts interest at 9.5% (2014 –9.5%). It is secured by a second mortgage over commercial propertiesowned by the company.
(b) This loan is repayable on a monthly basis, maturing in September 2019 and attractsinterest at 9% (2014 – 9%). It is secured by a first mortgage over commercial propertiesowned by the company.
(c) This loan is unsecured and repayable on a monthly basis, maturing in November 2017and attracts interest at 6% (2014 – Nil).
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92Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
26. Long Term Loans & Finance Leases (Continued)
Finance leases
Finance lease liabilities – minimum lease payments
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Not later than 1 year 11,804 8,264 4,014 4,014
Later than 1 year and not later than 5 years
26,883 30,604 12,226 15,722
38,687 38,868 16,240 19,736
Future finance charges on finance leases
(4,652) (8,459) (3,273) (4,367)
Present value of finance lease obligations
34,035 30,409 12,967 15,369
The present value of finance lease obligations is as follows:
The Group The Company
2015$’000
2014$’000
2015$’000
2014$’000
Not later than 1 year 8,490 5,216 2,785 2,509
Later than 1 year and not later than 5 years
25,545 25,193 10,182 12,860
34,035 30,409 12,967 15,369
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93Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
27. Segment Reporting
Management has determined the group’s operating segments based on the reports reviewed by the company’s Board of Directors that are used to make strategic decisions. The group is organised and managed in two main business segments based on its business activities. Operating results for each segment are used to measure performance, as management deems that information to be the most relevant in evaluating segments relative to other entities that operate within these industries.
The designated segments are:
(a) Audio visual, comprising the operations of the group’s free-to-air television station and its cable stations; and
(b) Radio and other, comprising the operations of the group’s radio stations.
The group’s operations are primarily located in Jamaica.
Audio Visual
Radio and Other Sub-total Eliminations Total
$’000 $’000 $’000 $’000 $’000
2015
Revenues 1,556,136 626,721 2,182,857 (133,807) 2,049,050
Operating profit 151,645
10,125161,770 2,923 164,693
Assets 1,157,809 1,550,594 2,708,403 (729,456) 1,978,947
Liabilities 475,027 474,360 949,387 (280,906) 668,481
Capital expenditure 54,804 27,724 82,528 - 82,528
Depreciation 95,906 33,313 129,219 - 129,219
Finance costs 6,756 18,968 25,724 - 25,724
2014
Revenues 1,350,339 611,744 1,962,083 (117,893) 1,844,190
Operating profit 112,095 47 112,142 (11,437) 100,705
Assets 1,319,986 1,567,664 2,887,650 (1,019,670) 1,867,980
Liabilities 752,063 480,062 1,232,125 (568,200) 663,925
Capital expenditure 298,080 40,418 338,498 - 338,498
Depreciation 69,566 33,050 102,616 - 102,616
Finance costs 8,543 19,257 27,800 - 27,800
The Group’s customers are mainly resident in, and operate from, Jamaica.
The result of its revenue from external customers in Jamaica is $2,048,827,000 (2014 -$1,812,354,000), and the total of revenue from external customers from other countries is $39,181,000 (2014 - $31,836,000).
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94Radio Jamaica Limited Annual Report 2015
Notes to the Financial Statements
31 March 2015
(expressed in Jamaican dollars unless otherwise indicated)
Radio Jamaica Limited
28. Contingencies
The company and its subsidiaries are subject to various claims, disputes and legal proceedings, in the normal course of business. Provision is made for such matters when, in the opinion of management and its legal counsel, it is probable that a payment will be made by the group, and the amount can be reasonably estimated. In respect of claims asserted against the group which has not been provided for, management is of the opinion that such claims are either without merit, can be successfully defended or will result in exposure to the group which is immaterial to both financial position and results of operations.
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Five-Years SummaryConsolidated Profit & Loss Account
Restated Restated
2011 2012 2013 2014 2015
$000 $000 $000 $000 $000
Turnover 1,944,590 1,828,840 1,783,997 1,844,190 2,049,050
Profit/(Loss) (before tax) 186,265 146,521 (76,628) 72,905 138,969
Taxation (53,437) (59,114) 46,783 (13,429) (25,695)
Exceptional Item - - - - -
Profit (Loss) for the Financial Year 132,828 87,407 (29,845) 59,476 113,274
Other Comprehensive Income (5,216) (18,213) (42,307) 10,699
Dividends/Capital Distribution 41,584 34,995 28,034 - 17,562
Net Transfer of Capital Reserve - - - - -
Retained (Loss)/Profit for the year 91,244 47,196 (76,092) 17,169 106,411
Shareholders Funds
Capital:
Ordinary 467,656 467,656 467,656 467,656 467,656
Preference - - - - -
Share Premium - - - - -
Unissued Shares
Reserves 748,126 795,322 719,230 736,399 842,810
1,215,782 1,262,978 1,186,886 1,204,055 1,310,466
Long Term Liability 199,717 173,605 309,765 369,032 353,372
Total Funds Employed 1,415,499 1,436,583 1,496,651 1,573,087 1,663,838
Represented by:
Fixed Assets & Investments 929,228 941,710 983,437 1,297,184 1,107,669
Net Current Assets 486,271 494,873 513,214 275,903 556,169
1,415,499 1,436,583 1,496,651 1,573,087 1,663,838
Ordinary Shares in Issue (mls) Year end 357.5 357.5 357.5 357.5 357.5
cents cents cents cents cents
Dividends Per Ordinary Shares 11.6 9.8 7.8 - 4.9
Earnings Per Ordinary Shares 37.97 24.96 (8.52) 16.99 32.35
Shareholders Funds
Per Ordinary Stock Unit 340.1 353.3 332.0 336.8 366.6
% % % % %
Returns on Sales (Profit before tax as a
Percentage of Turnover) 9.58 8.01 (4.30) 3.95 6.78
Gearing (Net Borrowing as a
Percentage of Capital and Reserves) 5.80 2.50 18.20 24.20 20.33
Return on Net Assets (Profit After Tax
as a Percentage of Net Assets) 9.38 6.08 (1.99) 3.78 6.81
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NOTES
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NOTES
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NOTES
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Place
$100.00
stamp
here
FORM OF PROXY
I/We ...........................................................................................................................………
of ..............................................................................................................................……….
being a Member/Members of the above-named Company hereby appoint
................................................................of..............................……........................... ......….
or failing him/her………………………..…………..of......................................………….......................
As my/our proxy to vote for me/us on my/our behalf at the Sixty-seventh Annual General Meeting of the Company to be held on Tuesday, September 15, 2015 at 10:00 a.m. and at any adjournment
thereof.
I/We desire this form to be used for/against the resolutions as indicated below.
Signed this ........................................... day of ....................……….....…................... 2015
Signature: ...............................................................................…….......................................
Unless otherwise directed the proxy will vote, as he thinks fit. Please indicate by inserting an
“X” in the spaces below how you wish your votes to be cast. If no indication is given your
Proxy will vote for or against each resolution or abstain, as he thinks fit.
RESOLUTIONS FOR AGAINST
RESOLUTION 1
RESOLUTION 2 (a)
RESOLUTION 2(b) (i)
RESOLUTION 2(b) (ii)
RESOLUTION 2(b) (iii)
RESOLUTION 2(b) (iv)
RESOLUTION 3
(For text of Resolutions please refer to Notice of Meeting)
NOTES:
1. An instrument appointing a proxy, shall, unless the contrary is stated thereon be valid as well for any
adjournment of the meeting as for the meeting to which it relates and need not be witnessed.
2. If the appointer is a corporation, this form must be under its common seal or under the hand of an officer or
attorney duly authorized in writing.
3. In the case of joint holders, the vote of the senior will be accepted to the exclusion of the votes of others,
seniority being determined by the order in which the names appear on the register.
4. To be valid, this form must be received by the Registrar of the Company at the address given below not less
than 48 hours before the time fixed for holding the meeting or adjourned meeting.
5. The proxy form should bear stamp duty of One Hundred dollars ($100.00) which may be in the form of
adhesive stamp duly cancelled by the person signing the proxy form.
REGISTRAR AND TRANSFER AGENTS
Jamaica Central Securities Depository
40 Harbour Street, Kingston
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