INVESTMENTS LIMITED ANNUAL REPORT The path to financial freedom Safety Integrity Prudent Money Management

Transcription

1 INVESTMENTS LIMITED ANNUAL REPORT 2015 The path to financial freedom Safety Integrity Prudent Money Management

2 TABLE OF CONTENTS Notice of Annual General Meeting Mission & Values Corporate Data Chairman s Message Directors Report Corporate Governance Board Members Management Discussion & Analysis Executive Team Corporate Social Responsibility Highlights of our Financial Year Five year Statistical Review Shareholdings of Directors & Connected Parties Auditor s Report Proxy Form

3 Notice of Annual General Meeting Notice is hereby given that the Thirty Eighth Annual General Meeting of Barita Investments Limited will be held at the Courtleigh Hotel, 85 Knutsford Boulevard, Kingston 5, on Thursday, March 24, 2016 at 10a.m., for the following purposes: 1. To receive and consider the Directors Report and Financial Statements for the year ended September 30, 2015, and the Report of the Auditors thereon. 2 To consider and (if thought fit) pass the following Resolution: - Resolution 1 THAT the Balance Sheet and the Profit and Loss Account together with the Reports of the Directors and the Auditors circulated with the Notice convening the meeting be and are hereby adopted. 2. To approve and ratify the Final Dividend for the year under review. To consider and (if thought fit) pass the following Resolution: - Resolution 2 THAT the interim dividend of J$0.11c per share declared by the Board of Directors of the Company on February 15, 2016, paid to ordinary shareholders of the Company on March 11, 2016 to shareholders on record as at February 29, 2016, be approved and declared as a final dividend for the year ended September 30, To elect Directors and fix their remuneration. (i) The Directors retiring from office by rotation pursuant to Article 93 of the Articles of Incorporation are Mrs. Rita Humphries-Lewin and Mr. Karl Lewin.

4 Notice of Annual General Meeting cont d To consider and (if thought fit) pass the following Resolutions: - Resolution 3 (a) THAT retiring Director Mrs. Rita Humphries Lewin be and is hereby re-elected a Director of the Company. Resolution 3 (b) THAT retiring Director Mr. Karl Lewin be and is hereby re-elected a Director of the Company. 4. To appoint Auditors and authorize the Directors to fix the remuneration of the Auditors. 3 To consider and (if thought fit) pass the following Resolution: - Resolution 4 THAT the Directors be authorized to appoint and fix the remuneration of the Auditors. 5. To consider any other business of an Annual General Meeting. By Order of the Board Ian McNaughton Secretary Kingston, Jamaica February 15, 2016 Please note: A member entitled to attend and vote at the above-mentioned meeting is entitled to appoint one or more proxies to attend and on a poll to vote instead of him. Such proxy must be lodged at the Company s Registered Office no less than forty-eight hours before the meeting. A proxy need not be a member. A suitable form of proxy is enclosed.

5 Mission To be the premier investment services group in Jamaica and the Caribbean; To maintain alliances with successful regional and international investment institutions; To utilize appropriate technology and business practices; To foster conditons for a highly motivated team of professionals; To provide a high level of global financial products and services; To generate wealth for our wide range of clients, owners and employees. 4 INVESTMENTS LIMITED making money work for you Values safety We are committed to providing secure investment products and services. integrity We believe in communicating honestly with our clients and operating in an ethical and transparent manner. PRudent Money ManageMent We practice wise management of your money and provide the best returns for your investment.

6 Corporate Data Barita Investments Limited was founded in 1977 by Rita Humphries-Lewin and has the distinction of being the oldest member of the Jamaica Stock Exchange. The Company is licensed by the Financial Services Commission (FSC), and is a Primary Dealer and a Cambio Dealer for the Bank of Jamaica. With a highly dedicated team of over eighty (80) professionals, Barita is committed to serving its customer s island wide, through its head office in New Kingston, and branches in Mandeville and Montego Bay. RegisteRed office external auditor 15 St. Lucia Way PricewaterhouseCoopers Kingston 5, Jamaica Scotiabank Centre Toll Free: Duke Street Tel: (876) Kingston, Jamaica Fax: (876) subsidiary internal auditor Barita Unit Trusts Management Co Ltd. Ernst & Young 15 St. Lucia Way 8 Olivier Road Kingston 5, Jamaica Kingston 8 Tel: (876) Fax: (876) branches Mandeville Principal Banker Shop 2A, Manchester Shopping Centre CIBC First Caribbean 17 Caledonia Road 23 Knutsford Boulevard Mandeville, Manchester Kingston 5, Jamaica Tel: (876) Fax: (876) Montego Bay Suite S301, Baywest Shopping Centre Harbour Street Montego Bay, St. James Tel: (876) Fax: (876) barita@cwjamaica.com Website: Registrar & Transfer Agents Jamaica Central Securities Depository 40 Harbour Street Kingston

7 Chairman s Message 6 On behalf of our Board of Directors, I am very pleased to share with you our year s performance, as we continue our historic record of never posting a loss. For the financial year October 1, 2014 to September 30, 2015, the Company increased its pre-tax profits by 226%; a direct response to the foundation we created to manage the slew of changes in our environment. As a boutique operation, we focus on forging stronger relationships with our clients, who continue to respond to our culture of service and wide range of products. Our resolve to enhance shareholder value remained at the fore and led to a Profit after tax of $242 million, which translated into earnings per share of $0.55 cents. Total Revenues also increased from $1,335 billion prior year to $1,531 billion during this reporting period. Of note, is the increased performance of Barita Unit Trusts, aided by the mandated shift from the repo business model to that of Collective Investment Schemes. We listened to our clients and created solutions for them that bolstered Barita Unit Trusts funds under management by an astounding 56% from prior year.

8 Chairman s Message cont d During this financial year, we successfully completed a number of projects to continue on our growth trajectory. To meet the demands of regulatory changes, we added two additional portfolios to Barita Unit Trusts Multiple Portfolio Fund -The Barita FX Growth Portfolio (US$) and the Barita Real Estate Portfolio (JA$). We also completed the development of the fixed income module of our in-house software platform BIIMS; a significant investment in improving our output. The transformation needed to meet the needs of the retail repo framework was significant and while other players decided to exit this market, we worked tirelessly to ensure that this product remained an option for our clients who want to operate on this platform. Our investment in technology continued to be substantial and to enhance our client interface, we introduced the revamped Barita Roadmap (a financial planning tool) and Barita Stock Alerts - (which allows clients real-time access to equity information). Barita Stock Alerts is the first of its kind in Jamaica, and we will continue to search for and bring innovative products and tools to the market. Operating expenses increased by 3% during this financial period, as we strived to minimize the impact of the costs of expanding our business. Our investment in our IT systems continue to pay off, allowing us to bring further automation to our processes and be more efficient. Our solid performance this year would not have been achieved without the leadership of our Board and Management team and the tireless efforts of our other team members. Our hard work was recognised by the Jamaica Stock Exchange, who presented us with a trophy for Investor Relations and Best Website in It was truly an honour to be recognised as a leader amongst our peers. I continue to extend my deepest gratitude to our customers who continue to show confidence in our brand. We remain committed to serving you, as we look forward to another robust financial year. 7 Rita Humphries Lewin Chairman

9 Directors Report The Directors present their Report and the audited Financial Statements for the year ended September 30, financial Results Full details of our results are set out in pages We however highlight the following: 8 Profit before Income tax $372,698,000 Profit after tax $242,062,000 RetiRing directors Mrs. Rita Humphries-Lewin Mr. Karl Lewin auditors Messrs. Pricewaterhouse Coopers will continue in office as Auditors in accordance with the provisions of Section 154(2) of the Companies Act. By Order of the Board, February 15, 2016 Ian McNaughton Company Secretary

10 Corporate Governance The Board of Directors of Barita Investments Limited is committed to establishing and maintaining the highest standards of good corporate governance. The fundamental objective of good governance is to ensure transparency and accountability, in an effort to protect shareholders and stakeholders value. The corporate governance policies are overseen by the Board who ensure that prudent and effective controls are in place, so that the company functions in a sound and sustainable way, and meets its strategic goals. It includes the stewardship of the organization s assets and the management of risk to meet legal and regulatory requirements, and to ensure compliance. board selection and composition 9 Selection Board members are selected to provide a balance of skills and experience for the company. Consideration is given as to their reputation in their respective professions, their honesty and integrity, and the time available to devote to the Board and work of the committees. Composition The Company s Articles, requires that there be no less than two (2) and no more than ten (10) directors. As at September 30, 2015, the board of Barita Investments Limited consists of eight (8) members, five (5) of which are Non Executive Directors, who analyze specific areas of the business to ensure that agreed goals and policies are met. The Policy requires that the Board meets for a minimum of six (6) times annually. During this financial period, six (6) board meetings were held.

11 Corporate Governance cont d 10 board MeMbeR Meetings attended Rita Humphries-Lewin 6 John (Jackie) Minott 1 Carl Domville 6 R. Anthony Jenkinson 4 George W. Cooper 5 Karl Lewin 5 Enith Williams 6 Ian McNaughton 5 board committee The Audit Committee appointed by the Board, provides guidance and oversight on strategic issues. The primary role of this committee is to provide the conduit between our internal auditors and the Board, regarding the strengthening and maintenance of internal processes vis-à-vis internal controls and operating compliance to established policy. Our internal auditors are Ernst and Young, and the members of the Audit Committee are Mr. Carl Domville, Mr. Karl Lewin, Mr. R. Anthony Jenkinson, Mr. George W. Cooper and Mr. Ian McNaughton, Mrs. Rita Humphries-Lewin is an ex-officio member and the committee is chaired by Mr. Carl Domville who is a Non Executive Director. During the period under review, the committee met for the required minimum of four (4) times. There were no known reported incidences of fraud or any reported irregularities.

12 Corporate Governance cont d audit committee MeMbeR Meetings attended Carl Domville 4 Rita Humphries-Lewin 3 R. Anthony Jenkinson 3 George W. Cooper 4 Karl Lewin 4 Ian McNaughton 4 investments committee The Investments committee while not being a board appointed committee does perform a critically important role in the Governance function of the organization. This Committee is mandated to meet on a fortnightly basis to examine and determine the directions of the various markets for both the clients and the Company. The Board remains committed to best practices. The Corporate Governance Policy will continue to be reviewed to ensure that the company s core values of safety, integrity and prudent money management are met. Kindly note that our Corporate Governance Policy is available on our website at 11

13 Board Members John (Jackie) Minott, b. comm., c.d., J.P., deputy chairman 1. Rita humphries-lewin, c.d., chairman Mrs. Humphries-Lewin is the Founder and Chairman of Barita Investments Limited and is a pioneer in the financial services sector in Jamaica. Her sterling contribution to the development of the island s Financial Industry led to her being conferred with The Order of Distinction Commander by the Government of Jamaica in the year A philanthropist in many areas of the Jamaican society, her passion continues to rest in the field of early childhood education. She was honoured with a Doctorate Degree of Education in Leadership by Mico University, for her contribution to early childhood development. Mr. Minott is the Managing Director of Jamaica Standard Products Company Limited. He sits on numerous boards and committees and is a Justice of the Peace for Manchester. In 2000, Mr. Minott was bestowed with the Order of Distinction, Commander Class (CD) for his outstanding contribution in the fields of Commerce and Export. 3. carl domville, b.sc. (hons.), f.c.c.a., f.c.a., chairman audit committee Mr. Domville is the former Chief Operating Officer and Group Treasurer of the Seprod Group of Companies. A Chartered Accountant, he currently serves as a Director of Radio Jamaica Limited (RJR); the Teachers Services Commission (TSC) and is a Trustee of the Seprod et al Superannuation Scheme. He is also a former President of the Jamaica Cooperative Credit Union League Limited.

14 7. 6. enith williams 8. Ms. Williams is a Business Consultant with many years of experience working in the non-profit, government and private sectors in Jamaica and the United States. A licensed financial professional, she is a former international banker with Merrill Lynch in New York City. She currently serves as a member of the Board of the Export-Import Bank of Jamaica and sits on Bank s Audit and Conduct Review and Enterprise Risk Management committees. Ms. Williams is also a member of the Projects Committee of 138 Student Living Jamaica Limited, a developer and operator of student accommodations on the campus of the University of the West Indies, Mona R. anthony Jenkinson, ll.b. (hons.), M.a., J.P. Mr. Jenkinson, an Attorney-at-law with a commercial practice, is the former Managing Partner and Senior Partner and now Consultant of the Law Firm Nunes Scholefield DeLeon and Company. He is also a Barrister- at-law of Gray s Inn, U.K. and has been called to the Grenadian Bar. He is a Director of the Bermudez Group Limited, the Jamaica Biscuit Company Limited and Xsomo International Limited, and Fleetwood Jamaica Limited. He is also a former President of the American Chamber of Commerce of Jamaica and a former Director of Colgate Palmolive Jamaica Limited, Goodyear Jamaica Limited and T. Geddes Grant (Jamaica) Limited. Mr. Jenkinson resides in Grenada where he is an Attorney-at-Law. 5. george (Paul) w. cooper Mr. Cooper is a former Senior Partner at the law firm of Livingston, Alexander and Levy. He has over 44 years of experience in the areas of real estate, lenders security documentation, company law and commercial law. He is a member of the Jamaica Bar Association and the Law Society of England and Wales. He also serves on the Boards of The Laws Street Trade Training Centre and Mustard Seed Communities. 7. karl lewin, b.sc., Mba Managing director, barita unit trusts Mr. Lewin, Managing Director of Barita Unit Trusts Management Company Limited, joined Barita Investments Limited in 1992 and was appointed Managing Director of Barita Unit Trusts Management Co. Ltd. in Mr. Lewin serves on the Board of the St. Andrew Care Centre and is a former Director of Radio Jamaica Limited and Television Jamaica Limited. A career financial manager, he has held numerous senior management positions both locally and overseas. 8. ian Mcnaughton, b.sc., Mba company secretary & Managing director Mr. McNaughton joined Barita in 2008 as the Financial Controller and has been promoted from this post to General Manager and now Managing Director effective September 1, He also serves as the Company Secretary for Barita Investments Limited and is the Deputy Chairman of the Jamaica Stock Exchange and a Director of the Jamaica Central Securities Depository. An avid footballer, Mr. McNaughton also sits on the board of the Harbour View Football Club.

15 Management Discussion & Analysis 14 MaRket ReView In stark contrast to the corresponding twelve-month period of 2014, the 2015 financial year saw a boost in investor confidence, as was demonstrated by stronger demand for Jamaican dollar liquidity, and a vibrant stock market in the latter half of the year. As the Jamaican economy continued its transformation under the International Monetary Fund s External Funds Facility programme, real Gross Domestic Product (GDP) growth, which started the period predominantly flat, closed the year between 1 percent and 2 percent for the final quarter after two consecutive quarters of growth. Additionally, the country s ranking in the World Bank s Ease of Doing Business Report jumped 27 places to 58th among 189 measured territories, and first in the Caribbean. Point to point inflation moved down 500 basis points from 9 per cent to 4 per cent over the financial year ending September 30, 2015 as fuel and fuel related costs trended down. fixed income MaRket In February and March of 2015, the central bank introduced what they called Open Market Repurchase Operations (ORTOs) which provided 90-day liquidity to deposit taking institutions at a rate of 9.15 per cent. These ORTOs were conducted in response to an increase in Jamaican Dollar liquidity from large maturities of BOJ repurchase agreements, as well as Government of Jamaica operations. The financial year ending September 30, 2015 saw short term market interest rates declining in the December, June and September quarters, and rising in the March quarter. The increase in March was consistent with the stronger demand for Jamaican Dollar liquidity. The Bank of Jamaica reduced its signal rate - the 30-day Certificate of Deposit, in the June and September quarters from per cent, and per cent, respectively. The declines reflected the central bank s outlook for lower inflation.

16 Management Discussion & Analysis cont d 15 Treasury Bills started the financial year with yields trending downwards in the first quarter, moving from per cent, per cent, and percent for 30-day, 60-day and 90-day instruments, respectively. The declines reflected overall improvements in local liquidity, and lowered inflation expectations; and were primarily influenced by strong demand for the instruments. As the year progressed, Treasury Bill rates continued a predominantly downward path to close the September quarter at 6.23 per cent for 30-day, 6.20 per cent for 90-day, and 6.35 per cent for 180-day bills. foreign exchange MaRket

17 Management Discussion & Analysis cont d 16 The beginning of the financial year saw local currency depreciating 1.76 percent against the US dollar from October to December of 2014, marking a slowdown in calendar year depreciation to 7.8 percent from the 14 per cent reported the year before. By the end of the second quarter, devaluation slowed considerably to a rate of 0.3 per cent for those three months and 5.0 per cent for the year, as the Bank Of Jamaica (B.O.J.) intervened in the foreign exchange market in January by providing liquidity of US$ million. Also, the March quarter in particular saw a number of locally registered companies selling their foreign currency to meet the annual March 31 tax deadline. The effects of this carried over into the April to June quarter, resulting in the Jamaican dollar losing 1.69 per cent to its US counterpart, and 4.26 per cent over 12 months. The performance of the local currency in the December, March, and June quarters reflected the trend of slow-down in depreciation observed by the central bank since September 2013, however, that trend was reversed in the final quarter. By year end, the weighted average selling rate of the Jamaican Dollar vis-a-vis the US dollar closed the fourth quarter at $ to US$1.00, reflecting a rate of depreciation of 1.77 per cent for those final three months, and an annual pace of 5.67 per cent. The period under review saw increases in net demand for foreign currency to satisfy Balance of Payments current account transactions which were estimated to have increased for the year. local equities

18 Management Discussion & Analysis cont d The financial year ended with most Jamaica Stock Exchange indices higher relative to the corresponding period last financial year, and the twelve months ending June. The main and junior indices advanced 33.3 per cent and 49.9 per cent for the year, respectively, following a negative return over the last five calendar years. The stronger performance demonstrated by the local indices reflected the improved confidence among investors on the back of significantly lower world oil prices and lower inflation, improved liquidity conditions, and the lowering of the BOJ s signal rate which in turn led to lower private interest rates. The transition of the retail repo business also had a positive impact on the stock market as equities became the more attractive option to private repurchase agreements. For the quarter ending December 31, 2014, growth in the main index stood at 5.7 per cent while the junior market index grew 5.23 per cent. By the end of the second quarter, the main index feared significantly better as it closed the period at 9.76 percent. Market performance was strongest in the third quarter, as the main and junior indices grew 16.1 per cent and 29.5 per cent, respectively. In the final quarter however, growth in the main index temporarily came to a halt as it recorded declines in August and September of 2015, closing the quarter with a loss of less than one percent. 17 financial PeRfoRMance Demonstrating resilience and strong recovery in the midst of regulatory and other changes to the financial industry, Barita delivered sterling financial results for the financial year ending September 30, We posted profit before tax amounting to $372.7 million - an increase of $253.2 million or 240% over the prior financial year. After-tax profits for the 2015 financial year increased over 255% to close the period at $242.1 million, translating to earnings of $0.55 per share, and resulting in our return on equity increasing three-fold to 13.1%.

19 Management Discussion & Analysis cont d 18 ReVenue PeRfoRMance

20 Management Discussion & Analysis cont d 19 Net operating revenues, which includes net interest income, fee & commission income, dividend income, cambio gains and trading gains rose year-over-year by 44.8% to $905 million, compared with the prior year s gain of 21.9%. Trading gains, which comprises fixed income and equities trading, was largely responsible for the group s bolstered performance, recording an improvement of almost 256% to $346 million. This increase resulted in a 38% contribution to net operating revenues, coming from its 16% contribution for the 2014 financial year. Net interest income which declined 13% for the financial year totaled $265 million, and was the second largest contributor to the company s improved performance at 29% of net operating revenues, coming from 49% in the previous financial year. The change in net interest income chiefly reflects the changes effected on the retail repo framework in the middle of 2015, and the lower interest rate environment. Concerning dividend income, our company realised a 13.8% increase to $13.8 million, while foreign exchange trading & translation gains closed the year 5% lower at $100.3 million. Fees and commission income also increased 66.7% year-on-year to $170.9 million. As we embrace the shifts in the market to collective investment schemes, we will continue to focus our efforts on growing our non-interest income revenues.

21 Management Discussion & Analysis cont d 20 The Group is focused on increasing efficiencies and cost containment. Our total operating expenses grew 3% to $521 million, compared with the 13% increase recorded for the previous year. This increase was largely due to increases in staff and administrative expenses of 13.8% and 11% respectively. Administrative expenses include, among other things our marketing expenses, asset tax, utilities and security costs. Please note however that due to our green energy initiatives, utilities fell 29.5% to $8 million. The Group incurred no impairment costs on available-for-sale investments for the period. As it relates to operating efficiency, we did remarkably well as we achieved a 23 percentage point reduction in our operating expense/operating revenue ratio to 58% coming from 81%, while operating expenses as a percentage of total revenues fell nearly 4 percentage points to 34%.

22 Management Discussion & Analysis cont d assets and liabilities Barita realised a 2.4% reduction in total assets to $13.23 billion for the financial year ending September 30, 2015 as significant increases in cash and bank balances, resale agreements, and amounts due from other parties were offset by a 13% or $1.4 billion reduction in marketable securities and pledged assets. The Group s liabilities declined by 4% or $483.6 million to $11.38 billion as repurchase agreements and deferred tax liabilities fell 6.3% and 35.9%, respectively. 21 shareholders equity Total shareholder s equity increased 9.6% to $1.85 billion. The increase was due primarily to a 35% gain in retained earnings to $809 million. During the year, the company paid out over $31 million in ordinary dividends to our stockholders. capital adequacy Ratios The capital base of Barita Investments Limited remains strong. Barita continues to comply with and surpass the minimum of all the regulatory requirements of the primary regulator, the Financial Services Commission and also the Jamaica Stock Exchange. The Group was able to increase its capital to risk-weighted asset ratio from 18% in 2014 to 19% in 2015.

23 Management Discussion & Analysis cont d Regulatory Capital/Risk-weighted assets Tier 1 Capital/Capital base Actual Required Actual Required 19% >10% 18% >10% 96% >50% 94% >50% 22 segmented Results The Group is organized in business segments based on core business activities. They are as follows: a) Fixed Income this includes money market activities and securities broking. b) Funds Management this includes the administration of our six unit trust products Barita Money Market Fund, Barita Capital Growth Fund, Barita FX Bond Portfolio, Barita Income Portfolio, Barita FX Growth Portfolio and Barita Real Estate Portfolio. c) Other Operations this includes the operation of the Foreign Exchange Cambio, stock broking and any other income. Our segmented results show a 216% increase in Funds under Management, and 405% increase in Fixed Income year over year. segmented financial Results ($000) change Total Gross External Revenue Fixed Income 1, % Funds Management 175,557 88,740 98% Other 158, ,514-62% Segmented Results Fixed Income 570, , % Funds Management 128,987 40, % Other 158, ,514-62% Net Segmented Assets Fixed Income 11,861,468 12,436,811-5% Funds Management 289, ,842 40% Net Segmented Liabilites Fixed Income 10,861,028 11, %

24 Management Discussion & Analysis cont d segmented financial Results ($000) change Funds Management 92,904 20, % Margins Fixed Income 47.68% 13.65% 249% Funds Management 73.47% 46.06% 60% Other % % 0% subsidiary Barita Unit Trusts Barita Unit Trusts is a wholly owned subsidiary of Barita Investments Limited. Barita Unit Trusts is comprised of The Management Company, a Capital Growth Fund, a Money Market Fund, and The Barita Multiple Portfolio Fund which houses The Barita FX Bond, FX Growth, Income and Real Estate Portfolios. 23 The Management Company For the financial period under review, the Management Company recorded total revenues of $176 million, as against $88 million prior year. This increase is attributable to a 100% increase in Management Fees earned through the continuous outstanding performance of the Barita Money Market, Capital Growth, and FX Bond Fund, and an increase in realised gains on investment of $6.6 million compared to $139 thousand prior year. In addition, two new funds, namely the FX Growth and the Real Estate Portfolio became operational in April Consequently, funds under management increased from $5 billion for the prior year to $8 billion as at September 30, Expenses (which include operating and interest costs), were $47 million for 2015, compared to $48 million for prior year Profit before tax for the year was $128 million, compared to prior results of $40 million. Profit after taxation was $87 million compared to prior results of $25 million. Assets increased by 119% or $177 million to $382 million. This increase in assets is attributable to substantial increases in stock holdings and Bond Securities. There was also an increase in our liabilities largely due to an increase in taxation payable of $33 million compared to prior of $8 million. Shareholder s equity increased by 54% or $103 million to $293 million.

25 Executive Team claudine anderson dalton campbell dianne clunie-wallace dionne ennis JosePh cools-lartigue geneieve harty dorothea JaMes Michele McRae dennis orgill sonia owens Jacqueline PeaRt sean taylor angelia thomson Vanessa williams

26 Executive Team cont d claudine anderson 1 ManageR, Risk & compliance Ms. Anderson joined Barita in 2003 as a Cambio Trader and in 2005 was appointed to the post of Operations Manager. In November 2014, she was promoted to the post of Risk & Compliance Manager. She has over 25 years of experience in the financial sector, having held various positions in commercial, merchant and investment banks. She holds an MBA in Finance and Banking from Manchester Business School and is a Fellow and Certified Professional Member of the International Compliance Association. dalton campbell 2 ManageR, operations Mr. Campbell joined Barita in 2003 as Operations Assistant and was later appointed to the position of Senior Supervisor. In November 2014, he was promoted to the post of Operations Manager with responsibility for the Back Office Operations including Settlement and Securities. Dalton holds a B.Sc. in Mathematics from Northern Caribbean University. dianne clunie-wallace 3 ManageR, MaRketing & client services Mrs. Clunie-Wallace joined Barita in July of 2004 as the Marketing Manager and in August of 2005, was promoted to the position of Marketing and Client Services Manager. She holds a Bachelors of Arts in Business Administration (Marketing Major) from the University of Technology and an MBA from Nova Southeastern University. dionne ennis 4 operations ManageR (but) Miss Ennis joined Barita in April of 2004 as the Cambio Assistant and over the years has worked in several Accounting positions. In September of 2015 was promoted to the position of Operations Manager. Dionne holds a Bachelors of Arts in Business Administration (Accounting Major) from the University of Technology. JosePh cools-lartigue 5 ManageR, information technology Mr. Cools-Lartigue joined Barita in April 2002 as the Manager of Information Technology. Joseph is a graduate of the University of Technology, where he pursued undergraduate studies in Computer and Management Studies. geneieve harty 6 ManageR, Montego bay branch Mrs. Harty joined Barita in August 2002 as an Account Executive and was promoted in 2005 to the position of Manager, Montego Bay Branch. She holds a BSc. in Management Studies from the University of the West Indies and a Bachelors of Laws (LLB) from the University of Technology and a Certificate in Compliance from the International Compliance Association.. dorothea JaMes 7 consultant, equity & cambio operations Mrs. James joined Barita in 1992 as the Acting Accounts and Finance Manager and has served as the Risk and Compliance Manager since In 2015, she was appointed to the post of Consultant, Equity and Cambio Operations. Prior to joining Barita, she was a Management Consultant and Financial Analyst for many years at the now defunct Julius Edwards and Company. She was also an Auditor Supervisor at Mair Russell and Partners. Michele McRae 8 ManageR, software development Ms. McRae joined Barita Investments Limited in 1992 as a Systems & Software Consultant. In November 2013, she was appointed as Manager of Software Development. Michele holds a Master of Science Degree in Computer Based Management & Information Systems. 25

27 Executive Team cont d 26 dennis orgill 9 ManageR, Pensions Mr. Orgill joined Barita in 2001 as the Sales Manager for Barita Unit Trusts Management Company Limited. He spent four years in that position and left Barita for a few years. In November 2012 he returned to Barita as a Sales Consultant and in November 2014 was appointed as Pension Manager. Dennis holds a B.Sc. in Mathematics and Physics and is a Fellow of the Life Management Institute. He has extensive sales and management experience having worked at the senior management level in the insurance industry in Jamaica, the United States and in Barbados. sonia owens 10 ManageR, trading & investments Mrs. Owens joined the Barita Group in 1984 and is now the Trading and Investments Manager. She holds a Bachelor s degree in Banking and Finance from the University of the West Indies, has attended several professional training courses with JIM, JIB, CI Financial and Euro Finance and has completed an MBA at Edinburgh Business School. Jacqueline PeaRt 11 financial controller Ms. Peart joined Barita Investments Limited on February 01, 2015 as the Financial Controller. She has over 25 years of experience in the accounting field, including 14 at the management level as Deputy General Manager and Financial Controller at St. Thomas Co-operative Credit Union. Jacqueline earned her MBA from the Mona School of Business and is a Certified Public Accountant (CPA). sean taylor 12 ManageR, business development Mr. Taylor joined Barita in May 2009 as a Senior Research Analyst and was appointed to the post of Business Development Manager on September 1, With over 10 years of experience in local and international financial markets, he has spearheaded the management of several prestigious companies portfolios and prepared projections and business plans for executive management. Sean is a graduate of the University of the West Indies, where he earned a Bachelor of Sciences degree in Actuarial Sciences. angelia thomson 13 ManageR, human ResouRces Mrs. Thomson joined Barita Unit Trusts Management Company Limited in 2001 as an Administrative Officer and in 2005 was transferred to Barita Investments as the Human Resources Manager. She has many years of experience in the administrative field and has completed several courses in human resource management. Vanessa williams 14 ManageR, MandeVille branch Mrs. Williams joined Barita Investments Limited in 2002 as the Manager of our Mandeville Branch. She has over 25 years of experience in the financial sector having worked at NCB, Century National Bank, DB&G and Manufacturers Sigma Merchant Bank. She holds an MBA in Finance from Manchester Business School and a Certificate in Compliance from the International Compliance Association.

28 Corporate Social Responsibility Barita considers Corporate Social Responsibility vital because of its direct impact on the future of our country. This year, we continued to make extensive contributions to various entities such as The Missionaries of the Poor, Saint Vincent de Paul, Mustard Seed Communities and Teen Challenge Jamaica. Our strongest commitment however remained towards early childhood development, as we believe that this area has the potential to deliver the highest returns for our nation. barita education foundation The Barita Education Foundation aims to improve the overall literacy and numeracy skills of at- risk children between the ages of 3-6. The Foundation hires teachers who work with assigned partner schools to conduct numeracy and literacy programmes. To ensure it s sustainability, we also have as a part of our team social workers who implement a parenting programme that makes parents aware of the important role they play in their child s education. To enhance our work in the communities, we implemented two new initiatives this year; A Recycling Project with the children and a Library Project with the parents to improve the resource capabilities available to the children. 27 the Recycle PRoJect Sean Taylor, Business Development Manager, with two students from Mennonite Basic School doing their super hero pose. Sean Taylor, Business Development Manager presents a recycle bin, garbage bags and a poster to Carolina Johnson, Principal of Galilee Basic School.

29 Corporate Social Responsibility cont d the library PRoJect 28 Children from Mennonite Basic School enjoy their reading corner created for them during the Library Project. harbour View football club first kick PRogRaM Barita recently completed its fifth year of sponsoring the Harbour View Football Club s (H.V.F.C.) First-Kick Programme. The sponsorship valued at $350,000 for the academic year, provided training for the coaches, gears for the children and accounts for the top 31 students. Barita considers this programme an integral extension of its work in the early childhood arena as it not only recognises the physical prowess of the children but also develops life skills by rewarding members of the club (ages 5-11), who are disciplined, punctual and are strong academic performers. Barita presents the achievers with investments in the Barita Money Market Fund, developing in them the habit of saving and investing for their future goals. Dianne Clunie-Wallace, Marketing & Client Services Manager and Danielle Lyn, Marketing Officer share a celebratory moment with awardees from the First-Kick Programme.

30 Corporate Social Responsibility cont d barita MandeVille branch Our branch in Mandeville continued to serve the community by participating in the following projects: The renovation of the Brooks Park Playground. Donating Screens to Mandeville Hospital Sponsoring the Manchester Festival Prince & Princess 2015 The Manchester Festival Prince & Princess contestants paid a courtesy call on Chairman Rita Humphries-Lewin & Karl Lewin (Managing Director, Barita Unit Trusts) 29 The refurbished playground

31 Highlights of our Financial Year barita Montego bay 10th anniversary Barita Montego Bay celebrated its 10th anniversary on July 2, To mark this milestone, customer appreciation was held in branch from July 1 10 and a cocktail reception was held at Seawind Beach Club on July 2, to thank Western Jamaica for their overwhelming support of the branch. The Branch also used the opportunity to donate $100,000, to improve Grants Basic School located in the community of Flankers. 30 Montego bay s 10th anniversary Team members of the branch band together to thank clients for their support at Mobay s 10th Anniversary. (L-R) Dainton MacFarlane, Geneieve Harty, Nordia Morrison, Stephanie Thompson (Resigned), Marlene Nicholson and Crystal Grant. Clients of Barita Montego Bay enjoying a festive evening.

32 Highlights of our Financial Year cont d Geneieve Harty, Montego Bay Branch Manager along with Ian McNaughton, Managing Director, presents a cheque to Ms. Ferguson, Principal of Grant s Basic School. barita is a winner at the Jse best PRactices awards dinner 31 Sean Taylor, Business Development Manager, accepts awards for Best Website and 1st Runner Up Investor Relations, as a Member Dealer Company at the JSE Best Practices Awards. barita launches two new PRoducts To facilitate the shift from the repo business model, Barita provided investors with more options to secure wealth by launching two new investment products in April 2015.The Barita FX Growth is a US$ Equity Portfolio while The Barita Real Estate Portfolio is JA$ denominated and invests in commercial and/ or residential properties for lease or sale.

33 Five year Statistical Review 2011 $ $ $ $ $ 000 consolidated statement of comprehensive income REVENUES Interest income 891,345 1,015,769 1,025,487 1,127,269 1,337,377 Interest expense 626, , , , ,745 Net interest income 265, , , , ,632 Fees & commission income 170, ,490 89,096 94,562 58,546 Dividend income 13,779 12,104 22,032 8,031 6,758 Foreign exchange gain 100, , ,748 46,632 12,019 Gain on sale of investments 346,272 97, , , ,852 Net operating income 896, , , , ,807 Total revenues 1,531,316 1,335,863 1,099,581 1,482,965 1,636,698 EXPENSES Staff costs 271, , , , ,715 Administration 250, , , , ,185 Impairment of available-for-sale investment - 42,035 7,328 4,071 61,277 Share of results of Investment in associated company (11,262) (9,956) Total operating expenses 521, , , , ,177 Profit before Tax 372, ,535 70, , ,776 Taxation 130,636 43, , ,697 Net Profit 242,062 66,450 70, , , $ $ $ $ $ 000 consolidated statement of financial Position ASSETS Cash and bank balances 217,002 76,760 92, , ,650 Resale agreements 2,296,371 1,506,259 1,169,371 1,308,449 1,465,705 Marketable securities & pledged assets 9,487,697 10,913,346 11,108,196 11,372,955 12,501,024 Receivables 549, , , , ,473 Loans receivables 291, , , ,505 73,753 Due from related companies 59,310 13,615 6,907 13,751 9,667

34 Five year Statistical Review cont d Property, plant and equipment 226, , , , ,447 Investment in associated company 6,915 18, Total Assets 13,234,139 13,555,524 13,170,855 13,562,652 14,805,721 LIABILITIES Bank overdraft 22,502 3,167 17,501 2,851 4,288 Repurchase agreements 10,861,027 11,590,978 11,643,482 11,287,523 12,306,108 Payables 210,394 75,263 64,734 97,458 82,769 Preference stock , ,428 Taxation payable 123,040 8,452 14,249 90, ,377 Deferred tax liabilities 130, ,334 27, , ,605 Total liabilities 11,381,508 11,882,194 11,767,099 11,861,279 13,046,151 SHAREHOLDER S EQUITY Share capital 736, , , , ,009 Capital reserves 69,799 69,799 28,506 28,506 28,506 Fair value reserves 17,077 57, , , ,876 Capital redemption reserve 220, , , Retained earnings 809, , , , ,179 Total Shareholder s Equity 1,852,631 1,673,330 1,403,756 1,701,373 1,759,570 Ratios & share information Net profit margin 15.8% 5.0% 6.4% 17.2% 13.4% Operating expense/total revenue 34.0% 37.8% 40.2% 31.1% 25.9% Operating expense/operating revenue 58.1% 81.2% 86.6% 57.2% 57.7% Effective tax rate 35.1% 39.3% 0.3% 26.7% 32.5% Return on average equity 13.1% 4.0% 5.0% 15.0% 12.5% Return on total assets 1.8% 0.5% 0.5% 1.9% 1.5% Earnings per share $0.55 $0.15 $0.16 $0.57 $0.49 Book Value per Share $4.19 $3.77 $3.15 $3.35 $3.48 Share Price as at September 30 $2.20 $2.18 $2.49 $2.99 $3.00 Dividends Paid ($ 000) 31,211 13,376 50,730 40,050 15,575 33

35 Shareholdings of Directors & Connected Parties shareholdings of the 10 largest ordinary shareholders shareholder amount Rita Humphries-Lewin 339,975,664 BPM Financial Ltd. A/C BP ,180,000 Peta-Rose Hall 11,188,814 John O. Minott (Snr.) 5,885,322 Karl Lewin 5,675, First Caribbean International Securities Limited A/C B.U.T. 5,404,804 George William Cooper 5,302,322 Monica L. Cools-Lartigue 4,310,500 Yvonne Shaw 4,260,000 Agnes Barbara Humphries 4,000,000 shareholdings of directors and connected PaRties shareholdings of senior ManageRs and connected PaRties director shareholding ManageR shareholding Rita Humphries-Lewin 339,975,664 John O. Minott (Snr.) 5,885,322 Robert A. Jenkinson 875,000 George William Cooper 5,302,322 Ian McNaughton 296,000 Sonia Owens 260,000 Dorothea Lynette James 25,000 Claudine McLeish 0 Carl Domville 2,151,061 Vanessa Lawrence-Williams 75,000 Connected Party 608,713 Geneieve Harty 35,000 Karl Lewin 5,675,322 Ian McNaughton 296,000 Enith Williams 195,000 Connected Parties 39,000

36 Audited Financial Statements YEAR ENDED 30 SEPTEMBER

37 Index Pages Independent Auditors Report to the Members financial statements Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position 40 Consolidated Statement of Changes in Stockholders Equity 41 Consolidated Statement of Cash Flows 42 Company Statement of Comprehensive Income 43 Company Statement of Financial Position 44 Company Statement of Changes in Stockholders Equity 45 Company Statement of Cash Flows 46 Notes to the Financial Statements

38 Independent Auditors Report , 37

39 Independent Auditors Report cont d 38

40 Consolidated Statement of Comprehensive Income Year ended 39

41 Consolidated Statement of Financial Position 40

42 Consolidated Statement of Changes in Stockholders Equity Year ended 41

43 Consolidated Statement of Cash Flows Year ended 42

44 Company Statement of Comprehensive Income Year ended 43

45 Company Statement of Financial Position 44

46 Company Statement of Changes in Stockholders Equity Year ended 45

47 Company Statement of Cash Flows Year ended 46

48 Notes to the Financial Statements 47

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116 Proxy Form barita investments limited I/We... of... being a member/members of Barita Investments Limited, hereby appoint... of... or failing him/her... of...as my/ 115 our Proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held at the Courtleigh Hotel, 85 Knutsford Boulevard, Kingston 5 on Thursday, March 24, 2016, at 10:00 a.m. Dated the... date of Signed:... NOTES: 1. This Form of Proxy must be received by the Secretary of the Company not less than 48 hours before the time appointed for the Meeting. 2. This Form of Proxy should bear stamp duty of $ If the appointer is a Corporation, this Form of Proxy must be executed under its common Seal or under the hand of an officer or attorney duly authorized in writing. J$ 100 STAMP

117 INVESTMENTS LIMITED 15 St. Lucia Way, Kingston 5, Jamaica W.I. T: (876) , F: (876) website: Designed by Sharmac Graphics Ltd.