Contents. Table of. 6 Notice of Annual. 8 Financial Highlights 10 Directors Report 11 Mission Statement 12 Chairman s &

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1 Table of Contents 6 Notice of Annual General Meeting 8 Financial Highlights 10 Directors Report 11 Mission Statement 12 Chairman s & President s Review Largest Ordinary Shareholders 31 Shareholdings of DIrectors & Senior Management and Connected Parties 32 Directors and Officers 33 Auditors Report 34 Group Profit & Loss Account 35 Group Balance Sheet 36 Group Statement of Changes in Stockholders Equity 37 Group Statement of Cash Flows 39 Company Balance Sheet 40 Notes to the Financial Statements 88 Corporate Divisions & Subsidiaries Advisers (inside back cover)

2 Integrity

3

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5 Quality

6 You can trust us.

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8 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the 48th Annual General Meeting of Jamaica Broilers Group Limited will be held at the Jamaica Conference Centre, Ocean Boulevard, Kingston Mall, Kingston on Saturday, October 21, 2006 at 10:00am to transact the following Business: 1. To receive the Audited Accounts for the year ended April 29, 2006, together with the reports of the Directors and Auditors thereon, The Company is asked to consider, and if thought fit, pass the following resolution: Resolution No.1 - That the Audited Accounts for the year ended April 29, 2006, together with the reports of the Directors and Auditors thereon, be and are hereby adopted. 2. To elect Directors. (i) The Directors retiring by rotation in accordance with Regulation 89 of the Company s Articles of Association are The Hon. Raby Danvers Williams, O.J., Mr. Phillip Levy., Mr. Christopher Levy and Mr. Hirlie Williams who, being eligible for re-election, offer themselves for re-election. The Company is being asked to consider, and if thought fit, pass the following resolution: Resolution No. 2 - That the Directors, retiring by rotation, be re-elected by a Single Resolution. Resolution No. 3 - That The Hon. Raby Danvers Williams, O.J., Mr. Phillip Levy, Mr. Christopher Levy and Mr. Hirlie Williams who are retiring by rotation in accordance with Regulation 89 of the Articles of Association be and are hereby re-elected as Directors of the Company. 3. To approve the remuneration of the Directors. The Company is asked to consider, and if thought fit, pass the following resolution: Resolution No. 4 - That the amount shown in the Audited Accounts of the Company for the year ended April 29, 2006 as fees of the Directors for their services as Directors, be and is hereby approved. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

9 4. To appoint Auditors and to authorize the Directors to fix the remuneration of the Auditors. The Company is asked to consider, and if thought fit, pass the following resolution: Resolution No. 5 - That the remuneration of the Auditors, PricewaterhouseCoopers, who have signified their willingness to continue in office, be such as may be agreed between the Directors of the Company and the Auditors. DATED THIS 4 TH DAY OF SEPTEMBER, 2006 BY ORDER OF THE BOARD PETER A. DePASS SECRETARY REGISTERED OFFICE CONTENT, MCCOOK S PEN ST. CATHERINE NOTE: A member entitled to attend and vote at the meeting may appoint a proxy, who need also be a member, to attend and so on a poll, vote on his/her behalf. A suitable form of proxy is enclosed. Forms of proxy must be lodged at the registered office of the Company at Content, McCook s Pen, Saint Catherine or with the Registrar of the Company, Duke Corporation 13th Floor, Scotiabank Centre, Cnr. Duke & Port Royal Streets, Kingston not less than 48 hours before the time of the meeting. A Corporate shareholder may (instead of appointing a proxy) appoint a representative in accordance with Regulation 75 of the Company s Articles of Association. A copy of Regulation 75 is set out on the enclosed detachable proxy form. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

10 Financial Highlights J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

11 Wincorp - $528,939 International Poultry Breeders - $1,506,762 Jamaica Eggs Div. - $110,008 Information Systems Dept. - $33,430 Content Div. - $9,043,300 Aquaculture Ja. - $15,652,507 Jamaica Poultry Breeders - $28,145,280 Best Dressed Chicken - $141,218,125 Best Dressed Foods - $29,933,784 Capital Expenditure (J$) Year Ended April 29, 2006 TOTAL = $226,172,135 J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

12 Directors Report THE DIRECTORS present their annual report with the Financial Statements for the year ended 29th April, RESULT OF OPERATIONS TURNOVER The Group s turnover for the year amounted to $9,938,217,000 as compared with $9,146,538,000 for the previous year. PROFIT, DIVIDENDS AND APPROPRIATIONS Group Profit after taxation 645,334,000 Profits brought forward from previous years were 1,811,416,000 To give an amount of 2,456,750,000 Interim Dividends (317,917,000) Thereby leaving profits to be carried forward as Retained Earnings of 2,318,833,000 The Directors do not recommend the payment of a final Dividend. DIRECTORS The Directors retiring in accordance with Regulation 89 of the Articles of Incorporation are The Hon. Raby Danvers Williams, OJ., Mr. Phillip Levy, Mr. Christopher Levy and Mr. Hirlie Williams, all of whom are eligible for re-election. AUDITORS PricewaterhouseCoopers will continue in office as Auditors in accordance with the provisions of Section 154(2) of the Companies Act. DATED THIS 18 TH DAY OF SEPTEMBER, 2006 BY ORDER OF THE BOARD PETER A. DePASS SECRETARY REGISTERED OFFICE CONTENT, MCCOOK S PEN ST. CATHERINE J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

13 Mission Statement With God s guidance we shall efficiently manage our Company to fulfill its obligations to our customers, shareholders, employees, contractors and the community at large with an attitude of service and commitment to truth, fairness and the building of goodwill. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

14 Chairman s & President s Annual Review J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

15 OVERVIEW Our Group was able to achieve an increase in revenue from $9.1 billion to $9.9 billion and an increase in gross profits from $2.3 billion to $2.5 billion, despite the challenges that resulted from a very active hurricane season, the illegal importation of leg quarters, the heightened attention given, globally, to the threat of Bird Flu, as well as social unrest in the parishes in which our main operations are located. In the previous year, we were able to claim and obtain business interruption insurance proceeds of $210 million to offset the gross profits reduction resulting from Hurricane Ivan. Profits before taxation for this year of $765 million reflects a decline of $218 million resulting from the factors mentioned above. The net profit after tax of $645 million for the year serves to further solidify the Group s financial position and shore up our confidence to take advantage of opportunities for future growth. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

16 Highlights Five new products were introduced to the market 2. Two of our operations were consolidated 3. New marketing and production strategies were adopted for Aquaculture Jamaica Ltd. 4. Plans were finalized for expansion of our main cold storage facilities 5. A new partnership was formed with HEART and JAMAL for programmes in the communities in which we operate 6. We concluded the installation of our Enterprise Resource Planning (ERP) software in the main operations 7. Executives participated as mentors in the Group s new Management Mentoring Program (MMP) OPERATIONAL HIGHLIGHTS Divisions BEST DRESSED FOODS The 2005/2006 financial year was another successful one for Best Dressed Foods, with a 2.7% increase in the volume of poultry products that were sold. Most of this was achieved through our Nook & Cranny strategy, which called for increased penetration of the remote areas of the island. In addition, sales at our restructured Montego Bay Depot grew against the background of improved service through prompt and flexible deliveries. We also continue to dominate the rotisserie segment of the chicken market and in September 2005, we added the Oriental flavour bringing the choice of flavours to six. Additionally, our New Product Development team created five value-added products, which were well accepted by consumers. The new products were Chicken Salad, Kiddies Fish Nuggets, Chicken Nuggets, and Best Dressed Economy Pack Chicken and Soya Burgers. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

17 new! J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

18 In January, 2006, we redesigned and updated the packaging of the Best Dressed Chicken. With the emphasis on increased sales, we thought it fitting to introduce a new incentive programme to recognize our external customers. In this regard, the inaugural Customer Recognition Programme was launched to honour our top billing customers in retail, wholesale and fast food. Our Sales and Telesales Representatives of the Year were also recognized for delivering exceptional customer service and achieving outstanding sales performance. In keeping with our plans to improve the quality of our customer service, we acquired a Multi- Route software system, which interfaces with our ERP programme. This has greatly improved the timeliness of our distribution and the efficiency of our inventory management. During the year, the activities of Best Dressed Foods were expanded by utilizing our large and efficient refrigerated distribution system, with the importation of a range of refrigerated protein products, which will be offered to the 1,900 customers that we now service. BEST DRESSED CHICKEN PROCESSING PLANT The Processing Plant continued to perform at high international standards, thereby maintaining a good ranking in the international bench-marking agency for our industry, AGRISTATS. During the year, our performance was high for most efficiency measures, ranking in the top 10% internationally. Plans are well underway to enlarge our cold storage capacity, which will tie in with the Best Dressed Foods objective of expanding our product lines. The Cogeneration operations, which supplies electricity and thermal energy to BDC s Processing Plant, was managed during this year by us, under an agreement with the managing partner of EAL/ERI Cogeneration Partners, LP and 16.1 million kilowatt hours of electricity was sold to JPSCo at dumped energy prices. Another 5 megawatts engine was rebuilt, which now puts this operation in a position to consider entering into a power-service agreement with JPSCo, which would increase revenue substantially. Effective April 2006, the company which is the majority partner in the Cogeneration operations became a subsidiary of Jamaica Broilers Group Limited. The negative goodwill of $120 million, being excess of fair valued assets over liabilities and acquisition costs, arising from these transactions are reflected in this year s Profit & Loss Account. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

19 Co-generation J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

20 Bio-security J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

21 FIELD/FEED MILL OPERATIONS The emphasis on improved efficiencies continued within the Field and Feed Mill Operations in the year 2005/2006. To further facilitate this process both the Feed Mill and the Field Operations were merged in the second half of the financial year. Both Operations continued the rationalization and streamlining processes, critical to achieving the highest quality in the most cost effective manner. The modernization of the grow-out facilities is in its final stages and by the end of this financial year will be at optimum level. The Operations emphasis on strict bio-security measures an absolute necessity continues in all aspect of the Division. The Company is equipped with one of the best poultry diagnostic laboratories within the Caribbean, with two veterinarians and a number of trained laboratory technicians, to ensure that there are adequate measures in place for prevention, surveillance, diagnosis, control and eradication of any threat of poultry diseases. This emphasis has been enhanced with the threat of bird flu. The transformation exercise along with the merger will continue to allow this section of the division to achieve the expected efficiencies. The Field Operation is already realizing efficiencies in Livability and Feed Conversions in line with the best in the international arena. The Feed Milling section is focused on ensuring that feed of the highest quality reaches customers at the most competitive rates. The combined Field/Feed Mill team including contractors and contract farmers are fully committed to the task at hand. The drive for international competitiveness continues. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

22 One of the best J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

23 Poultry Diagnostic Laboratories in the Caribbean. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

24 HI-PRO/ACE The Hi-Pro/ACE Division was able to achieve overall profit targets this year. Although this performance is considered good, the results could have been better, were it not for the fact that the island was affected adversely by the active 2005 Hurricane Season. This resulted in dumping and loss of sale of nearly 1.5 million baby chicks, as well as lower-than-expected feed sales and resultant shortfalls in both the pig and layer markets. In addition, sales at the Hi-Pro/ACE Farm & Garden Supercentre at White Marl dropped significantly because of extensive and prolonged repairs to the Mandela Highway at Ferry, as well as sporadic violence in Spanish Town, St. Catherine, which resulted in reduced commuter traffic in the area. Over the past few years, the island s Livestock Industry has been weakened by the effects of flooding or drought. However, we are working with certain segments of the industry to rebuild and grow. For example, Hi-Pro/ACE collaborated with USAID to provide Hurricane Recovery assistance for affected farmers and we have embarked on a Genetic Upgrade Project for pig farmers, through an alliance with the Santa Maria Farms, in St. Mary, which provides high grade animals for improved performance. During 2005/2006, we began the delivery of baby chicks in an environmentally-controlled truck to ensure delivery of an improved quality of birds. In addition, Hi-Pro/ACE has continued to increase the range of pharmaceuticals, as well as veterinary supplies and fertilizers supplied to the farming community. At the same time, the Supercentre has expanded its Home Supplies Department and has widened the range of goods offered in all departments to ensure a better shopping experience for customers. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

25 Development of new Products CONTENT AGRICULTURAL PRODUCTS It was a challenging year for Content Agricultural Products, due to high prices as demand outstripped supplies. The real effects of the reduction in local breeder herds are now being felt. The decision was taken to discontinue the processing of local grass-fed cattle. This impacted negatively on sales revenues. In order to stabilize the operation, emphasis was put on the development of new products in keeping with suggestions from Best Dressed Foods. These products included Chicken Nuggets, Kiddies Fish Nuggets, Breaded, Formed Fish Fillet and Battered Chicken. The market response to these new products has been encouraging and we expect demand to grow. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

26 JAMAICA EGG SERVICES The Jamaica Egg Services Division performed well in 2005/2006, despite its share of difficulties in the last quarter of the year which resulted primarily from the destruction of the Table Egg Industry by Hurricane. The industry was able to rebound quickly and we were able to respond to the increased demand for pullets. The company identified new sales opportunities in the eastern Caribbean and exported pullets to Antigua during the year under review. In fact, exports, natural replacements and revenue from the replenishment of hens lost during the Hurricane pushed sales to 30% above the previous year. Jamaica Egg Services continues to contribute to the developmental plans of the Table Egg Industry and is integrally involved in the formation of guidelines for regional egg grading and labeling standards, which are soon to be implemented. During the year, the company gave support to the Jamaica Egg Farmers Association s plans to set up a modern liquid egg plant on the island. Both major projects will open opportunities for increased product diversification, sustained linkages with the hospitality industry and improved viability for the Table Egg Industry. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

27 SUBSIDIARIES Local AQUACULTURE JAMAICA Management took the major decision to realign the company towards the production of a larger fish for the fresh fillet markets in the USA and Europe. The decision was also taken to more adequately supply the local market demand for live fish (pond side) and a larger fish. This resulted in the ceasing of supply to the fast food operations, which was proving to be very unprofitable, due to the cost of processing smaller fish and lack of significant market growth. Management is confident that this strategy will bring the Aquaculture operation into profitability. The explosive growth that was anticipated from the supply to world-wide Quick Service Restaurants (QSR s), has not materialized; however, management is convinced that Aquaculture can still play a very important and profitable role in the corporate structure of Jamaica Broilers. In the last 2 periods of the year, 350,000 lbs of large fresh fillet were exported to the USA and Europe at prices that show a much improved gross margin. JAMAICA POULTRY BREEDERS The programme initiated two years earlier to upgrade the black-out rearing facilities and install tunnel-ventilation chicken houses on all our production farms was completed during the fiscal year. These measures have resulted in the production of hatching eggs moving up by 6% to million during this year, compared to million in the previous year. In addition, the quality of chicks produced has improved significantly. Application has been made for an extension to our Approved Farmer Status to facilitate further local expansion in the hatching egg production facilities. This will allow a greater percentage of hatching eggs produced at our International Poultry Breeders facility in Georgia, USA to be sold in other regions. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

28 SUBSIDIARIES Overseas INTERNATIONAL POULTRY BREEDERS LTD The company s performance during the year under review was outstanding, as team members managed to improve production efficiencies considerably thereby surpassing all production and financial targets for the year. WINCORP INTERNATIONAL, INC External sales contributed most to the increased revenues realized over the period being reviewed. However, toward the end of the year, our sales growth slowed somewhat because of the steep increase in fuel costs which resulted in substantial cost increases in export products, especially hatching eggs. This, in addition to the negative effects of three hurricanes in Miami during the year, had a negative impact on sales. On the other hand, sales of the Tunnel-Ventilated Chicken Houses to Jamaican farmers were steady, especially as the houses proved durable under harsh Hurricane conditions. In addition, Wincorp has been successful in selling a range of repeatable consumer products to Trinidad and Jamaica and the company s packaging material products have received good response from the market. HUMAN RESOURCE DEVELOPMENT & PUBLIC RELATIONS ACTIVITIES TRAINING AND DEVELOPMENT There were numerous training activities throughout the Group over the past year, with emphasis being placed on workplace safety and food safety which will facilitate HACCP certification customer service, and certification of technical staff, as well as facilitating formal academic pursuits. We also introduced a new initiative, which saw members of the Executive management team mentoring employees who are studying under the resident joint Jamaica Broilers Group/American Management Association (AMA) Programme, to secure additional certification in their particular areas of expertise. As shifts continue in the nature and management of human resources, as well as in the dynamic workplace environment, the company seeks to equip its staff with the necessary knowledge and expertise to enable them to perform at their optimal level. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

29 PUBLIC RELATIONS MANAGEMENT Among the most significant tasks that PR had to undertake during the year under review was management of issues surrounding the spread of Avian Influenza (AI), commonly referred to as Bird Flu. Our unit played an integral, coordinating role in the formation of the Group s internal AI Task Force, and also monitored the messages that were communicated to contract farmers and other key constituents as part of our stepped-up training on biosecurity measures that will enhance the safety of the organization s operations, should AI find its way into Jamaica. Worthy of note is the fact that, in order to make our public education plans more strategic, the PR unit commissioned a market survey on AI to determine the level of public awareness of the disease. As far as we are aware, this is the only such study that has been commissioned in Jamaica to date. Other major projects undertaken by the Group during 2005/2006 included the presentation of the Jamaica Broilers Fair Play Awards a programme that honours outstanding work in the field of journalism and seeks, thereby, to encourage excellence in a profession that can have significant impact on the national psyche marked the fifth year of the presentation of those awards. CORPORATE CITIZENSHIP In keeping with our Mission Statement to fulfill our obligation to the development of people and the community at large, the Jamaica Broilers Group participated in a number of social partnerships throughout 2005/2006. These partnerships assisted young adults in becoming empowered and self-sufficient through educational pursuits; encouraged a spirit of service and commitment in the communities; and promoted lifestyle and behavioural adjustments, while emphasizing the need for social cohesiveness. To help us to effectively execute these partnerships, we utilized the resources of such government agencies as the Social Development Commission, the HEART Trust/NTA and JAMAL Foundation. Of significance was the partnership between the JAMAL Foundation, our Group and the residents of the Bodles/Freetown communities. Members of these communities were able to participate in JAMAL s Literacy Improvement programme. The primary objective was to equip them to advance into the HEART Trust s Skill Certification process. Another notable partnership was the financial assistance extended to the Spring Village Training Institute to purchase welding equipment and supplies to outfit its Welding Workshop. We continue to be guided by strong spiritual and moral beliefs and accept, as our responsibility, that we must positively influence the lifestyle and attitudes of persons or J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

30 groups with whom we interact. In keeping with this, we partnered with Campus Crusade for Christ Jamaica, in attempting to positively influence the minds of Jamaica s youth through the Youth at the Crossroads Character Education Strategy. Youth at the Crossroads is a 30-lesson curriculum designed to help students develop good character, in order to become mature adults who make decisions based on respect and responsibility for themselves, their community and their environment. The programme was delivered to over twenty (20) primary schools across Jamaica. As part of our continuing outreach programme, we made contributions to various charitable and non-profit entities, to include social programmes within the communities in which we operate. ACHIEVEMENTS IN SPORTS The sporting prowess of the Jamaica Broilers Group continues to be well known in Business House circles, as the Group s team performed very well in their respective areas. In cricket, our team dominated all three (3) categories of the Business House Cricket Board competitions, taking the Reggae Jammin Foods title, the Herman Spoerri Double Wicket title and the overall Best Dressed Chicken Trophy. In football, our team raised the bar and captured the St. Catherine Business House Football Trophy. And our resilient and strong netballers were able to withstand strong competition to gain a third place spot in the Business House Netball Competition. We continue to use sports as a unifying and team building tool, to encourage greater staff interaction and promote a healthy lifestyle. JAMAICA BROILERS GROUP FOUNDATION LIMITED The Jamaica Broilers Group Foundation, now in its second year of existence, has been building its financial capacity through various investment instruments. Given that the 2.5% allocation of the Group s profit before tax will form the principal seed funding for the Foundation, it is necessary for the Foundation to gain wealth from its investments to sustain the prospective projects. The Foundation continues to be guided by its primary purpose of providing assistance to organizations in Jamaica and overseas, who have a desire to enhance the lives of others spiritually and materially. JAMAICA BROILERS GROUP WEBSITE < The site continues to be a reliable and current source of information on the company, as well as a strong communication tool for external interests. In recognition of the design, J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

31 functionality and innovativeness of the site, we were presented, in December 2005, with the Jamaica Stock Exchange s Best Practices Website Award for We continue to work toward improving and enhancing the site to increase user satisfaction. The Way Forward Our commitment to being the most efficient broiler producer in the Caribbean with the best quality products and highest service to our customers remains firm. With this commitment, it is necessary that we continue to support the trade negotiations on behalf of the industry; therefore, full support of the Caribbean Poultry Association will continue. New poultry and beef products will be developed and offered to the market this year, as we see more sophistication in the purchasing habits of our consumers. This year, we are committed to realize a profit in the Aquaculture operation and see significant growth in exports. The Directors and Executives have realized for some time that the industries in which we operate are mature. With this in mind, there has been a concerted effort to conserve cash to take advantage of opportunities in diverse fields that would give the company the necessary level of growth to keep ahead of inflation. With cash and investments that could be readily liquidated at approximately $1 billion and long term debt equivalent to only 5% of equity, this is now possible. On July 2006, the Board of Directors of the Company approved the construction and operation of an Ethanol Production Facility. It is expected that this facility will be completed by May 2007 and will have an annual ethanol production capacity of sixty million gallons. The Company anticipates that the initial capital outlay for this project will be approximately US$17 million (J$1,100,000,000) and that same will be financed through a combination of debt and equity resources. The coming year promises to be an important one for the company and we continue to seek God s guidance that our decisions will be beneficial to our shareholders, employees and communities. HON RABY DANVERS WILLIAMS, OJ, CD, JP, CLU Chairman ROBERT E. LEVY, CD President & CEO J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

32 10 Largest Ordinary Shareholders as at 29 APRIL 2006 The holdings of those persons owning the ten (10) largest blocks of stock units as at 29th April, 2006 are set out hereunder:- NAME OF SHAREHOLDER Portland Corporation Ltd. NO. OF SHARES 205,862,410 Ja. Broilers Employees Trust 157,696,247 Halcyon Ltd 60,899,945 The Arrol Trust 44,411,830 National Insurance Fund 45,007,902 Scotiabank Jamaica Trust & Merchant Bank Ltd. a/c #542 29,679,793 West Indies Trust Co WT89 18,636,796 LOJ-Pooled Equity Fund No 1 22,158,129 Carzlyn Ltd 13,589,068 Capital & Credit Financial Group Limited 13,253,528 PETER A. DEPASS Secretary June 15th, 2006 J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

33 Shareholdings of Directors & Senior Management and Connected Parties as at 29 APRIL 2006 For purposes of compliance with Rule 407A(vii) of the Jamaica Stock Exchange Rules, details of stockholdings of Directors and Senior Management and their connected persons as at 29th April,2006 are set out hereunder: DIRECTORS S/HOLDING CONNECTED PERSONS S/HOLDING R. Danvers Williams 500,000 Shirley Williams (Joint holder) Chairman Ravers Limited 8,373,332 Robert E. Levy 14,004,781 Portland Corp. Ltd. 205,862,410 President & Chief Executive Officer Phillip Levy 5,748,128 Portland Corporation Ltd 205,862,410 Christopher Levy 5,119,910 Vice President Poultry Operations Malcolm McDonald Nil Trevor Dewdney 53,333 Trevor D Dewdney Jr 9,318 Barrington Pryce 74,548 Douglas Senior 72,533 Peta-Gay & Sydna Senior 9,318 Gregory & Sydna Senior 18,636 Hirlie Williams 89,041 Claudette Cooke 2,140,908 Vice President Human Resource Development & Public Relations Andrew Mahfood 1,000,000 Aubyn Hill 1,941,251 N.B. The Senior Management of the Company includes Messrs. Robert E. Levy and Christopher Levy and Dr. Claudette Cooke, as above, and connected parties who held shares as is set in the table below. SENIOR MANAGMENT NO. OF SHARES CONNECTED PARTY NO OF SHARES David Mair 23,310 David Mair/Kim Mair 1,763,099 Leon Headley 1,025,002 Leon/June Headley 120,524 June Headley 64,500 Donald Patterson 306,283 Ian Parsard Nil Peter DePass Nil Conley Salmon 1,494,066 J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

34 Directors and Officers DIRECTORS OFFICERS Hon Dr. Raby Danvers Williams O.J. C.D. Hon LL. D, J.P. C.L.U. Chairman Robert E. Levy C.D. President & Chief Executive Officer Claudette D. Cooke CMT, Ed.D. Vice President Human Resource Development & Public Relations Trevor D. Dewdney Ph.D Non-Executive Director Christopher E. Levy MBA Vice President Poultry Operations Philip Levy CA Non-Executive Director Robert E. Levy, C.D. President Chief Executive Officer Claudette D. Cooke Vice President Human Resource Development & Public Relations Leon O. N. Headley Vice President Procurement & Trading Christopher E. Levy Vice President Poultry Operations Donald A. Patterson Vice President Accounting & Information Systems Ian S. Parsard Vice President Corporate Planning/Aquaculture Operations Aubyn Hill MBA Non-executive Director Andrew J. Mahfood B.Sc., CA Non-executive Director Malcolm D. L. McDonald Attorney-at-Law Non-executive Director Barrington A. Pryce Non-Executive Director Conley N. Salmon Vice President Marketing Feeds & Agricultural Supplies David Mair Vice President Marketing Protein Products Peter A. DePass Company Secretary Douglas B. Senior Non-executive Director Hirlie E. Williams Non-executive Director J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

35 Directors Profiles J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

36 Directors Profiles Dr. the Hon. Raby Danvers Williams, O.J., C.D., Hon. LLD, J.P, C.L.U. Chairman Dr. R. Danvers (Danny) Williams, Chairman of the Board of Jamaica Broilers Group Limited, has had a distinguished career in the life insurance industry spanning some 53 years. He is the founder and Past President and Chief Executive Officer of Life of Jamaica Ltd., one of the largest life insurance companies in the West Indies. Dr. Williams has served the Government of Jamaica in the capacity of Senator, Minister of State and Minister of Industry and Commerce respectively. He is currently the Chairman of the Board of Jamaica College and serves on the boards of several major Jamaican companies, organizations and foundations. Robert E. Levy, C.D. President and Chief Executive Officer Robert Levy started his career in Jamaica Broilers Group in His management and leadership expertise at all levels of the company s operations has contributed significantly to the level of success the Group currently enjoys today. A graduate of Harvard Business School, his commitment and service to the agri-business industry locally and regionally have earned him the national honours of Commander of the Order of Distinction. Christopher Levy, MBA Christopher Levy has worked with the Jamaica Broilers Group since 1985 and has substantial experience and in-depth knowledge of the company business. He is currently the Vice President of Poultry Operations and an Executive Director of the Board. He has served as a Director of the Jamaica Manufacturers Association (JMA) and the Postal Corporation of Jamaica, as well as the First Vice President of the Munroe College Old Boys Association. Claudette Cooke, CMT, Ed. D. Dr. Claudette Cooke is an Executive Director of the Jamaica Broilers Group Limited since 2003 and currently holds the post of Vice President of Human Resource Development and Public Relations, having joined the Group in A Certified Master Trainer, in the area of Human Performance Improvement (HPI), Dr. Cooke is listed in the International Who s Who of Professionals and is a member of the American Society for Training and Development (ASTD). Barrington Pryce Barrington Pryce joined the Jamaica Broilers Group Limited in He has been a Director of Company since 1992 and is currently the General Manager of one of the Group s subsidiary, Jamaica Poultry Breeders Limited. A Committee Member of the Lauriston United Church, St. Ann and the Deputy President of the Men s Fellowship, he enjoys music and is an avid sportsman. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

37 Trevor Dewdney, Ph.D. Dr. Trevor Dewdney, Veterinary Consultant, and past Senior Veterinary Officer of the the Jamaica Broilers Group Limited became a member of the company s Board of Directors in He is the Chairman of the College of Agriculture, Science & Education (CASE) and a member of the Jamaica Veterinary Board. A devoted farming practitioner, Dr Dewdney has served the industry as a Vice President of the Jamaica Agricultural Society and Chairman of the St Catherine Parish Development Committee. Malcolm D.L. McDonald, Attorney-at-law Malcom McDonald, Attorney at law and partner in the firm McDonald Millingen, specializing in Banking, Taxation, Commercial Law and Conveyancing, has been a Director of the Jamaica Broilers Group limited since He has extensive experience in international commercial transactions and is a keen negotiator in the acquisition and sale of private companies. He is a member of the Law Society of England and the Jamaica Bar Association. Andrew Mahfood, CA Andrew Mahfood qualified as a Chartered Accountant in Canada before becoming the Financial Controller for Wisynco Trading Ltd. In 1997 he became the Finance Director of the Wisynco Group Limited, and has been a Director of Jamaica Broilers Group Limited since He currently serves on the boards of Food For The Poor and First Global Financial Services and is a member of the Institute of Chartered Accountants of Ontario. Aubyn Hill, MBA Aubyn Hill is the Chief Executive Officer of Corporate Strategies Limited, with over 25 years of expertise in the areas of banking and finance. A graduate of Harvard Business School, he has held various senior positions in a number of major financial corporations worldwide, and conducted business in over eighty four countries. Mr Hill became a Director of Jamaica Broilers Group Limited in July He is Chairman of the Strategic Implementation Board of the Jamaica Constabulary Force and board member of Allied Insurance Brokers, Nationwide News Network and Kingston City Centre Improvement Company. Douglas Senior Douglas Senior has been a Director of the Jamaica Broilers Group Limited since He has been directly associated with the Group through employment and service to the Sales and Distribution department for over twenty four years. He is Chairman of the Credit Committee of the Jamaica Broilers Group Credit Union, Administrative Director of the Jamaica Mennonite Church and Board Member of the Good Tidings Mennonite Church. An avid fan of cricket, he is a former player of the sport. Hirlie E. Williams Hirlie Williams has been an employee of Jamaica Broilers Group Ltd for over twenty one years and a Director on the company s Board since He is currently employed in the Hatchery Department of the Best Dressed Chicken Division and is a keen sports fan. J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

38 Corporate Divisions & Subsidiaries JAMAICA BROILERS GROUP LTD. Group Head Office Content, McCook s Pen St. Catherine Jamaica, West Indies Tel: Fax: Website: Hon. Dr. R. Danvers Williams Chairman Mr. Robert Levy President and CEO Dr. Claudette Cooke Vice President Mr. Leon Headley Vice President Mr. Christopher Levy Vice President Mr. Ian Parsard Vice President Mr. Donald Patterson Vice President Mr. David Mair Vice President Mr. Conley Salmon Vice President BEST DRESSED CHICKEN Content, McCook s Pen, St. Catherine Tel: / ; Fax: JAMAICA POULTRY BREEDERS LIMITED Caentabert, P.O., Box 27 Claremont, St. Ann Tel: ; Fax MASTER BLEND FEEDS P.O. Box 24 Old Harbour, St. Catherine Tel: ; Fax BEST DRESSED FOODS Spring Village St. Catherine Tel: Fax: Toll Free: BUY BDF1 CONTENT AGRICULTURAL PRODUCTS Bog Walk, St. Catherine Mailing Address: Content, McCook s Pen, St. Catherine Tel: ; Fax: JAMAICA EGG SERVICES Mailing Address: White Marl. St. Catherine Tel: ; Fax: HI-PRO FARM SUPPLIES P.O. Box 886 White Marl, St. Catherine Tel: : Fax: AQUACULTURE JAMAICA LIMITED Maggoty, P.O. Box 17 St. Elizabeth Tel: ; Fax: WEST INDIES NUTRITIONAL CORP. LIMITED Caracas Avenue Kingston Export Freezone P.O. Box 112, Kingston 15 Tel: ; Fax WINCORP INTERNATIONAL INC NW 116 Way, Suite 14 Medley, FL Tel: (305) ; Fax: (305) INTERNATIONAL POULTRY BREEDERS, L.L.C Perry Batts Road Norman Park, Georgia Tel: (229) ; Fax (229) ATLANTIC UNITED INSURANCE CO. LTD. One Regis Place 94th Street P.O. Box 472 Georgetown, Grand Cayman J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

39 Auditors Letter J a m a i c a B r o i l e r s G r o u p L i m i t e d A n n u a l R e p o r t & A c c o u n t s

40 Group Profit and Loss Account Year ended 29 April Restated 30 April Note $ 000 $ 000 Turnover 9,938,217 9,146,538 Cost of sales (7,437,672) (6,875,391) Gross Profit 2,500,545 2,271,147 Other operating income 6 242, ,917 Distribution costs (326,134) (239,055) Administration and other expenses (1,601,455) (1,484,197) Operating Profit 815,720 1,067,812 Finance costs 9 (50,611) (84,379) Profit before Taxation 765, ,433 Taxation 10 (119,775) (261,521) NET PROFIT 645, ,912 Dealt with in the financial statements of: Holding company 321, ,680 Subsidiaries 323,591 27, , ,912 Cents Cents Earnings per Stock Unit

41 Group Balance Sheet Restated 29 April 30 April Note $ 000 $ 000 Non-Current Assets Property, plant and equipment 12 2,092,535 1,744,142 Intangible assets 13 99,641 93,610 Investment properties 14-2,453 Investments , ,704 Deferred income taxes 17 3,965 10,524 Pension plan asset , ,900 2,822,189 2,835,333 Current Assets Inventories 19 1,034, ,278 Biological assets , ,741 Receivables , ,576 Affiliates 22 35,116 32,903 Taxation recoverable 12,365 15,074 Financial assets at fair value through profit or loss 23 67,885 - Cash and short term investments , ,226 2,942,339 3,003,798 Current Liabilities Payables ,448 1,061,962 Taxation payable 118, ,041 Dividends payable 26 77,953 77,953 Borrowings , ,265 1,423,319 1,968,221 Net Current Assets 1,519,020 1,035,577 4,341,209 3,870,910 Stockholders Equity Share capital , ,638 Capital reserve , ,221 Retained earnings 2,318,833 1,811,416 3,804,047 3,250,275 Non-Current Liabilities Borrowings , ,476 Deferred income taxes , ,059 Post-employment obligation 18 7,500 7,100 4,341,209 3,870,910 Approved for issue on behalf of the Board of Directors on 28 July 2006 and signed on its behalf by: R. Danvers Williams Chairman Robert E. Levy Director

42 Group Statement of Changes in Stockholders Equity Year ended Number of Shares Share Capital Capital Reserve Retained Earnings Total Note 000 $ 000 $ 000 $ 000 $ 000 Balance at 1 May ,199, , ,631 1,189,932 2,648,201 Unrealised gains on available-for-sale securities Translation gain ,295-17,295 Net gains recognised directly in stockholders equity ,079-18,079 Net profit , ,912 Total income recognised in current year , , ,991 Realised gains on disposal of investment property - - (37,489) 37,489 - Dividends (137,917) (137,917) Balance at 30 April ,199, , ,221 1,811,416 3,250,275 Unrealised gains on available-for-sale securities - - 1,524-1,524 Translation gain ,831-44,831 Net gains recognised directly in stockholders equity ,355-46,355 Net profit , ,334 Total income recognised in current year , , ,689 Dividends (137,917) (137,917) Transfer of share premium to share capital ,499 (165,499) - - Balance at 1,199, , ,077 2,318,833 3,804,047

43 Group Statement of Cash Flows Year ended Cash Flows from Operating Activities 29 April Restated 30 April Note $ 000 $ 000 Net profit 645, ,912 Adjustments for: Depreciation , ,292 Amortisation 13 9, Gain on disposal of property, plant and equipment (183) (5,539) Gain on disposal of investment properties - (110,899) Negative goodwill arising on acquisition 31 (120,339) - Gain on disposal of investment - (3,353) Fair value loss on financial assets at fair value through profit or loss 6 9,588 - Change in pension plan asset and post-employment obligations (78,900) (65,600) Taxation expense , ,521 Interest income 6 (80,085) (86,737) Unrealised foreign exchange (gains)/losses (24,922) 12,482 Interest expense 9 47,121 75,756 Changes in operating assets and liabilities: 725, ,009 Inventories (68,612) (152,952) Biological assets (30,337) (62,882) Receivables 210,614 (303,726) Affiliates (2,213) (13,660) Payables (119,948) 173,584 Financial assets at fair value through profit or loss (77,473) - Translation gain on working capital of foreign subsidiaries 47,405 10, , ,716 Taxation paid (185,486) (114,289) Cash provided by operating activities 499, ,427

44 Group Statement of Cash Flows (Continued) Year ended 29 April Restated 30 April Note $ 000 $ 000 Cash Flows from Operating Activities (Page 4) 499, ,427 Cash Flows from Investing Activities Purchase of property, plant and equipment 12 (226,172) (206,365) Proceeds from disposal of property, plant and equipment 43,323 4,564 Purchase of intangible asset 13 (15,828) (92,869) Proceeds from disposal of investment properties - 148,393 Purchase of investments - (240,205) Proceeds from sale of investments 242, ,663 Interest received 88,314 97,472 Cash provided by/(used in) investing activities 132,462 (119,347) Cash Flows from Financing Activities Long term loans, net (186,813) (245,593) Interest paid (52,069) (77,229) Dividends paid (137,917) (113,931) Cash used in financing activities (376,799) (436,753) Increase/(decrease) in cash and cash equivalents 255,296 (32,673) Effect of changes in exchange rates on cash and cash equivalents 11, Cash and cash equivalents at beginning of year 150, ,382 CASH AND CASH EQUIVALENTS AT END OF YEAR , ,688

45 Company Balance Sheet Restated 29 April 30 April Note $ 000 $ 000 Non-Current Assets Property, plant and equipment 12 1,175,792 1,187,057 Intangible assets 13 95,922 92,946 Investments , ,161 Interest in subsidiaries ,602 81,964 Pension plan asset , ,500 2,035,973 2,169,628 Current Assets Inventories , ,740 Biological assets , ,322 Receivables , ,862 Subsidiaries 330,172 - Affiliates 22 35,115 32,903 Financial assets at fair value through profit or loss 23 67,885 - Cash and short term investments , ,537 2,629,647 2,186,364 Current Liabilities Payables , ,528 Taxation payable 102, ,949 Subsidiaries - 211,923 Dividends payable 26 77,953 77,953 Borrowings , ,150 1,235,949 1,846,503 Net Current Assets 1,393, ,861 3,429,671 2,509,489 Stockholders Equity Share capital , ,638 Capital reserve , ,335 Retained earnings 2,059,323 1,087,664 2,961,561 1,999,637 Non-Current Liabilities Borrowings , ,239 Deferred income taxes , ,713 Post-employment obligation 18 6,200 5,900 3,429,671 2,509,489 Approved for issue on behalf of the Board of Directors on 28 July 2006 and signed on its behalf by: R. Danvers Williams Chairman Robert E. Levy Director

46 1. Identification Jamaica Broilers Group Limited (the company) is a company limited by shares, incorporated and domiciled in Jamaica. Its registered office is located at Content, McCooks Pen, St. Catherine. The principal activities of the company and its subsidiaries (the Group) include the production and distribution of poultry, beef, fish, animal feeds and agricultural items (Note 2(b)). The company is listed on the Jamaica Stock Exchange. 2. Significant Accounting Policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a) Basis of preparation The consolidated 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 certain financial assets. 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 company s accounting policies. Although these estimates are based on management s best knowledge of current events and action, actual results could differ from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4. Standards, interpretations and amendments to published standards effective in 2005 Certain new standards, amendments and interpretations to existing standards have been published that became effective during the current financial year. The Group has assessed the relevance of all such new standards, interpretations and amendments and has adopted the following IFRS, which are relevant to its operations. The 2005 comparative figures have been amended as required, in accordance with the relevant requirements. The effects of adopting the revised and new standards on equity previously reported for the Group are detailed in Note 33.

47 2. Significant Accounting Policies (Continued) (a) Basis of preparation (continued) Standards, interpretations and amendments to published standards effective in 2005 (continued) IAS 1 (revised 2003) IAS 2 (revised 2003) IAS 8 (revised 2003) IAS 10 (revised 2003) IAS 16 (revised 2003) IAS 17 (revised 2003) IAS 21 (revised 2003) IAS 24 (revised 2003) IAS 27 (revised 2003) IAS 32 (revised 2003) IAS 33 (revised 2003) IAS 36 (revised 2004) IAS 38 (revised 2004) IAS 39 (revised 2003/2004) IAS 40 (revised 2003) IFRS 3 (issued 2004) IFRS 4 (issued 2004) Presentation of Financial Statements Inventories Accounting Policies, Changes in Accounting Estimates and Errors Events after the Balance Sheet Date Property, Plant and Equipment Leases The Effects of Changes in Foreign Exchange Rates Related Party Disclosures Consolidated and Separate Financial Statements Financial Instruments: Disclosure and Presentation Earnings per Share Impairment of Assets Intangible Assets Financial Instruments: Recognition and Measurement Investment Properties Business Combinations Insurance Contracts The adoption of IAS 1, 2, 8, 10, 16, 17, 21, 24, 27, 32, 33 and 40 (all revised 2003), 36 and 38 (revised 2004), 39 (revised 2003/2004) and IFRS 4 (issued 2004), did not result in substantial changes to the Group s accounting policies. In summary: IAS 1 (revised 2003) has affected the presentation of minority interest and other disclosures. IAS 2, 8, 10, 16, 17, 27, 28, 32, 33 and 40 (all revised 2003), 36 (revised 2004), IAS 39 (revised 2003/2004) and IFRS 4 (issued 2004) had no material effect on the Group s policies. IAS 21 (revised 2003) had no material effect on the Group s policy. The functional currency of each of the consolidated entities has been re-evaluated based on the guidance to the revised standard. IAS 24 (revised 2003) has affected the identification of related parties and some other related-party disclosures. The Group has reassessed the useful lives of its intangible assets in accordance with the provisions of IAS 38 (revised 2004). No adjustment resulted from this assessment.