Chairman s Report for the Quarter ended July 31, 2018

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1 Blue Power Soap Division and Head Office 4 Victoria Avenue Kingston CSO, Jamaica Phone: Fax: Lumber Depot Division 17C Gordon Town Road, Papine Kingston 6, Jamaica Phone: Fax: Chairman s Report for the Quarter ended July 31, 2018 The first quarter ended July 31, 2018 shows increased sales and significantly improved profits. Overall sales for the three-month period are up by 15% from $381 million to $436 million with the Lumber Depot Division showing an increase of 10% while the Blue Power Division jumped by 27%. In the period under review profits have been bolstered by significant benefits due to changes in the exchange rate. The overall increase in sales for this quarter was accompanied by net finance income which was $23 million compared to $2 million for the same period last year. Thus, due to improved sales and net financial income, profit after tax was up by 56% from $38 million in Q1 last year to $60 million this year in the first quarter. Earnings per share rose from $0.68 to $1.07 or 57%. Our efforts to improve our export performance continue to show results. Over 32% of our soap sales went to export markets in the Caribbean, the USA and the UK. Most significant improvement has come from the Caribbean market where we now have many distributors selling our products. The increase in export sales over the same quarter in the previous year was 82%, from $25 million to $45 million. The 10 for 1 stock split which many stockholders had been requesting is now in effect after having been approved at the AGM held on August 14, It is hoped that the availability of more units will result in greater trading and ease of access for those who wish to acquire a stake in our company. We continue to prepare for the competitive pressures which we have begun to face from the new producers on the market. On behalf of the Board, I would like to thank our customers and our staff for their support during the year with a promise to continue to strive for better. Dhiru Tanna Chairman September 2, Directors: Dhiru Tanna (Chairman) Hon. Kenneth Benjamin, O.J.,C.D. Felice Campbell Catherine Goodall Jeffrey Hall Peter Millingen Laura Tanna, O.D. Noel Dawes (Managing) 1

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3 Consolidated Statement of Profit or loss and Other Comprehensive Income Three months ended July 31, 2018 Unaudited Unaudited Audited July 31, 2018 July 31, 2017 April 30, 2018 Revenue 436,446, ,536,715 1,507,586,013 Cost of revenue (332,694,514) (292,447,645) (1,184,451,047) Gross profit 103,751,833 88,089, ,134,966 Administrative and other expenses (58,300,872) (47,408,051) (210,719,857) 45,450,961 40,681, ,415,109 Other income - 1,135,932 3,446,243 Profit before net finance costs and taxation 45,450,961 41,816, ,861,352 Finance income 24,642,526 3,113,122 14,864,152 Finance cost (1,625,349) (1,153,022) (14,797,968) Net financial income 23,017,177 1,960,100 66,184 Profit for the period 68,468,138 43,777, ,927,536 Taxation (8,272,914) (5,302,049) (13,686,393) Profit attributable to members, being total comprehensive income for the period 60,195,224 38,475, ,241,143 Earnings per stock unit $ 1.07 $ 0.68 $

4 Consolidated Statement of Changes in Equity Three months ended July 31, 2018 Share Capital Retained earnings Total $ $ $ Balances as at April 30, 2017 (audited) 86,900, ,331, ,231,955 Total comprehensive income for the quarter - 38,475,002 38,475,002 Balances as at July 31, 2017 (unaudited) 86,900, ,806, ,706,957 Balances as at April 30, 2018 (audited) 86,900, ,838, ,738,288 Dividends Paid (10,734,810) (10,734,810) Total comprehensive income for the quarter - 60,195,224 60,195,224 Balance as quarter end July 31, 2018 (unaudited) 86,900, ,298, ,198,702 4

5 Consolidated Statement of Cash Flows Three months ended July 31, 2018 Unaudited Unaudited Audited July 31, 2018 July 31, 2017 April 30, 2018 Cash Flows From Operating Activities Profit for the quarter 60,195,224 38,475, ,241,143 Adjustments for: Interest Income (6,380,619) (3,113,123) (14,864,152) Interest expense 138,969 1,153,022 - Depreciation 3,788,110 3,880,781 16,494,784 Loss on disposal of property,plant and equipment ,833 Taxation 8,272,914 5,302,049 13,686,393 Cash generated before changes in working capital 66,014,598 45,697, ,044,001 Inventories 25,734,212 1,125,197 (46,597,567) Accounts receivables and prepayments (25,163,160) 2,210,268 7,527,410 Accounts payable (21,929,335) 15,894,421 29,586,831 Due to related party (28,930,494) - 28,650,644 Cash provided by operations 15,725,821 64,927, ,211,319 Interest paid (138,969) (1,153,022) - Taxation paid (3,706,250) (3,369,932) (16,069,387) Cash provided by operating activities 11,880,602 60,404, ,141,932 Cash Flows From Investing Activity Purchase of property, plant and equipment (204,618) (3,010,804) (64,766,721) Proceeds from sale of property, plant and equipment - - 2,400,000 Purchase of Investments (9,900,000) (148,500,000) Interest received 6,380,619 3,113,123 12,247,890 Cash(used)/provided by investing activity (3,723,999) 102,319 (198,618,831) Cash Flows From Financing Activities Dividends paid (10,734,810) - (10,734,810) Cash (used) by Financing Activities (10,734,810) - (10,734,810) Net increase in cash and cash equivalents (2,578,207) 60,506,982 (88,211,709) Cash and cash equivalents at beginning of the period 188,082, ,294, ,294,542 Cash and cash equivalents at end of period $ 185,504, ,801, ,082,833 5

6 Consolidated Segment Reporting Three months ended July 31, 2018 Lumber Division Soap Division Total $ $ $ Revenue 298,636, ,809, ,446,347 Profit from operations 18,675,820 26,775,141 45,450,961 Other income Net finance income 10,052,666 12,964,511 23,017,177 Profit before taxation 28,728,486 39,739,652 68,468,138 Taxation (3,447,418) (4,825,495) (8,272,914) Profit for the period 25,281,068 34,914,157 60,195,224 Segment assets Non-current 241,170,050 73,063, ,233,577 Current assets 297,158, ,131, ,290, ,328, ,195, ,524,112 Segment liabilities Current liabilities 62,527,381 31,868,334 94,395,715 Non-Current liabilities 490, , ,695 63,017,653 32,307,757 95,325,410 Other segment items: Capital expenditure 110,500 94, ,618 Depreciation 1,026,497 2,761,613 3,788,110 6

7 Consolidated Segment Reporting Three months ended July 31, 2017 Lumber Division Soap Division Total $ $ $ Revenue 271,687, ,849, ,536,715 Profit from operations 18,446,301 22,234,718 40,681,019 Other income 1,102,718 33,214 1,135,932 Net finance costs 1,586, ,423 1,960,100 Profit before taxation 21,135,696 22,641,355 43,777,051 Taxation (2,536,283) (2,765,766) (5,302,049) Profit for the period 18,599,413 19,875,589 38,475,002 Segment assets Non-current 37,381,914 75,779, ,160,987 Current assets 449,831, ,304, ,136, ,213, ,084, ,297,588 Segment liabilities Current liabilities 78,134,100 23,536, ,670,244 Non-Current liabilities 490,272 1,430,115 1,920,387 78,624,372 24,966, ,590,631 Other segment items: Capital expenditure 32,538 2,978,266 3,010,804 Depreciation 1,101,229 2,779,552 3,880,781 7

8 Consolidated Segment Reporting Year ended April 30, 2018 Lumber Division Soap Division Total $ $ $ Revenue 1,067,226, ,359,548 1,507,586,013 Profit from operations 54,738,572 57,676, ,415,109 Other income 3,369,936 76,307 3,446,243 Net finance income 3,909,064 (3,842,880) 66,184 Profit for the year 62,017,572 53,909, ,927,536 Segment assets Non-current 83,727, ,189, ,917,069 Current assets 442,139, ,299, ,439, ,867, ,489, ,356,863 Segment liabilities Current liabilities 63,240,139 77,448, ,688,880 Non- current liabilities 490, , ,695 63,730,411 77,888, ,618,575 Other segment items: Capital expenditure 54,049,192 10,717,529 64,766,721 Depreciation 4,309,973 12,184,811 16,494,784 8

9 Notes to the Unaudited Financial Statements July 31, Identification and principal activities Blue Power Group Limited (the company) is incorporated and domiciled in Jamaica. The registered office of the company is located at 4 Victoria Avenue, Kingston CSO. The company is listed on the Junior Market of the Jamaica Stock Exchange. The company and its two wholly-owned subsidiaries are referred to as the "group" The main activities of the company and the group comprise the manufacture and sale of soaps and the sale of lumber,hardware supplies and other related products. 2 Basis of preparation The financial statements have been prepared in accordance with International Financial Reporting Standards and interpretations issued by the International Accounting Standards Board, and comply with the relevant provisions of the Jamaican Companies Act. These financial statements are presented in Jamaica dollars. 3 Segment reporting An operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses; whose operating results are regularly reviewed by the entity's Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance; and for which discrete financial information is available. The group has two reportable segments, as described below, which are the group's strategic business units. The strategic business units offer different products and services, and are managed seperately because they require different technology and marketing strategies. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period. The primary reportable segments are: (i) Soap division - Manufacture and sale of soaps (ii) Lumber division - Sale of lumber, hardware supplies and related products The manufacturing operations are conducted at 4 Victoria Avenue, Kingston and the lumber division operations are carried out mainly at Papine in St. Andrew, Jamaica. Transactions between business segments have been eliminated. 4 Significant accounting policies The accounting policies followed in these interim financial statements are consistent with those used in the audited financial statements for the year ended April 30,

10 31 Jul 18 TOTAL SHARES OUTSTANDING: 56,499,000 DIRECTORS AND CONNECTED PARTIES REPORT PRIMARY HOLDER (JOINT HOLDER) RELATIONSHIP UNITS PERCENTAGE KENNETH BENJAMIN** SELF 3,130, FELICE CAMPBELL SELF NOEL DAWES*** SELF 1,412, CATHERINE GOODALL SELF JEFFREY HALL (SWEE TEEN CHUA) SELF 257, PETER MILLINGEN SELF 821, DHIRU TANNA* (LAURA TANNA) SELF 10, LAURA TANNA* SELF *ANTIBES HOLDINGS LTD CONNECTED PARTY 28,300, **SHEILA BENJAMIN MCNEIL CONNECTED PARTY 155, **GUARDSMAN GROUP CONNECTED PARTY 687, ***KAREL DAWES CONNECTED PARTY 3, SENIOR MANAGERS REPORT PRIMARY HOLDER (JOINT HOLDER) RELATIONSHIP UNITS PERCENTAGE LISA KONG SELF VERONICA LOWE SELF TOP 10 SHAREHOLDERS PRIMARY HOLDER (JOINT HOLDER) UNITS PERCENTAGE ANTIBES HOLDINGS LIMITED 28,300, MAYBERRY WEST INDIES LIMITED 11,247, KENNETH BENJAMIN & SISTER 3,285, JANE FRAY 3,095, NOEL DAWES 1,412, SILVER INVESTMENTS LIMITED 1,077, JPS EMPLOYEE SUPERANNUATION FUND 921, PETER MILLINGEN 821, PAM INDIVIDUAL RETIREMENT SCHEME 891, GUARDSMAN GROUP LTD 687, TOTAL UNITS OWNED BY TOP 10 51,741,

Chairman s Report for the 2nd Quarter ended Oct 31, 2016

Chairman s Report for the 2nd Quarter ended Oct 31, 2016 Blue Power Soap Division and Head Office 4 Victoria Avenue Kingston CSO, Jamaica Phone: 876-928-1882 Fax: 876-930-3283 Lumber Depot Division 17C Gordon Town Road, Papine Kingston 6, Jamaica Phone: 876-977-5075