A Time To Build Caribbean Cement Company Limited Annual ...

A Time To Build 

Caribbean Cement Company Limited Annual Report 2004

MISSION STATEMENT 

Caribbean Cement Company Limited, 

a member of the TCL Group of Companies, 

is committed to providing high quality 

products and services in an environmentally 

friendly manner, achieving the financial 

objectives of its shareholders, meeting the 

needs of customers and employees whilst 

adding value to the community.

CONTENTS 

CORPORATE DATA 

Mission Statement 1 

Corporate Data 3 

Boad of Directors 4 

Notice of Annual General Meeting 6 

Directors’ Report 8 

Chairman’s Statement 10 

General Manager’s Report 13 

The Senior Management Group 19 

Subsidiary Companies 20 

Celebrating Excellence – 2004 Awards 21 

Plant Expansion and Modernization 22 

Carib Cement – A Good Corporate Citizen 24 

Carib Cement Plus 25 

Ten Year Financial Summary 26 

Financial Section 

Auditors’ Report 28 

Financial Statements 2004 29 

Proxy Form 61 

©2005, CARIBBEAN CEMENT COMPANY LIMITED 

Produced by CGR COMMUNICATIONS LIMITED, Editorial Management CREATIVE PROJECTS 

Photography HERBIE GORDON, PrePress DIGITAL PREPRESS LIMITED 

Lithography PHOENIX PRINTERY LIMITED 

CARIBBEAN CEMENT COMPANY LIMITED 

Registered Office: Rockfort, Kingston 

Postal Address: P. O. Box 448, Kingston 

Tel: (876) 928-6231-5 Fax: (876) 928-7381 

Email: info@caribcement.com 

DIRECTORS 

Brian Young, F.C.A. – Chairman 

Rollin Bertrand, Ph.D. 

Hollis Hosein, F.C.C.A, C.A. 

Leopoldo Navarro BSc. Civil Eng. M.B.A. 

Yusuff Omar, Dip. Mech.Eng. 

Judith Robinson, F.C.C.A, Ph.D. 

Paul Stockhausen, B.Eng. 

Ernest Williams, BSc. Civil Eng. 

COMPANY SECRETARY 

Cordia J. Constable, LLB 

SUBSIDIARY COMPANIES 

Jamaica Gypsum & Quarries Limited, Harbour Head 

Rockfort Mineral Bath Complex Limited, Rockfort 

Caribbean Gypsum Company Limited, Rockfort 

ATTORNEYS-AT-LAW 

Dunn Cox, 48 Duke Street, Kingston 

Myers, Fletcher & Gordon, Park Place, 21 East Street, Kingston 

AUDITORS 

Ernst & Young, 8 Oliver Road, Kingston 8 

BANKERS 

Bank of Nova Scotia Jamaica Ltd. 

Citibank, N.A. 

National Commercial Bank Jamaica Ltd. 

RBTT Bank Jamaica Ltd. 

REGISTRAR & TRANSFER AGENT 

Scotia Jamaica Investment Management Ltd. 

4th Floor, Scotiabank Centre 

Corner Duke & Port Royal Streets, Kingston 

Tel: (876) 922 1000 

Email: scotiatrust@cwjamaica.com 

2004 ANNUAL REPORT 2 3 

2004 ANNUAL REPORT

Caribbean Cement Company 

board of directors 

left to right: Hollis Hosein, Leopoldo Navarro, Rollin Bertrand, Brian Young (chairman), 

Yusuff Omar, Judith Robinson, Ernest Williams, Paul Stockhausen 

2004 ANNUAL REPORT 

4 

5 

2004 ANNUAL REPORT

NOTICE OF ANNUAL GENERAL MEETING 

NOTICE is hereby given that the FIFTY SIXTH ANNUAL GENERAL MEETING of 

CARIBBEAN CEMENT COMPANY LIMITED will be held at THE JAMAICA PEGASUS 

HOTEL, 81 Knutsford Boulevard, Kingston 5, on Friday, April 29, 2005 at 9:3O A.M. to transact 

the following business and to consider and, if thought fit, pass the following Resolutions: 

1. AUDITED ACCOUNTS FOR YEAR ENDED 31ST DECEMBER 2004 

To receive the audited accounts for the year ended 31st December 2004, together with the 

Directors’ and Auditors’ Reports circulated therewith and to declare a dividend: 

(a) THAT the Balance Sheet and Profit & Loss Account for the year ended 31st December 

2004, together with the Reports of the Directors and Auditors now submitted to this 

meeting, be and are hereby adopted; and 

(b) THAT a final dividend of seven cents per stock unit be and is hereby declared payable 

out of the profits of the Company, in respect of the year under review, to the holders of 

ordinary stock units registered at the close of business on May 16, 2005 and be paid on 

June 27, 2005. 

2. REMUNERATION OF THE AUDITORS 

To fix the remuneration of the Auditors: 

THAT the remuneration of the Auditors, Ernst & Young, who have signified their 

willingness to continue in office, be agreed with the Directors. 

3. ELECTION OF DIRECTORS 

In accordance with Article 96 of the Company’s Articles of Association, the following 

Directors retire by rotation and, being eligible, offer themselves for re-election: 

• Mr. Hollis Hosein 

• Mr. Paul Stockhausen 

(a) THAT the retiring Director, Mr. Hollis Hosein, be and is hereby re-elected. 

(b) THAT the retiring Director, Mr. Paul Stockhausen, be and is hereby re-elected. 

PURSUANT to Article 100 (A) of the Company’s Articles of Association, members 

qualified to attend and vote at the meeting who wish to nominate a person (other than 

a retiring Director who may be re-appointed at the meeting) to stand as a Director shall 

deposit such nomination, in writing, signed by the member at the Registered Office of 

the Company situated at Rockfort, Kingston addressed to “The Company Secretary, 

Caribbean Cement Company Limited” between 8:00 a.m. on the 15th April 2005 and 4:00 

p.m. on the 21st April 2005. Each such nomination shall be accompanied by a notice in 

writing, signed by the person nominated, indicating his/her willingness to be elected. 

4. REMUNERATION OF DIRECTORS 

To fix the remuneration of the Directors: 

THAT the amount shown in the Accounts of the Company for the year ended 31st 

December 2004, as remuneration of the Directors for their services as Directors be and is 

hereby approved. 

SPECIAL BUSINESS 

As special business the following resolution be proposed as an ordinary resolution. 

5. ELECTION TO RETAIN PAR VALUE SHARES 

That pursuant to Section 37 (1) of the Companies Act 2004 the Company hereby elects to 

retain the Company’s existing shares with a nominal or par value and to continue to issue 

shares with a nominal or par value for the period of eighteen months from the date of this 

election. 

As special business the following resolution be proposed as a special resolution. 

6. AMENDMENT OF ARTICLES OF ASSOCIATION 

THAT the Articles of Association be altered by inserting as Article 107A the following: 

107A. Members of the Board of Directors may participate in a meeting of the Directors 

by means of a telephone or video conference or other communications equipment 

which permit all persons participating in the meeting to hear each other. 

Participation by such means shall constitute presence in person at the meeting and 

shall be counted to constitute a quorum. Meetings by such means shall be deemed 

to take place in Jamaica. 

7. To transact any other business which may properly be transacted at an Annual General 

Meeting. 

NOTE: 

A member may appoint a proxy to attend and vote on his/her behalf. The proxy appointed 

need not be a member of the Company. An appropriate form of proxy accompanies this 

Notice. 

The proxy form must be signed and deposited duly stamped at the Registered Office of the 

Company situated at Rockfort, Kingston addressed to “The Company Secretary, Caribbean 

Cement Company Limited” not less than forty-eight hours before the meeting. 

BY ORDER OF THE BOARD 

Cordia J. Constable (Mrs.), Company Secretary 

Rockfort, Kingston 

18 March 2005 


2004 ANNUAL REPORT

DIRECTORS’ REPORT 

The Directors submit this report and the audited Financial Statements for the year ended 

December 31, 2004. 

FINANCIAL RESULTS 

Results for the year are shown on pages 29 to 60 in the Financial Statements. These results 

reflect the operations and financial position of the Company and its subsidiaries, Jamaica 

Gypsum & Quarries Limited, Rockfort Mineral Bath Complex Limited and Caribbean Gypsum 

Company Limited. 

Highlights are set out in the table below: 

HIGHLIGHTS OF THE YEAR 

2004 2003 

$ million $ million 

Turnover 5,452.76 4,016.64 

Net Profit 842.36 454.88 

Total Net Assets 2,771.12 2,102.12 

Dividend proposed 59.58 59.58 

Dividend paid 59.58 59.58 

Profit per stock unit 99 cents 53 cents 

DIVIDENDS 

The Directors recommend that at the Annual General Meeting the stockholders declare a final 

dividend of seven cents per stock unit payable out of the profits of the Company in respect of 

the year under review. This dividend to be paid on June 27, 2005 to stockholders registered at 

the close of business on May 16, 2005. This payment will cost $59.58 million. 

AUDITORS 

The retiring auditors, Ernst & Young, having signified their willingness to continue in office, 

will be deemed to be reappointed in accordance with the provisions of Article 155 of the 

Company’s Articles of Association. 

DIRECTORS 

The Directors in office at March 18, 2005 are as follows: 

TEN LARGEST STOCKHOLDERS AS AT DECEMBER 31, 2004 

TCL Nevis Limited 558,688,942 

Trinidad Cement Limited 71,876,497 

Scancem International (St. Lucia) Ltd. 42,187,482 

Scotia Jamaica Investment Management Limited – A/C 542 11,199,960 

National Insurance Fund 5,755,833 

Pan Caribbean Merchant Bank (a/c J1996) 4,984,620 

Gleaner Superannuation Fund 4,657,179 

Manchester Pension Trust Fund Limited 4,424,375 

West Indies Trust Co. Ltd. a/c WT109 3,571,714 

Trading A/C – Pooled Equity Fund No. 1 3,003,314 

TOTAL 710,349,916 

SENIOR MANAGERS’ STOCKHOLDINGS AS AT DECEMBER 31, 2004 

Paul Lue Lim 48,500 

Chester Adams 9,000 

Maxwell Brooks 6,466 

Dalmain Small 1,125 

TOTAL 65,091 

No Director or any person/company connected to him/her has a stockholding interest in 

the Company. 

The Directors wish to express thanks to the management and staff for their continued 

commitment and hard work and for the progress achieved in 2004. 

On behalf of the Board of Directors, dated this 18th day of March, 2005. 

BRIAN YOUNG 

Chairman 

Brian Young 

Rollin Bertrand 

Hollis Hosein 

Leopoldo Navarro 

Yusuff Omar 

Judith Robinson 

Paul Stockhausen 

Ernest Williams 

The Directors due to retire by rotation in accordance with the provisions of Article 96 of the 

Articles of Association are Mr. Hollis Hosein and Mr. Paul Stockhausen who being eligible offer 

themselves for re-election. 


2004 ANNUAL REPORT

operating profit as a percentage 

of sales decreased from 20% in 

2003 to 16%. 

CHAIRMAN’S STATEMENT 

Dear Shareholders, 

After the challenges of 2003, 2004 proved to be a year of 

outstanding performances in regard to production, sales and 

brian w. young 

profits. Profit after tax (PAT) attributable to shareholders grew 

to $842M, up 85% over the prior year, driven primarily by the return to profitability of the 

subsidiary company, Jamaica Gypsum & Quarries Limited. In USD terms, the net profit 

amounted to USD13.7M, a significant improvement over prior years. 

Year 2004 2003 2002 2001 2000 1999 

PAT (US$M) 13.76 7.81 7.79 6.36 6.60 (13.48) 

The Jamaican market grew by 13% 

over the previous year, with the 

Company improving its market share 

from 77% to 93%. During the last 

quarter of 2004, with the temporary 

trade tariff of 25.83% in place, the 

Company enjoyed 100% market share 

for the first time since the first quarter 

of 2001. Cement sales and production 

increased by 33% over the previous 

year. Annual cement sales of 803,855 MT was a record and cement production of 808,070, 

exceeded sales by 4,215MT. 

The significant increase in net profit was primarily influenced by the return to profitability of 

the subsidiary company, Jamaica Gypsum and Quarries Ltd (JGQ). Over the last three years 

a Revitalization Programme has been instituted at JGQ aimed at improving productivity and 

quality. This initiative has seen significant improvements in production and sales. In addition, 

the Company has actively sought to optimize its port assets, also growing third party business 

considerably. Within the next five years, this Company is expected to realize profits that will 

utilize the existing accumulated losses. Therefore, in compliance with International Financial 

Reporting Standards, deferred tax is now being accounted for. The impact of this reduced the 

tax charge on the consolidated operating profit by $231M. 

While the Company was able to grasp the opportunity provided by the favourable ruling of the 

Anti Dumping and Subsidies Commission and demonstrate its ability to supply the growing 

domestic market, 2004 was not without its challenges. The drastic increases in input costs such 

as fuel, electricity, steel products and freight adversely affected our cost of sales, but were partly 

offset by economies of scale from our increased production and sales. Notwithstanding, our 

In addition, Hurricanes Ivan 

and Charlie and the frequent 

interruptions in the electricity 

supplies that followed, severely 

disrupted our third quarter’s 

performance. JGQ was especially hard hit and had to suspend its operations for over a 

month to carry out repairs following Hurricane Ivan. While the cement company was able to 

quickly resume sales and cement grinding, the quarry and clinker manufacturing operations 

were more affected and approximately 30,000MT of clinker production and 35,000MT of 

gypsum production was lost as a result of the hurricanes. At the end of the year however, 

both companies were fully back in production. The Company was able to recoup most of the 

hurricane losses from its insurance coverage. 

We are particularly proud of the fact that, in an environment where inflation grew by 13% 

and building materials such as lumber and steel doubled and trebled in price, there were no 

price adjustments to cement during the year. In fact, in real terms, our customers enjoyed a 3% 

reduction in cement prices. 

With the significant 

improvement in profitability 

Shareholders’ equity increased 

to $2.77 billion and the 

Company’s working capital 

became positive for the first 

time in many years, increasing 

by $465.4M from a negative 

-$346.7M at the beginning of 

the year to a positive $118.7M 

at year-end. Bank advances 

and loan obligations reduced 

from $207M (2003) to $98M at 

year-end, and cash and shortterm 

deposits increased from 

$56M (2003) to $100M. 

Perhaps the most significant 

event affecting the Company 

for 2004 was the passing 

in Parliament of a bill to 

increase the Common External 

Tariff (CET) to 40% on all 

cement imports into Jamaica, 


2004 ANNUAL REPORT

in December 2004. This bill effectively clears the way for the Company to implement its 

expansion and modernization programme. 

With the improving efficiency and productivity of the plant and a more facilitative market 

environment, the Company can now focus on completing arrangements for its proposed 

expansion and modernization programme. Over the next three years the Company intends 

to spend a further USD100M in capital expenditure programmes, which will see significant 

improvements in clinker and cement production capacity and overall efficiency by 2008. This 

will enable us to continue to satisfy the increasing Jamaican market, and compete effectively in 

the liberalized markets in the near future. 

A preferred supplier for the main equipment to be installed in the expansion programme 

has been selected and the Company is in negotiations with a leading financing institution to 

provide financing for the programme. During the second quarter of this year, we expect to 

finalize our arrangements for the expansion. 

Shareholders would have 

noted the investment public’s 

affirmation of confidence in 

Caribbean Cement Company’s 

performance as share prices 

have risen more than 260% in 

the last fourteen months. 

I wish to draw shareholders’ 

attention to the fact that 

included in the 2004 earnings 

per ordinary stock unit, 99 

cents, is a one time recognition 

of the deferred tax asset in JGQ 

amounting to 27 cents per 

ordinary stock unit. 

On behalf of the Board of Directors, I 

wish to commend our management 

and staff for an outstanding 

performance for 2004 and to 

express our appreciation to you, 

the Shareholders, for maintaining 

confidence in the Company and have pleasure in recommending a dividend of seven cents per 

ordinary share for the year 2004. 

General Manager’s Report 

During 2004, Caribbean Cement Company recorded a 

consolidated profit of $842M (US$13.76M). Earnings per share 

increased to ninety nine cents, up from fifty three cents in 2003. 

This is the highest profit in the history of the Company and 

f.l.a. haynes 

represents an increase of 85% ($388M) over 2003 performance. 

This performance includes a one time impact on the Profit & Loss account for 2004 of $231M 

in a deferred tax credit as a result of the turnaround of the Company’s subsidiary Jamaica 

Gypsum and Quarries Ltd. to profitability. It was also a year in which the Company recorded 

increased cement sales of 33%, demonstrating that it could supply the entire domestic market, 

and rewriting every production record once again. 

1000 

800 

600 

400 

200 

0 

$M 

GROUP OPERATING PROFIT 

$MILLION 

2002 

640,317 

2003 

811,894 

2004 

893,000 

Financial Performance 

Review 

Revenues, driven by a 33% increase 

in cement sales volumes and a 56% 

increase in revenue out of Jamaica 

Gypsum and Quarries Ltd. increased 

by $1.4B or 36% over the previous year. 

Operating profit however increased 

by only 9%, as increases in key inputs 

continued to erode the gains being made 

in productivity and efficiency. 

The selling price of cement has been 

held constant since July 2003. On the 

other hand, over the last three years, 

coal prices have increased by 40% and 

the price of heavy fuel oil, used by the 

electricity service, increased by 51%, 

impacting key cost inputs. In addition, 

Brian W. Young 

Chairman 


2004 ANNUAL REPORT

the worldwide increases in freight, steel and steel products also continued to put upward 

pressure on costs. In summary, while the fixed cost elements were absorbed to some extent 

by increasing production volumes, the direct unit cost of production increased by 18%, and 

operating profit as a percentage of sales fell to 16%, compared with 20% in 2003. 

Finance costs on the other hand reduced over 2003 as a result of the following two key factors, viz.: 

• The foreign exchange rate remained relatively stable over the year, depreciating by 2% 

compared to the 20% devaluation in 2003. The loss on currency exchange was $3M 

compared to the $100M in 2003. 

• Interest expenses reduced by $52M, primarily as improved cash flows reduced the reliance 

on borrowings to fund working capital. 

Additionally, there was a reduction in the taxation charge as, in accordance with the 

International Financial Reporting Standard, Jamaica Gypsum and Quarries Limited (JGQ) 

recognized a deferred tax asset amounting to $231M arising from unused tax losses, based on 

an assessment that future taxable profits will be available against which these losses can be 

utilized. 

Over the last three years a Revitalization Programme has been instituted at JGQ aimed at 

improving productivity and quality and returning the Company to viability. The programme 

has included a re-capitalization of the rolling stock, improvements to crushing plant and 

environmental control equipment and the introduction of new management and work systems 

that has resulted in a revitalized work force and significant improvements in the quality of the 

product. In addition, the port facilities have been upgraded and marketed successfully for use 

by third parties for the export of aggregates. In fact, the Company received the award for the 

largest bulk exports in 2004. Jamaica Gypsum and Quarries port facilities, and Carib Cement’s 

cement and coal wharfs, are all fully in compliance with the International Ship and Port Facility 

Security (ISPS) Code. 

The Company’s balance sheet strengthened during the year and significant pay downs on 

outstanding loans were made. Working capital became positive for the first time since 1996. 

Market Review 

Carib Cement achieved record total domestic sales for the year 2004, ending the year at 803,855 

MT, 33% over the prior year’s performance. This represents an additional 198,364MT of cement 

sold by the Company in 2004 over the previous year. The domestic market grew by 13% over 

the previous year. The cumulative annual growth rate in domestic cement sales has averaged 

8% over the last three years, compared with 5% over the previous ten years. 

In their final determination in July 2004, the Anti-Dumping & Subsidies Commission 

recommended the imposition of a safeguard duty of 25.83% on cement entering the Jamaican 

market. This recommendation was based on the highest FOB price on record for cement 

imported into the Jamaican market and, when added to the 15% CET, would result in total 

duties payable on cement imports of 40.83%. 

However, the Government of Jamaica, while accepting the recommendations of the 

Commission, decided instead to increase the Common External Tariff (CET) on all cement 

imports to 40%. Approval for the adjustment of this duty was granted by Parliament in 

December 2004. 

In a more disciplined market place, Carib Cement’s market share improved to 93% compared 

with 77% in 2003. From December 2003, the Company’s monthly market share has been in the 

ninety percentiles and during the last quarter of 2004 the Company commanded 100% of the 

local market. This is the first time since the beginning of 2000 that the Company supplied the 

complete domestic market for such a period. 

The Montego Bay, 

Portmore and Mandeville 

depots continue to service 

the Company’s customers 

with depot sales now 

accounting for 30% of total 

sales. Plans are underway 

to further expand the 

network with the opening 

of a new depot in Spanish 

Town by mid 2005, along 

with increasing the 

capacity of the Mandeville 

depot. 

Our new brand, Carib Cement Plus, was well received by contractors and premix concrete 

operators. Carib Cement Plus is a Portland Pozzolan Cement or ASTM Type 1P Cement and 

produces concrete that develops a lower heat of hydration, has higher later strengths and 

is more resistant to alkali and sulphate reactions. In addition, during the manufacturing 

process, less energy is required to produce this cement and less carbon dioxide is released 

to the atmosphere, reducing the greenhouse effect. Carib Cement’s introduction of this 

blended cement is in line with international best practices subscribed to under the Cement 

Sustainability Initiative (CSI). In February 2005, Carib Cement Plus was launched in 42.5kg 

sacks and has also received a very positive response from this market segment. 

Operations Review 

Cement production totalled a record 808,070MT 33% or 200,388MT over the 2003 

performance. Clinker production totalled 605,814MT. This was 4,834MT more than the 

performance in 2003 and also established a new production record. This performance, which 

was in spite of the interruptions arising from Hurricanes Charlie and Ivan and the frequent 

power outages that continued thereafter, has validated the previous expenditure in 2003 on 

refurbishing the cement milling areas, the training of our staff and improving the information 

and work systems in the plant through the Manufacturing Excellence Transformation 

Programme. 


2004 ANNUAL REPORT

65000 

60000 

55000 

50000 

45000 

900000 

800000 

700000 

600000 

500000 

400000 

300000 

200000 

100000 

CLINKER PRODUCTION 

2000 2001 2002 2003 2004 

CEMENT PRODUCTION 

2000 2001 2002 2003 2004 

The capital expenditure programme 

continued to focus on rehabilitating 

the existing plant and introducing 

new equipment to provide 

incremental improvements, Capital 

expenditure amounted to USD6.8M. 

An on-line analyzer on the Kiln 4 

line was successfully commissioned 

in the final quarter of the year to 

provide real time analysis and 

control of the raw meal entering 

the kiln line and this has already 

reduced the variability of the inputs 

and by extension improved the 

consistency of the finished product. 

Other key projects completed 

included: 

• The upgrade of the process 

control equipment to replace 

obsolete hardware and software 

and enhance the supervisory 

control and reporting functions 

• The installation of standby 

generator to provide electric 

power to critical areas in the 

event of a power outage 

• Upgrades to the three ports to 

provide compliance with the 

new ISPS code. 

In addition the Company has started an upgrade to the kiln solid fuel firing system that will 

allow the use of pet coke and reduce the energy costs by the middle of 2005. A technical study 

to explore the burning of used tires and other waste derived fuels was also initiated, as were 

discussions with the regulatory bodies in regard to implementation of this global industrywide 

cost reduction and environmentally friendly practice. 

Documentation in regard to the Level 1 Quality Management System was also completed. It 

is well recognized that a documented, relevant quality management system provides a means 

of continuous quality improvement and increased satisfaction to the Company’s customers 

and other stakeholders and are therefore part of the best practices employed by organizations 

today. Quality Management Systems lead to improved profitability and longevity of 

organizations through efficient and effective resource utilization, rework and waste reduction 

and a superior quality reputation. In furtherance of this the Company has targeted achieving 

ISO9001 system certification in 2005. 

Human Resource 

Management 

Our focus on developing our people 

continued with a total of 10,872 manhours 

of training being conducted in 

2004, an increase of some 35% over 

the 8,000 hours registered in 2003. 

The training addressed a wide range 

of identified competency gaps and 

included company-wide sensitivity 

training in customer service and 

environmental management systems. 

An Artisan Training Programme was 

implemented in the last quarter 

of 2004, in conjunction with the 

HEART Trust/NTA. 

General Manager Anthony Haynes makes a presentation to 

Fitzroy Riley, Top Employee of the Human Resources 

Department, for 2004. 

The Company also successfully launched its Reward and Recognition (R&R) Programme. The 

R&R committee comprises key stakeholder groups including representatives from the various 

bargaining units and the Management team. Several instant awards were given out in addition 

to identifying Employees of the Quarters, Safe Worker of the Quarters and the Employee of the 

Year. 

Labour agreements with Carib Cement’s trade unions have expired and are in various stages of 

negotiations. 

Health Safety and the Environment 

A continued focus on health and safety, including compliance audits and the introduction 

of several new initiatives continued to drive down the number of lost time accidents. 

As part of a TCL Group initiative, a group forum was convened to bring together senior 

Operations personnel and Health, Safety and Environment (HSE) personnel across the 

various cement plants. The HSE Forum focused on charting a course of action to improve 

the safety performance of companies, and at establishing and implementing necessary 

practices, procedures and systems for the ultimate achievement of the classic HSE Objective 

of “Zero Accidents, Zero Incidents and No harm to people or damage to property and the 

environment.” Recommendations from the forum are currently being implemented. 

Carib Cement also celebrated World Environment Day on June 5. Activities included: 

• Sponsorship of a booth at the National Arena 

• Acquiring, painting and distribution of garbage bins 

• Printing and distribution of posters and a ceremony to formally commission the new 

Sewage Treatment Plant. 

Procedures for an Environmental Management System (EMS) were completed and 

documented and all employees exposed to training in this system. The Company will also be 

seeking ISO14000 certification to this end. 


2004 ANNUAL REPORT

Community Relations 

The Company remains committed to building a better Jamaica by supporting its various 

community outreach programmes. These include our recently launched programme with the 

HEART Trust/NTA to fast-track artisan training in our adjoining communities in preparation 

for our new kiln construction. 

THE SENIOR MANAGEMENT GROUP 

We continued to support the traditional educational programmes such as those offered by 

the MultiCare Foundation, our Mentorship Programme with the Harbour View Primary 

School, our School Feeding Programme; our sponsorship of the Prep/Primary School Debate 

Competition, tertiary scholarships and our Community Back to School Programme. 

Outlook for 2005 

Although inflation, primarily impacted by Hurricane Ivan, is estimated to be 13% for 2004, the 

reduction in interest rates and the stability of the currency exchange rate over the past year 

provide for a cautiously optimistic macroeconomic outlook. Real GDP is expected to grow by 

approximately 3% per annum in the medium term, supported by projected foreign investment 

inflows that will significantly expand the bauxite/alumina sector and see a doubling of 

hotel room capacity over the next five years. In addition, the Government’s programme for 

infrastructural development is expected to continue. 

F.L.A. Haynes 

General Manager 

Paul Lue Lim 

Technical Operations Manager 

John Mendes 

Quality Manager 

The expected increase in construction activity will continue to support the current robust 

growth in domestic cement sales. It has therefore become even more of an imperative that 

Carib Cement pursues its expansion and modernization programme. During 2004, the 

Company received and evaluated proposals from the leading pyroprocessing equipment 

suppliers and has selected a preferred vendor for the new kiln line. In addition, funding 

options have been pursued and developed and the Company is in the process of finalizing the 

supply contract and financing arrangements. 

Ken Wiltshire 

Planning & Development Manager 

Maxwell Brooks 

Quarries Manager 

Derrick Isaac 

Materials Manager 

The expansion and modernization programme centres on the installation of a new 

pyroprocessing line that will see the retirement of Kiln 3, the long wet kiln. Kiln 4 will be 

upgraded to improve its efficiency and environmental performance following the installation 

of the new kiln, targeted for the end of 2007. Clinker capacity will double to 1.3 million MT per 

year. In addition, the cement-milling department will also be upgraded to increase its capacity 

to 2 million MT per annum. 

Carib Cement’s programme will employ the best available technologies to improve its 

environmental performance and to reliably produce cement at a world-competitive cost. 

Cordia Constable 

Company Secretary/Manager, 

Legal & Corporate Services 

Chester Adams 

Manufacturing Manager 

Orville Hill 

Finance Manager 

F.L.A. Haynes 

General Manager 

Dalmain Small 

Human Resource Manager 

Alice Hyde 

Marketing Manager 

Godfrey Stultz 

Engineering Services Manager 


2004 ANNUAL REPORT

SUBSIDIARY COMPANIES 

JAMAICA GYPSUM & QUARRIES 

(JGQ) LIMITED 


Postal Address: Rockfort, P.O. Box 11, Kingston 2 

Tel: (876) 928-6102/6 / Fax: (876) 938-7010 

Jamaica Gypsum & Quarries Limited, a wholly 

owned subsidiary, was acquired from the 

National Investment Bank of Jamaica in 1990 

as part of the Company’s strategy to control its 

major sources of raw material. JGQ is one of the 

main producers of gypsum and anhydrite in the 

region and most of its products are exported to 

markets in South America and the Caribbean. 

ROCKFORT MINERAL BATH 

COMPLEX LIMITED 


Postal Address: Rockfort, P.O. Box 208, Kingston 2 

Tel: (876) 928- 6231-5 / Fax: (876) 928-7381 

In 1992, Rockfort Mineral Bath Complex Limited 

was incorporated, as a wholly owned subsidiary 

of Caribbean Cement Company Limited (CCCL), 

to restore the historical site and operate the spa 

as one of the Company’s community outreach 

programmes. The site is a national monument 

under the aegis of the Jamaica National Heritage 

Trust. In the year 2000, the facilities were sublet 

to a third party as a part of CCCL’s restructuring 

process aimed at focusing on its core business. 

The operations continued on this basis 

throughout the year 2004. 

Board of Directors 

• JGQ LIMITED 

and 

• ROCKFORT MINERAL BATH 

COMPLEX LIMITED 

Brian Young Chairman 


Hollis Hosein 

Leopoldo Navarro 

Yusuff Omar 

Judith Robinson 


Ernest Williams 

Senior Officers 

F.L.A. Haynes General Manager 

Orville Hill Finance Manager 

Cordia J. Constable Company Secretary 

Celebrating Excellence 

2004 AWARDS 

At Carib Cement’s Awards 

Ceremony held on January 22, 

2004, a number of employees 

were recognized in respect of 

their performance and their 

years of valuable service. 

Employees who had attained 

high levels of excellence in 

their performance and were 

outstanding in their areas of 

work were nominated for the 

General Manager’s Awards. 

They were all winners in 

their own right however, Mrs. 

Janet Brooks a Purchasing 

Officer from the Purchasing 

Department copped the 

General Manager’s Award for 

the Employee of the Year. 

The Company commends and 

congratulates its present and 

past personnel who together, 

over the last 52 years, have 

contributed to its growth and 

participated in its objective of 

“Building Jamaica.” 

CARIBBEAN GYPSUM COMPANY 

LIMITED 


Tel: (876) 928-6231-5 / Fax: (876) 928-7381 

Caribbean Gypsum Company’s major asset is 

its 167 acres of gypsum/anhydrite quarry lands 

which considerably enhance the reserves of raw 

material available to the CCCL Group. There is 

no quarrying or trading at this time. 

Board of Directors 

Brian Young Chairman 


Yusuff Omar 


Senior Officers 

Cordia J. Constable Company Secretary 

TOP: General Manager, Anthony Haynes, 

makes a presentation to Suzanne Ali, the 

Planning and Development Department’s 

2004-Top Employee. 

CENTRE: Employee of the Year and Nominee 

for the TCL Group Chairman’s Award, 

Janet Brooks, receives her award from 

Director, Paul Stockhausen. 

BOTTOM: Jamaica Gypsum & Quarries 

Limited’s 2004-Top Employee, Gordon 

Joseph, receives his award from General 

Manager, Anthony Haynes. 


2004 ANNUAL REPORT

PLANT EXPANSION AND MODERNIZATION 

The Jamaican cement market has had a significant 

growth of approximately 5% per year since 1999. 

The projection is that this trend will continue 

in the medium and long term. Carib Cement is 

encouraged and excited by the expected rate 

of growth, as this will impact positively on the 

Company’s future operations. 

Carib Cement is now operating at its maximum 

clinker producing capacity. In order to continue 

meeting the needs of the Jamaican market, its 

planned expansion and modernization programme 

are crucial. 

Preliminary plans and activities are currently 

underway to increase the capacity of the plant 

to 1.2 million MT of clinker and 2 million MT of 

cement per year by 2008. This expansion and 

modernization programme will cost over US$100 

million. 

The expansion programme will affect every aspect 

of the Company’s operations and although centred 

on clinker and cement production will require 

upgrades in other areas like quarrying, packing and 

dispatching. 

• The upgrade of the existing Kiln 4. The 

existing dust collecting equipment will be 

replaced to improve the environmental 

performance of this kiln, and to ensure that 

local and international emission standards are 

met. Some of the main process equipment 

on this kiln will also be upgraded to improve 

energy efficiency and kiln stability. 

• The installation of a new pre-grinding 

circuit to operate in conjunction with 

Cement Mill # 4. This upgrade will increase 

the production of the mill by 200-250%, 

using less energy and more in keeping with 

world standards. This mill will now be capable 

of producing very fine cements with rapid 

hardening properties. 

• The installation of additional 

packers to facilitate packing for export 

purposes at the Rockfort plant and the 

installation of a remote packing plant to 

service bulk and bag customers that are 

geographically far from Kingston. 

• Additional upgrades to the ancillary plant to 

ensure that all areas of the plant can match 

the increased production requirements. 

The dust collecting and dust abatement 

equipment across the plant will also be 

upgraded to ensure local and international 

environmental performance standards. 

Investment in human capital will take place 

in tandem with the upgrades. Carib Cement 

operates on the belief that the welfare of its 

employees forms the basis of the performance 

of the Company. Continuous and specialized 

training will ensure that the Company’s employees 

are adept at functioning in a more competitive 

environment. 

The Company will continue to focus on its 

customer and by 2008 will be offering the highest 

levels of service and technical assistance to 

customers. With the improvement in technology, 

Carib Cement will be able to offer a wider variety 

of cement products to the market. 

These upgrades will allow Carib Cement to 

become more efficient and competitive by 2008, 

by which time the Free Trade Area of the Americas 

is expected to be a reality. The efficiencies gained 

through the expansion programme will translate 

into a reduction in the cost of production and allow 

the Company to produce at a world-competitive 

cost so that it can successfully defend its market in 

a globalized environment. 

The main aspects of the expansion programme 

are: 

• The installation of a new dry process, 

precalciner kiln system. This kiln will utilize 

the most efficient and environmentally friendly 

technology to produce clinker at world-class 

levels of fuel and power, while meeting local 

and international environmental emission 

standards. This new system, Kiln 5, will 

replace the existing Kiln 3 line.

CARIB CEMENT 

A Good Corporate Citizen 

The Company is committed to contributing 

to the improvement of education and 

community development. During 2004 

Carib Cement continued its philanthropic 

work through donations and scholarships to 

various institutions throughout the island as 

well as its core projects namely the Multicare 

Foundation and the Community Skills 

Training Programme. These programmes 

continue to foster positive influences 

among the youth as well as members of the 

community who are being empowered by 

obtaining marketable skills. Carib Cement 

reiterates its commitment to be a part of the 

process of community and nation building. 

TOP: Staff members, from left, Basil Perriel, Suzanne Ali and 

Richard Flynn cleaned up the Harbour View Primary School on 

Labour Day. 

SECOND FROM TOP: Doreen Frankson, President of the Jamaica 

Manufacturers’ Association presented Winsome Wilkins, Chief 

Executive Officer of the United Way with a cheque for J$2.7 

million to assist farmers affected by Hurricane Ivan. Carib 

Cement, together with other manufacturers contributed to this 

fund. Sharing this moment is Lystra Sharp, Public Relations 

Officer, Carib Cement. 

THIRD FROM TOP: Carib Cement’s members of staff, from left, 

Sonia Thomas and Denise Minto assisted in serving breakfast 

to students in the Company’s School Feeding Programme. 

FOURTH FROM TOP: Carib Cement’s Safety & Environmental 

Officer, Melvin Howell, left, and the Legal and Corporate 

Services Manager, Cordia Constable, centre, presented 

environmental posters and garbage bins to Leabert Grant, 

General Manager of the MultiCare Foundation. 

BELOW: Human Resources Officer, Judith Sobion , posed with 

the winners of the Prep-Primary School Debate Competition. 

• Strength 

that lasts – 

• Quality at an 

affordable price 

In keeping apace 

with international 

best practices we 

now produce the 

new Carib Cement 

PLUS, a strong, 

duarable, highquality 

and versatile 

product. 

Proven to be ideal 

for construction 

in tropical 

environments, Carib 

Cement PLUS 

produces a fortified 

concrete mix that 

is suitable for every 

building application. 


2004 ANNUAL REPORT

TEN YEAR FINANCIAL SUMMARY 

(In $’000 except for items * ) 

2004 2003 Restated 

2002 

2001 Restated 

2000 

1999 1998 1997 1996 1995 

SALES 5,452,759 4,016,643 3,676,266 3,160,402 3,078,031 2,917,558 2,713,736 2,514,314 2,619,209 2,218,169 

Profit/(Loss) before taxation and 

Extraordinary Items 859,012 632,300 526,083 394,409 388,146 (788,147) (2,169,048) (473,736) 281,623 179,351 

Extraordinary Items - - - - - - - (17,777) - - 

Taxation (1997 restated for comparison) (16,651) (177,416) (146,617) (100,567) (102,220) 257,952 313,927 57,719 - - 

Net Profit/(Loss) (1997 restated for 

comparison) 

842,361 454,884 379,466 293,842 285,926 (530,195) (1,855,121) (433,794) 281,623 179,351 

*Net Profit/(Loss) per Share 1.0 0.5 0.4 0.3 0.3 (0.8) (4.4) (1.0) 0.7 0.4 

Cash Distribution/ Dividend Proposed 59,580 59,580 42,557 42,557 - - - 42,204 - 31,652 

*Cash Distribution/ Dividend per Share 0.1 0.1 0.1 0.1 - - - 0.1 - 0.1 

Shareholders Equity 2,771,121 2,102,115 1,820,586 1,664,238 1,526,460 1,398,265 (520,925) 1,648,124 2,181,841 1,909,515 

*Share Holders’ Equity Per Share 3.3 2.5 2.1 2.0 1.8 1.6 (1.2) 3.9 5.2 4.5 

Capital Expenditure - Other 120,211 368,178 38,225 75,219 186,855 10,857 589,746 - 35,669 32,223 

Capital Expenditure - CWIP 269,743 98,372 121,694 77,899 - 35,048 322,847 671,906 480,725 578,058 

Depreciation 269,380 217,488 191,034 175,932 180,506 195,475 239,932 - 140,961 134,269 

Working Capital 118,665 (346,746) (229,247) (592,808) (752,754) (821,835) (3,703,722) (1,544,228) 135,968 99,238 

Property Plant & Equipment Before 4,319,606 3,979,743 3,655,789 3,498,180 3,343,802 3,199,414 5,210,495 5,366,879 4,608,460 4,093,659 

Depreciation 

Long Term debt 9,315 9,013 558 81,745 179,011 270,782 783,334 1,278,481 1,879,819 1,690,772 

*Cement imported (tonnes) - - 12,311 - 95,236 116,915 - - 22,600 67,454 

*Clinker imported (tonnes) 41,192 Zero 53,564 39,852 - - - 80,019 - - 

Pozzolan Imported (tonnes) 35,319 4,200 - 2,487 - - - - - - 

*Production 

CARIBBEAN CEMENT COMPANY 

and its subsidiaries 

FINANCIAL STATEMENTS 

for the year ended 31 December 2004 

(expressed in Jamaican dollars) 

Cement 808,070 607,682 613,981 596,247 521,344 501,148 557,991 588,288 555,125 523,462 

Clinker 605,814 600,980 532,140 511,598 528,134 463,962 505,575 456,891 521,601 504,920 

*Cement Sold - tonnes 

Local 800,354 589,344 620,319 594,669 603,962 601,367 557,729 575,323 565,390 562,773 

Export 3,501 16,056 4,912 4,815 - 227 14,672 16,013 8,779 20,313 

Total 803,855 605,400 625,231 599,484 603,962 601,594 572,401 591,336 574,169 583,086 

2004 ANNUAL REPORT 26 27


AND ITS SUBSIDIARIES 

Consolidated Balance Sheet 

As at 31 December 2004 

(Expressed in Jamaican Dollars) 

Notes 2004 2003 

$’000 $’000 

NET ASSETS 

Non-current assets 

Property, plant and equipment 11 2,636,149 2,527,176 

Due fr 

om related company 16 303,531 

 

336,289 

- 

2,939,680 2,863,465 

- 

 

Inventories 14 903,032 945,672 

Receivabl 

es and prepayments 15 407,765 143,088 

Due fr 

om related companies 16 107,162 56,515 

Taxation recoverabl 

e - 23,494 

Cash and cash equivalents 17 99,719 

 

55,567 

- 

1,517,678 

 

1,224,336 

- 

Current liabilities 

Bank advances 19 77,972 108,212 

Payabl 

es and accruals 20 532,059 584,392 

Due to parent and related companies 21 639,744 788,903 

Taxation payabl 

e 138,391 - 

Current portion of long-term 

loans 22 10,847 6,364 

Demand loans 23 - 83,211 

- 

1,399,013 1,571,082 

- 

Working capital surplus (defi 

cit) 118,665 (346,746) 

- 

Non-current liabilities 

Medium and long-term loans 22 9,315 9,013 

Defe 

rred tax liabi 

lity 7 277,909 405,591 

- 

287,224 414,604 

- 

TOTAL NET ASSETS 2,771,121 2,102,115 

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The accompanying notes fo 

rm an integral part of these fi 

nancial statements. 

29 

2004 ANNUAL REPORT



Consolidated Balance Sheet 





Consolidated Statement of Earnings 

Year ended 31 December 2004 


Notes 2004 2003 

$’000 $’000 

STOCKHOLDERS’ EQUITY 

Capital and reserves 

Share capi 

tal 24 425,569 425,569 

Reserves 1,816,476 1,033,695 

- 

2,242,045 1,459,264 

Defe 

rred gain 6 529,076 642,851 

- 

GROUP EQUITY 2,771,121 2,102,115 

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The accompanying notes for 

orm 

an int 

n egral part of the 

se fi 


On 25 February 2005, the Board of Directors aut 

horised these fi 

nancial statements for 

issue. 

Notes 2004 2003 

$’000 $’000 

Revenue 3 5,452,759 4,016,643 

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Operating profi 

t 3 888,777 811,894 

Finance costs - net 5 (29,765) (179,594) 

- 

Profi 

t befor 

e taxation 859,012 632,300 

Taxation 7 (16,651) (177,416) 

- 

Profi 

t aft 

er taxation 8 842,361 454,884 

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Cents 

Earnings per ordinary stock unit 9 99 53 

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……………………………………Director 


………………………………….Director 



orm 

an int 


se fi 



30 

31 

2004 ANNUAL REPORT


AND CARIBBEAN ITS SUBSIDIARIES CEMENT COMPANY LIMITED AND ITS SUBSIDIARIES 



Consolidated Statement of Changes in Equity 



 

 

 

 

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 

1,383,268 242,502 414,533 (17,489) (1,384,423) 638,391 425,569 1,063,960 

Net profit for the year - - - - 454,884 454,884 - 454,884 

Transfer of realised gain (Note 6) - - 113,775 - (113,775) - - - 

Amortisation for the year (Note 25) - (47,462) 47,462 - - - - - 

Dividends paid - - - - (59,580) (59,580) - (59,580) 

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1,383,268 195,040 575,770 (17,489) (1,102,894) 1,033,695 425,569 1,459,264 

Net profit for the year - - - - 842,361 842,361 - 842,361 

Transfer of realised gain (Note 6) - - 113,775 - (113,775) - - - 

Amortisation for the year (Note 25) - (47,462) 47,462 - - - - - 

Dividends paid - - - - (59,580) (59,580) - (59,580) 

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1,383,268 147,578 737,007 (17,489) (433,888) 1,816,476 425,569 2,242,045 

accompanying notes form an integral part of these financial statements. 

Consolidated Statement of Cash Flows 



2004 2003 

$’000 $’000 

Cash flows from operating activities 

Profit before taxation 859,012 632,300 

Adjustments for: 

Depreciation 269,380 217,488 

Amortisation of deferred gain (113,775) (113,775) 

(Gain) loss on disposal of property, plant and equipment (28,360) 402 

Interest income (16,242) (10,529) 

Interest expense 43,009 89,181 

Unrealised foreign exchange (gains) losses (4,581) 52,033 

Provision for taxation recoverable 17,552 - 

--------------------- --------------------- 

1,025,995 867,100 

Decrease in inventories 42,640 1,623 

Increase in receivables and prepayments (264,677) (48,236) 

Increase in due from related companies (8,269) (370,818) 

Increase in taxation recoverable - (1,108) 

Decrease in payables and accruals (47,937) (285,871) 

(Decrease) increase in due to parent and related companies (114,147) 227,485 

--------------------- --------------------- 

Cash generated from operations 633,605 390,175 

Interest received 6,807 3,491 

Interest paid (78,021) (89,356) 

--------------------- --------------------- 

Net cash generated from operating activities 562,391 304,310 

--------------------- --------------------- 

Cash flows from investing activities 

Purchase of property, plant and equipment (389,954) (466,970) 

Proceeds from disposal of property, plant and equipment 39,960 - 

--------------------- --------------------- 

Net cash used in investing activities (349,994) (466,970) 

--------------------- --------------------- 

Cash flows from financing activities 

Loans received 567,224 378,026 

Repayment of loans (645,649) (365,008) 

Dividends paid (59,580) (59,580) 

--------------------- --------------------- 

Net cash used in financing activities (138,005) (46,562) 

--------------------- --------------------- 

Increase (decrease) in net cash and cash equivalents 74,392 (209,222) 

Net cash and cash equivalents - beginning of year (52,645) 156,577 

--------------------- --------------------- 

Net cash and cash equivalents - end of year 21,747 (52,645) 

=========== =========== 

Represented by: 

Cash and cash equivalents 99,719 55,567 

Bank advances (77,972) (108,212) 

--------------------- --------------------- 

21,747 (52,645) 

=========== =========== 

The accompanying notes form an integral part of these financial statements. 

6 

2004 ANNUAL REPORT 32 

33 

2004 ANNUAL REPORT



Company Balance Sheet 



Notes 2004 2003 

$’000 $’000 

NET ASSETS 

Non-current assets 

Property, plant and equipment 11 2,465,040 2,368,440 

Investment in subsidiaries 12 103,010 103,010 

Due fr 

om related company 16 303,531 336,289 

Due fr 

om subsidiaries 13 767,475 

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Inventories 14 878,232 920,882 

Receivabl 

es and prepayments 15 315,961 124,922 

Due fr 

om related companies 16 102,838 56,197 

Taxation recoverabl 

e - 23,494 

Cash and cash equivalents 17 95,653 

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Current liabilities 

Bank advances 19 77,972 108,212 

Payabl 

es and accruals 20 509,685 574,188 

Due to parent and related companies 21 639,744 788,903 

Current portion of long-term 

loans 22 10,539 5,806 

Taxation payabl 

e 138,391 - 

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cit) 16,353 (306,402) 

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Non-current liabilities 

Medium and long-term loans 22 9,315 8,985 

Defe 

rred tax liabi 

lity 7 467,938 405,591 

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TOTAL NET ASSETS 3,178,156 2,820,509 

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Company Balance Sheet 



Notes 2004 2003 

$’000 $’000 

STOCKHOLDERS’ EQUITY 

Capital and reserves 

Share capi 

tal 24 425,569 425,569 

Reserves 2,223,511 1,752,089 

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Defe 

rred gain 6 529,076 642,851 

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COMPANY EQUITY 3,178,156 2,820,509 

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orm 

an int 


se fi 


On 25 February 2005, the Board of Directors aut 

horised these fi 

nancial statements for 

issue. 

………………………………………..Director………………………………………….Director 


Rol 

lin Bertrand 


orm 

an int 


se fi 



34 

35 

2004 ANNUAL REPORT



Company Statement of Earnings 



Notes 2004 2003 

$’000 $’000 

Revenue 3 5,343,651 3,946,418 

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t 3 767,997 820,088 

Finance costs - net 5 (30,315) (184,816) 

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t befor 

e taxation 737,682 635,272 

Taxation 7 (206,680) (177,416) 

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t aft 

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Cents 

Earnings per ordinary stock unit 9 62 54 

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orm 

an int 


se fi 




Company Statement of Changes in Equity 



 

 

 

 

$’000 $’000 $’000 $’000 $’000 $’000 $’000 

1,383,268 242,502 414,528 (686,485) 1,353,813 425,569 1,779,382 

Net profi 

t for 

the year - - - 457,856 457,856 - 457,856 

 

Amortisation for 

the year (Note 25) - (47,462) 47,462 - - - - 

Dividends paid - - - (59,580) (59,580) - (59,580) 

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1,383,268 195,040 575,765 (401,984) 1,752,089 425,569 2,177,658 

Net profi 

t for 

the year - - - 531,002 531,002 - 531,002 

Transfe 

r of realised gain (Note 6) - - 113,775 (113,775) - - - 


the year (Note 25) - (47,462) 47,462 - - - - 

Dividends paid - - - (59,580) (59,580) - (59,580) 

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-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

1,383,268 147,578 737,002 (44,337) 2,223,511 425,569 2,649,080 

 


36 37 

2004 ANNUAL REPORT



Company Statement of Cash Flows 



2004 2003 

$’000 $’000 

Cash fl 

ows fr 

om operating activities 

Profi 

t befor 

e taxation 737,682 635,272 

Adj 

ustments for 

: 

Depreciation 253,324 208,771 

Amortisation of defe 

rred gain (113,775) (113,775) 

(Gain) loss on disposal of property, plant and equipment (28,360) 402 

Interest income (15,177) (5,720) 

Interest expense 42,170 84,985 

Unrealised for 

eign exchange (gains) losses (4,581) 52,033 

Provision fo 

r taxation recoverabl 

e 17,552 - 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

888,835 861,968 

Decrease in inventories 42,650 9,882 

Increase in receivabl 

es and prepayments (191,039) (45,676) 

Increase in due fr 

om related companies (4,263) (374,215) 

Increase in taxation recoverabl 

e - (1,108) 

Decrease in payabl 

es and accruals (60,107) (281,546) 

(Decrease) increase in due to par 

ent and related companies (114,147) 233,207 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

Cash generated fr 

om operations 561,929 402,512 

Interest received 5,743 - 

Interest paid (77,182) (89,381) 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

Net cash generated fr 

om operating activities 490,490 313,131 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

Cash fl 

ows fr 

om investing activities 

Purchase of propertrt 

y, plant and equipment (361,525) (407,167) 

Proceeds fr 

om disposal of property, plant and equipment 39,960 - 

(Advances to) repayment by subsidiaries (33,727) 4,000 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

Net cash used in investing activities (355,292) (403,167) 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

Cash fl 

ows fr 

om fi 

nancing activities 

Loans received 567,224 17,416 

Repayment of loans (562,161) (85,557) 

Dividends paid (59,580) (59,580) 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

Net cash used in fi 

nancing activities (54,517) (127,721) 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

Increase (decrease) in net cash and cash equivalents 80,681 (217,757) 

Net cash and cash equivalents - beginning of year (63,000) 154,757 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

Net cash and cash equivalents – end of year 17,681 (63,000) 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 

Represented by: 

Cash and cash equivalents 95,653 45,212 

Bank advances (77,972) (108,212) 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

17,681 (63,000) 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 


orm 

an int 

egral part of the 

se fi 


11 



Notes to the Consolidated Financial Statements 



1. Corporate infor 

mation 

Caribbean Cement Company Limited (the “Company”) and its Subsidiaries are 

incorpor 

ated under the laws of Jamaica. 

The Company is a 65.65% owned subsidiary of TCL (Nevis) Limited. TCL (Nevis) 

Limited is a wholly owned subsidiary of Trinidad Cement Limited (the Ultimate Par 

ent 

Company) which also owns 8.45% of the ordinaryry 

shares of the Company. The principal 

activities of Caribbean Cement Company Limited and its Subsidiaries (the “Group”) are 

the manufa 

cturing and sale of cement and the mining and sale of gypsum. 

The registered off 

fi 

ce of the Company is Rockfor 

t, Kingston, Jamaica. 

2. Signifi 

cant accounting policies 

The most signifi 

cant policies are summarised below: 

a] Basis of preparation 

These fi 

nancial statements have been prepared in accordance with International 

Financial Reporting Standards (“IFRS”) and are prepared under the historical cost 

convention except for 

the measurement at deemed cost of certain property, plant 

and equipment. Deemed cost represents fa 

ir value at the date of transition to 

IFRS. 

b] Basis of consolidation 

The Group’s fi 

nancial statements present the results of operations and fi 

nancial 

position of the Company and its Subsidiaries as fol 

lows: 

Subsidiaries: 

Ownership 

Level 

Jamaica Gypsum and Quarries Limited 100% 

Caribbean Gypsum Company Limited 100% 

Rockfor 

t Mineral Bath Complex Limited 100% 


38 

39 

2004 ANNUAL REPORT






2. Signifi 

cant accounting policies (Continued) 

c] Interest bearing loans and borrowings 

Borrowings are stated initially at cost, being the fa 

ir value of the consideration 

received, net of issue costs associated with the borrowings. Aft 

er initial 

recognition, borrowings are stated at amortised cost using the eff 

fe 

ctive yield 

method; any diff 

fe 

rence between proceeds and the redemption value is recognized 

in the statement of earnings over the period of the borrowings. 

d] Property, plant and equipment 

Land and buildings, held for 

use in the production or supply of goods and services 

or for 

administrative purpos 

es, and certain machinery and equipment are stated in 

the balance sheet at their deemed cost, being the fa 

ir value on the basis of their 

existing use at the date of the adoption of IFRS 1, less any subsequent 

accumulated depreciation and impairment losses. The values of these assets are 

subject to annual management reviews. 

Other property, plant and equipment are stated at cost, net of accumulated 

depreciation and any impairment in value. 

Depreciation is calculated on the straight-line method 

assets. Current annual rates of depreciation are: 

over the useful 

lives of the 

Buildings 2.5% to 50% 

Plant, machinery and equipment 3% to 33.3% 

Off 

fi 

ce fur 

niture and equipment 25% to 33.3% 

Motor vehicles 20% to 33.3% 

Leasehold land and improvements are amortised over the remaining term of the 

lease. 

It is the Group’s policy to capi 

talise interest on loans specifi 

c to capi 

tal projects 

during the period of construction. The interest rate is determined by using the 

weighted average cost of capi 

tal. Repairs and renewals are charged against 

income when the expenditure is incurred. 

e] Inventories 

Plant spares and raw materials are valued at the lower of weighted average cost 

and net realisablabl 

e value. Work in progress and fi 

nished goods are valued at the 

lower of cost, including attributablabl 

e production overheads, and net realisablabl 

e 

value. Net realisablabl 

e value is the estimated selling price in the ordinary course of 

business less the costs of completion and estimated costs necessary to make the 

sale. 






2. Signifi 


f] 

Foreign currency translation 

Monetary assets and liabi 

lities denominated in currencies other than Jamaican 

dollars are translated at the rate of exchange in eff 

fe 

ct at the balance sheet date. 

Non-monetary assets and liabi 

lities and transactions denominated in currencies 

other than Jamaican dollars are translated at the rate of exchange in eff 

fe 

ct at the 

date of the transaction. Exchange diff 

fe 

rences on for 

eign currency translations are 

recognised in the statement of earnings. Exchange rates are determined by the 

published weighted average rate at which commercial banks trade in for 

eign 

currencies. 

g] Financial instruments 

Financial instruments carried on the balance sheet include cash and cash 

equivalents, receivables, medium and long-term loans, related company balances 

and payables. The particular recognition methods adopted are disclosed in the 

individual policy statements associated with each item. 

The fa 

ir values of the Group’s and the Company’s fi 

nancial instruments are 

discussed in Note 30. 

h] Taxation 

The taxation charge fo 

r the curr 

ent year is based on the results for 

the year as 

adjusted for 

items, which are non-assessablabl 

e or disallowed. The taxation charge 

is calculated using the tax rate in eff 

fe 

ct at the balancanc 

e sheet date. 

A defe 

rred tax charge is provided, using the liabi 

lity method, on all temporary 

diff 

fe 

rences between the tax bases of assets and liabi 

lities and their carrying 

amounts for 

fi 

nancial report 

ing purpos 

es. 

Defe 

rred tax assets are recognised for 

all deductible temporary diff 

fe 

rences, carry- 

for 

ward of unused tax credits and unused tax losses, to the extent that it is 

probabl 

e that fut 

ure taxabl 

e profi 

t will be availablabl 

e against which these deductible 

temporary diff 

fe 

rences, carry-for 

ward of unused tax credits and unused tax losses 

can be utilised. The carrying amount of defe 

rred tax assets is reviewed at each 

balance sheet date and reduced to the extent that it is no longer probabl 

e that 

suff 

fi 

cient fut 

ure taxabl 

e profi 

t will be availablabl 

e to allow all or part of the defe 

rred 

tax assets to be utilised. 

Defe 

rred tax assets and liabi 

lities are measured at the tax rates that are expected to 

appl 

y to the year when the assets are realised or the liabi 

lities are settled, based on 

tax rates and tax laws that have been enacted or substantively enacted at the 

balance sheet date. 


40 

41 

2004 ANNUAL REPORT






2. Signifi 


i] Employee benefi 

ts 

The Group has a defi 

ned contribution pension scheme for 

all perm 

anent 

employees. This scheme is managed by an outside agency. The Group’s liabi 

lity 

is limited to its contributions which are accounted for 

on the accrual basis and 

charged to the statement of earnings in the period to which they relate. 

j] Revenue recognition 

Revenue is recognised when the signifi 

cant risk and rewards of ownership of 

goods have been passed to the buyers and the amounts of revenue can be 

measured reliabl 

y. 

Rental and interest income are recognised as they are accrued unless collectabi 

lity 

is in doubt. 

k] Receivables and payables 

Trade receivabl 

es are carried at anticipated realisablabl 

e value. A provision is made 

for 

doubtful 

receivabl 

es based on a review of outstanding amounts at the year end. 

Liabilities for 

trade and other accounts payable, which are normally settled on 30 

to 90 days terms, are recorded at amounts representing the fa 

ir value of the 

consideration to be paid in the fut 

ure fo 

r goods and services received by the 

balance sheet date, whether or not billed. 

l] Net cash and cash equivalents 

Net cash and cash equivalents comprise cash at bank and in hand and short-term 

deposits with an original maturity of three months or less, net of bank advances. 






2. Signifi 


p] Operating leases 

Leases of assets under which all the risks and benefi 

ts of ownership ar 

e eff 

fe 

ctively 

retained by the lessor are classifi 

ed as operating leases. Payments made under 

operating leases are charged to the statement of earnings on a straight-line basis 

over the period of the lease. 

q] Defe 

rred expenditures 

The costs of installed refr 

actories, chains and grinding media are amortised over a 

period of six to twelve months to match the estimated period of their economic 

useful 

ness. 

r] Comparative infor 

mation 

Where necessary, comparative fi 

gures have been reclassifi 

ed and/or restated to 

confor 

m with changes in presentation in the curr 

ent year. 

 

 

 

Equity investments in subsidiaries, classifi 

ed as long-term, are stated at cost. 

 

A segment is a distinguishabl 

e component of the Group that is engaged either in 

providing an individual product or service or a group of related products or 

services that is subject to risks and returns that are diff 

fe 

rent fr 

om those of other 

segments. The Directors are of the view that there are no material segments into 

which the Group’s business should be disclosed. 

m] Earnings per stock unit 

The earnings per stock unit is computed by dividing profi 

t attrtr 

ibutabl 

e to ordinary 

stockholders by the weighted average number of ordinary stock units in issue 

during the year. 

n] Use of estimates 

The preparation of the fi 

nancial statements in confor 

mity with IFRS requires 

management to make estimates and assumptions that aff 

fe 

ct the amounts reported 

in the fi 

nancial statements and accompanying notes. Actual results could diff 

fe 

r 

fr 

om these estimates. 

o] Provisions 

Provisions are recognised when the Group has a present legal or constructive 

obligation as a result of past events, it is probabl 

e tha 

t an outfl 

ow of resources will 

be required to settle the obligation, and a reliabl 

e estimate of the amount can be 

made. 


42 

43 

2004 ANNUAL REPORT






3. Operating profi 

t 


t consists of the fol 

lowing: 

 

 

 

$’000 $’000 $’000 $’000 

Revenue 5,452,759 4,016,643 5,343,651 3,946,418 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

Raw materials, fi 

nished 

goods and consumables 513,486 421,213 573,856 426,814 

Fuels and electricity 1,130,548 834,200 1,130,548 834,200 

Personnel remuneration 

and benefi 

ts (Note 4) 922,690 804,311 893,541 783,877 

Depreciation 269,380 217,488 253,324 208,771 

Other operating expenses 1,702,931 1,374,992 1,635,259 1,294,618 

Changes in inventories of fi 

nished 

goods and work in progress 238,597 (294,739) 238,606 (279,546) 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

4,777,632 3,357,465 4,725,134 3,268,734 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

Gross profi 

t 675,127 659,178 618,517 677,684 

Other income 213,650 152,716 149,480 142,404 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

888,777 811,894 767,997 820,088 

Other income includes: 

Amortisation of defe 

rred 

gain (Note 6) (113,775) (113,775) (113,775) (113,775) 

(Gain) loss on disposal of 

property, plant and equipment (28,360) 402 (28,360) 402 


t is arr 

ived at aft 

er charging (crediting): 

 

 

 

$’000 $’000 $’000 $’000 

Audit fe 

es 

Current year 3,963 3,463 3,500 3,000 

Prior year 1,428 (71) 1,428 (71) 

Directors’ emoluments 

Fees 5,939 4,266 5,939 4,266 

Management remuneration - - - - 

Technical assistance fe 

es 

and related charges 67,009 64,230 67,009 58,431 

Operating lease charges 615,200 608,066 615,200 608,066 






4. Personnel remuneration and benefi 

ts 

 

Personnel remuneration and benefi 

ts consist of the fol 

lowing: 

 

 

 

$’000 $’000 $’000 $’000 

Wages and salaries 759,505 656,669 732,459 639,950 

Statutory contributions 55,231 54,444 53,229 51,350 

Pension costs (Note 28) 26,182 23,404 26,182 23,404 

Other personnel costs 81,772 69,794 81,671 69,173 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

922,690 804,311 893,541 783,877 

Average number of employees: 

Full-time 280 270 268 258 

Part-time 107 86 81 62 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

387 356 349 320 

 

Finance costs consist of the fol 

lowing: 

 

 

 

$’000 $’000 $’000 $’000 

Interest expense 43,009 89,181 42,170 84,985 

Interest income (16,242) (10,529) (15,177) (5,720) 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

26,767 78,652 26,993 79,265 

Net loss on currency exchange 2,998 100,942 3,322 105,551 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

29,765 179,594 30,315 184,816 


44 

45 

2004 ANNUAL REPORT











 

 

 

 

$’000 $’000 

 

 

The taxation charge diff 

fe 

rs fr 

om the theoretical amount that would arise using the income 

tax rate as fol 

lows: 

 

Balance at 1 January 642,851 756,626 


the year (113,775) (113,775) 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

Balance at 31 December 529,076 642,851 

Defe 

rred gain represents the profi 

t fr 

om the sale of certain machinery and equipment in 

August 1999 which is being credited to the statement of earnings over ten years, the period 

of the original operating lease (Note 11). 

The current and prior year amort 

isation gains were transfe 

rred to capi 

tal reserve as realised 

capi 

tal gains. 

 

 

 

 

$’000 $’000 $’000 $’000 

 

The taxation charge consists of: 

Defe 

rred tax (credit) charge (127,682) 177,416 62,347 177,416 

Income tax 144,333 - 144,333 - 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

16,651 177,416 206,680 177,416 

 

 

2003 2004 2003 

$’000 $’000 $’000 $’000 

Profi 

t befor 

e taxation 859,012 632,300 737,682 635,272 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

Taxed at 33.3% 286,337 210,767 245,894 211,757 

Tax on non-assessable income (54,045) (43,981) (54,045) (43,981) 

Tax on non-allowable expense 15,749 9,640 14,831 9,640 

Losses not utilised - 990 - - 

Tax on prior years’ losses 

recognised in subsidiary (231,390) - - - 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

Eff 

fe 

ctive tax charge 16,651 177,416 206,680 177,416 

During the year, Jamaica Gypsum and Quarries Limited recognised a defe 

rred tax asset 

amounting to $231,390,000 ar 

ising fr 

om unused tax losses, based on an assessment that 

fut 

ure taxable profi 

ts will be available against which these losses can be utilised. 

Group 

Company 

2004 2003 2004 2003 

$’000 $’000 $’000 $’000 

 

Balance at beginning of year 405,591 228,175 405,591 228,175 

Defe 

rred tax (credit) charge 

fo 

r the year (127,682) 177,416 62,347 177,416 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

---- 

- -- 

-- 

--- 

- -- 

-- 

- 

Balance at end of year 277,909 405,591 467,938 405,591 

== 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

= 


46 

47 

2004 ANNUAL REPORT






 

 

The signifi 

cant components of defe 

rr 

ed tax liabi 

lity 

are as fol 

lows: 

Group 

Company 

2004 2003 2004 2003 

$’000 $’000 $’000 $’000 

Property, plant and equipment 495,902 517,075 490,963 517,075 

Losses (194,900) (59,969) - (59,969) 

Other (23,093) (51,515) (23,025) (51,515) 

---- 

- -- 

-- 

--- 

- -- 

-- 

- ---- 

- -- 

-- 

--- 

- -- 

-- 

- ---- 

- -- 

-- 

--- 

- -- 

-- 

- ---- 

- -- 

-- 

--- 

- -- 

-- 

- 

277,909 405,591 467,938 405,591 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

= 






 

 

 

 

 

’000 $’000 $’000 $’000 

Profi 

t attributable to 

stockholders 842,361 454,884 531,002 457,856 

Number of stock units in 

issue (thousands) 851,138 851,138 851,138 851,138 

Earnings per ordinary 

stock unit (cents) 99 53 62 54 

 

Subject to agreement with the Taxpayer Audit and Assessment Department, losses 

availablabl 

e for 

off 

fs 

et against fut 

ure profi 

ts amount to appr 

oximately $620,507,000 (2003 - 

$907,101,000) fo 

r the Group and Nil (2003 - $177,416,000) for 

the Company. 

 

(i) 

The net profi 

t is dealt with in the fi 

nancial 

statements as fol 

lows: 

2004 2003 

$’000 $’000 

10. Related party transactions 

The fol 

lowing signifi 

cant tr 

ansactions have been entered into with Trinidad Cement 

Limited and its subsidiaries: 

Included in the statement of earnings: 

2004 2003 

$’000 $’000 

(ii) 

Company 531,002 457,856 

Subsidiaries 311,359 (2,972) 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

842,361 454,884 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 

The accumulated losses are refl 

ected in 

the fi 

nancial statements as fol 

lows: 

Company (44,337) (401,984) 

Subsidiaries (389,551) (700,910) 

---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - ---- 

- -- 

-- 

--- 

- -- 

-- 

-- 

--- 

- - 

(433,888) (1,102,894) 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 

(Income) expenses – 

Inventory storage fe 

e received (1,020) (908) 

Inventory usage fe 

e paid 11,328 - 

Sale of gypsum and shale (18,194) (22,153) 

Interest earned on long-term loan (9,427) (7,058) 

Sale of spares - (345,764) 

Technical fe 

e charges 45,925 57,431 

Purchase of spares and materials 284,964 137,828 

Interest charges on advances 32,442 33,800 

Payments under operating lease (Note 11) 615,200 13,609 

Included in balance sheet: 

Short-term advances received, net (59,315) (365,130) 

On 10 March 2003 the Company sold at book value to an aff 

fi 

liated company, TCL Trading 

Limited, excess spares valued at US$6,174,000. Under the terms of the agreement the sale 

price will be paid over ten years, commencing 1 April 2004, by ten equal installments and 

at an annual interest rate of 2.5%. The agreement fur 

ther provides for 

TCL Trading 

Limited to make spares available to the Company when required. The Company is 

required to pay an annual usage fe 

e of US$185,000 for 

these services and TCL Trading 

Limited is required to pay the Company an annual inventory storage fe 

e of US$20,000. 


48 

49 

2004 ANNUAL REPORT

CARIBBEAN CEMENT COMPANY AND ITS SUBSIDIARIES 




 

 

 

 

 

 

 

$’000 $’000 $’000 $’000 $’000 

 

Balance as at 1 January 2004 934,898 2,718,653 165,625 160,567 3,979,743 

Additions 25,681 83,316 11,214 269,743 389,954 

Disposals and adjustments (38,730) 14,094 (22,308) (3,147) (50,091) 

Transfe 

rs 10,360 148,912 - (159,272) - 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

Balance as at 31 December 2004 932,209 2,964,975 154,531 267,891 4,319,606 

 

Balance as at 1 January 2004 330,586 1,006,910 115,071 - 1,452,567 

Charges during the year 25,779 225,130 18,471 - 269,380 

Disposals and adjustments (38,508) 22,324 (22,306) - (38,490) 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

Balance as at 31 December 2004 317,857 1,254,364 111,236 - 1,683,457 

 



CARIBBEAN CEMENT COMPANY AND ITS SUBSIDIARIES 




 

 

 

 

 

 

 

$’000 $’000 $’000 $’000 $’000 

 

Balance as at 1 January 2004 836,174 2,593,693 164,492 145,475 3,739,834 

Additions 10,654 70,559 11,214 269,098 361,525 

Disposals and adjustments (38,730) 14,094 (22,308) (3,147) (50,091) 

Transfe 

rs - 144,180 - (144,180) - 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 


 

Balance as at 1 January 2004 313,021 944,477 113,896 - 1,371,394 

Charges during the year 21,765 213,188 18,371 - 253,324 

Disposals and adjustments (38,508) 22,324 (22,306) - (38,490) 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

Balance as at 31 December 2004 296,278 1,179,989 109,961 - 1,586,228 

 




2004 ANNUAL REPORT






 

 

 

a) In August 1999, the Company entered into a sale and operating leaseback transaction 

with a third party involving certain of its machinery 

and equipment having a net book 

value of $1,406,873,000. A gain of $1,139,232,000, representing the diff 

fe 

rence 

between the net fa 

ir value of the assets and the sale proceeds, was realised and is 

being amortised on a straight-line basis over ten years, the term of the resulting 

operating lease (Note 6). The lease was terminated in December 2003 and the 

related machinery and equipment sold by the lessor to TCL Services Limited, an 

aff 

fi 

liated company. A lease was established with TCL Services Limited under the 

same terms and conditions as the original lease, except that the Company could 

terminate the lease at any time. 

In August 2004, the lease with TCL Services Limited was terminated and the 

machinery and equipment sold to Trinidad Cement Limited. A new lease was then 

established with Trinidad Cement Limited with similar terms and conditions to those 

that existed under the lease arrangements with TCL Services Limited (Note 27). 

b) The amount of borrowing costs capitalised during the year amounted to $19,108,000 

(2003 - Nil). 

 

Investment in subsidiaries consists of the fol 

lowing: 

At cost: 

 

 

$’000 $’000 

Jamaica Gypsum and Quarries 

Limited - 375,000,000 ordinary 

shares of $0.01 each 79,000 79,000 

Rockfor 

t Mineral Bath Complex 

Limited - 21,000,000 ordinary 

shares of $0.01 each 20,010 20,010 

Caribbean Gypsum Company 

Limited - 1,000 ordinary shares 

of $2.00 each 4,000 4,000 

________ ________ 

103,010 103,010 






 

 

 

 

Due fr 

om subsidiaries consist of the fol 

lowing: 

 

 

$’000 $’000 

Jamaica Gypsum and Quarries Limited 738,494 705,217 

Rockfor 

t Mi 

neral Bath Complex Limited 27,899 27,484 

Caribbean Gypsum Company Limited 1,082 1,047 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

767,475 733,748 

These amounts represent net advances to subsidiaries, which are interest fr 

ee and have no 

fi 

xed dates for 

repayment. 

 

Inventories consist of the fol 

lowing: 

 

 

 

$’000 $’000 $’000 $’000 

Plant spares 512,093 398,565 512,093 398,565 

Consumables 282,209 161,189 282,209 161,189 

Raw materials and work in 

progress 82,358 385,174 57,558 360,384 

Finished goods 155,750 125,401 155,750 125,401 

Goods in transit 17,274 21,995 17,274 21,995 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

Provision fo 

1,049,684 1,092,324 1,024,884 1,067,534 

f r obsolescence (146,652) (146,652) (146,652) (146,652) 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

903,032 945,672 878,232 920,882 

 

Receivables and prepayments consist of the fol 

lowing: 

 

 

 

$’000 $’000 $’000 $’000 

Trade receivables 112,057 74,109 90,407 62,804 

Sundry receivables and 

prepayments 284,895 65,322 214,741 58,461 

Def 

fe 

rred expenditures 10,813 3,657 10,813 3,657 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

407,765 143,088 315,961 124,922 


52 

53 

2004 ANNUAL REPORT






 

 

Due fr 

om related companies consists of the fol 

lowing: 

 

 

 

$’000 $’000 $’000 $’000 

TCL Services Limited - 391 - 391 

Trinidad Cement Limited 2,408 181 1,188 69 

TCL Trading Limited 398,294 381,600 398,294 381,600 

Readimix (West Indies) Limited 1,872 - 1,872 - 

Arawak Cement Company Limited 8,119 10,632 5,015 10,426 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

410,693 392,804 406,369 392,486 

Long-term 303,531 336,289 303,531 336,289 

Short-term 107,162 56,515 102,838 56,197 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

410,693 392,804 406,369 392,486 






 

 

The interest rate exposure of the borr 

owings is as fol 

lows: 

Total borr 

owings: 

 

 

 

$’000 $’000 $’000 $’000 

At fi 

xed rates 20,162 98,588 19,854 14,791 

At fl 

oating rates 77,972 108,212 77,972 108,212 

Weighted average eff 

fe 

ctive interest rates: 

(%) (%) (%) (%) 

Bank advances 22.5 24.7 22.5 24.7 

Bank borrowings (US$ loans) - 7.2 - 7.2 

Trinidad Cement Limited 6.5 9.1 6.5 9.1 

Other bank loans 21.75 9.3 21.75 9.3 

 

 

Cash and cash equivalents consist of the fol 

lowing: 

 

 

 

$’000 $’000 $’000 $’000 

 

 

Bank advances consist of the fol 

lowing: 

 

 

$’000 $’000 

Overdraft 

s 77,972 108,212 

Cash at bank and in hand 73,884 55,467 69,818 45,112 

Short-term deposits 25,835 100 25,835 100 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

99,719 55,567 95,653 45,212 

In 2003 advances amounting to $39,805,000 were supported by a letter of comfor 

t issued 

by Trinidad Cement Limited. There are no such advances in 2004. Other advances are 

unsecured. 


54 

55 

2004 ANNUAL REPORT











 

 

 

 

Payables and accruals consist of the fol 

lowing: 

Medium and long-term loans are comprised of: 

 

 

 

 

$’000 $’000 $’000 $’000 

Sundry payables and accruals 428,783 325,238 415,330 321,038 

Trade payables 79,587 150,972 71,512 146,233 

Technical assistance fe 

es - 60,912 - 60,912 

Statutory obligations 23,689 47,270 22,843 46,005 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

532,059 584,392 509,685 574,188 

 

 

 

 

$’000 $’000 $’000 $’000 

RBTT Bank Jamaica 

Limited 19 - 25% 2005 -2007 19,854 14,791 19,854 14,791 

National Investment 

Bank of Jamaica Limited nil 2006 308 586 - - 

--- 

- -- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

- 

20,162 15,377 19,854 14,791 

The amounts due to parent and related companies consist of the fol 

lowing: 

The loans are repayable as fol 

lows: 

 

 

 

$’000 $’000 

TCL Ponsa Manufa 

cturing Ltd 202 7,694 

TCL Services Limited - 187,451 

Trinidad Cement Limited 423,802 449,265 

TCL (Nevis) Limited 72,571 73,772 

TCL Packaging Limited 62,120 30,479 

TCL Trading Limited 81,049 40,242 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

639,744 788,903 

Amounts repayable within: 

 

 

 

$’000 $’000 $’000 $’000 

One year 10,847 6,364 10,539 5,806 

Two years 7,914 5,834 7,914 5,806 

Three years 1,401 3,179 1,401 3,179 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

-- 

-- 

- 

20,162 15,377 19,854 14,791 

Current portion (10,847) (6,364) (10,539) (5,806) 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

-- 

-- 

- 

9,315 9,013 9,315 8,985 

The loan fr 

om RBTT Bank Jamaica Limited is repayable in equal monthly installments and 

is secured by a bill of sale over certain of the Company’s motor vehicles. 

The loan fr 

om National Investment Bank of Jamaica Limited is unsecured. 


56 

57 

2004 ANNUAL REPORT











 

 

 

 

Demand loans consisted of the fol 

lowing: 

 

 

 

$’000 $’000 

RBTT Bank Jamaica Limited – 

Interest rate of 7.25% per annum - 30,258 

Interest rate of 7.23% per annum - 52,953 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

- 83,211 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 

== 

== 

== 

== 

== 

== 

== 

== 

== 

== 

= 

 

 

$’000 $’000 

Balance at 1 January 195,040 242,502 

Realised during the year (47,462) (47,462) 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

- --- 

- -- 

-- 

-- 

-- 

-- 

-- 

- 

Balance at 31 December 147,578 195,040 

 

These loans were denominated in United States dollars and were obtained by Jamaica 

Gypsum and Quarries Limited to support worki 

ng capital requirements. They were 

secured by letters of undertaking and guarantees fr 

om the Company and Trinidad Cement 

Limited. 

 

Share capi 

tal consists of the fol 

lowing: 

 

 

 

(000) (000) $’000 $’000 

 

In August 1999, the Company entered into a sale and operating leaseback transaction with 

a third par 

ty involving certain of its machinery and equipment. This transaction resulted in 

the realisation of an existing revaluation reserve of approximately $474,618,000. This 

realised revaluation reserve is being amortised on a straight line basis over ten years, the 

term of the resulting original operating lease (Note 11). 

 

There are several pending legal actions and other claims in which the Group is involved. It 

is the opinion of the directors, based on the infor 

mation provided by the Company’s 

Attorneys, that liabi 

lity, if any, arising out of these claims is not likely to be material. 

Accordingly, no provision has been made in these fi 

nancial statements in respect of these 

matters. 

: 

 

 

Ordinary shares of 

$0.50 each 1,350,000 1,350,000 675,000 675,000 

: 

 

The Company has a commitment of J$4,687,752,000 (US$76,286,000) under the operating 

lease for 

machinery and equipment with Trinidad Cement Limited, which is payable semiannually 

in United States dollars as fol 

lows (Note 11): 

Ordinary stock units of 

$0.50 each 851,138 851,138 425,569 425,569 

In the year ending 31 December: 

$’000 

 

 

2005 577,434 

2006 552,074 

2007 528,664 

2008-2014 3,029,580 

--- 

- -- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

4,687,752 

The Group participates in a defi 

ned contribution pension plan which is managed by an 

independent party, Life 

of Jamaica Limited. This plan is mandatory for 

all categories of 

permanent employees. Contributions are 10% of pensionable salary for 

both employee and 

employer. The amount of annual pension at any date shall be that pension which can be 

secured by the accumulated contribution plus interest to that date. The Group’s 

contributions in the year amounted to $26,182,000 (2003 - $23,404,000). 


58 

59 

2004 ANNUAL REPORT






 

 

The maj 

or raw material used in the cement manufa 

cturing process is limestone. The 

 

limestone requirements of the Company are met fr 

om reserves in land leased fr 

om the 

Government of Jamaica. The lease term has 44 years remaining but exploitable reserves 

Notes 

are 

to the 

expected 

Consolidated 

to have 

Financial 

a life 

of 174 

Statements 

years based on the current extraction rate. Deep reserves 

Year ended 

have a 

31 fur 

December 

ther exploitable 

2004 

life 

of approximately 130 years. These limestone reserves are 

(Expressed 

not recorded 

in Jamaican 

in these 

Dollars) 

fi 


 

 

 

The fair values of cash and cash equivalents, receivables, related company balances, 

payables and other liabilities approximate their carrying amounts due to the short-term 

nature of these instruments. 

The fair values of medium and long-term financing approximate their carrying amounts. 

The fair value of long term amounts receivable from related company cannot be reasonably 

determined as there are no fixed terms for repayment. 

 

The Group has no significant concentrations of credit risk. Cash and short-term deposits 

are placed with substantial financial institutions. The primary concentration of the Group’s 

credit risk is with its trade receivables, which is mitigated by regular credit evaluation of its 

customers. 

 

The net foreign currency exposures as at year end, expressed in Jamaican dollars, are as 

follows, asset (liability): 

 

 

 

 

$’000 $’000 $’000 $’000 

United States dollars: 

Cash 57,578 52,226 55,796 41,938 

Other balances, net 103,559 277,109 129,491 265,611 

_______ ________ ________ ________ 

161,137 329,335 185,287 307,549 

Trinidad and Tobago dollars: 

Related company balances, net (366,719) (245,393) (366,719) (245,393) 

Euro (16,058) - (16,058) - 

Canadian dollars (9) - (9) - 

Pound sterling (3,080) - (3,080) - 

38 


60

Building Jamaica 

Caribbean Cement Company Limited Annual Report 2004 

A MEMBER OF THE 

GROUP

A Time To Build Caribbean Cement Company Limited Annual ...

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