Final Gleaner 2005.qxd - Jamaica Stock Exchange

Transcription

MISSION
S TAT E M E N T
The Gleaner
Company Limited
THE GLEANER…
committed to being the source
for accurate, independent information.
COMMITTED TO PROVIDING OUR
C U S TO M E R S
with quality Products and Service delivered in courteous, timely and efficient manner
SHAREHOLDERS
with a profitable return on their investment
EMPLOYEES
with a work environment that is safe, innovative, dynamic and rewarding
COMMUNITY
with corporate citizenship that is socially active and environmentally
responsible
SUPPLIERS
with a harmonious and mutually beneficial business relationship
¸
INFORMATION
¸
CREDIBILITY
¸
INDEPENDENCE
THE GLEANER
COMPANY LIMITED
TA B L E O F
CONTENTS
List of Officers and Corporate Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 5
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7
2005 Directors’ Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-16
Senior Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The Gleaner Where Life Unfolds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-22
Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Group Profit and Loss Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Group Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Group Statement of Changes in Stockholder’s Equity . . . . . . . . . . . . . . . . . . . . . . . 27-28
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29-59
Financial Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 - 61
Declaration of Number of Stock Units owned by Directors / Officers. . . . . . . . . . . . . . . 62
List of 10 Largest Blocks of Stock Units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Form of Proxy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
THE GLEANER
COMPANY LIMITED
LIST OF OFFICERS AND
C O R P O R AT E DATA
DIRECTORS
The Hon. O. F. Clarke, O.J., J.P., B.Sc. (Econ), F.C.A. - Chairman/Managing Director
The Hon. J. J. Issa, O.J., C.D., J.P., B.Sc., LLD (Hons.) - Vice-Chairman
C. S. Roberts, J.P., C.A.,
J. M. Matalon, B.Sc. (Hons.) Econ.
D. R. Orane, C.D., B.Sc. (Hons.), M.B.A.,
Prof. The Hon. G. C. Lalor, O.J., C.D., B.Sc., M.Sc., Ph.D. (Retired December 8, 2005)
M. M. Seymour, B.Sc., M.B.A, F.L.M.I.
L. G. Johnston (Mrs.), M.A., B.A.
Dr. C. D. Archer, B.A., M.A. M.U.R.P., M.Phil, Ph.D.
H. W. R. Dear, J.P., C.L.S.
HONORARY CHAIRMAN
R. G. Ashenheim, C.D., M.A., B.C.L. (Resigned November 30, 2005)
Prof. The Hon. G. C. Lalor, O.J., B.Sc., M.Sc., Ph.D (Appointed December 15, 2005)
MANAGEMENT AND KEY OFFICERS
Ken Allen, C.D. - Editor, Opinion Page
Mavis Belasse - Information Systems Manager
Jennifer Campbell - Managing Editor
Collin R. Bourne - Administration Manager/Company Secretary
Claire Clarke-Grant - Editor, Daily/Weekend Star
The Hon. Oliver F. Clarke, O.J. - Managing Director
Karin E. Daley-Cooper - Corporate Affairs and Marketing Manager
Marlene Davis - Managing Director, Gleaner On-Line Limited
Mary Dick - Training Manager
Michael Gallow - Maintenance Manager
Garfield Grandison - Editor-in-Chief
Locksley Henry - Managing Director, Sangster’s Book Stores Limited
John Hudson - Special Projects/Overseas Publications Manager
Errol Knight - Technology Manager
L. Anthony O’Gilvie - Industrial Relations/Personnel Manager
Ian R. Roxburgh - Print Manager
Yvonne Senior - Advertising Manager
Rudolph A. Speid - Group Financial Controller/Manager
Colin Steer - Associate Opinion Editor
Neville Wallace - Circulation Manager
Shernett Robinson
Branch Manager
- Western Bureau
Montego Bay
Ph: 876-952-2822
BRANCH OFFICES
Mrs. Sheila Alexander
Operations Manager
Miss Sandra Moore - The Gleaner Co. (USA) Ltd.
Operations Manager New York
Ph: 718-657-0788
- The Gleaner Co. (Can.) Inc.
Ontario
Ph: 416-784-3002
The Hon. Kingsley Thomas, O.J.- GV Media Group Limited,
Managing Director
London
Ph: 207-737-7377
AUDITORS
KPMG PEAT MARWICK
Chartered Accountants
6 Duke Street, Kingston
BANKERS
THE BANK OF NOVA SCOTIA (JAMAICA) LIMITED
Scotia Bank Centre,
Kingston, Jamaica
REGISTRAR FOR THE COMPANY
SCOTIA JAMAICA INVESTMENT
MANAGEMENT LIMITED
Scotia Centre, Kingston
ATTORNEYS
DUNNCOX
48 Duke Street
Kingston
THE BANK OF NOVA SCOTIA London & New York
THE GLEANER
COMPANY LIMITED
NOTICE OF ANNUAL
GENERAL MEETING
7 North Street
P.O. Box 40
Kingston
Phone: 922-3400
Email: [email protected]
Fax: (876) 922-6297/2058
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Stockholders of the Company will
be held at the registered office of the Company, 7 North Street, Kingston, Jamaica, on Thursday,
June 8, 2006 at 9:00 a.m. for the following purposes:
1.
To receive the Directors' and Auditors' Reports and the Audited Financial Statements for the
year ended December 31, 2005 and to consider, and if thought fit, to pass the following
resolutions:Resolution 1
RESOLVED THAT the Directors' and Auditors' Reports and the Audited Financial
Statements for the year ended December 31, 2005 be hereby approved and adopted.
2.
To re-elect Directors who have retired from office in accordance with Article 93 of the Company's
Articles of Association. The Directors namely, Christopher Roberts, Douglas Orane and H.
Winston Dear being eligible have offered themselves for re-election.
Resolution 2
3.
(a)
That Mr. Christopher Roberts be and is hereby re-elected Director of the
Company, and
(b)
That Mr. Douglas Orane be and is hereby re-elected Director of the Company.
(c)
That Mr. H. Winston Dear be and is hereby re-elected Director of the Company.
To fix the remuneration of the Directors and to consider and if thought fit to pass the following
resolution:
Resolution 3
Resolved that the Directors' fees payable for the year to all non-executive Directors of
the Company be and are hereby approved.
4.
To re-appoint the retiring auditors and to authorize the Directors to determine their remuneration
and to consider and if thought fit, to pass the following resolution.
Resolution 4
That the retiring auditors, KPMG, Chartered Accountants, having expressed their
willingness to continue as auditors of the Company until the conclusion of the next
Annual General Meeting, be and are hereby re-appointed and the Directors be
authorised to fix their remuneration.
2
THE GLEANER
COMPANY LIMITED
5.
NOTICE OF ANNUAL
GENERAL MEETING
As Special Business
To consider and, if thought fit pass with or without modifications, the following Special
Resolutions:(1)
Resolved That: The Memorandum of Association of the Company be altered
as follows:“The objects and powers set out in paragraph 3 are hereby
deleted in their entirety and removed from the Memorandum of
Association."
(2)
Resolved That: The Articles of Association of the Company are hereby deleted
in their entirety and the said Articles so deleted are hereby
adopted as the Company's Articles of Incorporation.
(3)
Resolved That: The adopted Articles of Incorporation be amended as follows:
That the Articles of Incorporation be amended by the insertion
of a new Article to be numbered 5A:"5A. Subject to the provisions of sections 56 and 57 of the Act,
the Company may issue shares which by the terms of the
issue will be redeemed or at the option of the Company may
be redeemed."
(4)
Resolved That: Article 12 of the Company's Articles of Incorporation be deleted
and by the insertion in its place a new article to be numbered
'12':"12.
Subject to section 184 of the Act, the Company may
give financial assistance by means of a loan,
guarantee or other wise:
(a)
to a shareholder, director, officer or employee of the
Company or affiliated company, or to an associate of
any such person for any purpose;
or
(b)
(5)
to any person for the purpose of, or in connection
with, a purchase of a share issued or to be issued by
the Company or a company with which it is affiliated."
Resolved That: The following Articles be inserted to be numbered '12A' and
12B'.
"12A.
Subject to the provisions of section 58 of the Act, the
Company may purchase or otherwise acquire shares
issued by it."
"12B.
purchase or otherwise acquire its own shares of any
class:
3
THE GLEANER
COMPANY LIMITED
(6) Resolved That:
NOTICE OF ANNUAL
GENERAL MEETING
(a)
to settle or compromise a debt or claim asserted by or
against the Company;
(b)
to eliminate fractional shares; or
(c)
to fulfill the terms of a non-assignable agreement
under which the Company has an option or is obliged
to purchase shares owned by an officer or an
employee of the Company."
Article 45 of the Company's Articles of Incorporation be deleted
and by the insertion in its place a new Article '45':“45
(7) Resolved That:
(8) Resolved That:
Article 140 of the Company's Articles of Incorporation be
deleted and by the insertion in its place a new Article '140':“140.
indemnify:
(a)
a director or officer of the Company or any person
employed by the Company as an auditor;
(b)
a former director, officer or auditor of the Company; or
(c)
a person who acts or has acted at the Company's
request as a director or officer of a body corporate of
which the Company is or was a shareholder or
creditor, and his legal representatives, against all
costs, charges and expenses reasonably incurred by
him in respect of any civil, criminal or administrative
action or proceeding to which he is made a party by
reason of being, or having been, a director or officer
of the Company or body corporate, or any person
employed by the Company or body corporate as an
auditor."
The Company's Articles of Incorporation be amended by the
insertion of an article to be numbered '141'.
“141.
(9) Resolved That:
4
Subject to section 71 of the Act the Company may by
special resolution reduce its stated capital or any
capital redemption reserve fund in any manner and
with, and subject to, any incident authorised, and
consent required, by law."
Subject to section 204 of the Act the Company may
purchase and maintain insurance for the benefit of
any present or former director, officer or auditor of the
Company against liability incurred by these persons
in their capacity as director, officer or auditor of the
Company other than liability for fraud."
The Proviso to Article 129 of the Articles of Incorporation be
amended by deleting the words ''a share premium account
THE GLEANER
COMPANY LIMITED
NOTICE OF ANNUAL
GENERAL MEETING
and".
6.
To transact any other business which may be transacted at an Ordinary General Meeting.
By order of the Board
C. R. Bourne
Secretary
April 6, 2006
Note: In accordance with Section 131 of the Companies Act, 2004, a member entitled to attend and
vote at the above meeting is entitled to appoint a proxy to attend and vote instead of him, and
such proxy need not also be a member. A proxy form is included at page 63
5
THE GLEANER
COMPANY LIMITED
6
DIRECTORS’
PROFILES
THE GLEANER
COMPANY LIMITED
DIRECTORS’
PROFILES
7
THE GLEANER
COMPANY LIMITED
2005 DIRECTORS
REPORT
The Directors have pleasure in presenting the 109th Annual
Report and Audited Financial Statements for the year ended
December 31, 2005.
GROUP PROFIT
The Group Financial Statements for the year 2005, and for 2004,
were prepared under the International Financial Reporting
Standards (IFRS). Under the IFRS, the employees benefit asset
of $55M (2004 - $224M) in respect of a portion of the surplus in
the pension scheme has been credited to the Profit & Loss
Account. The portion of the surplus credited, however, is not
realised profit, as it represents future economic benefits to be
derived from a reduction in the Company’s contribution to the
pension scheme.
The reduction of the employee benefit asset surplus of $55M
(2004 - $224M) has materially impacted the comparative Group’s
results for both years.
Hon. Oliver F. Clarke, O.J., J.P.
Net profit after taxation, excluding employee benefit asset and its
taxation effect, for the Group amounted to $150M (2004 -$218M).
The passage of two hurricanes in 2005, particularly Dennis in early
July, significantly affected the Company’s operations during the third quarter. These events not only resulted
in loss of revenue but also drove up the Company’s costs. The decline in consumer spending power in the
fourth quarter has also contributed to the reduction in profit for the year.
GROUP FINANCIAL HIGHLIGHTS
Group revenue
Group profit after taxation
Working capital
Dividends paid
Net Worth
Number of 50 cents Stock Units
Issued – thousands
Earnings per Stock Unit
Dividends per Stock Unit
2005
$Million
* 2004
$Million
3,291
179
528
81
2,037
2,939
367
553
68
1,947
1,211,244
15¢
7¢
1,211,244
30¢
6¢
* Restated to confirm with 2005 presentation.
GROUP COMPANIES
(a) (i)
Revenue and Market Research
The profit after taxation from Media Services (newspapers and radio) amounted to $161M (2004 - $342M)
The profit after taxation for your parent company is $212M (2004 - $381M).
The Company’s advertising revenue increased by 12% moving from $1.7B to $1.9B for 2005. This was
largely due to a volume increase as there was only a 6% increase in display rates for 2005, implemented
on October 1, 2005.
8
THE GLEANER
COMPANY LIMITED
2005 DIRECTORS
REPORT
The revenue from the sale of the publications was up by 9% over 2004. The revenue increased from $682M to
$746M in 2005.
Market Research
Market Research played an increased role in our decision-making in 2005. In order to access more frequent and
specific research information, the Gleaner contracted the services of Johnson Research Survey Limited to conduct
a series of surveys on focus groups on the Gleaner and the Star. With the research information, we were able to
make timely and necessary changes to our products and test the responsiveness of our customers to these
changes.
The re-package of the Star and the re-vamp of the Saturday Gleaner both resulted from Market Research findings.
(ii)
Human Resource Development
Training and development continues to be of importance to our Company. For 2005 a total of $4M was spent on
the development of journalism, technological and customer service skills. In addition to specialized skill
development, the Company provided financial assistance to staff pursuing certification in job related courses.
To encourage a positive attitude towards work and enhance good relationships at the workplace and with our
customers, a formal employee recognition programme was implemented.
Mr. Andrew Walters, Sales Representative in the Advertising Department, was named the 2005 Employee of the
Year in recognition of his performance, demonstrated customer service skills and support for the Company’s
objectives.
(iii)
Editorial Coverage
For the year 2005, the Editorial Department continued to improve on its efficiency and productivity following the
installation of the SCOOP system. This system allows the department to track the process of production in order
to keep deadlines and ensure smoother communication between units.
The department also moved to strengthen existing features in our publications and continued training programmes
for reporters and editors to further enhance our position as the number one local newspaper.
Our editorial theme for the year, ‘Your Health, Take Control’, made significant impact among all age groups.
Beginning with the controversial issue of abortion, we moved through a gamut of concerns, addressing matters
raised by readers throughout the period. So well-appreciated was the focus that the Company won local and
international awards for the effort. The Pan American Health Organization, Press Association of Jamaica, UNFPA
and the Jamaica Broilers’ PLAYFAIR awards were won.
‘Your Health’ feature attracted positive responses from members of the wider public who wrote many letters
seeking answers to health issues and commending our effort.
We introduced a number of new features in 2005 including: ‘Roving with Lalah’ – a trek around the country-side
describing quaint townships published in The Gleaner, and ‘Life & Times’ focusing on church and family issues
published in the Star. These were well received by our readers. ‘Phenomenal Women’ – a supplement featuring
100 Jamaican women who have excelled in various fields of endeavour was a major success for the Company.
The year also saw a major focus on the Star which continues to have the largest daily circulation of newspapers
published in Jamaica. Various features were revamped in our quest to maintain its relevance to readers.
Our prestigious Editors’ Forum series continued to make and break news throughout the year, bringing to national
attention important issues and giving a voice to many key players in a variety of sectors and industries.
9
THE GLEANER
COMPANY LIMITED
2005 DIRECTORS
REPORT
(iv) Libel
Your Company continues to take the necessary measures to prevent and reduce the number of libel cases brought
against it. At the end of December 2005, the Company had a total of eleven active cases - one less than the
number of cases at December 2004.
The most significant occurrence in 2005 was the ruling by the Privy Council in favour of the Gleaner in an appeal
brought by Leymon Strachan. The Privy Council upheld the ruling of the Court of Appeal and the Supreme Court
which had both decided to allow the Gleaner to file a Defense and had set aside a default judgment and $23 million
awarded to Leymon Strachan. The matter was then sent back to the Supreme Court for trial.
However, the Supreme Court on March 29, 2006 upheld an application by the Gleaner to strike out Leymon
Strachan’s claim on the ground that Strachan had not complied with the new Civil Procedure Rules of the Supreme
Court.
In 2005 the Gleaner also entered into a round of ‘Friendly Settlement’ discussions with the Government of Jamaica
pursuant to a recommendation by the Inter American Commission on Human Rights. A Petition had been filed by
the former Editor-in-Chief, Dr. Dudley Stokes, with the Commission against the Jamaican Government seeking a
ruling that the huge award in the Abrahams case breached the American Convention on Human Rights with
regards to Freedom of Expression. The discussions will continue in 2006.
(b)
Overseas Companies
Most of the overseas companies continued to incur losses during 2005. However, these losses were substantially
reduced as compared with the previous year.
Extra (a free, no cover price publication which is intended to increase advertising revenue) is still being published
in Miami and Toronto.
In April 2005, the Company concluded an agreement with Radio Jamaica Limited for the sale of 20% of the ordinary
shares in the Gleaner Company (UK) Limited at a price of £223,000, plus a participation on a pro rata basis, in
loans to the Company for the purchase and refinancing of the Voice Group.
The name of the Gleaner Company (UK) Limited was changed to GV Media Group Limited in late 2005. The
management structure of this company was greatly enhanced with the appointment of the Honourable Kingsley
Thomas, O.J., as Managing Director.
There have also been organisational changes in the North American operations in the early part of 2006.
We believe that with these changes, the overseas companies will return to profitability in 2006.
(c)
Independent Radio Company – Power 106FM
Independent Radio Company experienced another profitable year of operations. Music 99FM achieved a 45%
growth in advertising revenue over the previous year.
Power 106FM continued to dominate the ‘talk listenership’ segment of the radio market by having four (4) of the
top five Talk Shows in the island. Music 99FM also achieved a significant growth in listenership with a leadership
position in Kingston, St. Andrew and St. Catherine on Sundays.
The new radio programme, Good Evening Jamaica, with its financial feature ‘Real Business’ has made significant
impact in the market resulting in a 70% higher average 15 minutes listenership than its predecessor.
The new partnership between Power 106 and The Gleaner Company Limited in establishing the Gleaner/Power
106 News Centre has resulted in a significant improvement in the news output of both Power 106FM and Music
99FM.
10
THE GLEANER
COMPANY LIMITED
(d)
2005 DIRECTORS
REPORT
Gleaner Online – www.jamaica-gleaner.com
Go-Jamaica celebrated its ninth year of operation on February 16, 2006. It continues to remain the leading news
media web site in Jamaica. The number of page views for all of the Gleaner Online properties grew over 2004.
For instance, page views for the Jamaica Gleaner have grown by 34% since January 2005, while page views for
the Jamaica Star (www.jamaica-star.com) have grown by over 65%.
www.go-jamaica.com partnership with Power 106FM remains strong with a peak of 850 concurrent listeners during
the day, Monday to Friday.
www.go-localjamaica.com is continuing to break ground with its community focused content and initiatives. In 2005
www.go-localjamaica.com signed a Memorandum of Understanding with the Scientific Research Council to work
together to encourage more Jamaican students to pursue the study of science.
(e)
Gleaner Archives
On February 28, 2005, the Archives of the Gleaner dating back to 1834 were made available on the Internet.
The Gleaner joined top newspapers; such as, The Toronto Star in Canada, The London Times in the United
Kingdom, The Washington Post and the New York Times in the United States having Archives on the Internet.
Readers may access the Archives at www.Gleaner.NewspaperArchive.com by paying the requisite subscription
fee.
BOOKS AND STATIONERY
Sangster’s Book Stores Limited achieved revenues of $614M in 2005 ($551M in 2004) a growth of 12% over the
previous year. Key driver of this growth was the increased sales under a contract with the Ministry of Education to supply
textbooks to secondary schools. The expected growth in revenues for the company was not realised due to a significant
downturn in the general retail trade sales over the Christmas period.
Profits decreased on the prior year to $12M due mainly to Christmas recession plus an increased stock write-off and
one-time expenses during the year.
OTHER
The other activities in which your company continued to be engaged include real estate, publication of a racing guide,
“Track & Pools”, and books including “The Jamaican Directory of Personalities” and “Black Pages”.
i.
Property Companies
Your Company through a 100% subsidiary company, Selectco Publications Limited, has for some years owned 33
1/3% of a property company, Jamaica Joint Venture Investment Company Limited.
Jamaica Joint Venture, through its two subsidiaries, Manhart Properties Limited and City Properties Limited, owns
a couple of properties on Duke Street. The continuous low demand for office space in the downtown Kingston area,
along with inflation, has negatively impacted the operations of these companies. Both companies suffered a
combined operational loss of $1.6M for the year.
During the year, your Company completed the sale of its interest in Jamaica Popular Investment Company Limited,
a property company which it owned jointly with Jamaica National Building Society, through its subsidiary, Popular
Printers Limited.
Profit of $13M arising from the sale of the Company’s shares in this company is included in the Group’s results
for the year.
11
THE GLEANER
COMPANY LIMITED
2005 DIRECTORS
REPORT
ii.(a) The Jamaica Directory of Personalities 2004-2005
The eighth edition of the Jamaica Directory of Personalities was printed during the year. Most copies have been
sold, and a lot of interest is still being shown in this Directory.
There are still a few copies of this book available from our North Street Offices and from Sangster’s Book Stores
island wide.
(b)
Black Pages
Our Canadian company published during the year a Directory of Black Businesses called Black Pages and has
made a profit on this publication.
DIVIDENDS, BONUS ISSUE AND STOCK PRICES
The following Interim Ordinary Dividends were paid during the year:-
Dividends Declared
Amount
1st Interim
3.5 cents
Revenue
(per stock unit)
2nd Interim
3.5 cents
Revenue
(per stock unit)
Record Date
Payment Date
Amount Paid
28.02.05
11.03.05
$42.393M
14.09.05
28.09.05
$42.394M
No final dividend is recommended for the year.
The Company’s stock unit price on the Jamaica Stock Exchange closed the year at $2.65. This was just above the
opening price of $2.61 in January 2005.
For 2006 your Directors approved the payment of an Interim Ordinary Dividend of 3.5 cents per stock unit, payable to
stockholders on record at February 24, 2006. Payment was made on March 10, 2006.
OUTREACH
(a)
GSAT Workbook Project
The Gleaner Company, through its subsidiary company Selectco Publications Limited, has undertaken
to publish GSAT lessons carried in its Children’s Own newspaper under the five subject titles:
Language Arts, Communication Task, Mathematics, Science and Social Studies.
Each book offers:
●
●
●
●
An integrated approach
Clear procedures
Related exercises and activities
Practice tests
and will target Grades 4-6 students preparing for the Grade Six Achievement Test (GSAT).
We will commence promotions and distribution in May 2006.
12
THE GLEANER
COMPANY LIMITED
(b)
2005 DIRECTORS
REPORT
PALS Jamaica
Your Company continues to lend its support to the work of PALS in promoting peace throughout Jamaica.
The CIDA-funded Social Conflict and Legal Reform Project came to an end, with some favourable results in the
project schools. The PALS programme was adopted in two teachers’ colleges and PALS completed its pilot
projects in four basic schools. PALS continued its work under the Citizen Security and Justice Programme.
PALS served on the task force of the Ministry of National Security Safe Schools Programme as well as serving as
a member of the USAID Strengthening Civil Society Advisory Board.
Peace Day 2005 was celebrated by schools across the island, with favourable support from the wider public.
(c)
Sponsorships
i.
The Spelling Bee Championship sponsored by the Children’s Own Newspaper is in its 47th year. The
2006 Spelling Bee Champion is Rosanna Pike of Ardenne High School. She will participate in the
Scripps Howard National Spelling Bee Competition in Washington, D.C. in June 2006.
The 2005 Champion, Stacey-Ann Pearson represented Jamaica in the Scripps Howard Spelling
competition in June 2005.
ii.
The Governor General’s Achievement Award, co-sponsored by the Company in association with the
Jamaica National Building Society and other Building Societies, continues to give exposure to the
ordinary Jamaican who is an ‘unsung hero’ in his/her community.
Three (3) county functions were held across the island. The presentation of the pins to the award
recipients for 2005 was carried out by Lady Cooke at Kings House on November 9, 2005.
iii. The Gleaner Honour Award is an annual recognition of individuals or organisations which have
contributed significantly to improving Jamaica’s quality of life.
The work of the voluntary sector in Jamaica, especially in the inner-city, has become invaluable as it
seeks to alleviate the conditions that foster the severe crime and violence problem facing the country.
Generally, the work of volunteers is critical in supplementing the social and economic programmes for
the less fortunate in the society. For its 2005 Honour Awards, The Gleaner Company sought to recognise
voluntarism where it was evident in the activities of the nominees in categories under which awards were
given.
The Selection Committee chaired by Prof. The Hon. Gerald Lalor, O.J. met on October 6, to consider the
nominations for the 2005 Gleaner Honour Award.
The committee was unanimous in its selection for the Gleaner’s Man of the Year 2005 Award. One of
our category recipients received the prestigious Man of the Year Award for 2005.
This Award went to the faith-based organisations involved in voluntary activities, as represented by:
●
Food for the Poor
●
The Salvation Army
●
Pentecostal Tabernacle (Wildman Street)
●
The Adventist Development and Relief Agency (ADRA)
●
St. Andrew Settlement
13
THE GLEANER
COMPANY LIMITED
2005 DIRECTORS
REPORT
The category award recipients were:
✦
Pat Ramsay
Arts and Culture
✦
Michael Lee-Chin (co-recipient)
Business
✦
G. Raymond Chang (co-recipient)
Business
✦
Vincent Hosang (co-recipient)
Business
✦
Dr. Rae Davis
Public Service
✦
Dr. Denise Eldermire-Shearer
Health and Wellness
✦
Trecia-Kaye Smith
Sports
✦
Prof. Edward Robinson
Science and Technology
✦
The Salvation Army (co-recipient)
Voluntary Service
✦
Food For The Poor (co-recipient)
Voluntary Service
✦
St. Andrew Settlement (co-recipient)
Voluntary Service
✦
Adventist Development and Relief Agency (co-recipient) Voluntary Service
✦
Pentecostal Tabernacle (co-recipient)
Voluntary Service
✦
Sheila Nicholson (Individual)
Voluntary Service
✦
Claudette Pious
Entertainment
Merit Award:
Dr. Barbara Carby
Elsie Sayle
✦
✦
Public Service
Voluntary Service
The Gleaner Youth Honour Award for Excellence in Education:
✦
✦
✦
Stacey-Ann Pearson
Pooja Gurnani
Andrew Christopher Lyle
2005 National Spelling Bee Champion
2005 GSAT Top Student
His remarkable record at the Tertiary
Level (obtaining two A’s and fourteen
A+’s in the degree programme at
the University of the West Indies,
(Mona Campus).
(iv) Newspaper in Education
As part of our continued contribution to improving general knowledge and literacy, your Company will
continue to distribute 1,250 copies of the Gleaner daily to 50 schools island wide.
STAFF AND BOARD NEWS
(a)
Industrial Relations
Two two-year Collective Agreements, effective March 2005, were concluded at the Ministry of Labour on behalf of
the hourly paid production employees and monthly paid production supervisors and specialists.
Wages were increased by 10% in Year 1. Non-unionised employees also benefited from salary increases and
improved benefits.
The Union of Technical and Supervisory Personnel (UTASP) gained bargaining rights on behalf of Clerical, Clerical
Administrative, Editorial Officers and Editorial Clerks, at a poll conducted by the Ministry of Labour. One Hundred
and Thirty-five (135) employees participated. The University & Allied Workers Union (UAWU) previously held
bargaining rights for these groups of employees.
Negotiations have since commenced with UTASP for a new two-year collective agreement for these employees.
The Company also signed a Collective Agreement with the Newspaper Delivery Contractors’ Association (NDCA)
effective January 2005.
14
THE GLEANER
COMPANY LIMITED
2005 DIRECTORS
REPORT
The year was characterized by a stable industrial relations climate with no work stoppages or incidents resulting in
financial loss to the Company.
(b)
Long Service Awards
The Annual Long Service Awards Luncheon was held on Thursday, September 22, 2005, at the Jamaica Pegasus
Hotel. Forty-Six (46) employees from various departments received awards for their years of service ranging from
ten to thirty-five.
Five employees (Pauline Lee, Algon Brown, Robert Jackson, Aedris Morris and John Hewitt) were recognized for
thirty-five (35) years of continuous service.
(c)
Directors
In December 2005, Professor The Hon. Gerald Lalor, O.J., retired after having reached the mandatory retirement
age set by the Company’s Articles of Association.
In recognition of his valuable contribution to the Company, he was appointed to the position of Honorary Chairman
of the Board replacing Mr. Richard Ashenheim who had resigned from the position. As Honorary Chairman,
Professor Lalor will continue to attend Board Meetings as a non-voting member where his knowledge will still be
available to the Board.
The Directors wish to place on record their sincere appreciation to Mr. Richard Ashenheim for his service to the
Company and to wish him well on his retirement, and to thank Professor the Hon. Gerald Lalor, O.J. for agreeing
to continue serving the Company in his new capacity.
The Directors retiring by rotation at this year’s Annual General Meeting are Messrs. Christopher Roberts, Douglas
Orane and H. Winston Dear. All have played important roles on the Board and, being eligible, offer themselves
for re-election.
(d)
Audit Committee
Your Directors in keeping with the principles of good corporate governance have, in March 2006, established an
Audit Committee which has as its main function the monitoring and keeping under review the scope of the
Company’s audit and the integrity of its financial reporting.
This Committee, chaired by Vice Chairman the Hon. John Issa, O.J., has as its other members Christopher Roberts
and Mrs. Lisa Johnston.
(e)
Company’s Articles of Association
Your Directors recognise the need to bring the Company’s Articles in line with the provisions of the Companies Act
2004 and will be taking the necessary Resolutions to the upcoming Annual General Meeting to have this done.
The relevant Resolutions are set out in the Notice of the Meeting, but shareholders who wish to have further
information on the proposed changes, prior to the meeting, are invited to contact the Company Secretary at
(876)932-6014.
(f)
The Gleaner Company Limited Employees Investment Trust
In 1994, your Company established an Investment Trust for the benefit of its employees.
During the year 2005, the Trustees granted options to 48 members of staff to acquire 10.2M shares in the
Company. The shares issued to staff during the year, resulting from previous options, cost the Company
approximately $1.3M.
15
THE GLEANER
COMPANY LIMITED
2005 DIRECTORS
REPORT
For the financial year ended December 31, 2005, the accounts of the Trust were consolidated in the Group’s Accounts
in keeping with the provisions of the International Financial Reporting Standards.
STOCKHOLDERS’ BENEFITS
The Company is pleased to continue to make available to stockholders, on request, discount on classified
advertisements and gift vouchers of up to $2,000 per annum on books bought through Sangster’s Book Stores Limited.
The Company Secretary is authorised to extend these benefits to stockholders and can be contacted at 7 North Street,
Kingston or by e-mail, [email protected]
AUDITORS FOR THE COMPANY
The retiring auditors are KPMG, and they have expressed their willingness to continue.
LOOKING FORWARD
The year 2005 was a challenging one for your Company. During the year, your Directors continued to restructure the
operations of the overseas companies and reposition them for future growth.
For 2006, the stability in the value of the Jamaican dollar as well as the cost of newsprint, electricity, fuel and other
important supplies will impact your Company’s financial results. Your Company will continue to take steps to improve its
earnings from its overseas companies and reduce costs where possible.
Your company for the eighth consecutive year, in 2005, won the Advertising Agencies Association of Jamaica (AAAJ)
Media of the Year Award and again saw improvement in both advertising and circulation revenues.
The installation of a new Advertising System will be completed in 2006 following the installation in 2005 of the new
Editorial System (SCOOP).
Since the commencement of 2006, the Company’s managers have devoted extensive time and effort to improving the
Company’s operational efficiency and profitability and enhancing its profile so that it can be recognised as the national
exemplar of newspaper standards.
Your Company had a number of successes in 2005. We intend to capitalize on them, and build a company that
continues to grow and develop in the years to come.
OFFICERS AND STAFF
The Directors wish to place on record their appreciation for the services given by Officers and Staff during the year under
review.
ON BEHALF OF THE BOARD OF DIRECTORS
………………………………….……….
Oliver F. Clarke, O.J., J.P.
Chairman & Managing Director
April 20, 2006
16
THE GLEANER
COMPANY LIMITED
SENIOR
M A N AG E R S
17
THE GLEANER
COMPANY LIMITED
▼
▼
Pooja Gurnani (left) receives her
Gleaner Youth Honour Award
from John Issa at The Gleaner
Honour Awards ceremony at the
Jamaica Pegasus Hotel on
November 28, 2005.
Professor Denise Eldemire-Shearer receives
the Gleaner Honour Award for Health and
Wellness from Gleaner Chairman and
Managing Director Oliver Clarke at The
Gleaner Honour Awards ceremony at the
Jamaica Pegasus Hotel on November 28,
2005
▼
▼
18
Managing Director and Chairman of The Gleaner
Company Oliver Clarke (right) and Prof. Gerald
Lalor (second right) with representatives from the
faith-based voluntary organisations that won the
prestigious ‘Man Of The Year award at the
Gleaner Honour Award ceremony at the Jamaica
Pegasus Hotel on November 28. The
representatives are (from left) Pastor Claude
Brown of the Adventist Development and Relief
Agency; Major Devon Haughton of the Salvation
Army; Rev. John Bartlett of the Pentecostal
Tabernacle; Bishop Alfred Reid from the St.
Andrew Settlement and Bradley Finzi-Smith,
executive director of Food For the Poor.
THE GLEANER
COMPANY LIMITED
The 2005 Gleaner Honour Awards, Gleaner Youth Honour Awards and Certificate of Merit recipients with Gleaner Chairman Oliver Clarke (back row,
centre), and members of The Gleaner board.
mpany at
wspaper co
d by the ne
te
ack row)
fe
(b
e
ft
er
le
w
, 2006. From , Christopher
nsioners who
14
pe
ry
ny
ua
pa
br
Com
on Fe
sley martin
The Gleaner otel in New Kingston
pson, Welle
) from left
H
, Alvin Thom
(middle row , Violet
or
a,
ct
nd
ire
the Pegasus
D
ira
g
M
in
ns
on
ag
ki
rn
an
aw
Ve
m
H
d
e,
in
an
kl
Oliver Clark
sh,
osmo Grant aymond Morrison, Fran
Hubert Mar
n,
en Allen, C
R
w
K
,
tt,
ro
ts
B
re
er
ar
ra
B
ob
ve
s,
R
ia
el
ph
D
an
,
se
ph
ld
Jo
Ze
fie
y
,
et
ve
ilson
, Raston G
ie and Har
Adolphus W
‘Tony’ Becca
Junior Dow
d Leonard
el
y,
an
sc
d
ne
al
La
od
R
on
n,
Llewelly
m, Shirley
Megan McD
Cunningha
uth Phipps,
Theophilus
Graham, R
la
el
.
in
nt
et
fro
R
)
w
the
(second ro
iams sits in
, Elaine Will
Prendergast
The Gleaner’s 2005 Employee of the Year, Andrew Walters
Advertising Sales Representative.
19
THE GLEANER
COMPANY LIMITED
Scenes at the Gleaner Sports day at Emmett Park on Sunday, May 29, 2005
20
THE GLEANER
COMPANY LIMITED
Andrew Walters, advertising sales representative (third left)
smiles with his 2005 Gleaner Employee of the Year Award. He
is surrounded by the top finalists in the competition and the
Company’s chairman, Oliver Clarke (second right). Others in
the picture (from l - r) are Ricardo Makyn, photographer;
Phillippa Ennis, administrative assistant; Paulette Donaldson,
administrative assistant and Shernett Maragh-Deer, cashier
delight
hs with
ke laug utchinson of
o
o
C
use
Howard Andrene H
ings Ho
eral Sir
by
ured K
or Gen ne for him
to
rn
ts
e
s
v
li
o
G
na
do
poem
g Bee fi
at the as the Spellin 2006.
,
r
9
e
v
ry
Hano
ebrua
rsday F
on Thu
▼
▼
Rosanna Pike, The Gleaner’s Children’s Own
2006 All-Island Spelling Bee Champion lifts
her trophy after the contest held at the
Jamaica Pegasus hotel on February 8, 2006.
21
THE GLEANER
COMPANY LIMITED
▼
Minister of Information,
Hon. Burchell Whiteman,
addresses the students
participating in the Access
To Information Competition sponsored by The
Gleaner Company Limited
and the Access to
Information Stakeholders
Committee at the launch
held at Jamaica House.
Also in the photo are the
Hon. Oliver Clarke, O. J.
Chairman & Managing
Director of The Gleaner
Company, Dr. Carolyn
Gomes and Carol Excell
of
the
Access
To
Information Stakeholders
Committee.
▼
ampbell,
Jenni C
g Editor
in
g
Mana
Gleaner
of The
(left) ,
Company
the
ts
n
e
s
pre
2005
r
e
b
m
e
Dec
Silver
Gleaner
to Mr.
rd
Pen Awa
ickshank
ru
C
n
le
G
er to the
for his lett
blished
u
p
editor
th.
n
o
in that m
▼
▼
Mr. Adrian R
obinson, M
anag
The Marke
ting Couns ing Director of
elors with
Gleaner To
p B
the
2005 Awards illing trophy following
the
. The Marke
was the ag
ting Couns
elors
ency with
the highes
with The G
t sp
leaner Com
pany in 2005 end
.
The three Gleaner Spelling Bee GSAT county
scholarship winners for 2005 (in front)
Towanda Whyte (St. Mary) Theodore Wynter
(St.
Thomas)
and
Alicia
Lindsay
(Westmoreland ) pose with their teachers and
representatives of The Gleaner Company at
the presentation function held in June.
22
THE GLEANER
COMPANY LIMITED
AUDITORS’
REPORT
TO THE MEMBERS OF
THE GLEANER COMPANY LIMITED
AUDITORS’ REPORT
We have audited the financial statements of The Gleaner Company Limited (company and parent company) as at and
for the year ended December 31, 2005, set out on pages 24 to 60, and have obtained all the information and
explanations which we required. The financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on the financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, proper accounting records have been kept and proper return adequate for the purpose of our audit have
been received from branches not visited from us. The financial statements, which are in agreement therewith and have
been prepared in accordance with International Financial Reporting Standards, give a true and fair view of the state of
affairs of the group and the company as at December 31, 2005, and of the results of operations, changes in
shareholders' equity and cash flows of the group for the year then ended, and comply with the provisions of the
Companies Act, so far as concerns members of the company.
KPMG
Chartered Accountants
Kingston, Jamaica
April 12, 2006
23
THE GLEANER
COMPANY LIMITED
GROUP BALANCE SHEET
December 31, 2005
GROUP
COMPANY
NOTES
2005
$’000
2004*
$’000
2005
$’000
4
5
6 (i)(a)
7
8
9
10, 2(e)
17
618,400
438,061
442,098
1,063
150
359,666
10,149
588,478
463,794
385,432
94
150
387,789
29,762
491,608
432,000
968
17,132
337,605
-
471,222
376,500
14,959
379,571
-
1,869,587
1,855,499
1,279,313
1,242,252
66,766
534,377
18,660
7,348
238,320
67,935
535,979
32,417
10,657
241,219
21,605
991,406
18,660
45,484
13,834
862,875
20,487
89,610
327,228
348,279
260,428
268,499
Total current assets
1,192,699
1,236,486
1,337,583
1,255,305
Total Assets
3,062,286
3,091,985
2,616,896
2,497,557
605,622
1,431,358
605,622
1,341,525
605,622
1,346,685
605,622
1,217,154
2,036,980
1,947,147
1,952,307
1,822,776
6,184
33,456
-
-
2,043,164
1,980,603
1,952,307
1,822,776
49,169
50,700
254,425
116,125
41,300
270,724
49,169
50,700
248,508
63,819
41,300
248,380
354,294
428,149
348,377
353,499
10,931
557,416
61,548
23,821
11,112
5,815
504,782
136,875
25,595
10,166
286,853
5,538
23,821
-
295,515
2,201
23,566
-
664,828
683,233
316,212
321,282
Total liabilities
1,019,122
1,111,382
664,589
674,781
Total equity and liabilities
3,062,286
3,091,985
2,616,896
2,497,557
Assets
Property, plant and equipment
Intangible assets
Employees benefit asset
Long-term receivables
Investment in subsidiaries
Investment in associates
Investments
Deferred tax assets
Total non-current assets
Cash and cash equivalents
Trade and other receivables
11
Prepayments
Taxation recoverable
Inventories and goods-in-transit
12
Securities purchased under
agreements for resale
2e(ii)(iii)
Stockholders’ equity
Share capital
Reserves
15
16
Total equity attributable to equity
holders of the parent
MINORITY INTEREST
Total equity
Liabilities
Long-term liabilities
Employees benefit obligation
Deferred tax liabilities
14
6 (ii)(b)
17,2
Total non-current liabilities
Bank overdraft
Trade and other payables
Taxation
Current portion of long-term liabilities
Deferred income
Total current liabilities
13
14
2k(ii)
2004*
$’000
The financial statements on pages 24 to 60 were approved for issue by the Board of Directors on April 12, 2006 and signed on
its behalf by:Chairman and Managing Director
Hon. O.F. Clarke, O.J., J.P.
*Restated to conform with 2005 presentation
The accompanying notes form an integral part of the financial statements.
24
Director
Christopher S. Roberts, C.A., J.P.
THE GLEANER
COMPANY LIMITED
GROUP PROFIT & LOSS ACCOUNT
December 31, 2005
NOTES
Revenue
Cost of sales
Gross profit
Other operating income
18, 19
Profit before taxation
Taxation
2,938,637
( 1,611,793)
1,326,844
191,084
55,148
1,737,344
294,056
224,146
1,845,046
(
(
(
(
21
(
(
(
(
388,192)
513,535)
384,405)
2,313)
( 1,288,445)
286,749
556,601
(
22,093)
(
25,899)
(
264,656
85,201)
(
530,702
164,173)
Profit for the year
Attributable to:
Parent company Stockholders**
Minority interest
(
**Dealt with in the financial statements of:
Parent company
Subsidiary companies
(
Earnings per stock unit:
Based on stock units in issue
After exclusion of stocks held by GCLEIT
424,115)
580,424)
443,614)
2,442)
( 1,450,595)
20
Finance costs
2004*
$’000
3,291,238
( 1,800,126)
1,491,112
6(i)(c)
Distribution costs
Administration expenses
Other operating expenses
Pension costs
Profit from operations
2005
$’000
23
179,455
366,529
186,631
7,176)
179,455
358,293
8,236
366,529
211,701
25,070)
(
381,066
22,773)
186,631
358,293
15.41¢
16.42¢
29.58¢
31.52¢
*Restated to conform with 2005 presentation
25
THE GLEANER
COMPANY LIMITED
GROUP STATEMENT OF CASH FLOWS
December 31, 2005
2005
$’000
Cash flows from operating activities
Profit attributable to stockholders
Adjustments to reconcile profit to net cash provided
by operating activities:
Depreciation and amortisation
Deferred taxation, net
Employees benefit asset, net
Gain on disposal of property, plant and equipment
Net unrealised exchange gains
Gain on disposal of investments
Minority interest’s in share of (loss) profit
Interest income
Interest expense
Taxation
186,631
358,293
92,345
3,849)
47,266)
4,206)
60,217)
35,047)
7,176
( 88,119)
22,093)
89,050
127,535
59,816
(215,232)
( 6,867)
( 43,563)
(119,740)
( 8,236)
( 71,670)
25,899
104,357
(
(
(
(
(
158,591)
210,592
(Increase)/decrease in current assets:
Tax paid
Interest paid
Interest received
Prepayments
Inventories and goods-in-transit
Securities purchased under agreements for resale
( 99,458)
( 15,341)
83,046)
7,410)
13,757)
2,899)
21,051)
( 83,715)
( 25,535)
82,934
( 9,546)
( 7,325)
713
210,824
Increase/(decrease) in current liabilities:
Deferred income
Net cash provided by operating activities
52,091)
946)
224,992
291,528
5,194
675,664
Cash flows from investing activities
Exchange gain on investments, goodwill and property, plant
and equipment
Additions to property, plant and equipment
Property, plant equipment acquired on purchase of subsidiary
Intangible assets acquired on purchase of subsidiary
Goodwill arising on purchase of subsidiary
Proceeds from disposal of investments and property, plant
and equipment
Investments
Minority interest
Net cash used by investing activities
(105,825)
-
(
958)
(145,755)
( 16,854)
(434,834)
( 18,424)
41,557
28,123
( 27,272)
( 63,417)
149,705
(246,230)
14,441
(698,909)
Cash flows from financing activities
Bank overdraft
Long-term receivable
Dividends paid
5,116
( 2,777)
( 84,438)
( 80,645)
1,439
3,870
117,552
( 68,368)
Net cash (used)/provided by financing activities
(162,744)
54,493
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
(
1,169)
67,935
31,248
36,687
66,766
67,935
Cash and cash equivalents at end of the year
26
2004
$’000
THE GLEANER
COMPANY LIMITED
GROUP STATEMENT OF CHANGES IN
STOCKHOLDERS’ EQUITY
December 31, 2005
Share
Capital
Capital
reserves
Fair value
reserves
Reserves for
own shares
$’000
$’000
$’000
$’000
605,622
338,560
46,393
-
-
-
605,622
338,560
46,393
( 90,215)
660,708
1,561,068
19,015
Restated profit for the year
-
-
-
-
358,293
358,293
8,236
Appropriation in respect of bonus
shares issued by subsidiary
-
12,460
-
-
( 12,460)
-
-
Dividends paid (gross) (note 22)
-
-
-
-
( 68,368) (
Deferred tax on property, plant,
and equipment
-
607)
-
-
- (
Gain on disposal of property, plant
and equipment transferred
-
462
-
-
Transfer to reserve in subsidiary
-
244
244)
Gain on revaluation of buildings
-
27,240
Change in fair value of investments
-
-
Balances at December 31, 2003
As previously reported
Effect of consolidation of GCLEIT
Restated balance at December 31, 2003
(
( 90,215) (
Minority
interest
Total
equity
$’000
$’000
665,015
19,015
1,655,590
4,307) (
94,522)
1,674,605
- (
94,522)
1,580,083
366,529*
-
68,368)**
- (
607)
- (
68,368)
607)*
462)
-
-
-
-
-
-
-
-
-
-
-
27,240
-
27,240*
-
54,263
-
-
54,263
-
54,263*
9,119
-
-
-
9,119
6,205
15,324*
1,947,147
33,456
(
(
Retained Parent company
profits
Stockholders’
equity
$’000
$’000
Currency translation differences of foreign
Subsidiaries
Own shares sold by Gleaner Company
Limited Employee Investment Trust
(GCLEIT)
Restated balances at
December 31, 2004
605,622
6,139
-
6,139
387,478
100,412
( 84,076)
-
6,139
937,711
1,980,603
Total gains recognised for the year amounted to $188,495,000 (2004: $462,749,000) for the group and $217,247,000 (2004: $461,363,000)
for the company.
**Restated
27
GROUP STATEMENT OF CHANGES IN
STOCKHOLDERS’ EQUITY
December 31, 2005
THE GLEANER
COMPANY LIMITED
Share
Capital
Capital
reserves
Fair value
reserves
Reserves for
own shares
Retained Parent company
profits
Stockholders’
equity
$’000
$’000
Minority
interest
Total
equity
$’000
$’000
$’000
$’000
$’000
$’000
605,622
387,478
100,412
( 84,076)
937,711
33,456
Profit for the year
-
-
-
-
186,631
Dividends paid (gross) (note 22)
-
-
-
- (
Deferred tax on property, plant,
and equipment
-
( 7,163)
-
-
Gain on disposal of property, plant,
and equipment transferred
-
504
-
- (
Gain on revaluation of buildings
-
21,490
-
Change in fair value of investments
-
-
Currency translation differences on
foreign Subsidiaries
-
Own shares acquired by Gleaner
Company Limited Employee
Investment Trust (GCLEIT)
Own shares sold by Gleaner
Company Limited Employee
Investment Trust (GCLEIT)
Restated balances at
December 31, 2004
1,947,147
1,980,603
186,631 ( 7,176)
80,645)
-
( 80,645)
7,163)
-
(
504)
-
-
-
-
21,490
-
21,490*
( 10,443)
-
-
10,443)
-
( 10,443)*
25,252
-
-
-
25,252 ( 20,096)
5,156*
-
-
-
( 58,613)
-
-
-
-
13,324
605,622
427,561
Retained in the financial
statements of:
The Company
Subsidiary companies
605,622
-
The Company
Subdidiary companies
Restated Balances at
December 31, 2004
80,645) (
179,455*
-
(
(
(
7,163)*
-
58,613)
-
( 58,613)
-
13,324
-
13,324
89,969
( 129,365) 1,043,193
2,036,980
6,184
2,043,164
255,919
171,642
87,708
2,261
- 1,003,058
( 129,365)
40,135
1,952,307
84,673
605,622
427,561
89,969
( 129,365) 1,043,193
2,036,980
605,222
-
241,592
145,886
99,419
993
( 84,076)
876,143
61,568
1,822,776
124,371
605,622
387,478
100,412
( 84,076)
937,711
1,947,147
Total gains recognised for the year amounted to $188,495,000 (2004: $462,749,000) for the group and $217,247,000 (2004: $461,363,000)
for the company.
28
THE GLEANER
COMPANY LIMITED
1.
NOTES TO THE
FINANCIAL STATEMENTS
December 31, 2005
Identification
The Gleaner Company Limited (“company” or “parent company”) is incorporated under the laws of, and is
domiciled in Jamaica. The principal activities of the company and its subsidiaries are the publication and printing
of newspapers and the sale of books. Its registered office is located at 7 North Street, Kingston.
The company, established in 1897, is the holding company of the following subsidiary companies:
(a)
(b)
(c)
(d)
(e)
Sangster’s Book Stores Limited and its
wholly-owned subsidiary,
The Book Shop Limited
Popular Printers Limited and its
wholly-owned subsidiaries,
Creek Investments Limited
(formerly Beckford’s Auto Supplies Limited)
Selectco Publications Limited and
Associated Enterprise Limited
Selectco Publications Limited
owns 33 1/3% of the shares in
Jamaica Joint Venture Investment
Company Limited, a property
company.
Independent Radio Company Limited
GV Media Group Limited
(formerly The Gleaner Company (UK) Limited)
and its wholly-owned subsidiaries,
The Voice Group Limited
Vee Tee Ay (Media Resources) Limited
The Gleaner Company (Canada) Inc.
(formerly The Gleaner Company (NA) Inc.)
and its wholly-owned subsidiary,
The Gleaner Company (USA) Limited
2005
2004
-
100%
100%
-
100%
100%
-
100%
100%
-
65%
80%
56%
100%
-
100%
100%
100%
100%
100%
95%
100%
100%
-
100%
100%
All these companies are incorporated under the laws of Jamaica with the exception of GV Media Group Limited
and its subsidiaries, The Gleaner Company (Canada) Inc. and The Gleaner Company (USA) Limited, which are
incorporated in the United Kingdom, Canada and the United States of America, respectively. The parent company’s
shares are quoted on the Jamaica Stock Exchange.
2.
Basis of preparation, compliance and significant accounting policies
(a)
Basis of preparation:
The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and
their interpretations adopted by the International Accounting Standards Board (IASB), and comply with the
provisions of the Companies Act.
The financial statements are presented in Jamaica dollars and are prepared on the historical cost basis, except for
buildings [note 4(c)] and available-for-sale investments (note 10), which are stated at fair value.
The preparation of the financial statements in conformity with IFRS requires management to make estimates and
assumptions that affect the reported amount of assets, liabilities, contingent assets and contingent liabilities at the
balance sheet date and the income and expenses for the year then ended. Actual amounts could differ from those
estimates.
29
THE GLEANER
COMPANY LIMITED
NOTES TO THE
December 31, 2005
2.
Basis of preparation, compliance and significant accounting policies (cont’d)
(a)
Basis of preparation (cont’d)
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and future periods.
(b)
Accounting estimates and judgements
Judgements made by management in the application of IFRS that have significant effect on the financial
statements and estimates with a significant risk of material adjustments in the next financial year are discussed
below:
(i)
Pension and other post-retirement benefits
The amounts recognised in the balance sheet and group profit and loss account for pension and other postretirement benefits are determined actuarially using several assumptions. The primary assumptions used in
determining the amounts recognised include expected long-term return on plan assets, the discount rate used
to determine the present value of estimated future cash flows required to settle the pension and other postretirement obligations and the expected rate of increase in medical costs for post-retirement medical benefits.
The expected return on plan assets assumed considering the long-term historical returns, asset allocation
and future estimates of long-term investments returns. The discount rate is determined based on the estimate
of yield on long-term government securities that have maturity dates approximating the terms of the
company’s obligation; in the absence of such instruments in Jamaica, it has been necessary to estimate the
rate by extrapolating from the longest-tenor security on the market. The estimate of expected rate of increase
in medical costs is determined based on inflationary factors. Any changes in these assumptions will impact
the amounts recorded in the financial statements for these obligations.
(ii)
Impairment of intangible assets
Impairment of intangible assets is dependent upon management’s internal assessment of future cashflows
from cash-generating units that gave rise to the assets. That internal assessment determines the amount
recoverable from future use of those units. In addition, the estimate of the amount recoverable from future
use of those units is sensitive to the discount rates used. See note 5 for additional information on intangible
assets.
It is possible, based on existing knowledge, that outcomes that are different from these assumptions could
require a material adjustment to the carrying amount reflected in the future financial statements.
(c)
Basis of consolidation:
(i)
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power directly
or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its
activities.
The consolidated financial statements comprise the financial results of the company and its subsidiaries,
including The Gleaner Company Limited Employee Investment Trust, a special purpose entity, prepared to
December 31, 2005. The principal operating subsidiaries are listed in note (1) and are referred to as
“subsidiaries” or “subsidiary”. The company and its subsidiaries are collectively referred to as the “Group”.
The results of associated companies are also included to the extent explained in note 2 (i).
(ii)
30
Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions are
eliminated in preparing the consolidated financial statements. Ordinary shares held by third parties in the
company’s subsidiaries are included in minority interests reported in the financial statements.
THE GLEANER
COMPANY LIMITED
NOTES TO THE
December 31, 2005
2.
(d)
Related party balances and transactions:
A party is related to an entity if:
(i)
directly or indirectly the party:●
controls, is controlled by, or is under common control with the entity;
●
has an interest in the entity that gives it significant influence over the entity, or
●
has joint control over the entity
(ii) the party is a member of the key management personnel of the entity;
(iii) the party is a close member of the family of any individual referred to in (i) and (ii) above;
(iv) the party is a post-employment benefit plan for the benefit of employees of the entity, or any entity that is
related party of the entity.
(e)
Financial instruments:
(i)
Classification of investments:
Management determines the classification of investments at the time of purchase and takes account of the
purpose for which the investments are made. Investments are classified as loans and receivables, and
available-for-sale (“AFS”).
Investments with fixed or determinable payments and which are not quoted in an active market are classified
as loans and receivables and are stated at amortised costs, less impairment losses. Other investments held
by the group are classified as being available-for-sale and are stated at fair value. Available-for-sale
investments include certain debt and equity securities.
(ii)
Measurement:
Financial instruments are measured initially at cost, including transaction costs.
Subsequent to initial recognition, all AFS investments are measured at fair value, except that any instrument
that does not have a quoted market price in an active market and whose fair value cannot be reliably
determined, is stated at cost, including transaction costs, less impairment losses [see note 2 (f)].
All non-trading financial liabilities and loans and receivables are measured at amortised cost, less impairment
losses [see note 2 (f)]. Amortised cost is calculated on the effective interest rate method. Premium and
discounts, including initial transaction costs, are included in the carrying amount of the related instrument and
amortised based on the effective interest rate of the instrument.
Based on the above guidelines, the company’s financial instruments are measured as follows:
[i]
Government of Jamaica securities which are not traded in an active market, securities purchased under
resale agreements and interest-bearing deposits are stated at historical or amortised cost, less
impairment losses [see note 2(f)].
[ii] Government of Jamaica securities traded in an active market and equity securities are classified as
available-for-sale and measured at fair value. Appreciation and diminution are carried to fair value
reserve.
31
THE GLEANER
COMPANY LIMITED
NOTES TO THE
December 31, 2005
e)
Financial instruments (cont’d):
[iii] Securities purchased under resale agreements:
Reverse repurchase agreements (“Reverse repo”) are short-term transactions whereby securities are
bought with simultaneous agreements for reselling the securities on a specified date and at a specified
price. Reverse repos are accounted for as short-term collateralised lending, and are carried at cost.
The difference between the purchase and resale considerations is recognised on an accrual basis over
the period of the agreements, using the effective yield method, and is included in interest income.
[iv] Investment in subsidiaries:
Investment in subsidiaries in the company is stated at cost, less impairment losses [see note 2(f)].
(iii)
Fair value measurement principles:
The fair value of financial instruments is based on their quoted market price at the balance sheet date without
any deduction for transaction costs. Where a quoted market price is not available, the fair value of the
instrument is estimated using pricing models or discounted cash flows or a generally accepted alternative
method.
Where discounted cash flows are used, estimated future cash flows are based on management’s best
estimates and the discount rate is a market related rate at the balance sheet date for an instrument with
similar terms and conditions. Where pricing models are used, inputs are based on market related measures
at the balance sheet date.
(iv) Gains and losses on subsequent measurement:
Unrealised gains and losses arising from a change in the fair value of available-for-sale investments are
recognised directly in equity. When the financial assets are impaired, sold, collected or otherwise disposed
of, the cumulative gain or loss recognised in equity is transferred to the Group profit and loss account.
(v)
Trade and other payables:
Trade and other payables, including provisions, are stated at cost. A provision is recognised in the balance
sheet when the company has a legal or constructive obligation as a result of a past event, it is probable that
an outflow of economic benefits will be required to settle the obligation, and a reliable estimate of the amount
can be made. If the effect is material provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
(vi) Cash and cash equivalents
Cash and cash equivalents which comprise cash and bank balances and include short-term deposits held for
operations, with maturities ranging between one and twelve months from balance sheet date, are shown at
cost.
(vii) Trade and other receivable:
These are stated at their cost, less impairment losses [see note 2 (f)].
(viii) Derecognition:
A financial asset is derecognised when the company loses control over the contractual rights that comprise
that asset. This occurs when the rights are realised, expire or are surrendered. A financial liability is
derecognised when it is extinguished.
32
THE GLEANER
COMPANY LIMITED
NOTES TO THE
December 31, 2005
2.
(e)
Financial instruments (cont’d):
(viii) Derecognition (cont’d):
Available-for-sale assets that are sold are derecognised and corresponding receivables from the buyer for
the payment are recognised as of the date the company commits to sell the assets.
Originated loans and receivables are derecognised on the day they are transferred by the company.
(f)
Impairment:
The carrying amounts of the group’s assets are reviewed at each balance sheet date to determine whether there
is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For
goodwill arising on acquisition since March 31, 2005 and intangible assets that have an indefinite useful life, the
recoverable amount is estimated at each balance sheet date. An impairment loss is recognised whenever the
carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are
recognised in the group profit and loss account.
(i)
Calculation of recoverable amount:
The recoverable amount of the group’s investments in loans and receivables is calculated as the present
value of expected future cash flows, discounted at the original effective interest rate inherent in the asset.
Receivables with a short duration are not discounted.
The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
(ii)
Reversals of impairment:
An impairment loss in respect of loans and receivable is reversed, if the subsequent increase in recoverable
amount can be related objectively to an event occurring after the impairment loss was recognised. An
impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed, if there has been a change in the estimates used
to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss
has been recognised.
(g)
Property, plant and equipment:
(i)
Owned assets:
Items of property, plant and equipment are stated at cost, or valuation, less accumulated depreciation and
impairment losses [see note 2 (f)].
(ii)
Leased assets:
Leases, the terms of which the group assumes substantially all the risks and rewards of ownership are
classified as finance leases. Assets acquired under finance leasing arrangements are stated at an amount
equal to the lower of their fair value and the present value of the minimum lease payments at inception of the
lease, less accumulated depreciation (see below) and impairment losses [see note 2 (f)].
33
THE GLEANER
COMPANY LIMITED
NOTES TO THE
December 31, 2005
2.
(g)
Property, plant and equipment (cont’d):
(ii)
Leased assets (cont’d):
Finance charges on leased assets are recognised in the group profit and loss account over the term of the
lease using the effective interest rate method.
(iii)
Depreciation:
Property, plant and equipment, with the exception of freehold land on which no depreciation is provided, are
depreciated on both the straight-line and reducing-balance methods at annual rates estimated to write off the
assets over their expected useful lives. The depreciation rates are as follows:
Buildings [see note 4(c)]
Machinery & equipment
Fixtures and fittings
Motor vehicles & computer
equipment
Press
Typesetting equipment
Leased assets [see note 4(d)]
(h)
-
2 1/2% and 5%
10%, 12 1/2%, 20% and 25%
10% and 20%
-
20% and 25%
5%
33%
over the period of the leases
Intangible assets:
(i)
Goodwill:
Goodwill arising on an acquisition represents the excess of the cost of the acquisition over the fair value of
the net identifiable assets acquired. Goodwill arising on acquisition prior to March 31, 2004 is stated at cost,
less accumulated amortisation (note 5) and impairment losses [note 2(f)]. Goodwill at March 31, 2005 is
stated at cost less accumulated impairment losses. It is allocated to cash generating units, is not amortised
but is tested annually for impairment.
Amortisation is charged to the Group profit and loss account on the straight-line basis over the estimated
useful lives of intangible assets.
(ii)
Newspaper titles, Patents and Trade Marks
Newspaper titles, Patent and Trade Marks are stated at cost less impairment losses if any. The useful life is
estimated to be indefinite.
(i)
Associated companies:
Jamaica Joint Venture Investment Company Limited and its subsidiaries are associated companies. The company
has not adopted the equity method of accounting for investments as the Directors of the company do not consider
that they exercise significant influence over the financial or operating policies of Jamaica Joint Venture Investment
Company Limited and its subsidiaries (see note 9).
34
THE GLEANER
COMPANY LIMITED
NOTES TO THE
December 31, 2005
2.
(j)
Inventories:
Inventories are stated at the lower of cost, determined principally on an average cost or first-in first-out (FIFO)
basis and net realisable value.
(k)
Revenue recognition:
(i)
Revenue from the sale of goods and services is recognised in the Group profit and loss account when the
significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised, if
there are significant uncertainties regarding recovery of the consideration due, material associated costs or
the possible return of goods.
(ii)
Subscription revenue is recognised over the life of the subscription. Revenue received in advance is deferred
to match the revenue with the future costs associated with honouring the subscription.
(iii) Other operating income:
Other operating income includes investment income on the accrual basis, taking into account the effective
yield on the asset.
(l)
Expenses:
(i)
Finance costs:
Finance costs comprise material bank charges, interest payments on finance leases and bank loans and
are recognised in the Group profit and loss account using the effective interest rate method.
(ii)
Other expenses:
These are recorded on the accrual basis.
(m)
Taxation:
(i)
Income tax:
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in
the Group profit and loss account, except to the extent that it relates to items recognised directly to equity, in
which case, it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the
balance sheet date, and any adjustment to tax payable in respect of previous years.
(ii)
Deferred tax:
Deferred tax is provided, using the balance sheet liability method, for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement
of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date.
A deferred tax asset in respect of tax losses carried forward is recognised only to the extent that it is probable
that future taxable profits will be available against which the losses can be utilised. Deferred tax assets are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
35
THE GLEANER
COMPANY LIMITED
NOTES TO THE
December 31, 2005
2.
(n)
Foreign currencies:
Foreign currency balances outstanding at the balance sheet date are translated at the rates of exchange ruling on that
date [US$1 = J$64.38 (2004: US$1 = J$61.44); £1= J$109.62 (2004: £1 = J$116.80); Can$1 = J$54.32
(2004: Can$1 = J$49.98). Transactions in foreign currencies are converted at the rates of exchange ruling at the
dates of those transactions.
Gains and losses arising from fluctuations in exchange rates are included in the Group profit and loss account. For
the purpose of the group statement of cash flows, all foreign currency gains and losses recognised in the Group
profit and loss account are treated as cash items and included in cash flows from operating or financing activities
along with movements in the principal balances.
The reporting currencies of the foreign subsidiaries (see note 1) are also the currencies in which their economic
decisions are formulated. For the purpose of the financial statements, revenues, expenses, gains and losses have
been translated at the average rates of exchange for the year; assets and liabilities have been translated at
exchange rates ruling at the balance sheet date.
Unrealised gains and losses arising on translation of net stockholders’ equity in foreign subsidiaries are taken to
equity on the Group balance sheet and added or deducted to reflect the underlying Group cash flows from
operating activities on the Group statement of cash flows.
(o)
Employee benefits:
Employee benefits comprising pensions and other post-employment benefit asset and obligation included in the
financial statements are actuarially determined by a qualified independent actuary, appointed by management.
The appointed actuary’s report outlines the scope of the valuation and the actuary’s opinion. The actuarial
valuations are conducted in accordance with IAS 19, and the financial statements reflect the company’s postemployment benefit asset and obligations as computed by the actuary. In carrying out their audit, the auditors rely
on the work of the actuary and the actuary’s report.
(i) Pension obligations:
The Group operates both defined benefit and defined contribution pension schemes (see note 6); the assets of
the schemes are held separately from those of the Group.
(a)
Defined benefit schemes
The Group’s net obligation in respect of defined benefit pension scheme is calculated separately for each
scheme by estimating the amount of future benefit that employees have earned in return for their service
in current and prior periods; that benefit is discounted to determine the present value, and the fair value of
any scheme assets is deducted. The discount rate is the yield at balance sheet date on long-term
government instruments that have maturity dates approximating the terms of the Group’s obligations. The
calculation is performed by a qualified actuary using the projected unit credit method.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by
employees is recognised as an expense in the Group profit and loss account on the straight-line basis over
the average period until the benefits become vested. To the extent that the benefits vest immediately, the
expense is recognised immediately in the Group profit and loss account.
In calculating the Group’s obligation in respect of a scheme, to the extent that any cumulative
unrecognised actuarial gain or loss exceeds ten percent of the greater of the present value of the defined
benefit obligation and the fair value of scheme’s assets, that portion is recognised in the Group profit and
loss account over the expected average remaining working lives of the employees participating in the plan.
Otherwise, the actuarial gain or loss is not recognised.
36
THE GLEANER
COMPANY LIMITED
2.
NOTES TO THE
December 31, 2005
Basis of preparation and significant accounting policies (cont’d)
(o) Employee benefits (cont’d):
(a)
Defined benefit schemes (cont’d):
Where the calculation results in a benefit to the Group, the recognised asset is limited to the net total of
any unrecognised actuarial losses and past service costs and the present value of any future refunds from
the scheme or reductions in future contributions to the scheme.
(b)
Defined contribution schemes
Obligations for contributions to defined contribution plans are recognised as an expense in the Group profit
and loss account as incurred.
(ii) Equity compensation benefits:
A share option scheme is operated by the parent company. Share options are granted to management and key
employees of the company with more than three years of service. Options are granted at the market price of
the shares on the date of the grant and are exercisable at that price. Options are exercisable beginning one
year from the date of grant and have a contractual option term of five years. The company does not make a
charge to staff costs in connection with share options.
(iii) Termination benefits:
Termination benefits are payable whenever an employee’s employment is terminated before the normal
retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The
company recognises termination benefits when it is demonstrably committed to either terminate the employment
of current employees according to a detailed formal plan, without possibility of withdrawal, or provision of
termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more
than 12 months after balance sheet date are discounted to present value.
(iv) Profit-sharing and bonus plans:
A liability for employee benefits in the form of profit sharing and bonus plans is recognised in other provisions
when there is no realistic alternative but to settle the liability and at least one of the following conditions is met:
-
there is a formal plan and the amounts to be paid are determined before the time of issuing the financial
statements; or
-
past practice has created a valid expectation by employees that they will receive a bonus/profit sharing
and the amount can be determined before the time of issuing the financial statements.
Liabilities for profit sharing and bonus plans are expected to be settled within 12 months and are measured at
the amounts expected to be paid when they are settled.
(p)
Segment Reporting:
A segment is a distinguishable component of the company that is engaged either in providing products
(business segment), or in providing products within a particular economic environment (geographical segment),
which is subject to risks and rewards that are different from those of other segments.
37
THE GLEANER
COMPANY LIMITED
3.
NOTES TO THE
December 31, 2005
Roles of the actuary and auditors
The actuary has been appointed by the Board of Directors pursuant to the requirements of IAS 19. With respect
to preparation of financial statements, the actuary is required to carry out an actuarial valuation of management’s
estimate of the company’s medical and defined benefit pension schemes and report thereon to the shareholders.
The valuation is made in accordance with accepted actuarial practice. The actuary, in his verification of the
management information provided by the company used in valuation, also makes use of the work of the external
auditors. The actuary’s report outlines the scope of his work and opinion.
The external auditors have been appointed by the shareholders pursuant to the Act to conduct an independent and
objective audit of the financial statements of the company in accordance with International Standards on Auditing,
and report thereon to the shareholders. In carrying out their audit, the auditors also make use of the work of the
actuary and his report on the company’s actuarially determined policy liabilities. The auditors’ report outlines the
scope of their audit and their opinion.
38
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
4.
Property Plant and equipment
(a) Group
Freehold
land and
buildings
Machinery
and
equipment
Fixtures
and
fittings
Motor
vehicles
and
computer
equipment
$’000
$’000
$’000
$’000
Press
Typesetting
equipment
Leased
assets
Total
$’000
$’000
$’000
$’000
At cost or valuation
Additions
Disposals
Surplus on revaluation of building
361,427
4,784
16,700
202,268
49,165
(
678)
-
112,952
206,636
6,711
25,073
(
78) ( 9,149)
-
135,710
6,856
-
4,890
-
382,911
250,755
119,585
222,560
142,566
4,890
38,742
1,162,009
At cost
At valuation
37,201
345,710
250,755
-
119,585
-
222,560
-
142,566
-
4,890
-
38,742
-
816,299
345,710
382,911
250,755
119,585
222,560
142,566
4,890
38,742
1,162,009
24,683
19,861
149,771
25,425
65,180
8,105
145,455
24,055
73,328
7,128
4,890
-
12,809
7,771
476,116
92,345
4,790)
-
7,641)
-
-
( 12,343) (
24,852)
39,754
175,196
73,207
161,869
80,456
4,890
8,237
543,609
Carrying amounts
December 31, 2005
343,157
75,559
46,378
60,691
62,110
-
30,505
618,400
December 31, 2004
336,744
52,497
47,772
61,181
62,382
-
25,040
585,616
Depreciation and impairment
Losses
Charge for the year
Eliminated on disposals/
revaluation
Construction-in-progress
(
(
78) (
37,849 1,061,732
13,236
105,825
( 12,343) ( 22,248)
16,700
2,862
588,478
39
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
4.
Property Plant and equipment (cont’d)
(b) Company
Freehold
land and
buildings
Machinery
and
equipment
Fixtures
and
fittings
Motor
vehicles
and
computer
equipment
$’000
$’000
$’000
$’000
At cost or valuation
Additions
Disposals
Revaluation
292,160
3,689
16,700
83,371
13,865
-
30,054
3,617
-
151,554
24,419
( 7,677)
-
135,710
6,856
-
4,890
-
312,549
97,236
33,671
168,296
142,566
4,890
38,312
797,520
At cost
At valuation
8,449
304,100
97,236
-
33,671
-
168,296
-
142,566
-
4,890
-
38,312
-
493,420
304,100
312,549
97,236
33,671
168,296
142,566
4,890
38,312
797,520
Depreciation and impairment
Losses
4,987
Charge for the year
15,230
Eliminated on disposals/
revaluation
( 4,790)
51,809
10,638
10,043
2,983
106,351
20,978
73,328
7,128
4,890
-
12,528
7,771
263,936
64,728
-
-
5,619)
-
-
15,427
62,447
13,026
121,710
80,456
4,890
7,956
305,912
December 31, 2005
297,122
34,789
20,645
46,586
62,110
-
30,356
491,608
December 31, 2004
287,173
31,562
20,011
45,203
62,382
-
24,891
471,222
(
Press
Typesetting
equipment
Leased
assets
Total
$’000
$’000
$’000
$’000
37,419
735,158
13,236
65,682
( 12,343) ( 20,020)
16,700
( 12,343) (
22,752)
Carrying amounts
(c) Freehold land and buildings:
The Company’s building at 7 North Street was revalued at $300M (2004: $283.6M) and Harbour Street at $4.1M
(2004: $3.8M) on a fair market value basis as an office and warehouse complex in October 2005 by Property
Consultants Limited, Real Estate Brokers and Appraisers of Kingston, Jamaica. Sangster’s Book Stores
Limited’s buildings were revalued in September 2004 at $46M. The surplus arising on revaluation, inclusive of
depreciation no longer required, has been included in capital reserves (see note 16).
(d) Assets at cost:
Except as mentioned in note 4(c) all property, plant and equipment are shown at cost.
40
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
5.
Intangible Assets
Group
Cost
Effects of movements in foreign exchange
Newspaper
Titles
$’000
Patents and
Trademarks
$’000
434,834
( 26,736)
408,098
173
6
179
Amortisation
Reversal of prior year amortisation
6.
-
Goodwill
$’000
28,988
796
29,784
9
( 9)
-
(
192
192)
-
Total
$’000
463,995
( 25,934)
438,061
201
201)
-
(
Carrying amounts
December 31, 2005
408,098
179
29,784
438,061
December 31, 2004
434,834
164
28,796
463,794
Employees benefit asset/obligation
The parent company operates a defined-benefit scheme which is self administered and managed by a Board of
Management appointed by The Gleaner Company Limited. A defined-benefit scheme is a pension scheme that
defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years
of service or compensation.
The Scheme is subject to triennial actuarial valuations. The most recent valuation was done on the projected unit credit
method, by the appointed actuaries, Duggan Consulting Limited of Kingston, Jamaica, as at December 31, 2005.
This showed the scheme to be in surplus.
Sangster’s Book Stores Limited, a subsidiary, operates a defined-benefit pension scheme for all its employees, and
those of The Book Shop Limited, who have satisfied certain minimum service requirements. The benefits are
computed by reference to final salaries. The last actuarial valuation at December 31, 2005, showed that the Scheme
was adequately funded. Two subsidiary companies operate defined contribution pension schemes for its employees
who satisfy certain minimum service requirements. The contribution charged to the Group’s profit and loss account
for the year was $3.8M (2004: $3.6M).
The parent company operates a post retirement benefit scheme which covers health and life insurance. The method
of accounting and the frequency of valuations are similar to that used for the defined-benefit scheme.
The amounts recognised in the balance sheet in respect of employee benefits asset and obligations are as follows:
(i)
Pension Scheme:
(a) Employee benefit asset recognised in the balance sheet: Group
2005
$’000
Company
2004
$’000
2005
$’000
2004
$’000
Present value of funded obligations
Fair value of plan assets
( 593,728) ( 506,230)
2,381,418
2,047,562
( 578,000)
2,336,300
( 492,500)
2,011,000
Present value of net obligations
Actuarial gain to be recognised in future years
Economic benefit which remains in the
pension scheme
Recognised in balance sheet
Economic benefit attributable to the Group
1,787,690
1,541,332
( 660,615) ( 563,913)
1,758,300
( 649,000)
1,518,500
( 555,700)
( 684,977) ( 591,987)
442,098
385,432
1,102,713
949,345
( 676,900)
432,000
1,081,400
( 586,300)
376,500
932,200
41
NOTES TO THE
December 31, 2005
HE GLEANER
COMPANY LIMITED
6.
Employees benefit asset/obligation (cont’d)
(i)
Pension Scheme (cont’d):
(b) Movements in the asset recognised in the balance sheet:
Group
2005
$’000
Company
2004
$’000
2005
$’000
2004
$’000
Net asset at January 1
Contributions paid
Credit recognised in the group
profit and loss account
385,432
1,518
159,000
2,286
376,500
300
159,000
1,100
55,148
224,146
55,200
216,400
Net asset at December 31
442,098
385,432
432,000
376,500
(c) Credit recognised in the Group profit and loss account:
Group
2005
$’000
Current and past service costs
Interest on obligation
Expected return on scheme assets
Change in disallowed asset
Recognised losses
Actual return on scheme assets
Company
2004
$’000
2005
$’000
2004
$’000
15,809
9,291
60,895
52,366
( 204,990) ( 165,939)
93,090 ( 119,818)
( 19,952) (
46)
15,100
59,300
( 200,500)
90,700
( 19,800)
8,700
55,700
( 162,600)
( 118,200)
-
(
(
( 216,400)
55,148) ( 224,146)
33%
31.9%
55,200)
18%
32.7%
(d) Principal actuarial assumptions at the balance sheet date
Group
2005
%
Discount rate
Expected return on plan assets
Future salary increases
Future pension increases
12.5
10.0 - 12.5
9.0 - 10.0
3.5 - 6
Company
2004
%
2005
%
2004
%
12.5
10.0 - 12.5
10.0
3.5 -6
12.5
10.0
9.0
6.0
12.5
10.0
6.0
The pension scheme’s assets include the parent company’s ordinary shares with a fair value of $88.4M (2004:
$60.8M), building occupied by Group companies with fair values of $76.9M (2004: $66.1M) and finance lease
receivables from parent company of $22.4M (2004: $20.4M).
42
THE GLEANER
COMPANY LIMITED
6.
NOTES TO THE
December 31, 2005
Employees benefit asset/obligation (cont’d)
(ii) Group life and health plans:
(a) Employee benefit obligation recognised in the balance sheet: Group and Company
2005
$’000
2004
$’000
Present value of unfunded obligations
Unrecognised actuarial losses
Recognised in balance sheet
( 55,300)
4,600
( 50,700)
( 51,100)
9,800
( 41,300)
Economic benefit attributable to the group scheme
( 55,300)
( 51,100)
(b) Movements in net obligation recognised in the balance sheet:
Group and Company
2005
$’000
2004
$’000
Net liability at Jan 1
Contribution paid
Expense recognised in Group profit and loss account
( 41,300)
1,000
( 10,400)
( 30,100)
1,000
( 12,200)
Net liability at December 31
( 50,700)
( 41,300)
(c) Expense recognised in the Group profit and loss account:
Group and Company
2005
$’000
Current service cost
Interest on obligation
Net actuarial losses recognised in the year
2004
$’000
3,900
6,200
300
3,900
7,400
900
10,400
12,200
2004
%
2004
%
12.5
11.0
12.5
11.0
(d) Principal actuarial assumption at the balance sheet date:
Discount rate at December 31
Rate of increase in medical premiums claims cost
43
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
7.
Long-term receivables
Group
Company
2005
$’000
(i)
General Consumption Tax (GCT)
Less current portions [ (included in other
receivables – note (11) ]
2871
( 1,808)
1,063
(i)
8.
2004
$’000
(
2005
$’000
2004
$’000
648
2,776
-
554)
(1,808)
-
94
Investment in subsidiaries
Group
Shares at cost, less impairment losses:
Popular Printers Limited
Sangster’s Book Stores Limited
GV Media Group Limited
The Gleaner Company (Canada) Inc.
Independent Radio Company Limited
Company
2004
$’000
2005
$’000
2004
$’000
-
-
426
2,650
1
687
13,368
426
2,650
1
687
11,195
-
-
17,132
14,959
Investment in associates
Group
2005
$’000
Jamaica Joint Venture Investment Co. Ltd.
[see notes 2(b) (i) and 2 (i)]
150
Company
2004
$’000
150
2005
$’000
-
(a) Selecto Publications Limited owned 33.3% of Jamaica Joint Venture Investment Company Limited.
44
-
GCT paid on purchase of fixed assets, which is recoverable in twenty-four equal monthly
instalments from the date of purchase.
2005
$’000
9.
968
2004
$’000
-
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
10. Investments
Group
Loans and receivables:
Government of Jamaica Securities
Debentures
Other
Available-for-sale: [Note 2 (e)(i)]
Government of Jamaica Securities
Quoted equities
Unquoted equities:
Ocho Rios Beach Limited
Other
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
105,866
489
13,188
137,259
489
-
100,365
489
-
132,209
489
-
62,259
155,043
63,600
163,620
62,259
151,671
63,600
160,452
22,568
253
22,568
253
22,568
253
22,568
253
359,666
387,789
337,605
379,571
(a) At December 31, 2005, the fair value of loans and receivables aggregated to $119,561 (2004: 137,765).
(b) Other unquoted equities include an interest in the Caribbean News Agency, Caribbean Financial Services
Corporation and Stabroek News, Guyana.
11. Trade and other receivables
Group
Trade receivables
Other receivables (see note 7)
Less provision for doubtful debts
(
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
451,672
126,440
479,635
122,772
319,042
694,172
297,918
596,641
578,112
602,407
1,013,214
894,559
43,735) (
534,377
66,428)
535,979
(
21,808)
991,406
(
31,684)
862,875
12. Inventories and goods-in-transit
Group
Newsprint
Books, stationery and general supplies
Goods-in-transit
Consumable stores
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
27,795
142,308
10,435
57,782
82,603
143,955
7,654
7,007
27,795
1,132
16,557
82,603
7,007
238,320
241,219
45,484
89,610
45
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
13. Trade and other payables
Group
Trade payables
Other payables
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
196,674
360,742
153,709
351,073
86,902
199,951
44,236
251,279
557,416
504,782
286,853
295,515
14. Long-term liabilities
Group
Bank loan
Stockholders’ loans [see (a) below]
Finance lease obligations [see (b) below]
Less current portion
(
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
50,606
22,384
67,020
54,335
20,365
50,606
22,384
67,020
20,365
72,990
141,720
23,821) ( 25,595)
49,169
(
116,125
72,990
23,821)
87,385
23,566)
(
49,169
63,819
(a) The shareholders’ loans, made to a subsidiary are unsecured and bear interest at a rate equal to the yield of
the most recent issue of twelve-month treasury bills, determined as at the first day of April in each year the interest
is payable. The actual rate for the year was 22.6% (2004: 29%). There is a moratorium on principal for three years,
after which the loans will be repaid in five consecutive equal annual instalments, which commenced April 1, 2004.
(b) Finance lease obligations:
Group and Company
2005
2004
$’000
$’000
15. Share Capital
Due from balance sheet date as follows:
Within one year
Within two to five years
Total future minimum lease payments
Less: future interest charges
Present value of minimum lease payments
7,408
21,704
(
29,112
6,728)
7,200
19,203
(
26,403
6,038)
22,384
20,365
2005
$’000
2004
$’000
Authorised – 1,216,000,000 (2004: 1,216,000,000)
ordinary shares of no par value (2004: 50 cents each)
608,000
608,000
Issued and fully paid – 1,211,243,827 of no par value
(2004: 1,211,243,827) ordinary shares of 50 cents each)
605,622
605,622
Under the Companies Act 2004 (the Act) which became effective on February 1, 2005, all shares in issue are deemed
to be without a par (or nominal) value, unless the company, by ordinary resolution, elected to retain its shares with par
value by July 29, 2005. No such election was made. The share premium in respect of shares issued before the Act is
retained.
46
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
16. Reserves
Group
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
4,353
5,830
24,608
13,725
4,353
5,830
24,608
13,222
4,353
1,334
-
4,353
1,334
-
48,516
48,013
5,687
5,687
CAPITAL
Realised:
Share premium
Other
Gain on sale of loan
Gain on disposal of property, plant and equipment
Unrealised
Revaluation of buildings [(note 4(c)]
Deferred taxation
Reserve arising from consolidation of subsidiaries
(net of goodwill) and debt
Exchange difference on opening investment
in subsidiary
Total capital as previously reported
Adjusted for investment in associates
Total capital reserves
Reserve for own shares
Fair value reserve
401,126
379,636
( 133,707) ( 126,544)
373,587
( 123,355)
352,097
( 116,192)
83,484
76,311
-
-
27,992
9,912
-
-
378,895
339,315
255,919
235,905
427,411
150
427,561
387,328
150
387,478
255,919
255,919
241,592
241,592
-
-
87,708
99,419
1,003,058
1,003,058
876,143
876,143
1,346,685
1,217,154
( 129,365) (
89,969
84,076)
100,412
Revenue
As previously reported
Retained profits
Effect of consolidation of GCLEIT
As restated:
1,043,193
1,043,193
Total Reserves
1,431,358
(
945,181
7,470)
937,711
1,341,525
Reserve for own shares was included in the financial statements by consolidation of The Gleaner Company
Limited Employee Investment Trust (GCLEIT) as it is regarded as a Special Purpose Entity and is required to
be consolidated under IFRS 2, as amended. The previous year comparatives have been restated accordingly.
The reserve comprises the cost of the company’s shares held by the group through the GCLEIT. At December
31, 2005 the group held 74,671,814 (2004: 71,114,366) of the company’s shares (note 23).
Retained profits for the Company and the Group at December 31, 2005, include $652,000 (2004: $131,000)
franked income available for distribution without deduction of tax.
Capital distribution of $415,762 (2004: $415,762) can be made from distributions received from a subsidiary
company and transfer tax withheld and remitted by the Company.
47
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
17. Deferred taxation
Deferred taxation is attributable to the following:
Group:
Assets
2005
$’000
Employee benefits asset
Employee benefits obligation
Tax losses
Net assets/(liabilities)
(
2,419
78)
7,808
10,149
Liabilities
2004
$’000
2005
$’000
Net
2004
$’000
2005
$’000
2004
$’000
2,945
4,708
14,228
7,881
( 122,202) ( 131,459) ( 119,783) ( 128,514)
(
1,769) ( 13,778) (
1,769) ( 13,778)
- (
78)
4,708
( 147,352) ( 125,487) ( 147,352) ( 125,487)
16,898
16,898
14,228
7,808
7,881
29,762
( 254,425) ( 270,724) ( 244,276) ( 240,962)
Net deferred tax is recognised in the group balance sheet as follows:
2005
$’000
2004
$’000
Deferred tax liability in company
Deferred tax liability in subsidiaries
( 248,508) ( 248,380)
(
5,917) ( 4,336)
Deferred tax asset in certain subsidiaries
( 254,425) ( 252,716)
10,149
11,754
Net deferred tax liabilities
( 244,276) ( 240,962)
Movement in net temporary differences during the year are as follows:
Tax losses
Balance at
January 1
$’000
Recognised
in income
$’000
( 128,514)
( 125,487)
14,228
( 13,778)
4,708
7,881
15,894
( 21,865)
2,670
7,049
174
(
73)
( 240,962)
Recognised
in equity
$’000
Balance at
December 31
$’000
(7,163)
-
( 119,783)
( 147,352)
16,898
(
6,729)
4,882
7,808
(7,163)
( 244,276)
3,849
Deferred taxation is attributable to the following:
Company:
Assets
Net assets/(liabilities)
48
Liabilities
2005
$’000
2004
$’000
Net
2005
$’000
2004
$’000
2005
$’000
2004
$’000
4,256
16,898
4,243
13,765
( 119,770) ( 127,474) ( 119,770) ( 127,474)
(
5,906) ( 13,427) (
5,906) ( 13,427)
4,256
4,243
( 143,986) ( 125,487) ( 143,986) ( 125,487)
16,898
13,765
21,154
18,008
( 269,662) ( 266,388) ( 248,508) ( 248,380)
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
17. Deferred taxation (cont’d)
Movement in net temporary differences during the year:
Balance at
January 1
$’000
Recognised
in income
$’000
Balance at
December 31
$’000
( 127,474)
( 125,487)
13,765
( 13,427)
4,243
7,704
( 18,499)
3,133
7,521
13
( 119,770)
( 143,986)
16,898
(
5,906)
4,256
( 248,380)
(
( 248,508)
128)
18. Revenue
Revenue represents sales by the Group, before commission payable but excluding returns, as follows:
Advertising
Books and stationery
Circulation
Other
2005
$’000
2004
$’000
1,869,234
612,540
746,478
62,986
1,678,933
542,880
682,476
34,348*
3,291,238
2,938,637
19. Segment reporting
Segment information is presented in respect of the Group’s business segments. The primary format for business
segments, is based on the Group’s management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly income-earning assets and revenue.
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 year.
*Restated
49
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
19. Segment reporting (cont’d)
(a) Business segments
The main business segments of the Group comprise:
2005
Media
Service
$’000
Revenue
Cost of sales
Gross profit
2,632,644
( 1,343,175)
1,289,469
612,540
( 436,490)
176,050
170,932
1,460,401
53,982
1,514,383
Expenses
Distribution costs
(
(
(
Pension costs
(
339,056)
508,373)
412,958)
253,996
1,224)
Other
$’000
(
13,809
189,859
1,166
191,025
(
(
(
(
252,772
85,059)
54,761)
29,997)
21,208
1,218)
(
(
19,990
Total
$’000
46,054
20,461)
25,593
3,291,238
( 1,800,126)
1,491,112
6,343
31,936
31,936
191,084
1,682,196
55,148
1,737,344
17,290)
659)
13,987
-
(
(
(
(
13,987
424,115)
580,424)
443,614)
289,191
2,442)
286,749
Finance costs
(
18,945)
233,827
(
3,113)
16,877
(
35)
13,952
(
22,093)
264,656
Taxation
(
73,188)
(
8,339)
(
3,674)
(
85,201)
Segment results
Minority interest
Net profit attributable to stockholders
of the parent company
160,639
8,538
10,278
179,455
7,176
186,631
Segment assets
2,634,482
345,359
82,445
3,062,286
Segment liabilities
921,192
78,088
19,842
1,019,122
Capital expenditure
89,296
2,974
13,555
105,825
80,904
7,986
3,455
92,345
Other non-cash items
50
Books and
Stationery
$’000
(
127,627)
(
5,705)
(
2,634)
(
135,966)
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
(b) Business segments (cont’d):
2004
Media
Service
$’000
Revenue
Cost of sales
Gross profit
2,361,409
( 1,213,472)
1,147,937
542,880
( 382,599)
160,281
266,850
1,414,787
216,400
1,631,187
Employee Benefit Asset
Expenses
Distribution costs
Books and
Stationery
$’000
(
(
(
320,644)
435,381)
357,748)
517,414
1,127)
516,287
Other
$’000
(
17,909
178,190
7,746
185,936
(
(
(
(
(
(
34,348
15,722)
18,626
2,938,637
( 1,611,793)
1,326,844
9,297
27,923
27,923
294,056
1,620,900
224,146
1,845,046
16,335)
109)
11,479)
11,479
(
(
(
(
Finance costs
(
24,951)
491,336
(
932)
27,903
(
16)
11,463
(
25,899)
530,702
Taxation
(
149,520)
(
10,380)
(
4,273)
(
164,173)
(
366,529
8,236)
341,816
7,190
358,293
Segment assets
Segment liabilities
Capital expenditure
17,523
(
388,192)
513,535)
384,405)
558,914
2,313)
556,601
Pension costs
Segment results
Minority interest
Net profit attributable to stockholders
of the parent company
(
67,548)
61,819)
26,548)
30,021
1,186)
28,835
Total
$’000
(
2,638,134
364,986
88,865
3,091,985
956,231
80,799
119,782
11,069
35,369
53,887
1,111,382
145,755
66,948
9,893
50,694
127,535
319,102)
(
6,114)
(
8,456)
(
333,672)
51
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
(c) Geographical segments
Local
Overseas
2005
$’000
2004
$’000
2005
$’000
Revenue from External
Customers
2,875,446
2,574,152
415,792
Segment assets
2,495,415
2,917,557
Segment liabilities
627,986
Capital expenditure
Depreciation
(
Total
2005
$’000
2004
$’000
364,485
3,291,238
2,938,637
566,871
174,428
3,062,286
3,091,985
769,034
391,136
342,348
1,019,122
1,111,382
102,135
144,756
3,690
999
105,825
145,755
83,921
89,812
8,424
37,723
92,345
127,535
136,082)
( 333,424)
116
2004
$’000
(
248) ( 135,966) ( 333,672)
20. Profit from operations
Profit from operations is stated after charging/(crediting):
2005
$’000
Directors’ emoluments:
Fees
Management remuneration
Staff costs
Auditors’ remuneration
Interest income
2,380
18,269
891,602
13,439
92,345
( 88,119)
2004
$’000
950
17,990
897,282
9,888
127,535
( 79,630)
21. Taxation
(a) Taxation is based on the group profit for the year as adjusted for tax purposes and is made up as follows:
(i)
Current tax expense:
Income tax at 331/3%
(ii) Adjustment in respect of previous year
2005
$’000
2004
$’000
94,663
104,873
(
5,613)
(
3,849)
(
516)
(iii) Deferred tax expense:
Origination and reversal of timing difference (note 17)
Total taxation recognised in group profit and loss account
52
85,201
59,816
164,173
THE GLEANER
COMPANY LIMITED
NOTES TO THE
December 31, 2005
21. Taxation (cont’d)
(c) Total tax charge for 2005 represents an effective tax rate 32.19% (2004: 30.94%) on $264.65M (2004:
$538.17M) pre-tax profit compared to a Jamaica statutory tax rate of 331/3%. The tax effect of differences
between treatment of items for financial statements and taxation purposes are as follows:
2005
$’000
Income tax at 331/3%
Profit on disposal of property, plant and equipment and balancing charge
Difference between depreciation and tax capital allowance
Finance lease payments
Expenses not allowed for tax purpose
Adjustment in respect of previous year
2004
$’000
264,656
530,702
88,219
( 11,961)
4,865
( 2,695)
12,386
( 5,613)
176,901
( 40,771)
11,571
( 4,068)
21,056
(
516)
Actual tax expense
85,201
164,173
22. Dividends paid (gross)
An interim revenue distribution of 3.5 cents per stock unit was paid on March 11, 2005, to shareholders on record
at close of business on February 28, 2005.
A second interim revenue distribution of 3.5 cents per stock was paid on September 28, 2005, to shareholders on
record at the close of business on September 14, 2005.
2005
$’000
2004
$’000
Ordinary dividends:
First interim paid in respect of 2005: 3.5¢ (2004: 3¢) per stock unit - gross
Second interim paid in respect of 2005: 3.5¢ (2004: 3¢) per stock unit - gross
Dividends paid to GCLEIT
42,393
42,393
(
84,786
4,141)
80,645
36,337
36,337
(
72,674
4,307)
68,368
23. Earnings per stock unit
The calculation of earnings per stock unit for 2005 and 2004 is arrived at by dividing profit after taxation attributable
to stockholders of the parent company of $186,631,000 (2004: $358,293,000) by 1,211,243,827 and the number of
stock units in issue at December 31, 2005 less those held by the GCLEIT (note 16)
24. Related parties
(a) Identity of related party
The Group has a related party relationship with its subsidiaries, associates and with its directors and executive
officers.
53
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
24. Related parties (cont’d)
(b) Transactions with key management personnel
In addition to salaries, the Group also provides non-cash benefits to directors and executive officers, and
contributes to a post-employment defined benefit plan on their behalf, in accordance with the terms of the
plan. Executive officers also participate in the Group’s share option programme (see note 2 (o) (ii) ).
In 1994, the Company established an investment trust for the benefit of its employees. During the year
2005, the trustees granted options to 48 members of staff to acquire 10.2M shares in the Company. Shares
were issued to staff during the year resulting from previous options, at a cost of approximately $1.3M. The
value of the outstanding options was immaterial.
The key management personnel compensations are as follows:-
Short-term employee benefits
Post-employment benefits
2005
$’000
2004
$’000
85,964
7,100
93,064
84,620
41,900
126,520
(c) The balance sheet includes balances, arising in the ordinary course of business, with subsidiaries and
associated companies as follows:
Group
2005
$’000
Investments:
Subsidiaries
Trade and other receivables:
Subsidiaries
Associates
Trade and other payables:
Subsidiaries
Associates
54
Company
2004
$’000
2005
$’000
2004
$’000
-
-
17,132
14,959
-
-
609,856
-
467,507
11,110
-
-
(
23,524)
-
(
(
18,876)
389)
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
24. Related party balances and transactions (cont’d)
(d) The profit and loss account includes the following income earned from, and expenses incurred in, in transactions with
subsidiaries and associated companies:
Group
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
Revenue:
Subsidiaries
-
-
1,635
24,724
Other operating income:
Subsidiaries
-
-
37,925
22,718
Cost of sales:
Subsidiaries
-
-
1,635
7,409
Administration expenses:
Subsidiaries
-
-
1,000
59,370
Finance cost:
Subsidiaries
-
-
14,289
1,957
During the year the company purchased a loan in Jamaica Popular Investment Limited from Jamaica National
Building Society for $1, the value of the loan at the date of purchase was $13.34M.
25. Employee numbers
At balance sheet date, the average number of persons employed by the company and its subsidiaries was 699
(2004: 677).
26. Financial instruments
A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability
or equity instrument of another enterprise. For the purpose of the financial statements, financial assets have been
determined to include cash and cash equivalents, trade and other receivables, securities purchased under
agreements for resale, investments, and long-term receivables. Financial liabilities include bank overdraft, trade and
and other payables and long-term liabilities.
(a) Fair value: Fair value amounts represent estimates of the arm’s length consideration that would be currently agreed upon
between knowledgeable, willing parties who are under no compulsion to act and is evidenced by a quoted
market price, if one exists.
The fair values of cash and cash equivalents, trade and other receivables, securities purchased under
agreements for resale, trade and other payables approximate their carrying value due to their relatively shortterm nature. The fair value of available-for-sale investments (note 10) and long-term liabilities (notes 14) are
reflected at market value, or cost, where there is no market value.
(b) Financial instrument risks:
Exposure to credit, interest rate, foreign currency, market, cash flow and liquidity risks arises in the ordinary
course of the Group’s and company’s business. Derivative instruments are not presently used to manage, mitigate
or eliminate exposure to financial instrument risks.
55
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
26. Financial instruments (Cont’d)
(i)
Credit risk:
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation resulting in loss
to the other party.
The Group and company manage this risk by maintaining cash and cash equivalents and securities purchased
under agreements for resale with reputable financial institutions and by screening customers, establishing credit limits
and the rigorous follow up of receivables. At the balance sheet date, except for cash and cash equivalents, trade
and other receivables and securities purchased under agreements for resale, there were no significant
concentrations of credit risk and the maximum exposure to credit risk is represented by the carrying amount of each
financial asset.
(ii) Interest rate risk:
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest
rates.
The Group and company minimise interest rate risk by investing mainly in fixed rate government securities and
contracting liabilities at fixed rates, where possible.
(iii) Foreign currency risk:
Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign
exchange rates.
The Group and company are exposed to foreign currency risk on transactions that are undertaken in foreign
currencies. The main foreign currencies giving rise to this risk are the United States dollar (US$), Pound Sterling
(£) and Canadian dollar (Can.$). The Group and company ensure that the risk is kept to an acceptable level by
monitoring their risk exposure and by maintaining funds in US dollars as a hedge against adverse fluctuations
in exchange rates.
The net foreign currency assets/(liabilities) at December 31, 2005 are as follows:
Group
US$
£ Sterling
Canadian
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
1,199
966
Nil
1,551
208
Nil
1,391
1,105
Nil
1,590
335
Nil
(iv) Market risk:
Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices
whether those changes are caused by factors specific to the individual security, its issuer or factors affecting all
securities traded in the market. The Group and company manage this risk by monitoring daily the market value
of the securities on the Stock Exchange and their companies’ quarterly financial reports.
(v) Cash flow risk:
Cash flow risk is the risk that future cash flows associated with monetary financial instruments will fluctuate in
amount. The Group and company manage this risk by ensuring, as far as possible, that fluctuations in cash
flows relating to monetary financial assets and liabilities are matched, to mitigate any significant adverse cash
flows.
56
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
26. Financial instruments (Cont’d)
(vi) Liquidity risk:
Liquidity risk, also referred to as funding risk, is the risk that the Group and company will encounter difficulty in
raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an
inability to sell a financial asset quickly at, or close to, its fair value. The Group and company manage this risk
by maintaining sufficient cash and marketable securities and the availability of funding through an adequate
amount of committed facilities and by ensuring that it maintains a balanced investment portfolio to take care of
its operating cash requirements and its need to optimise its return on investments.
27. Lease commitments
Unexpired lease commitments at December 31 expire as follows:
Group
Within one year
Subsequent years
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
3,599
25,243
4,144
14,646
-
-
28,842
18,790
-
-
28. Authorised capital expenditure
Group
Company
2005
$’000
2004
$’000
2005
$’000
2004
$’000
Capital expenditure authorised but not contracted for
22,822
14,994
22,822
14,994
Capital expenditure authorised and contract for
18,214
7,497
18,214
7,497
29. Libel Cases
The Group’s and company’s lawyers have advised that they are of the opinion that the provision made in the Group’s
and company’s accounts as at December 31, 2005, is a reasonable provision for the purpose of covering all reasonable
and probable judgements and costs for libel actions against the Group and company.
30. Acquisition of Subsidiaries
On April 30, 2004, the company through its subsidiary, GV Media Group Limited, acquired 100% of the Voice Group
Limited and its 95% owned subsidiary, Vee Tee Ay (Media Resources) Limited for $234.4M. The Company is
involved in the publication and printing of newspapers.
On August 16, 2004, the company acquired 100% of Beckford’s Auto Supplies Limited for $300,000 satisfied in cash.
The company is involved in leasing of equipment and dealing in specific types of inventory by way of purchase and
resale agreements. These assets and liabilities were taken over at fair value.
57
NOTES TO THE
December 31, 2005
THE GLEANER
COMPANY LIMITED
30. Acquisition of Subsidiaries (cont’d)
These acquisitions were accounted for using the purchase method of consolidation and had the following effect on
the group’s assets and liabilities: $’000
Tangible fixed assets
Intangible assets – newspaper titles
Deferred tax assets
Investments
Debtors
Inventories
Taxation recoverable
Cash at bank and in hand
Creditors
Corporation tax
Minority interests
20,854
400,904
9,519
1,078
34,568
4,000
9,264
3,353
( 183,671)
( 76,431)
8,274
Net identifiable assets and liabilities
231,712
Goodwill
2,726
234,438
Consideration paid:
Cash
Deferred consideration
Cash acquired
Net Cash (outflow)
169,726
64,712
234,438
(
3,353)
231,085
Goodwill has arisen on the acquisition of the GV Media Group Limited (formerly Voice Group) because of certain
intangible assets that did not meet the criteria for recognition as an intangible asset at the date of acquisition.
31. Contingent liabilities
(i)
There are contingent liabilities in respect of $2M (2004: $4M) worth of guarantees issued on behalf of the Group
and the company.
(ii) The company has given an undertaking to a subsidiary to provide financial support required to meet its future
operations and obligations.
58
THE GLEANER
COMPANY LIMITED
NOTES TO THE
December 31, 2005
32. Adoption of new and revised IFRS and interpretations
At the date of approval of the financial statements for issue, certain new and revised standards and interpretations
were in issue but were not effective until after balance sheet date. Those which are considered relevant to the Bank
and their effective dates are as follows: IFRS
6
Exploration for Evaluation of Mineral Resources
January 1, 2006
IFRS
7
Financial Instruments: Disclosure
January 1, 2007
IFRIC
4
Determining whether an Arrangement Contains a Lease
January 1, 2006
IFRIC
5
Rights to Interest Arising from Decommissioning,
Restoration and Environmental Rehabilitation Funds
January 1, 2006
IFRIC
6
Liabilities arising from Participating in a Specific
Market - Waste, Electrical and Electronic Equipment
December 1, 2006
IFRIC
7
Applying the Restatement Approach under IAS 29
Financial Report in Hyper-Inflationary Economies
March 1, 2006
IAS
19 Amendments Actuarial Gains & Losses, Group Plans and Disclosures
January 1, 2006
IAS
39 Amendments The Fair Value Option
January 1, 2006
IAS
39 Amendments Financial Instruments Cash Flow Hedge
Account for Forecast Intra-group Transaction
January 1, 2006
IAS
39 Amendments Financial Guarantee Contracts
January 1, 2006
IFRIC
8
Scope of IFRS 2
January 1, 2006
IFRIC
9
Reassessment of Embedded Derivatives
January 1, 2006
The adoption of IFRS 7 and the IAS 19 amendment is expected to result in additional disclosures for financial
instruments and the defined benefit pension scheme. Except for these additional disclosures, the adoption of
these standards and interpretations are not expected to have a material impact on the financial statements.
59
THE GLEANER
COMPANY LIMITED
FINANCIAL SUMMARY
2001 - 2005
Turnover
Group profit before taxation
Taxation
Minority Interest
Net profit attributable to Gleaner Stockholders
2004
$(000)
2003
$(000)
2002
$(000)
2001
$(000)
3,291,238
2,938,637
2,546,707
2,273,720
2,010,456
264,656
85,201)
7,176)
(
(
530,702
164,173)
8,236)
(
(
314,290
80,736)
2,535)
(
(
281,876
74,978)
5,259)
(
231,838
62,314)
1,163
186,631
358,293
231,019
201,639
170,687
Ordinary Stockholders’ funds
Share Capital
Reserves
605,622
1,431,358
605,622
1,341,525
605,622
1,049,968
512,449
900,991
427,041
824,279
Deferred taxation
Minority interest
Employees benefit obligation
2,036,980
49,169
254,425
6,184
50,700
1,947,147
116,125
270,724
33,456
41,300
1,655,590
14,871
181,794
19,015
30,100
1,413,440
20,032
103,355
21,299
25,100
1,251,320
18,203
13,360
15,317
-
Total Funds employed
2,397,458
2,408,752
1,901,370
1,583,226
1,298,200
Represented by:
Non-current assets and investments
Long-term receivable
Working Capital
1,868,524
1,063
527,871
1,855,405
94
553,253
836,889
3,964
1,060,517
617,582
3,550
962,094
442,440
7,689
848,071
2,397,458
2,408,752
1,901,370
1,583,226
1,298,200
1,211,244
1,211,244
1,211,244
1,024,898
854,082
15.41¢
29.58¢
19.1¢
18.8¢
20.0¢
15.41¢
29.58¢
19.1¢
16.7¢
14.1¢
168.20¢
167.9¢
136.7¢
134.5¢
146.5¢
168.20¢
167.9¢
136.7¢
116.7¢
103.3¢
7.0¢
6.0¢
6.25¢
7.0¢
7.0¢
7.0¢
6.0¢
6.25¢
7.0¢
7.0¢
Stock units in issue at year end (‘000)
Earnings per stock unit
- historical
restated to 2001 stock units in issue
(see note i below)
Stockholders’ funds per stock unit
- historical
(see note i below)
Dividends per stock unit
- historical
(see note ii below)
60
(
(
2005
$(000)
THE GLEANER
COMPANY LIMITED
FINANCIAL SUMMARY
2001 - 2005
2005
$(000)
Exchange rates ruling at the balance
sheet dates were:
UK one Pound to J$
US$1 to J$
Can$1 to J$
(i)
109.62
64.38
54.32
2004
$(000)
116.80
61.44
49.98
2003
$(000)
105.89
60.63
45.93
2002
$(000)
79.89
50.97
32.09
2001
$(000)
64.62
47.17
28.85
The calculation of earnings per stock unit and shareholders’ funds for stock units is based on profit after taxation
divided by the 1,211,243,827 stock units in issue at year-end 2005.
(ii) The calculation of dividends per ordinary stock unit is based on the actual dividends for each year divided by the
1,136,572,013 stock units in issue net of stock units held by GCLEIT at year-end 2005 (2004: 1,140,129,461).
61
THE GLEANER
COMPANY LIMITED
Names
O. F. Clarke
G. C. Lalor
J. J. Issa
C. S. Roberts
J. M. Matalon
H. W. R. Dear
C. D. Archer
D. R. Orane
M.M. Seymour
L. G. Johnston
M. Belasse
C. R. Bourne
M. Davis
G. Grandison
L. Henry
J. Hudson
N. James
E. Knight
L. A. O'Gilvie
I. R. Roxburgh
K. E. Daley-Cooper
Y. Senior
R. A. Speid
N. Wallace
D E C L A R AT I O N O F N U M B E R O F
STOCK UNITS OWNED BY
DIRECTORS/OFFICERS
Personal
Shareholdings
Shareholding in which
Director/Officer has
a controlling interest
85,016,192
23,374,832
4,698,048
8,320
812,572
50,000
1,732
36,367
1,207,500
1,700
196,847
1,700
1,390,820
281,397
186,221
1,479,331
1,457,573
1,000,000
868,138
1,700
-
346,453,068
633,129
276,206
-
-
LIST OF (10) LARGEST BLOCKS OF STOCK UNITS AS AT
December 31, 2005
1.
Financial and Advisory Services Limited
95,483,758
2.
The Gleaner Company Limited Employees' Investment Trust
74,671,814
3.
Scotia Jamaica Investment Management Limited A/C 482
71,499,417
4.
64,772,197
5.
West Indies Trust Company Limited A/C J1485
51,070,620
6.
45,537,764
7.
39,974,013
8.
Life of Jamaica Pooled Equity Fund No. 1
36,398,367
9.
National Insurance Fund
30,883,010
10. Scotia Jamaica Investment Management Limited A/C 470
62
28,967,056
THE GLEANER
COMPANY LIMITED
FORM OF
P R OX Y
I/We . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
in the parish of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
being a member/members of the above-named company, hereby appoint
.....................................................................................................................................
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
or failing him . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company
to be held on the 8th day of June, 2006 and at any adjournment thereof.
Signature(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signed this . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . day of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2006
NOTES:
(1) A Proxy need not be a member of the Company.
(2) If the appointee is a Corporation this form must be under its Common Seal or under the hand of
an officer of the Corporation duly authorised on its behalf.
(3) In the case of joint holders the vote of the senior shall be accepted to the exclusion of the votes
of the joint holders. Seniority shall be determined by the order in which the names stand in the
register of members.
(4) To be valid this form must be completed and deposited with the Secretary, The Gleaner Company
Limited, 7 North Street, Kingston at least 48 hours before the time appointed for the meeting or
adjourned meeting.
(5) An adhesive stamp of $100.00 must be affixed to the form and cancelled.
63

Final Gleaner 2005.qxd - Jamaica Stock Exchange

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