Trinidad Cement Limited

Transcription

(A Company incorporated in the Republic of Trinidad and Tobago
and continued under the provisions of the Companies Act Chap 81:01
of the Revised Laws of the Republic of Trinidad and Tobago)
For a non- renounceable pro rata Rights Issue of 124,882,568 New
Shares at an issue price of $2.90 per New Share on the basis of one
(1) New Share for every two (2) Existing Share held at the Record Date
of the offer.
Lead Broker:
West Indies Stockbrokers Limited
P.O. Box 259
St. Clair Place
8 Sweet Briar Road,
Port of Spain, Trinidad W.I.
Important Notice
The Trinidad and Tobago Securities and Exchange Commission has not in any way evaluated the merits of the securities offered hereunder and any
representation to the contrary is an offence.
This Information Memorandum is an important and valuable document that requires the immediate attention of shareholders.
Shareholders shall read this memorandum carefully and retain it for future reference. If any shareholder is in doubt as to its contents, or the action that shall be
taken such shareholder shall immediately consult with his/her stockbroker or other professional adviser.
An application has been made to the Trinidad and Tobago Stock Exchange to list the 124,882,568 New Shares being offered.
However, this statement is not to be construed as a guarantee that the shares so offered will be listed.
(A Company incorporated in the Republic of Trinidad and Tobago and continued under the
provisions of the Companies Act Chap 81:01 of the Revised Laws of the Republic of Trinidad
and Tobago)
Information Memorandum
For a non-renounceable pro rata Rights Issue of 124,882,568 New Shares at an issue price
of $2.90 per New Share on the basis of one (1) New Share for every two (2) Existing Shares
held at the Record Date of the offer
Lead Broker: West Indies Stockbrokers Limited
P.O. Box 259
St. Clair Place
8 Sweet Briar Road,
Port of Spain, Trinidad and Tobago W.I.
Important Notice
The Trinidad and Tobago Securities and Exchange Commission has not in any way evaluated the
merits of the securities offered hereunder and any representation to the contrary is an offence.
This Information Memorandum is an important and valuable document that requires the immediate
attention of shareholders. Shareholders shall read this memorandum carefully and retain it for future
reference. If any shareholder is in doubt as to its contents, or the action that shall be taken such
shareholder shall immediately consult with his/her stockbroker or other professional adviser.
An application has been made to the Trinidad and Tobago Stock Exchange to
list the 124,882,568 New Shares being offered. However, this statement is not to be construed as a
guarantee that the shares so offered will be listed.
24 February 2015
TRINIDAD CEMENT LIMITED
DISCLAIMER
THE RIGHTS ISSUE DESCRIBED IN THIS INFORMATION MEMORANDUM IS NOT BEING MADE
OR OFFERED TO SHAREHOLDERS IN ANY OF THE EXCLUDED JURISDICTIONS.
Neither this document nor the Provisional Letter of Allotment constitutes, or will constitute, or forms part of any
offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, New Shares to any
shareholder with a registered address in, or who is resident or located in any of the Excluded Jurisdictions or to any
person in any jurisdiction in which such offer or solicitation is unlawful.
None of the New Shares have been or will be registered under any securities laws of any other jurisdiction or any of
the Excluded Jurisdiction, and may not be offered, sold, resold, taken up, exercised, renounced, transferred or
delivered, directly or indirectly, within the Excluded Jurisdictions.
The distribution of this document and/or Provisional Letter of Allotment into any jurisdiction other than Trinidad
and Tobago may be restricted by law and therefore persons into whose possession this document and/or
accompanying documents comes should inform themselves about and observe such restrictions. Any failure to
comply with such restrictions may constitute a violation of the securities laws of such jurisdictions.
Persons who have a registered address in, or are otherwise resident or located in any country other than Trinidad and
Tobago and any persons (including without limitation, nominees, custodians and trustees) who have a contractual or
other legal obligation to forward this document or a Provisional Letter of Allotment to a jurisdiction outside
Trinidad and Tobago should read Section 4.8 below.
Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of
any information contained in this document for any purpose other than considering an investment in the Rights Issue
is prohibited. By accepting delivery of this document, each Eligible Shareholder agrees to the foregoing.
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GLOSSARY
The definitions set out below apply throughout this document unless the context requires otherwise.
ACCL
Arawak Cement Company Limited
ACFE
Association of Certified Fraud Examiners
Board
Board of Directors of the Company
BSE
Barbados Stock Exchange
Capex
Capital Expenditure
CARICOM
The Caribbean Community
CCCL
Caribbean Cement Company Limited
Closing Date and Time
The date and time at which the Offer closes, being 4:00 pm on 31 March 2015, which
may be extended by the Directors
Direct Associate
Beneficial ownership of a shareholding effectively held by an officer or Director but
registered in the name of a person or entity other than that of the officer or Director
Director(s)
The director(s) of the Board
Dollars or $
Trinidad and Tobago Dollars unless otherwise stated
ECSE
Eastern Caribbean Securities Exchange
Eligible Shareholder
A shareholder of TCL on the Record Date resident in Trinidad and Tobago
Entitlement
The number of New Shares an Eligible Shareholder is entitled to under the Offer
ESOP
The Employee Share Ownership Plan of the Company
EVA
The Economic Value Added incentive plan of the Company
Ex-Rights Date
The date on which the shares of TCL are trading but no longer have rights attached
because such rights have either expired, been transferred to another investor or been
exercised
Excluded Jurisdictions
All jurisdictions except Trinidad and Tobago
Existing Shares
The shares of the Company recorded on the share register of the Company and in issue on
the Record Date
FCCA
Fellow of the Association of Chartered Certified Accountants
GASCI
Guyana Association of Securities Companies and Intermediaries Inc.
GDP
Gross Domestic Product
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GLOSSARY
ICATT
Institute of Chartered Accountants of Trinidad and Tobago
Indirect Associate
Inferred control or direction of shareholding held in the name of a person or entity
connected to an officer or Director of the Company
JGQ
Jamaica Gypsum and Quarries Limited
JSE
Jamaica Stock Exchange
M
Million
M3
Cubic metres
MOU
Memorandum of Understanding
New Share
A share offered and issued by TCL, the terms and conditions of which are set out under
Section (4) of this Information Memorandum
Opening Date and Time
The date and time at which the Offer opens, being 9:00 am on 10 March 2015
Override Agreement
The restructured loan agreement between TCL and its creditors dated 10 May 2012
Overseas Shareholders
Shareholders with a registered address in, or who are resident or otherwise located in a
jurisdiction other than Trinidad and Tobago
OWTU
Oilfield Workers Trade Union
Provisional Letter
of Allotment
The non-renounceable provisional letter of allotment in respect of the New Shares
Record Date
9 March 2015
Rights Issue or Offer
The issue or offer by TCL of 124,882,568 New Shares at an offer price of $2.90 per New
Share on the basis of one (1) New Share for every two (2) Existing Shares held at the
Record Date
RML
Readymix West Indies Limited
SA
Securities Act, 2012 of Trinidad and Tobago
SC
Steering Committee
Subscription Agreement
The Subscription agreement entered into between TCL and Sierra Trading on the 9
February 2015
Subsidiaries
Companies controlled by TCL being ACCL, CCCL, TGI, TPL, TPM, TTL, RML, JGQ,
Rockfort Mineral Bath Complex Limited and Caribbean Gypsum Company Limited
TCL or the Company
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GLOSSARY
TCL Group or the
Group
TCL and its Subsidiaries
TGI
TCL Guyana Inc
The Offer Price
$2.90 per New Share
TPL
TCL Packaging Limited
TPM
TCL Ponsa Manufacturing Limited
TTCD
Trinidad and Tobago Central Depository
TTL
Trinidad Trading Limited
TTSE
The Trinidad and Tobago Stock Exchange Limited
TTSEC
The Trinidad and Tobago Securities and Exchange Commission
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Vision Statement
We are a world class Group of Companies, committed to leadership in the regional business community and
progressive partnering with all our stakeholders through:
• A focus on customer satisfaction with quality products and services;
• Superior financial performance and rate of return to our shareholders;
• Growth through diversification and expansion in our core competency and through nurturing strategic alliances;
• The continuous empowerment of our family of employees participating in a network of mutual support.
Mission Statement
To be a world class Group of Companies providing quality products and services to our customers and generating a
superior rate of return to our shareholders through the optimisation of our human, technological and natural resources.
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TABLE OF CONTENTS
LETTER FROM THE CHAIRMAN ............................................................................................................ 9
TRINIDAD CEMENT LIMITED ............................................................................................................... 10
SECTION 1: KEY INFORMATION .......................................................................................................... 10
1.1
GENERAL INFORMATION ...................................................................................................... 10
1.2
THE OFFER AND USE OF PROCEEDS .................................................................................. 11
1.3
TIMETABLE ............................................................................................................................... 12
1.4
SHARE CAPITAL ...................................................................................................................... 13
1.5
EXCHANGES ............................................................................................................................. 13
SECTION 2: CORPORATE DIRECTORY ............................................................................................... 14
SECTION 3: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEE RELATIONS ................... 18
3.1
DIRECTORS ................................................................................................................................ 18
3.2
SENIOR MANAGEMENT .......................................................................................................... 21
3.3 COMPENSATION ....................................................................................................................... 23
3.4
CORPORATE GOVERNANCE .................................................................................................. 24
3.5.
EMPLOYEES ............................................................................................................................... 26
3.6 DIRECTORS AND SENIOR MANAGEMENT’S SHARE OWNERSHIP ............................... 27
SECTION 4: DETAILS OF THE OFFER .................................................................................................. 29
4.1
THE OFFER ................................................................................................................................. 29
4.2
USE OF PROCEEDS AND EFFECT OF THE OFFER ON THE COMPANY ......................... 29
4.3
ACCEPTANCE OF YOUR ENTITLEMENT ............................................................................. 30
4.4
OPTIONS AVAILABLE .............................................................................................................. 31
4.5
METHOD OF PAYMENT ........................................................................................................... 31
4.6
RIGHTS ATTACHING TO THE SHARES ................................................................................ 32
4.7
DIVIDEND POLICY.................................................................................................................... 32
4.8
OVERSEAS SHAREHOLDERS ................................................................................................. 32
4.9
VALIDITY AND REJECTION OF SUBSCRIPTIONS OF NEW SHARES ............................. 32
4.10
GOVERNING LAW ..................................................................................................................... 33
4.11
JURISDICTION ........................................................................................................................... 33
4.12
POSTING ...................................................................................................................................... 33
SECTION 5: TCL COMPANY HISTORY AND PROFILE ..................................................................... 34
5.1
HISTORY AND DEVELOPMENT ............................................................................................. 34
5.2
BUSINESS OVERVIEW ............................................................................................................. 37
SECTION 6: FIVE YEAR SUMMARY FINANCIALS ............................................................................ 40
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6.1
INDEPENDENT AUDITOR’S REPORT ON THE FIVE YEAR SUMMARY
CONSOLIDATED FINANCIAL STATEMENTS ...................................................................... 40
6.2
FIVE YEAR SUMMARY CONSOLIDATED FINANCIAL STATEMENTS TO 31
DECEMBER 2014 ........................................................................................................................ 42
SECTION 7: THE RESTRUCTURING PLAN.......................................................................................... 49
7.1
THE RESTRUCTURING PLAN OVERVIEW ........................................................................... 49
7.2
ACCOUNTANT’S REPORT ON THE CONSOLIDATED PROFORMA STATEMENT OF
FINANCIAL POSITION.............................................................................................................. 51
7.3
STATEMENT OF PROFORMA FINANCIAL POSITION AS AT 1 APRIL 2015 ................... 52
SECTION 8: RISK FACTORS ................................................................................................................... 54
8.1
GENERAL INVESTMENT RISKS ............................................................................................. 54
8.2
SPECIFIC INVESTMENT RISKS .............................................................................................. 55
SECTION 9: OTHER INFORMATION..................................................................................................... 61
9.1
SHAREHOLDING OF MAJOR SHAREHOLDERS ................................................................ 61
9.2
RELATED PARTY TRANSACTIONS ..................................................................................... 61
9.3
MATERIAL LITIGATION/ CLAIMS ....................................................................................... 61
9.4
INTERESTS OF EXPERTS AND COUNSEL .......................................................................... 63
9.5
LICENCES AND REGULATORY CONSENTS ...................................................................... 63
SECTION 10: CONSENTS ........................................................................................................................ 64
SECTION 11: DOCUMENTS AVAILABLE FOR INSPECTION ........................................................... 66
APPENDICES
APPENDIX 1: PROVISIONAL LETTER OF ALLOTMENT
APPENDIX 2: FORM OF ACCEPTANCE – FORM A
APPENDIX 3: SOURCE OF FUNDS DECLARATION
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LETTER FROM THE CHAIRMAN
Dear Shareholder
On behalf of the Directors, I am pleased to invite you to participate in this Rights Issue. This Rights Issue provides
you with the opportunity to maintain your equity interest in TCL and to participate in the continued growth of the
Company.
As set out in this Information Memorandum, under the Rights Issue the Company is offering up to 124,882,568 New
Shares at an issue price of $2.90 per share to all Eligible Shareholders, on the basis that all Eligible Shareholders are
invited to apply for one (1) fully paid ordinary share in the Company for every two (2) fully paid ordinary shares in
the Company held at the Record Date. The rights of the New Shares are non-renounceable.
The amount that the Company expects to raise under this Rights Issue is $362,159,447.20 (before costs).
The money raised under this Rights Issue will be used to:
a)
b)
c)
d)
pay restructuring and transaction expenses;
replenish working capital;
service debt; and
invest in capital expenditure.
The Board’s key objective is to ensure that TCL has the appropriate capital structure and the ability to finance the
Company’s necessary capital expenditure and optimisation projects as the Company seeks to return to generating
positive value for our shareholders over the long term.
I am pleased to inform you that as a shareholder of TCL, I intend to participate in and take up all of my entitlements
under the Rights Issue.
The details of the Offer are set out in this Information Memorandum and I encourage you to read the Information
Memorandum in its entirety before making your investment decision. A summary of risk factors that you should
consider is set out in Section 8.
A Provisional Letter of Allotment in respect of your Entitlement to the New Shares is enclosed with this document.
If you have sold or otherwise transferred all of your shares in TCL, please forward this document and the
Provisional Letter of Allotment at once to the purchaser or to the stockbroker, or other agent through whom the sale
or transfer was effected for transmission to the purchaser or transferee, except that, such documents should not be
sent to any jurisdiction where to do so might constitute a violation of local securities laws or regulations, including
the Excluded Jurisdictions.
If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial
advice from your stockbroker, attorney-at-law, tax advisor, accountant or other professional adviser immediately.
Finally, on behalf of the Board I thank you for your continued support in the Company and encourage you to take up
your Entitlement under the Rights Issue.
Yours faithfully
Wilfred Espinet
C h a i r m a n , T ri n i d a d C e m e n t L im i t e d
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SECTION 1: KEY INFORMATION
1.1
GENERAL INFORMATION
No person has been authorised to give any information or to make any representation other than those
contained in this Information Memorandum in connection with the Offer. If such information or
representation is given or made, the information or representations must not be relied on as having been
authorised by the Directors other than as set out in this Information Memorandum.
FORWARD-LOOKING STATEMENTS
This Information Memorandum contains forward-looking statements which are identified by words such as
‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve
risks and uncertainties.
These statements are based on an assessment of present economic and operating conditions and on a
number of assumptions regarding future events and actions that, as at the date of this Information
Memorandum, are expected to take place.
Such forward-looking statements are not guarantees of future performance and involve known and
unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the
control of our Company, the Directors and our management.
We cannot and do not give any assurance that the results, performance or achievements expressed or
implied by the forward-looking statements contained in this Information Memorandum will actually occur
and investors are cautioned not to place undue reliance on these forward-looking statements.
We have no intention to update or revise forward-looking statements, or to publish prospective financial
information in the future, regardless of whether new information, future events or any other factors affect
the information contained in the Information Memorandum, except where required by law.
These forward looking statements are subject to various risk factors that could cause our actual results to
differ materially from the results expressed or anticipated in these statements. These risk factors are set out
in Section 8 of the Information Memorandum.
GENERAL NOTICE
Nothing in this Information Memorandum is intended to constitute investment, legal, tax, accounting or
other professional advice. This Information Memorandum is for your information only. You should consult
with your professional adviser for specific advice rendered on the basis of your particular situation.
If this Information Memorandum is posted on a web site the contents of such web site will not form a part
of this Information Memorandum.
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SECTION 1: KEY INFORMATION (Continued)
1.2
THE OFFER AND USE OF PROCEEDS
1.2.1
The Offer
TCL is making a non-renounceable1, pro-rata issue offer of New Shares at an issue price of $2.90 per New
Share to Eligible Shareholders on the basis of one (1) New Share for every two (2) Existing Shares held on
the Record Date2. The fact that the Rights Issue is non-renounceable means that Eligible Shareholders who
do not take up their Entitlement will not be able to transfer or receive value for those Entitlements and their
equity interest in the Company will be diluted.
As at the Record Date, the Company has in issue 249,765,136 Existing Shares.
Should all the Entitlements be taken up under the Offer, TCL expects to:
1.2.2
�
issue 124,882,568 New Shares;
�
raise TT$362,159,447.20 (before costs).
The Offer Price
In determining the Offer Price of the New Shares, the Board considered a number of factors including:
•
The information set forth in this Information Memorandum and otherwise available to the brokers;
•
The prospects for the industry in which the Group competes;
•
The overall economic prospects of Trinidad and Tobago, Jamaica, Barbados and Guyana, being the
principal regions the Group operates;
•
The assessment of TCL’s management, and in particular the management support to be provided by
CEMEX, S.A. de C.V.;
•
The strength of a re-capitalised TCL Group post restructuring;
•
The recent market prices of TCL (Refer to Figure 1 below);
•
The general condition of the securities markets and the offering market in particular, at the time of the
offering; and
•
Other factors deemed relevant by the Board.
Non-renounceable means not transferable. The rights cannot be traded or sold.
)
*
The Record Date is 9 March 2015
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1.2.3
Purpose of the Offer and Use of Proceeds
The Company estimates that the net proceeds from this Rights Issue will be approximately
$354,365,776.20 after deducting the Company’s estimated transaction expenses and restructuring fees.
The Company intends to use the gross proceeds from the Offer in the following priority:
i.
Restructuring and transaction expenses
ii.
Replenishment of working capital (settlement of long outstanding payable balances including
amounts due to employees)
iii.
Debt Service3 and
iv.
Invest in capex.
The allocation of the gross proceeds of the Offer is shown in the following table.
Restructuring and transaction expenses
Working Capital
Debt Service3
Capex investments
Gross Proceeds of the Offer
1.3
$
7,793,671.00
150,000,000.00
63,565,776.20
140,800,000.00
362,159,447.20
TIMETABLE
The following key dates with regards to the distribution should be noted:
Activity
Ex-Rights Date
Time /Date
5 February 2015
Record Date for Entitlement to participate in the Rights Issue
9 March 2015
Opening Date and Time of the Offer
9:00 am, 10 March 2015
Rights Issue Offer Document and Entitlement and Acceptance Form
dispatched to Shareholders
10 March 2015
Latest time and date for acceptance and payment in Full
4:00 pm, 31 March 2015
Closing Date and Time of the Offer
4:00 pm, 31 March 2015
Issue of New Shares under the Rights Issue entered into holders’ security
holdings
Commencement date for dealings in New Shares
7 April 2015
9 April 2015
The Offer will open on 10 March 2015 at 9:00 am and will close at 4:00 pm on 31 March 2015 or such later
date or time as may be decided in the discretion of the Directors, but in any event no later than 1 year and
20 days after the date of the receipt for the Information Memorandum in keeping with section 83(4) of the
SA.
3
Outstanding borrowings under the Override Agreement bear interest at a weighted average effective interest rate of 11.9% as of
31 December 2014 and mature in 2018.
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The above dates (other than the Record Date) are indicative and may be changed without notice. The
Directors reserve the right to amend this indicative timetable at any time (subject to the listing rules of the
TTSE) and to extend the Closing Date or to cancel the Rights Issue without notice. If any of the times
and/or dates change, the revised times and/or dates will be notified to the TTSEC and the TTSE and the
Company will make appropriate announcements in two (2) daily newspapers in Trinidad and Tobago.
The other material attributes and characteristics of the Offer are provided in Section 4.
1.4
SHARE CAPITAL
1.4.1
Authorised Share Capital
TCL is authorized to issue an unlimited number of ordinary and preference shares of no par value.
1.4.2
Issued and fully paid Share Capital
As at 31 December 2014, the issued and fully paid share capital of TCL stood at TT$466,206,048.69
comprising 249,765,136 ordinary shares of no par value. As at that date, there were no preference shares in
issue.
There have been no changes in the issued share capital of the Company within the past three (3) financial
years ended 31 December 2014.
The ESOP
The object of the Plan is to provide, at the discretion of the Board, for a profit sharing bonus to be paid to
eligible employees in the form of ordinary shares of the Company. The scheme is operated through
Trustees, who receive the bonus payments from the Company, apply for take up of shares, and arrange for
shares to be registered in the names of the employees who become entitled under the Plan. The Trustees
may also use monies advanced by the Company to make loans to employees who qualify under the Plan in
order to enable such employees to purchase fully paid shares in the Company. As of 31 December 2014,
there were 7.96M shares in the ESOP (3.75M unallocated and 4.21M allocated shares).
Also refer to sections 4.1 and 7.1 for details on the amendments made to the Company’s Articles of
Continuance and Bye-Laws.
1.4.3
Material Contracts
There are no material contracts since the last audited financial statement which will have an impact on the
financial condition of the Company.
1.5
EXCHANGES
TCL is listed on the TTSE under the ticker symbol “TCL” and is cross-listed on the JSE, BSE, GASCI and
the ECSE.
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SECTION 2: CORPORATE DIRECTORY
BOARD OF DIRECTORS AND SENIOR OFFICERS
TCL’s current Board and Senior Management team are listed as follows:
Board of Directors
Name
Position
Mr. Wilfred Espinet
Chairman
Mr. Francisco Aguilera Mendoza
Deputy Chairman
Mr. Alejandro A. Ramirez Cantu
Executive Director/ Chief Executive Officer (Acting)
Mr. Jean Michel Allard
Non-Executive Director
Ms. Alison Lewis
Mr. Christopher Dehring
Mr. Michael Glenn Hamel-Smith
Mr. Carlos A. Palero Castro
Mr. Wayne Yip Choy
Mr. Nigel Edwards
COMPANY SECRETARY
REGISTERED OFFICE
Southern Main Road,
Claxton Bay, Trinidad & Tobago
Tel: (868) 659-2381
Fax: (868) 659-0818
Website: www.tclgroup.com
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SECTION 2: CORPORATE DIRECTORY (Continued)
ATTORNEYS TO THE RIGHTS ISSUE
Johnson, Camacho & Singh
Attorneys at Law
First Floor, Briar Place
10 Sweet Briar Road
St. Clair, Port of Spain
Trinidad & Tobago, W.I.
Tel: (868) 622-8959
Fax: (868) 622-2671
Website: www.jcscaribbeanlaw.com
REGISTRAR
Trinidad and Tobago Central Depository Limited
10th Floor, Nicholas Tower
63-65 Independence Square
Port of Spain
Tel: (868) 627-1674
OTHER ADVISORS TO THE ISSUE:
Independent Auditor:
Ernst & Young
5/7 Sweet Briar Road
St. Clair
Tel: (868) 628 1105
Fax: (868) 622 1153
Website: www.ey.com
Corporate Finance Consultant/
Reporting Accountant:
PricewaterhouseCoopers Advisory Services Limited
11-13 Victoria Avenue
Port of Spain
Tel: (868) 299 0700
Fax: (868) 623 6025
Website: www.pwc.com
Bankers to the Issue:
Republic Bank Limited
High Street
San Fernando
Website: https://republictt.com
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OTHER ADVISORS TO THE ISSUE (Continued):
Lead Stockbroker:
West Indies Stockbrokers Limited
St. Clair Place
8 Sweet Briar Road
Port of Spain
Tel: (868) 628 -9473
Fax: (868) 622 -5002
Website: www.wisett.com
Authorised Brokers:
AIC Securities Limited
Furness Court, No. 1
Richmond Street
Port of Spain
Tel: (868) 624-0995
Fax: (868) 623-2411
Website: www.aic.tt
Bourse Brokers Limited
96 Maraval Road
Port of Spain
Tel: (868) 628-9100
Fax: (868) 622-1603
Website: www.bourseinvestment.com
Caribbean Stockbrokers
Limited
2nd Floor
67 Independence Square
Port of Spain
Trinidad & Tobago, W.I
Tel: (868) 624-4415, (868) 624-8178
Fax: (868) 625-9258
Website: [email protected]
First Citizens Investment
Services Limited
17 Wainwright Street
St. Clair
Port of Spain
Tel: (868) 622-3247
Fax: (868) 627-5496
Website: www.firstcitizenstt.com
Republic Securities Limited
2nd Floor, Promenade Centre
72 Independence Square
Port of Spain
Tel: (868) 623-0435
Fax: (868) 623-0441
Website: www. rsltt.com
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OTHER ADVISORS TO THE ISSUE (Continued):
Authorised Brokers (Continued):
Scotia Investments
Trinidad and Tobago Limited
4th Floor Scotia Centre
56-58 Richmond Street
Port of Spain
Tel: (868) 625-3566
Fax: (868) 625-4405
Website: www.scotiabank.com/tt
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SECTION 3: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEE RELATIONS
3.1
DIRECTORS
Mr. Wilfred Espinet – Chairman
Mr. Wilfred Espinet was appointed to the Board in August 2014. He is a businessman with considerable
international experience in Manufacturing, Shipping and Retail industries in several countries. He is a former
Director of Associated Brands Industries Limited; Managing Director of Consolidated Biscuits Ltd and Chocolate
Products Ltd in Malta and President Director General of Cheval Blanc S.A. in France. He is a Past President of the
Trinidad and Tobago Manufacturers’ Association.
He is also the Chairman of Aeromarine International Logistics Company, which has operations in North America,
Central America and the Caribbean and Mayfair, a Cosmetic Retailer with outlets throughout the Caribbean.
Mr. Alejandro A. Ramirez Cantu – Executive Director Nominated by CEMEX, S.A. de C.V. (“CEMEX”)
Mr. Alejandro Ramirez Cantu was appointed to the Board in October 2012 and Acting Chief Executive Officer of
Trinidad Cement Limited in August 2014. Prior to his executive appointment at TCL, he was Country Director of
CEMEX Puerto Rico where the company attained marked improvements in its operations. From October 2012,
CEMEX business units in Peru and Argentina also reported to him.
Mr. Ramirez Cantu joined CEMEX in July 2000 and has held positions in various areas including Strategic Planning
Director and Projects Director at CEMEX Central, Planning Vice President of the Philippines and Asia, Country
Manager (Thailand), Vice President of Planning (Venezuela), Vice President of Strategic Projects (South America
and the Caribbean) and Director of Corporate Affairs (Americas).
Mr. Ramirez Cantu has extensive experience in the management of business units as well as development and
implementation of operating and corporate strategies. He holds an MBA with a Major in Finance from the Wharton
School of the University of Pennsylvania and a BSc. in Industrial and Systems Engineering from the Monterrey
Institute of Technology, Mexico.
Mr. Jean Michel Allard – Non Executive Director (Nominated by the Steering Committee of Lenders)
Mr. Jean Michel Allard was appointed to the Board in March 2012. He is an Independent Expert in the cement
industry and a Senior Advisor to the IFC (World Bank). Mr. Allard gained extensive experience during his 42 year
tenure with the Vicat Group, an international cement organization. He served as the Deputy Chief Executive Officer
for 22 years and as a member of the Board during the period 1983 to 2009. Prior to these appointments, he held
several managerial positions within the company. Mr. Allard’s other ancillary assignments included membership on
the board of directors of Syndicat Français de l’Industrie Cimentière and Chairman of the National Commission on
Safety for the French Cement Profession.
Mr. Wayne Yip Choy – Non Executive Director (Nominated by the Steering Committee of Lenders)
Mr. Wayne Yip Choy was appointed to the Board in November 2013. He is a Retired Businessman with over 37
years’ experience. He began his career in 1976 as Managing Director of a company called Sweetheart Cakes Ltd.
which was subsequently renamed Kiss Baking Company Ltd. He spent a total of 28 years at that company. Mr. Yip
Choy also served as the Managing Director of Caribbean Development Company Limited (makers of Carib and Stag
alcoholic beverages) and Angostura Holdings Limited. He was also a Past President of the Trinidad and Tobago
Manufacturers’ Association in 1995.
18 | P a g e
SECTION 3: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEE RELATIONS (Continued)
Ms. Alison Lewis – Non Executive Director
Ms. Alison Lewis was appointed to the Board in August 2014. She is a former Public Servant who served for over
twenty-nine years in the Ministry of Finance and rose to the position of Permanent Secretary of that Ministry, a
position that she held for 11 years. She has served as a member of a number of boards of directors including the
boards of the Central Bank of Trinidad and Tobago, the TTSEC, the Trinidad and Tobago Unit Trust Corporation
and the Heritage and Stabilization Fund. Ms. Lewis has recently been appointed to the board of Republic Bank Ltd.
During the period 2001 to 2003 she served as advisor to the Executive Director at the World Bank in Washington
DC returning home in 2003 shortly before being appointed Permanent Secretary.
Ms. Lewis holds a BA. in Economics and Management from the UWI, St. Augustine and became a distinguished
awardee on the occasion of the UWI Alumni’s 25th anniversary.
Mr. Christopher Dehring – Non Executive Director
Mr. Christopher Dehring was appointed to the Board in August 2014. He is the Chairman of LIME Jamaica and a
member of the senior executive team of Cable & Wireless Communications PLC. He also holds directorships in The
Bahamas Telecommunications Company, Cable and Wireless Barbados, Telecommunications Services of Trinidad
and Tobago, Caribbean Cement Company Ltd. and KLE Group Ltd. Prior to Cable and Wireless Communications
PLC, he was the CEO of the ICC Cricket World Cup 2007, staging the world’s 3rd largest global sporting event
across 9 Caribbean countries and involving 9,000 persons.
In 2002, Mr. Dehring conceptualized and launched Sportsmax - the Caribbean’s first sports television channel,
broadcast in 26 countries and sold recently to a major telecommunications company. He was recently appointed
Chairman of Jamaica Sports with a mandate to build on the success of the Jamaican sports brand and expand that
sub-sector of the country’s tourism industry. Mr. Dehring was also the founder and former President & CEO of
Dehring Bunting & Golding, Jamaica’s first investment bank, listed on the Jamaica and Trinidad & Tobago stock
exchanges and sold to Scotiabank in 2006.
He is a graduate of West Virginia Wesleyan College where he attained a BSc. in marketing and economics.
Mr. Michael Glenn Hamel-Smith – Non Executive Director
Mr. Glenn Hamel-Smith was appointed to the Board in August 2014. He is a partner and the Head of the Banking &
Finance Practice Group at M. Hamel-Smith & Co. and has been practicing law for over sixteen years. He is
admitted to practice both in the State of Florida and in Trinidad and Tobago. He began his legal career in 1998 in the
International and Corporate Departments of one of the largest international law firms headquartered in Miami before
joining M. Hamel-Smith & Co., in 2002.
Mr. Hamel-Smith obtained his Legal Education Certificate from Hugh Wooding Law School and his Juris Doctor
degree from the University of Miami, School of Law as a Deans’ Honor Scholar. He also holds a Bachelors of
Business Administration degree in International Business and Management Information Systems from Florida
International University where he graduated as a Faculty Scholar at the top of his class. Mr. Hamel-Smith’s legal
practice focuses on bank finance and regulation, secured and unsecured lending, project finance, mergers and
acquisitions, securities advisory matters and capital markets transactions.
Mr. Hamel-Smith currently serves as a Director and Vice President of the American Chamber of Commerce of
Trinidad & Tobago, having previously served as Chair of its Legislative Committee for several years. He is also a
Regional Board Advisory Member for the Association of Caribbean Corporate Counsel.
19 | P a g e
Mr. Nigel Edwards – Non Executive Director (Nominated by the Trinidad and Tobago Unit Trust
Corporation)
Mr. Nigel Edwards was appointed to the Board in August 2014. He is the Vice President – Finance at the Trinidad
and Tobago Unit Trust Corporation. Mr. Edwards began his career at the Ministry of Finance in 1993 where he
worked on several areas of government policy in relation to financial services. In his early career, he worked on
originating global equity transactions from emerging markets for an international merchant bank in London. He later
spent over 15 years working in various areas of the financial services sector of the ANSA McAL Group of
companies and has worked in the areas of investment banking, corporate finance, structured lending, investment
management as well as accounting and finance before moving on to be the Chief Executive of the ANSA McAL
Group’s life insurance subsidiary. He has been involved in several advisory mandates for mergers and acquisitions,
corporate restructuring and equity issuance.
Mr. Edwards graduated from the UWI, St. Augustine, with a B.Sc. degree in Management Studies and subsequently
attained an M.Sc. in Finance from the London Business School.
Mr. Francisco Aguilera Mendoza – Non Executive Director (Nominated by CEMEX)
Mr. Francisco Aguilera Mendoza was appointed to the Board in August 2014. He is the Vice President for Trading
Americas and Group Shipping for CEMEX. Mr. Aguilera Mendoza was appointed to the position in August 2011
and is responsible for the trading of cement and clinker for CEMEX in the Americas, including the Caribbean
Region. He also oversees all the shipping activities for the company.
Mr. Aguilera Mendoza joined CEMEX in June 1996, and has held positions in various areas throughout CEMEX’s
US operations including: Logistics Manager, Sales Administration Director, Aggregate Operations VP, and VP &
General Manager for the Concrete Pipe Division. Prior to his current role, he was VP of Trading for Europe, Middle
East, Africa and Asia, based in Madrid, Spain. He has extensive experience in the building materials industry,
especially in fields such as General Management, Logistics Operations, International Commerce and Post merger
integrations.
He holds an MBA with a Major in Operations from the Kellogg Graduate School of Management of Northwestern
University, and a BSc in Mechanical and Industrial Engineering from the Monterrey Institute of Technology,
Mexico.
Mr. Carlos A. Palero Castro – Non Executive Director (Nominated by CEMEX)
Mr. Carlos A. Palero Castro was appointed to the Board in August 2014. He is CEMEX’s Cement Operations
Director for Panama and Cartagena. Within this role, he is responsible for cement production for Panama and
Cartagena and has directed the start-up of a complete pyro-processing line at Panama and designed CEMEX’s
cement scheme for participation in the Panama Canal Project Expansion.
Mr. Palero Castro joined CEMEX in 1999 and has held positions in various areas including: Process Manager,
Quality Manager and Plant Director in several plants in Mexico. In addition, Mr. Palero Castro has participated in
multiple projects for CEMEX, including various due diligence processes in South America and efficiency increasing
efforts in the region.
He holds an MBA from the Monterrey Institute of Technology, Mexico and a BSc in Electromechanical Engineering
from the Panamerican University, Mexico.
20 | P a g e
3.2
SENIOR MANAGEMENT
Andres Peña, Strategy Implementation Manager - TCL
Mr. Peña joined the Company in November 2013 in the position of Strategy Implementation Manager. Prior to
joining the Company, he served as Regional and Export Manager at Corpacero, a leading steel company in
Colombia, from October 2011 to 2013. Mr. Peña has over seventeen years’ experience in sales and business
development, eleven of which were spent in the cement industry.
Anthony Haynes, General Manager - CCCL
Mr. Anthony Haynes joined the Company in April 1999 and was appointed General Manager of CCCL Jamaica in
January 2002. Prior to this, he held the post of General Manager at TCL. Mr. Haynes possesses extensive experience
in the manufacturing and energy industries.
Derrick Isaac, General Manager - ACCL
Mr. Isaac joined the Company in July 1995 and has held managerial positions at Caribbean Cement Company
Limited, Jamaica and Trinidad Cement Limited, Trinidad. He is a Fellow of the Association of Chartered Certified
Accountants (FCCA) and a member of the Institute of Chartered Accountants of Trinidad and Tobago (ICATT). He
is also an associate member of the Association of Certified Fraud Examiners (ACFE). Effective 1 March 2015, Mr.
Isaac will assume the position of General Manager of TPL and TPM.
Egwin Daniel, General Manager - International Business and Marketing
Mr. Daniel joined the Company in October 2006. He has extensive international marketing and financial experience,
having worked in these fields in Canada, USA and throughout the Caribbean for nineteen years, seven of which
were spent abroad in the French and Spanish Caribbean.
Jinda Maharaj, Manufacturing Development Manager and Acting General Manger – TCL
Mr. Maharaj joined the Company in May 1989 and was appointed Manufacturing Development Manager in May
2012. He was formerly TCL’s Energy Optimization Manager, a position he held from October 2010. Mr. Maharaj
possesses a wealth of knowledge and experience, having been with the Company for just about twenty five years.
He has held various positions throughout the Company, including Engineering Services Manager, Materials
Manager, Production Manager, Operations Manager (all at TCL) as well as General Manager and Operations
Manager at ACCL and, Operations Manager at CCCL.
Sharon Diaz, Human Resources Manager and Group Coordinator - TCL
Mrs. Diaz joined the Company in January 2015. Prior to this, Mrs. Diaz has served as an organizational leader and
innovator, for more than 15 years enhancing and streamlining divisions within esteemed national and global
companies. She has been recognized as an influential communicator and facilitator and fosters highly collaborative,
positive workplace environments. Mrs. Diaz has served both as a Human Resource Manager and Human Resource
Consultant internationally and throughout Trinidad & Tobago with specialization in leadership development, change
management, organizational development, workflow optimization and process improvement.
Kathryna Baptiste, Manager Legal/ Company Secretary TCL
Ms. Baptiste joined the Company in September 2012. She is an attorney-at-law with over eighteen years’ experience
in various facets, including corporate, commercial and employment law. Prior to joining the Company, Ms. Baptiste
was the Manager Legal/Company Secretary at Trinidad and Tobago National Petroleum Marketing Company
Limited from October 2005 to April 2010. Prior to her employment with TCL she conducted private practice in the
areas of corporate and commercial law from June 2010 to August 2012. She is a member of the Law Association of
Trinidad and Tobago.
21 | P a g e
3.2
SENIOR MANAGEMENT (Continued)
Parasram Heerah, Group Finance Manager (Ag.) – TCL
Mr. Heerah joined the Company in November 1984. He held the position of TCL Finance Manager from August
1995 and has been appointed to act as the Finance Manager of the TCL Group, effective November 2014. He has
several years of experience in public accounting, internal auditing and management. Mr. Heerah is a former member
of the Board of Governors on the Institute of Internal Auditors of Trinidad and Tobago and is also a former member
of Council of ICATT. He is a FCCA, a member of ICATT and a Certified Public Accountant.
Roger Ramdwar, Internal Auditor – TCL
Mr. Ramdwar joined the Company in April 2006 and is the Internal Auditor, responsible for overseeing the
Financial, Compliance, Operational and Information Technology Audits across the TCL Group. He has over twenty
years of combined Finance, Internal and External Audit experience, of which the last nine years have been at the
TCL Group. He is a FCCA, a Member of the Institute of Internal Auditors and a member of ICATT. Mr. Ramdwar
is also a Certified Fraud Examiner and a Certified Information Systems Auditor.
Rupert Greene, General Manager TCL Packaging Limited & TCL Ponsa Manufacturing Limited
Mr. Greene joined the Company in April 1995. In January 2014 Mr. Greene assumed the position of General
Manager of TCL Packaging Limited and TCL Ponsa Manufacturing Limited. Mr. Greene started off in ACCL as an
Accountant and was then promoted to the position of Finance Manager in July 1997, a position he held for eleven
years. He has several years of accounting experience, having held various senior positions prior to joining the TCL
Group. Effective 1 March 2015, Mr. Greene will re-assume the position of General Manager – ACCL.
Mr. Greene graduated with honors from the UWI with a Bachelor’s Degree in Accounting.
22 | P a g e
3.3
COMPENSATION
In accordance with TCL’s Bye-Laws, the Directors are entitled to receive remuneration as the Company’s
shareholders may determine in General Meeting. They are also entitled to be repaid all reasonable
travelling and other expenses properly incurred by them in the performance of their duties as directors.
Directors are entitled to a monthly fee, which is inclusive of a per diem travel allowance, meeting fee and
an entertainment allowance.
In light of the financial commitments facing the Company and the need to seek some forbearance from
creditors and shareholders alike, a resolution of the Board was passed on 18 September 2014 in which a
decision was taken to waive all fees and allowances payable to directors of the TCL Group and Subsidiary
boards until the outcome of the next annual general meeting. The following were also agreed upon:
�
Notwithstanding the above, the cost of Directors’ travel and per diem, at the recommended rates, for
attendance at TCL and subsidiary company Board meetings would be paid;
�
Existing group life and group health provisions would be continued;
�
The provision of computers and cellular phones would be discontinued, but a monthly allowance
would instead be given to each director to cover the expenses of data usage charge and cellular calls;
and
�
The overseas travel allowance would be discontinued with immediate effect.
Further to the above, effective January 2015, a decision was taken to resume the payment of Directors’ fees
from that date.
TCL’s managers receive monthly compensation and are eligible for annual bonuses. Bonuses are paid to
managers based on the Economic Value Added incentive plan of the Company, (“EVA”). The payment is
made upon the achievement of previously set targets by an independent value management consulting firm.
Management participates in this plan as part of the terms and conditions of their employment with the
Company. Managers are members of the employees’ pension plans which are managed by independent
trustees.
For the year ended 31 December 2014, the total compensation, including bonuses, for Directors and
management of the TCL Group was approximately at $42.6 M. No Director or member of the management
team will receive any compensation based on the outcome of this Rights Issue.
The present annual compensation levels of the Directors and senior management are as follows:
Key Management Compensation
Annual Range of Compensation (TT$)
Number of Directors and Senior Management
RANGE
TOTAL
CORP/TCL/TPL/TPM/RML
ACCL
CCCL
$0 TO $500K
17
10
5
2
$500 TO $1M
27
16
4
7
$1M TO $2M
7
6
1
>$2M
2
1
1
TOTAL
53
33
9
11
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3.4
CORPORATE GOVERNANCE
3.4.1
Board of Directors
The Board is responsible under law for the direction and control of the Company’s business. It has the
statutory authority and obligation to protect and enhance the assets of TCL in the interest of all
shareholders. Although Directors may be elected by the shareholders to bring special expertise or a point of
view to Board deliberations, they are not chosen to represent a particular constituency. The best interest of
TCL must be paramount at all times. The involvement and commitment of Directors is evidenced by
regular Board and committee attendance, preparation and active participation in setting goals and requiring
performance in the interest of shareholders. The duties of directors are itemized below:
Selection of key management;
Monitoring the Company’s progress and taking action where necessary;
Strategy formulation;
Approval of policies and ensuring compliance therewith;
Timely reporting of financial and other material information to shareholders ;
Ensuing compliance with all statutory and regulatory obligations; and
Annual self-evaluation.
Term
The term of office of Directors is outlined in the Company’s Bye-laws at Paragraph 4.6. In essence,
Directors are eligible to hold office for a maximum period of two (2) years however, in practice half of the
Board retires by rotation after one year of being elected at an annual meeting and the other half after two
years of being elected at an annual meeting.
Service Contracts
Directors do not have service contracts with the Company or its subsidiaries.
Board Committees
The Board currently has four (4) standing committees as depicted below:
Board of TCL
Scheduled number of meetings per year: 12
G ov ern an ce
C ommit tee
Members:
Alison Lewis
Michael Glenn
Hamel-Smith
Alejandro Ramirez
A ud it
C ommit tee
Fin an ce
C ommit tee
Hu man
R eso urce
C ommit tee
Members:
Nigel Edwards
(Chairman)
Alison Lewis
Jean Michel Allard
Members:
Alejandro Ramirez
Wayne Yip Choy
Parasram Heerah
Members:
Alison Lewis
Nigel Edwards
Christopher Dehring
Number of meetings
2014:4
Number of meetings
2014:1
Scheduled number of
meetings per year: 4
Number of meetings
2014: 0
Number of meetings
2014:7
24 | P a g e
Below are brief outlines of the terms of reference of each of the four (4) committees.
Governance Committee:
The TCL Group is committed to adhering to the principles and practices of good corporate governance. The TCL
Group recognises that a robust corporate governance system redounds to the overall benefit of the organization by
fostering better performance and by facilitating a lower risk of malfeasance as well as a lower cost of capital. Based
on the guiding principles of fairness, transparency and accountability, the Company strives to maintain a high
standard of corporate governance through the establishment of a comprehensive and efficient framework of policies,
procedures and systems and the promotion of a responsible corporate culture throughout the Group.
Audit Committee:
The Chairman of the Audit Committee is Nigel Edwards. The Audit Committee is a Subcommittee of the Board
charged with the responsibility for:
1.
2.
3.
4.
5.
6.
Appointment and ongoing assessment of the External Auditors;
Reviewing and advising the Board on the integrity of financial statements;
Oversight of the establishment, implementation and assessment of the Risk Management Function;
Ensuring that an effective system of internal controls is established and maintained;
Assessing compliance with applicable laws and regulations;
Monitoring and assessing the internal audit function.
State of Internal Controls:
The TCL Group has a robust internal controls framework, which provides reasonable assurance regarding the
achievement of the objectives. The related processes and control activities are independently assessed and monitored
on an ongoing basis, with continual improvement.
Finance Committee:
The objectives of the Board Finance Committee are two-fold:
1.
To enhance the financial strength and shareholder value of the TCL Group by providing guidance and
recommendations on issues which have a major financial impact on the TCL Group; and
2.
To enhance communication and understanding between TCL Group’s management and the Board on financial
matters.
A summary of the unofficial terms of reference of the Finance Committee follows:
1.
2.
3.
4.
5.
6.
7.
8.
Review all significant issues of a financial nature before they are presented for consideration to the Board;
Review the adequacy and sourcing of working capital for the TCL Group;
Evaluate and recommend proposals for the ongoing long term financing of the TCL Group;
Examine and/ or develop proposals for reducing the tax obligation of the TCL Group and the efficient
management of its tax affairs;
Review annual budgets and five year plans for the TCL Group before submission for approval to the Board;
Examine and/or develop solutions for problems of a financial nature arising from changes in accounting
standards, tax regulations and governmental legislation;
Develop a set of financial objectives for the TCL Group; and
Determine the appropriate capital structure for the TCL Group.
25 | P a g e
Human Resource Committee:
The members of the Human Resource Committee were appointed at a Board meeting which was held on 22 January
2015. In order to ensure excellence in TCL Group’s human capital and cultural initiatives, the Human Resource
Committee’s strategic direction and vision are aligned to the Company’s strategic plan. The following categories of
policies are administered by the Human Resource Committee:
� Talent acquisition
� Organization capacity building
� Performance management
� Executive development
� Organizational structure and design
� Employee wellness
A summary of the Terms of Reference of the Human Resources Committee follows:
1.
2.
3.
4.
3.5.
To formulate policies for the TCL Group’s Human Resource Management function and to make
recommendations to the Board for approval and adoption;
To review, approve and ensure compliance with existing administrative policies and recommend to the Board
the adoption of proposals for all senior managers and executives across the TCL Group;
To ensure that the TCL Group Human Resource function provides efficient services to all Subsidiaries utilizing
equitable, transparent and contemporary performance management measures and systems;
To act autonomously and approve on its own account specific human capital initiatives and recommendations
that fall within the overall ambit of pre-existing Board approved policies and systems.
EMPLOYEES
As of December 2014 the TCL Group employed 1,304 permanent, temporary and contract employees. The
non-management employees in Trinidad and Tobago are represented by the Oilfields Workers Trade
Union. The Collective bargaining agreements expired as follows:
Bargaining Unit
Estate Police Association
Hourly Rated, Weekly Paid and Confidential Secretaries
Junior Staff
Senior Staff
Expiration Date
31 December 2008
31 January 2012
31 July 2012
31 December 2012
TCL has engaged in negotiations to settle unpaid remuneration due to 15 employees and has agreed to a
Memorandum of Understanding (MOU) with the Union to settle same. (Refer to Section 7 for further
details).
TCL’s workforce has remained broadly consistent over the past three fiscal years as follows:
Year
2012
2013
2014
Number of
Employees
1,153
1,094
1,304
As at 31 December 2014, a total of 27 employees were employed on a temporary or contract basis. These
figures are included in the total above.
26 | P a g e
3.6
DIRECTORS AND SENIOR MANAGEMENT’S SHARE OWNERSHIP
TOTAL VOTING RIGHTS
(%)
SHAREHOLDING AS AT DECEMBER 31, 2014
NAME
ESOP
ASSOCIATE
DIRECT
INDIRECT
TOTAL
REGISTRAR
ALLOCATED
PURCHASED
DIRECT
INDIRECT
Wilfred Espinet, Chairman
-
-
-
6,361,797
495,000
2.55%
0.20%
2.75%
Alison Lewis, Director
-
-
-
-
-
-
-
-
Christopher Dehring, Director
-
-
-
-
-
-
-
-
10,730
-
-
-
9,905,572
-
3.97%
3.97%
Francisco Aguilera Mendoza, Director
-
-
-
-
-
-
-
-
Carlos Alberto Palero Castro, Director
-
-
-
-
-
-
-
-
Michael Glenn Hamel-Smith, Director
-
-
-
-
Jean Michel Allard, Director
-
-
-
-
-
-
-
-
Wayne Yip Choy, Director
-
-
-
-
-
-
-
-
Alejandro Alberto Ramirez Cantu, TCL
Group CEO (Ag.)
-
-
-
-
-
-
-
-
1,121,211
83,206
466,811
-
64,049
0.45%
0.25%
0.69%
-
3,452
53,697
-
-
-
0.02%
0.02%
156,032
16,410
721,969
-
-
0.06%
0.30%
0.36%
-
-
-
-
-
-
-
-
14,145
2,423
-
-
100,000
0.01%
0.04%
0.05%
Rupert Greene, General Manager TCL
Packaging Limited
197
7,893
-
-
-
-
-
-
Derrick Isaac, General Manager ACCL
-
7,038
16,333
-
-
-
0.01%
-
Manan Deo, General Manager
Readymix (W.I) Limited
10,226
7,947
115,179
-
-
-
0.05%
0.05%
Francis Anthony Haynes, General
Manager CCCL
10,000
5,800
17,997
-
-
-
0.01%
0.01%
Kathryna Baptiste, Manager Legal /
Company Secretary
-
-
-
-
-
-
-
-
Andres Peña, TCL Group Strategy
Implementation Manager
-
-
-
-
-
-
-
-
1,322,541
268,338
1,391,986
6,361,797
10,564,621
3.07%
4.85%
7.9%
Nigel Edwards, Director
Parasram Heerah, TCL Group Finance
Manager (Ag.)
Egwin Daniel, GM International
Business and Marketing
Jinda Maharaj, Manufacturing
Development Mgr. / GM – TCL (Ag.)
Sharon Diaz, Human Resource
Manager
Roger Ramdwar, Internal Auditor
Totals
-
27 | P a g e
Notes:
ESOP
�
�
“Allocated” - shares apportioned to employees annually and held by a Trustee in accordance with the
Company’s Policy.
“Purchased” - shares acquired on behalf of Executive Managers in lieu of cash bonus payments and held
by a Trustee in accordance with the Company’s Policy.
Associate
� “Direct Associate” – beneficial ownership of shareholding registered in the name of a person or entity
other than that of the Officer or Director.
� “Indirect Associate ” – inferred control or direction of shareholding held in the name of a person or entity
connected to the Officer or Director.
28 | P a g e
SECTION 4: DETAILS OF THE OFFER
4.1
THE OFFER
TCL is making a non-renounceable, pro-rata Rights Issue of 124,882,568 New Shares to Eligible
Shareholders. The New Shares are being offered to Eligible Shareholders by way of a Rights Issue on the
following basis and otherwise as set out herein.
The Company intends to provisionally allot to Eligible Shareholders ordinary shares of no par value for
subscription on the basis of one (1) New Share for every two (2) ordinary shares then held by them at The
Offer Price provided that fractional entitlements shall be ignored and holders of ordinary shares shall not be
entitled to fractional certificates or to payments in lieu of them.
Under the Rights Issue, TCL is seeking to raise $362,159,447.20 (before costs).
It should further be noted that on 9 February 2015, TCL’s shareholders passed a resolution authorising the
amendment of the Company’s constitutive documents to remove the restrictive covenant which limited any
one shareholder from holding more than twenty percent (20.0%) of the Company’s share capital. Also on
that date, TCL signed a subscription agreement with Sierra Trading (an affiliate of CEMEX and the holder
of 20% of TCL’s share capital), the main terms of which follow:
1.
Sierra Trading has committed to participating in the said Rights Issue to the fullest extent permitted
by its shareholding;
2.
Sierra Trading has agreed to commit additional capital (via an agreement to underwrite the raising of
capital up to a maximum of US$45M) in order to ensure that TCL meets a capitalization target
amount of at least US$50M;
3.
In consideration of the above commitments by Sierra Trading, TCL has agreed:
a)
To grant an exclusive right to Sierra Trading to subscribe and purchase any shares in the Rights
Issue, which are not taken up by Shareholders in the exercise of their preemptive rights during
the relevant period of the Rights Issue, up to such an amount that will not cause Sierra Trading’s
total shareholding in TCL to exceed 40% of TCL’s outstanding shares;
b) That if after the Rights Issue (including the exercise by Sierra Trading of the right granted above
to acquire any shares not taken up by other shareholders who elect not to fully exercise their
preemptive rights under the Rights Issue) Sierra Trading has not achieved a shareholding in
TCL of at least 35%, then subject to receiving all required approvals, including Shareholder
approval, a private placement of TCL shares will be issued in favour of Sierra Trading in an
amount that will permit Sierra Trading to achieve a shareholding of 35% of TCL’s outstanding
shares.
Fractional Entitlements
Fractional entitlements shall be ignored and holders of ordinary shares shall not be entitled to fractional
certificates or payments in lieu thereof. The number of New Shares to which you are entitled is shown on
the accompanying Provisional Letter of Allotment (Appendix 1).
4.2
USE OF PROCEEDS AND EFFECT OF THE OFFER ON THE COMPANY
The immediate financial effect of the Offer on the Company will be to increase cash reserves by up to
approximately $362,159,447.20 (before costs).
29 | P a g e
SECTION 4: DETAILS OF THE OFFER (Continued)
The Company will apply the proceeds under the Offer towards its transaction and restructuring expenses,
the retirement of long-outstanding accounts payable balances including amounts due to employees, capital
expenditure and debt service requirements. We expect that a better capitalised Company would achieve
both customer and revenue growth.
The principal effect of the Offer on the Company’s capital structure will be to increase the total number of
shares on issue to a maximum of approximately 374,647,704 shares.
The following table sets out the number of issued shares at the date of the Offer and the total number of
issued shares at the close of the Offer based on the maximum number of New Shares that may be issued
under the Offer subject to adjustments for fractional Entitlements which are ignored:
Shares
Current shares in issue
249,765,136
Maximum number of New Shares that may be issued pursuant to the Offer
124,882,568
Maximum number of issued Shares upon completion of the Offer
374,647,704
The Market in Rights
Your Rights are non-renounceable and are therefore not transferable, i.e. they may not be traded or sold.
It is important to note that your Rights are of value and failure to take up your Rights may result in
a dilution of your shareholding in the Company4. You are advised to seek professional investment
advice on your Rights, options and alternatives.
4.3
ACCEPTANCE OF YOUR ENTITLEMENT
Eligible Shareholders may accept their Entitlement in full or in part by completing and returning the Form
of Acceptance (Refer to Appendix 2) which accompanies this Information Memorandum. Instructions for
completion are set out on the accompanying Provisional Letter of Allotment. Eligible Shareholders
acceptance must not exceed the Entitlement as shown on that form.
In the event that Eligible Shareholders do not accept any of the New Shares provisionally allotted, Sierra
Trading has been granted an exclusive right to subscribe, by virtue of the Subscription Agreement for any
shares in the Rights Issue that are not taken up by Eligible Shareholders, up to an amount that, when
combined with Sierra Trading’s Existing Shares, will not exceed 40% of TCL's outstanding shares.
This exclusive right has been granted by the Board to Sierra Trading in consideration for Sierra Trading’s
demonstrable commitment and ability to provide a ‘back-stop’ or underwriting commitment for the Rights
Issue in the amount of US$ 45M.
If you have sold or otherwise transferred all of your shares in TCL, please forward this document, together
with the Provisional Letter of Allotment at once to the purchaser or to the stockbroker, or other agent
through whom the sale or transfer was effected for transmission to the purchaser or transferee, except that,
,
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30 | P a g e
subject to certain exceptions, such documents should not be sent to any jurisdiction where to do so might
constitute a violation of local securities laws or regulations, including the Excluded Jurisdictions.
Overseas Shareholders are not being sent this document or a Provisional Letter of Allotment.
4.4
OPTIONS AVAILABLE
The number of New Shares to which you are entitled is shown in the accompanying Provisional Letter of
Allotment. You may:
� Take up all of your Entitlement to New Shares;
� Take up part of your Entitlement and allow the balance to lapse; or
� Not take up any of your Entitlement and allow it to lapse.
Full Acceptance
If you wish to take up all of your Entitlement, please return the accompanying Provisional Letter of
Allotment and the signed and completed Form of Acceptance in accordance with the stated instructions.
Forward these forms with a remittance for the full amount payable on acceptance, in accordance with the
instructions printed thereon, by hand to any Authorized Stockbroker so as to arrive no later than 4:00 pm on
31 March 2015.
Partial Acceptance
If you wish to take up only part of the New Shares provisionally allotted you must:
Complete the Form of Acceptance for the number of New Shares for which you want to subscribe and
forward these forms with a remittance for the full amount payable on acceptance, in accordance with the
instructions printed thereon, by hand to any Authorized Stockbroker, so as to arrive no later than 4:00 pm
on 31 March 2015.
Entitlements not taken up
If you decide to take up only part of your Entitlement or fail to meet the deadline for submission or not to
accept any of your entitlement, (as the case may be), your Entitlement will lapse to that extent by 4:00 pm
on 31 March 2015.
4.5
METHOD OF PAYMENT
All subscription payments must be in Trinidad and Tobago dollars and cheques or banker’s drafts should be
made payable to Trinidad Cement Limited no later than 4:00 pm on 31 March 2015. Cheques or banker’s
drafts will be presented for payment upon receipt.
The Directors reserve the right to make presentation of cheques to allow the Company to obtain value for
remittances at the earliest opportunity. It is a condition of the Rights Issue that cheques shall be honoured at
first presentation and the Company may elect not to treat as valid, acceptances in respect of which cheques
are not so honoured. The Company may (in its sole discretion) treat a Provisional Allotment Letter as valid
and binding on the person(s) by whom or on whose behalf it is lodged even if not completed in accordance
with the relevant instructions or not accompanied by a valid power of attorney where required.
31 | P a g e
4.6
RIGHTS ATTACHING TO THE SHARES
The New Shares issued will rank pari passu in all aspects with existing ordinary shares on issue, including
the right to all future dividends and other distributions thereafter declared, paid or made.
4.7
DIVIDEND POLICY
The dividend policy of the TCL Group is to pay as dividends to its shareholders at an amount equal to 30%
-35% of the consolidated after tax profits of the TCL Group. The dividend payment strategy of the
subsidiaries in the TCL Group will be such to ensure consistency with this policy.
The payment of a dividend is further constrained by the Override Agreement between TCL and its lenders
which only provides for the payment of dividends in certain circumstances, but in any event, only if the
Consolidated Leverage Ratio5 is less than or equal to 3.0:1.0. Whereby, Reference Period means a period of
four (4) consecutive financial quarters, ending on either 31 March, 30 June, 30 September or 31 December.
4.8
OVERSEAS SHAREHOLDERS
The comments in this Section 4.8 are intended as a general guide only and any Eligible Shareholder who is
in doubt as to his or her position should consult his or her professional adviser without delay.
Receipt of this document and accompanying Provisional Letter of Allotment will not constitute an offer in
the Excluded Jurisdictions, and this Information Memorandum and the accompanying Provisional Letter of
Allotment must be treated as sent for information only and should not be copied or redistributed.
The Company reserves the right, but shall not be obliged, to treat as invalid and will not be bound to allot
or issue any New Shares in respect of any acceptance or purported acceptance of the New Shares which:
(a) Appears to the Company or its agents to have been executed, effected or despatched from any
Excluded Jurisdiction; or
(b) Appears to the Company or its agents to have been executed, effected or despatched in a manner which
may involve a breach of the securities laws or regulations of any jurisdiction of which the Company
believes or its agents believe would violate applicable legal or regulatory requirements.
4.9
VALIDITY AND REJECTION OF SUBSCRIPTIONS OF NEW SHARES
The Company reserves the absolute right to accept any subscription, application form or Provisional Letter
of Allotment as valid and binding even if not in the proper form, not completed in accordance with the
relevant instructions or not accompanied by a valid power of attorney or by evidence of satisfactory
authority where required.
The Company reserves the absolute right to reject any subscription, application, form of Provisional Letter
of Allotment if not in the proper form, not completed in accordance with the relevant instructions or not
-
Consolidated Leverage Ratio means, for any Reference Period, the ratio of
(a) Consolidated Debt as of the last date of such Reference Period to (b)Consolidated EBITDA for such Reference Period
32 | P a g e
accompanied by a valid power of attorney or by evidence of satisfactory authority where required, or if the
acceptance thereof or the allotment would in the opinion of the Company be unlawful.
If your subscription or Form of Acceptance is not accepted in whole, or is accepted in part only, the
application monies, or as the case may be, the balance of the amount paid on application, will be returned
without interest in the currency of subscription by returning your cheque or by crossed cheque in favour of
the person entitled thereto. All cheques will be sent by post at the risk of the person entitled thereto. In the
meantime, monies will be retained by each Authorised Broker in a separate account.
Ownership of New Shares will be in uncertificated form and the record of title of ownership will be
maintained in electronic form by the Company in the TTCD. This will be effected by 7 April 2015.
4.10
GOVERNING LAW
The terms and conditions of this Rights Issue set out in this Information Memorandum and the Provisional
Letter of Allotment and any non-contractual obligations arising out of or in relation to this Rights Issue
shall be governed by, and construed in accordance with, the laws of Trinidad and Tobago.
4.11
JURISDICTION
The courts of Trinidad and Tobago are to have jurisdiction to settle any dispute which may arise out of or
in connection with the Rights Issue, this Information Memorandum or the Provisional Letter of Allotment
(including any dispute relating to non-contractual obligations arising out of or in connection with them). In
consideration for the provisional allotment of New Shares based on each Eligible Shareholder’s Entitlement
each Eligible Shareholder irrevocably submits to the exclusive jurisdiction of the courts of Trinidad and
Tobago and waives any objection to proceedings in any such court on the ground of venue or on the ground
that proceedings have been brought in an inconvenient forum.
4.12
POSTING
All documents and cheques and bankers’ drafts posted to or by an Eligible Shareholder (or their agents, as
appropriate) will be posted at their own risk.
33 | P a g e
SECTION 5: TCL COMPANY HISTORY AND PROFILE
5.1
HISTORY AND DEVELOPMENT
5.1.1
Trinidad Cement Limited (“TCL”) was incorporated in Trinidad in 1951 and commenced operations in 1954.
Located at Southern Main Road, Claxton Bay Trinidad, the TCL Group consists of eight (8) operating companies in
Trinidad and Tobago, Barbados, Jamaica, Anguilla and Guyana.
Corporate Organisation Structure
Note: Premix and Precast Concrete Inc. was closed in 2014
The TCL Group is involved in the manufacture and sale of bulk and bagged cement, and has integrated vertically
into packaging and premixed concrete. TCL and three of its subsidiaries, TPL, TPM and RML are incorporated in
Trinidad and Tobago while ACCL is incorporated in Barbados and CCCL is incorporated in Jamaica. TCL Trading
Company Limited, a fully-owned subsidiary of TCL was incorporated in Anguilla in December 1997. Operations
began at TCL Guyana Inc. in December 2006. Diversification into packaging commenced in 1991 with a joint
venture between Dipeco of Switzerland and TCL, which resulted in the formation of TPL. The process continued in
1995 with the formation of TPM (a joint venture between Industrias Ponsa of Spain and TCL).
34 | P a g e
SECTION 5: TCL COMPANY HISTORY AND PROFILE (Continued)
5.1.2
Subsidiary Companies
o
TCL Ponsa Manufacturing Limited (TPM) was incorporated in Trinidad in 1995. Its primary activity is
the manufacture and sale of single use slings. It is also involved in the sale of jumbo bags, reusable
slings, safety harnesses and polypropylene sacks, as well as webbing for use in the furniture industry.
o
Readymix (West Indies) Limited (RML) was incorporated in Trinidad in 1961. Its primary activity is
the manufacture and sale of premixed concrete. In 1996, TCL acquired majority ownership of the
company. In 2002, RML acquired 60% shareholding in Premix and Precast Concrete Inc. in Barbados,
and in 2004, 100% of Island Concrete N.V. in St. Maarten and Island Concrete SARL in St. Martin.
The operations of the St. Maarten and St. Martin subsidiaries were discontinued in 2009 and
subsequently sold in 2011. In 2014, the Board took a decision to close Premix and Precast Concrete
Inc. RML currently operates five concrete plants in Trinidad and Tobago and is the premier supplier
of ready mixed concrete in this market. In 2014, the RML Group’s concrete sales totaled 144,426 M.
RML also operates its own quarries at Valencia, which supply all of the Company’s aggregate
requirements. The company operates in the following areas: Guanapo (head office, central dispatch
center, concrete batching plant, laboratory), Melajo, Valencia (quarry and wash plant) and operates
five (5) concrete batching plants.
o
Arawak Cement Company Limited (ACCL) was incorporated in Barbados in 1981 and was wholly
acquired by TCL in 1994. Its primary activity is the manufacture and sale of Ordinary Portland Cement
and Portland–Pozzolan Cement. Production of cement in 2014 was 220,127 tonnes. In December 1997,
the TCL Group purchased a lime plant adjacent to the ACCL plant. Its principal products are hydrated
& quick lime. Large quantities of quick lime are consumed in the steel industry, whereas hydrated lime
is the largest tonnage chemical used in the treatment of potable and industrial water supplies. Lime has
many other uses in the agricultural, glass, dairy products and chemical industries. Ultimately however,
the lime plant was mothballed in June 2010 due to the loss of some key customers, primarily Mittal.
ACCL commissioned the use of a new solid fuel supply system in 2007. Petcoke was identified as the
most economical and reliable alternative for kiln firing at ACCL after the curtailment of its Orimulsion
supply from Venezuela. The first year of operating the kiln using petcoke was 2008.
o
TCL Nevis Limited is a company incorporated and domiciled in the Island of Nevis on April 12, 1999
under the provisions of the Nevis Business Corporation Ordinance 1984 (as amended) and is a wholly
owned subsidiary of Trinidad Cement Limited. The Company is involved in the holding of investments
and in the provision of management services to related companies. The Company is the parent
company of Caribbean Cement Company Limited (CCCL), TCL Guyana Inc. and TCL Trading
Limited.
o
CCCL was incorporated in Jamaica in 1947 and was acquired by TCL (Nevis) Limited in 2008. CCCL
began commercial operations in 1952. Its primary activity is the manufacture and sale of Ordinary
Portland Cement and Portland-Pozzolan Cement. In 2008, CCCL commissioned a new pre calciner,
dry process kiln (Kiln 5), increasing the company’s clinker manufacturing capacity to 1.1 M tonnes
(the highest within the Group) and is now actively engaging in export sales of cement. One of CCCL’s
subsidiaries, Jamaica Gypsum & Quarries Limited (JGQ) is involved in the mining and sale of gypsum
and anhydrite and currently produces for internal consumption. The major assets of another subsidiary,
Caribbean Gypsum Company Limited are its gypsum/anhydrite quarry lands, which enhance the
reserve of raw material available to CCCL. Rockfort Mineral Bath Complex Limited is also a
subsidiary of CCCL. The volume of clinker exported from CCCL under the PetroCaribe Agreement to
Venezuela was 155,423 tonnes in 2014.
35 | P a g e
5.1.3
o
TCL Guyana Inc. (TGI) was incorporated in 2004 and is involved in the packaging of bulk cement for
sale on the Guyanese market. Its operations directly and tangibly benefit the Guyanese people and
economy with the creation of jobs, transfer of technology, net savings on foreign exchange outflow,
provision of a reliable cement supply to facilitate infra-structural developments, the potential for more
competitive cement pricing and the potential for downstream investments.
o
TCL Trading Limited (TTL), a wholly owned subsidiary of TCL (Nevis) Limited, was incorporated in
Anguilla in 1997. Its primary activity is trading in cement and related products. TTL is engaged in the
marketing and sale of cement to the TCL Group‘s export markets. Today, the TCL Group is the
leading producer and marketer of cement and ready-mix products in the Caribbean.
o
TCL Service Limited is a company incorporated in the Island of Nevis on July 22, 1999 under the
provisions of the Nevis Business Corporation Ordinance 1984 (as amended) and is a wholly owned
subsidiary of Trinidad Cement Limited. The Company is engaged in the provision of financial and
management services to related companies. In 2004, the Company sold its plant assets to its Parent
Company and liquidated its loan obligation. There have been no trading activities since 2004.
o
TCL Leasing Limited is a company resident and incorporated in Trinidad and Tobago on May 6, 1999
and is a wholly owned subsidiary of Trinidad Cement Limited. The Company is engaged in the
business of property ownership and leasing.
Capital expenditure
Over the last three (3) years, the Company has made a number of capex investments which are captured in
the table below.
Capex
Land & Buildings
TT$ M
2012
2013
2014
6.71
2.55
3.50
Plant &
Machinery
TT$ M
70.13
66.73
71.50
Office Furniture &
Equipment
TT$ M
1.07
4.68
2.72
Total TT$ M
77.91
73.96
77.72
During the last three (3) fiscal years, the Company has divested or closed the following subsidiary
companies and/or divisions as follows:
Year
Entity
Comments
2014
Premix and Precast
Concrete Inc.
New business
venture in Haiti
Amount written off: $0.925 M.
2014
2013
Lime Plant (a
division of ACCL)
The Company entered into a lease agreement with the
intention to commence business operations in Haiti. In
November 2014, the Company took a decision to write off
the investment in pre-incorporation expenses for business
venture in Haiti. The total amount written off was $3.12M.
There was no production at the Lime Plant in 2013, which
was fully impaired in that year. The amount written off
was $0.667M.
36 | P a g e
For the year to date period in 2015, the Company has invested in some capital expenditure items which are
shown in the table below. The method of financing used in 2015 was internal cash reserves.
CAPEX
2015
Trinidad
Jamaica
Barbados
Total
5.2
Plant &
Machinery
TT$ M
2.20
1.33
4.80
8.33
BUSINESS OVERVIEW
The Company is the sole fully-integrated manufacturer of cement in the CARICOM, with a significant
operational presence in Trinidad and Tobago, Jamaica, Barbados, Anguilla and Guyana. The Company’s
products and services are mainly used in the construction industry, which is dependent on general macroand micro-economic variables including Gross Domestic Product (GDP), employment levels, infrastructure
spending and real income.
Demand for the Company’s products and services are generally cyclical, fluctuating with the movement in
GDP throughout business cycles.
Through a process of diversification and expansion, the Company has evolved from a single cement
manufacturing operation in Trinidad into a diversified group of companies with operations throughout the
Caribbean. Its primary activity is the manufacture and sale of TCL premium Portland Pozzolan Cement,
Ordinary Portland Cement as well as Class G, High Sulphate Resisting (HSR) and Oilwell Cement. The
Company’s operations are vertically integrated with end-to-end capabilities across the full cement supply
chain, from the extraction of raw materials at its quarries to the production of ready-mixed cement and
ancillary products. The Company has been a manufacturer of cement in Trinidad since 1954, while its
Jamaica plant has been in operation since 1952. The Company’s Barbados cement plant began operations
in 1984. In addition to the manufacture and marketing of cement, the Company’s activities have grown to
include pre-mixed concrete, aggregates and packaging materials, serving markets spanning from northern
Brazil to the Bahamas.
With its history of successful projects, the Company believes it is well-positioned to capitalize on
Caribbean infrastructure spending and the resultant demand for cement. The Company believes that its
industry expertise, long-standing customer relationships and scale will enable the Company to remain a
leading producer and marketer of cement and ready-mixed products in the Caribbean.
5.2.1
Operations and Markets
Cement Manufacturing Segment
The Company owns three cement plants located in Trinidad, Jamaica and Barbados with combined output
of 1,889,143 tonnes for the 12 months ended December 31, 2014, an 80% utilization rate on capacity of
approximately 2.360M tonnes per annum. These plants produce for the domestic markets of each respective
host country as well as the export markets of the rest of the CARICOM region and other regional
territories.
37 | P a g e
o
Trinidad: The Company’s operations in Trinidad produce ordinary Portland, oilwell and sulphate
resistant cement, with an annual design capacity of approximately 900,000 tonnes of cement. The
operations also produce clinker, an intermediate product in the manufacture of cement, by two wet
process kilns that were installed in 1983 and 1996, respectively. The Company mines limestone, the
basic raw material essential for the manufacture of cement, for its Trinidad operations from lands
owned by the Company, which the Company believes will provide sufficient production supply for
over the next 50 years. The main fuel for the kilns is natural gas that is supplied under a multi-year
contract with The National Gas Company of Trinidad and Tobago Limited, which is currently being
re-negotiated.
o
Jamaica: The Company is the sole integrated manufacturer in Jamaica, operating in the country
through its subsidiary CCCL. With an annual design capacity of approximately 1.1M tonnes, pursuant
to the Company’s expected five year production plan, the Jamaican operations produce mostly
ordinary Portland cement. CCCL mines limestone on lands leased from the government of Jamaica
which the Company believes will provide sufficient production supply for the next 35 years. The
Jamaican kiln, commissioned in 2009 in connection with the Company’s modernization program,
operates using the latest dry process technology in the production of cement. The Company’s approach
to securing key inputs is to obtain energy for the kiln from coal and crude oil with coal supplies
generally secured six months in advance. Approximately 72% of CCCL’s 2014 cement production was
sold in the Jamaican market while the remainder is exported to regional markets in the form of cement
and clinker.
o
Barbados: The Company is the sole manufacturer and supplier of cement in the Barbados market,
operating in the country through its subsidiary ACCL. The Barbados operations produce mostly
ordinary Portland cement and the plant has an annual design capacity of approximately 360,000
tonnes. ACCL’s only cement kiln in Barbados uses petcoke as the primary input for fuel to convert
limestone to clinker. ACCL’s approach to securing key inputs is to obtain petcoke supplies generally
six months in advance, with limestone mined from lands that ACCL owns, which the Company
believes will provide sufficient production supply for the next 30 years. Two-thirds of ACCL’s
Barbados production is currently exported, serving mainly the regions of Guyana, Suriname and other
islands of the eastern and northern Caribbean.
Packaging Manufacturing Segment
The Company has two packaging subsidiaries: TCL Packaging Limited (TPL) and TCL Ponsa
Manufacturing Limited (TPM). These companies were primarily established to meet internal packaging
needs, although some packaging is sold to third parties.
TPL has an annual design capacity of 37.5 M sacks and manufactures mainly multi-walled paper sacks and
single ply paper bags. TPL was established on a joint-venture basis with Dipeco of Switzerland, which
holds a 20% interest in TPL. Raw paper, the major input in the production of the Company’s sacks and
bags, is imported from North America and Europe.
TPM has an annual design capacity of approximately 450,000 slings and manufactures primarily
polypropylene slings. TPM was established on a joint-venture basis with Industrias Ponsa S.A. of Spain,
which holds a 35% interest in TPM. TPM’s products are used for loading heavy items onto transport
carriers such as ships and trucks. The basic input raw material is imported from the joint venture partner
and manufactured into slings at the TPM's facilities in a tax free zone in Point Lisas, Trinidad.
38 | P a g e
Pre-mixed Concrete Segment
The pre-mixed concrete segment mines aggregates and produces pre-mixed concrete. The pre-mixed
concrete market represents a means for securing added value from the supply chain. It is also an important
distribution channel for the Company’s cement to a segment of the market focused more on quality and
price than brand differentiation.
Revenue by Segment and Geographic Region
The following tables show breakdowns of the TCL Group’s total revenue for continuing operations, by
category of activity and geographic market for the last three financial years:
Total Revenue for Continuing Operations - By Segment
Amounts in TT$ in 000s
Total Revenue for Continuing Operations - By Geographic Region
Amounts in TT$ in 000s
39 | P a g e
Ernst & Young
Trinidad and Tobago
Tel: +1 868 628 1105
Fax: +1 868 622 1153
www.ey.com
SECTION 6: FIVE YEAR SUMMARY FINANCIALS
6.1
INDEPENDENT AUDITOR’S REPORT ON THE FIVE YEAR SUMMARY CONSOLIDATED
FINANCIAL STATEMENTS
To the shareholders of
Introduction
The accompanying summary consolidated financial statements (as contained on pages 41 to 48 of the Information
Memorandum) of Trinidad Cement Limited and its subsidiaries (the “Group”), which comprise the summary
consolidated statements of financial position as at 31 December 2010, 2011, 2012, 2013 and 2014 and the summary
consolidated statements of income, comprehensive income, changes in equity and cash flows for the years then
ended and related notes, are derived from the audited consolidated financial statements of the Group for the
respective years.
With the exception of the financial year ended 31 December 2011, we expressed unmodified audit opinions on those
consolidated financial statements in our reports dated 17 May 2011 (year ended 31 December 2010), 25 March 2013
(year ended 31 December 2012), 2 May 2014 (year ended 31 December 2013) and 19 February 2015 (year ended 31
December 2014). In our report dated 12 April 2012 in respect of the year ended 31 December, 2011 we expressed a
qualified audit opinion owing to the non-recognition of additional impairment losses of $131.4M. The
accompanying summary consolidated financial statements have been restated to account for the recognition of this
impairment loss in the year ended 31 December 2011.
Those consolidated financial statements, and the summary consolidated financial statements, do not reflect the
effects of events that occurred subsequent to the dates of our reports on those consolidated financial statements.
The summary consolidated financial statements do not contain all the disclosures required by International Financial
Reporting Standards. Reading the summary consolidated financial statements, therefore, is not a substitute for
reading the audited consolidated financial statements of the Group.
Management’s Responsibility for the Summary Consolidated Financial Statements
Management is responsible for the preparation of a summary of the audited consolidated financial statements in
accordance with the basis of criteria established by management as described in Note 1.
40 | P a g e
SECTION 6: FIVE YEAR SUMMARY FINANCIALS (Continued)
6.1
INDEPENDENT AUDITOR’S REPORT ON THE FIVE YEAR SUMMARY CONSOLIDATED
FINANCIAL STATEMENTS (Continued)
Auditor’s responsibility
Our responsibility is to express an opinion on the summary consolidated financial statements based on our
procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810, “Engagements
to Report on Summary Financial Statements”.
Opinion
In our opinion, with the exception of the year ended 31 December 2011 in which a qualified opinion was issued as
described above, the summary consolidated financial statements derived from the audited consolidated financial
statements of the Group for the years ended 31 December 2010, 2012, 2013 and 2014 are consistent, in all material
respects with the audited consolidated financial statements, on the basis of management’s established criteria as
described in Note 1.
Emphasis of Matter
Going Concern
Without qualifying our opinion, we draw attention to Note 2 to the summary consolidated financial statements
which indicates the existence of material uncertainties related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern.
24 February 2015
Port of Spain
Trinidad and Tobago, W.I.
41 | P a g e
6.2
2014
FIVE YEAR SUMMARY CONSOLIDATED FINANCIAL STATEMENTS TO 31 DECEMBER
SUMMARY CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Amounts expressed in TT$’000)
Assets
As at December 31
2010
2011
Restated
2012
Restated
2013
Restated
2014
1,736,030
Non-Current Assets
2,493,206
2,202,002
2,088,542
1,983,111
Goodwill
Property Plant and Equipment
215,831
1,764
1,764
.-
-
Pension Plan asset
216,072
105,355
93,170
134,452
70,240
Receivables
9,203
10,913
7,800
7,437
6,049
418,576
377,787
405,143
437,371
347,771
3,352,888
2,697,821
2,596,419
2,562,371
2,160,090
Inventories
569,072
557,019
614,525
599,155
526,432
Receivables and prepayments
175,367
193,888
198,759
179,810
226,664
20,416
57,755
43,061
57,804
96,589
3,178
-
-
-
-
768,033
808,662
856,345
836,769
849,685
Deferred Tax assets
Current Assets
Cash at bank and on hand
Assets classified as held for sale
Assets held for distribution
-
-
-
-
226
4,120,921
3,506,483
3,452,764
3,399,140
3,010,001
Stated Capital
466,206
466,206
466,206
466,206
466,206
Unallocated ESOP shares
(28,658)
(25,299)
(25,299)
(25,299)
(25,299)
(202,579)
(179,810)
(177,926)
(205,704)
(228,187)
520,891
222,739
326,330
64,257
Total assets
Equity and liabilities
Equity
Other reserves
Retained earnings
1,189,938
Equity attributable to the parent
1,424,907
781,988
485,720
561,533
276,977
92,405
28,276
(24,654)
(25,236)
(31,450)
1,517,312
810,264
461,066
536,297
245,527
8,521
2,923
1,945,569
1,772,504
-
-
5,127
7,692
7,246
13,055
Non-controlling Interests
Total equity
Non-current liabilities
Long term portion of borrowings
Pension plan liabilities
Other post-retirement benefits
Deferred tax liabilities
19,325
40,593
42,999
41,738
50,800
438,357
314,060
317,978
342,623
316,203
Payables and accruals
-
-
-
8,924
8,203
466,203
362,703
2,314,238
2,173035
388,261
Current liabilities
Short term advances
Swap obligation
Current portion of borrowings
Liabilities directly associated with assets
classified as held for sale
Total equity and liabilities
123
447
40,665
18,758
14,707
433,839
657,629
536,238
491,771
510,973
33,349
1,665,888
1,675,440
100,557
179,279
1,848,903
4,207
-
-
-
1,630
2,137,406
2,333,516
677,460
689,808
2,376213
4,120,921
3,506,483
3,452,764
3,399,140
3,010,001
42 | P a g e
6.2
2014
FIVE YEAR SUMMARY CONSOLIDATED FINANCIAL STATEMENTS TO 31 DECEMBER
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
For the year ended 31 December
2010
2011
Restated
2012
Restated
2013
Restated
2014
1,561,084
1,560,860
1,615,888
1,930,553
2,103,074
161,917
98,884
169,423
407,725
407,845
(165,975)
(151,814)
(145,414)
(126,266)
(131,113)
-
118,885
(17,963)
(2,427)
(155,937)
Gain / (loss) on disposal of property , plant and equipment
7,084
(3,429)
(6,806)
(2,484)
(3,963)
Operating profit/(loss)
3,026
62,526
(760)
276,548
116,832
Restructuring expenses
-
(67,901)
(112,163)
-
-
Finance costs
(148,364)
(166,082)
(238,813)
(237,659)
(213,551)
(Loss)/profit before taxation from continuing operations
(145,338)
(171,457)
(351,736)
38,889
(96,719)
69,264
(50,343)
7,209
34,005
(108,584)
(76,074)
(221,800)
(344,527)
72,894
(205,303)
(4,253)
(1,681)
-
(5,613)
(5,716)
-
11,092
-
-
-
(4,253)
9,411
-
(5,613)
(5,716)
(80,327)
(212,389)
(344,527)
67,281
(211,019)
Shareholders of the parent
(48,549)
(167,169)
(292,913)
58,199
(214,394)
Non -controlling interests
(31,778)
(45,220)
(51,614)
9,082
3,375
(80,327)
(212,389)
(344,527)
67,281
(211,019)
(0.20)
(0.68)
(1.19)
0.24
(0.87)
(Amounts expressed in TT$' 000s )
Continuing Operations
Revenue
Earnings before interest , tax, depreciation
impairment, loss on disposal of assets
and restructuring expenses
Depreciation
Impairment charges/reversals and (write offs')
Taxation credit (charge)
(Loss)/profit for the year from continuing operations
Discontinued Operations
Operating loss for the year from discontinued operations
Gain on disposal of discontinued operations
Net (loss)/income for the year from discontinued operations
(Loss)/profit for the year
Attributable to :
Basic and diluted (Loss)/earnings per share
(expressed in $ per share )
43 | P a g e
SECTION 6: FIVE YEAR SUMMARY CONSOLIDATED FINANCIAL STATEMENTS TO 31
DECEMBER 2014
SUMMARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the year ended 31 December
2010
2011
Restated
2012
Restated
2013
Restated
2014
(80,327)
(212,389)
(344,527)
67,281
(211,019)
-
-
-
-
-
(5,416)
30,645
-
-
-
1,331
(7,661)
-
-
-
(4,085)
22,984
-
-
Exchange differences on translation of foreign
operations
22,657
(416)
2,456
(37,583)
(30,437)
Net other comprehensive (loss)/income to be
reclassified to profit or loss in subsequent
periods
18,572
22,568
2,456
(37,583)
(30,437)
Re-measurement (losses)/ gains on pension
plans and other post-retirement benefits
-
(48,230)
(6,341)
59,678
(65,610)
Income tax effect
-
12,937
727
(13,685)
16,915
-
(35,293)
(5,614)
45,993
(48,695)
-
(35,293)
(5,614)
45,993
(48,695)
18,572
(12,725)
(3,158)
8,410
(79,132)
(61,755)
(225,114)
(347,685)
75,691
(290,151)
Shareholders of the parent
(35,181)
(178,492)
(296,268)
75,813
(284,556)
Non - controlling interests
(26,574)
(46,622)
(51,417)
(122)
(5,595)
(61,755)
(225,114)
(347,685)
75,691
(290,151)
(Amounts expressed in TT$ '000s )
Profit/(loss) for the year
Other Comprehensive Income
Other comprehensive income to be reclassified
to profit and loss in subsequent periods:
Net movement on cash flow hedge (interest
rate swap)
Income tax effect
-
Other comprehensive income not to be
reclassified to profit and loss in subsequent
periods:
Net other comprehensive income /(loss) not
to be reclassified to profit or loss in
subsequent periods
Other comprehensive income/(loss) for the
year, net of tax
Total comprehensive income /(loss) for the
year, net of tax
Attributable to :
44 | P a g e
DECEMBER 2014
SUMMARY CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts expressed in TT$ '000s)
Year ended 31 December 2014
Balance at 1 January 2014
Unallocated
ESOP
shares
Stated
capital
Other
reserves
Retained
earnings
Noncontrolling
interests
Total
Total
equity
466,206
(25,299)
(205,704)
326,330
561,533
(25,236)
536,297
Other comprehensive loss
-
-
(22,483)
(47,679)
(70,162)
(8,970)
(79,132)
(Loss)/ income for the year
-
-
-
(214,394)
(214,394)
3,375
(211,019)
Total comprehensive loss
-
-
(22,483)
(262,073)
(284,556)
(5,595)
(290,151)
Dividends
-
-
-
-
-
(619)
(619)
466,206
(25,299)
(228,187)
64,257
276,977
(31,450)
245,527
Balance at 1 January 2013 as previously stated
466,206
(25,299)
(178,679)
437,558
699,786
(24,653)
675,133
Restatement - correction of prior period errors
-
-
753
(214,819)
(214,066)
(1)
(214,067)
466,206
(25,299)
(177,926)
222,739
485,720
(24,654)
461,066
Other comprehensive (loss)/income
-
-
(27,778)
45,392
17,614
(9,204)
8,410
Profit for the year
-
-
-
58,199
58,199
9,082
67,281
Total comprehensive (loss)/income
-
-
(27,778)
103,591
75,813
(122)
75,691
Dividends
Balance at 31 December 2013
(restated)
-
-
-
-
-
(460)
(460)
466,206
(25,299)
(205,704)
326,330
561,533
(25,236)
536,297
Balance at 1 January 2012 as
previously stated
466,206
(25,299)
(180,069)
864,882
1,125,720
42,411
1,168,131
Restatement - change in accounting policy
-
-
-
(97,745)
(97,745)
(1,750)
(99,495)
-
-
259
(246,246)
(245,987)
(12,385)
(258,372)
466,206
(25,299)
(179,810)
520,891
781,988
28,276
810,264
Other comprehensive income/(loss) (restated)
-
-
1,884
(5,239)
(3,355)
197
(3,158)
Loss for the year (restated)
-
-
-
(292,213)
(292,213)
(51,614)
(344,527)
Total comprehensive income/ (loss)(restated)
-
-
1,884
(298,152)
(296,268)
(51,417)
(347,685)
Dividends
(restated)
-
-
-
-
-
(1,513)
(1,513)
466,206
(25,299)
(177,926)
222,739
485,720
(24,654)
461,066
Balance at 1 January 2013 (restated)
45 | P a g e
DECEMBER 2015
SUMMARY CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Amounts expressed in TT$ ‘000s)
Stated
Capital
Unallocated
ESOP
shares
Other
reserves
Retained
earnings
Total
Noncontrolling
interests
Total
equity
466,206
(28,658)
(202,579)
1,189,938
1,424,907
92,405
1,517,312
Restatement - change in accounting policy
-
-
(59,479)
(59,479)
(477)
(59,956)
-
-
(408,566)
(408,566)
(17,030)
(425,596)
466,206
(28,658)
(202,579)
721,893
956,862
74,898
1,031,760
Other comprehensive income/(loss) (restated)
-
-
22,769
(34,092)
(11,323)
(1,402)
(12,725)
Loss for the year (restated)
-
-
-
(167,169)
(167,169)
(45,220)
(212,389)
Total comprehensive income/(loss) (restated)
Allocation to employees of ESOP
-
-
22,769
(201,261)
(178,492)
(46,622)
(225,114)
Shares net of dividends
-
3,359
-
26
3,385
-
3,385
Dividends forfeited
(restated)
-
-
-
233
233
-
233
466,206
(25,299)
(179,810)
520,891
781,988
28,276
810,264
466,206
(29,345)
(215,947)
1,238,825
1,459,739
119,548
1,579,287
Other comprehensive income
-
-
13,368
-
13,368
5,204
18,572
Loss for the year
-
-
-
(48,549)
(48,549)
(31,778)
(80,327)
Total comprehensive income /(loss)
-
-
13,368
(48,549)
(35,181)
(26,574)
(61,755)
Allocation to employees and sale of
ESOP shares net of dividends
-
687
-
(663)
24
-
24
Dividends forfeited /(paid)
-
-
-
325
325
(569)
(244)
466,206
(28,658)
(202,579)
1,189,938
1,424,907
92,405
1,517,312
Balance at 1 January 2011 as previously stated
Balance at 1 January 2010
46 | P a g e
DECEMBER 2014
SUMMARY CONSOLIDATED CASH FLOW STATEMENTS
For the year ended December 31
(Amounts expressed in TT$ '000s )
Cash from continuing operations
Cash from discontinued operations
Cash from operations
Pension contributions paid
Post-retirement benefits paid
Taxation paid
Restructuring expenses paid
2010
2011
Restated
2012
Restated
2013
Restated
2014
212,846
160,440
198,380
418,550
443,801
(356)
-
-
92
31
212,490
160,440
198,380
418,642
443,832
(8,990)
(8,414)
(6,856)
(9,039)
(10,969)
(616)
(993)
(1,112)
(1,322)
(1,451)
(8,490)
(6,812)
(6,088)
(20,893)
(24,147)
-
(33,125)
(49,143)
-
-
(155,554)
(10,282)
(59,497)
(204,682)
(196,670)
38,840
100,814
75,684
182,706
210,595
Additions to property, plant and equipment
Proceeds from disposal of property, plant and equipment
(63,673)
8,222
(40,721)
9,546
(77,913)
35
(73,957)
959
(77,727)
90
Net cash used in investing activities
(55,451)
(31,175)
(77,878)
(72,998)
(77,637)
(116,015)
(32,565)
(8,507)
(92,961)
(92,310)
180,565
-
-
-
-
(569)
-
(1,513)
(1,010)
(653)
63,981
(32,565)
(10,020)
(93,971)
(92,963)
Net increase/(decrease) in cash
47,370
37,074
(12,214)
15,737
39,995
Net foreign exchange differences
(6,381)
(59)
(2,033)
(994)
(1,210)
(20,696)
20,293
57,308
43,061
57,804
20,293
57,308
43,061
57,804
96,589
20,416
57,755
43,061
57,804
96,589
-
(447)
-
-
-
(123)
-
-
-
-
20,293
57,308
43,061
57,804
96,589
Net interest paid
Net cash generated by operating activities
Investing activities
Financing activities
Repayment of borrowings
Proceeds of short term advances
Dividends paid to non-controlling interests
Net cash used generated from/ (used in) financing
activities
Net cash - beginning of year
Net cash - end of year
Represented by :
Bank overdraft - continuing operations
Bank overdraft-discontinued operations
47 | P a g e
DECEMBER 2014
Notes to the Summary Consolidated Financial Statements
Note 1 – Basis of Preparation
Under management’s established criteria, management prepares the consolidated financial statements in accordance
with the International Financial Reporting Standards but summarises it by disclosing the summary consolidated
statements of financial position, income, comprehensive income, changes in equity and cash flows and excluding the
summary of significant accounting policies and other explanatory information.
Note 2 – Going Concern
As at 31 December, 2010, 2011, 2012, 2013 and 2014, certain conditions existed relating to the ability of the Group
to meet its debt service and related obligations as further described in the notes to the audited consolidated financial
statements in the respective years. These conditions indicated the existence of material uncertainties related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. Based on
the current plans and strategies pursued and being implemented in those years, the directors have maintained the
going concern assumption in the preparation of the consolidated financial statements.
48 | P a g e
SECTION 7: THE RESTRUCTURING PLAN
7.1
THE RESTRUCTURING PLAN OVERVIEW
On 29 September 2014, the TCL Board met with its creditors and informed them that the Company was not
in a position to make the principal and interest payment that was due on 30 September 2014. Following this
meeting, the Company met with its lenders who were represented by a Steering Committee of the largest
lenders (SC) to negotiate a restructuring plan for the Company’s debt. Simultaneously, the Board engaged
in discussions with the OWTU with respect to their Court awards for the period 2009-2011 and to settle
outstanding negotiations for the period 2012-2014. In mid-December 2014, a MOU was signed between
TCL and the OWTU, which outlined the agreements between the parties as follows:
�
�
�
�
partial forgiveness in respect of the total amount due to employees;
limit employee liabilities up to December 2014 at a calculated amount of TT$ 150M;
to receive a portion of outstanding payments in cash prior to December 2014; and
the deferral of the balance which is to be settled during 2015 both in and through the issue of TCL
shares.
In late December 2014, the Board and the SC reached an agreement in principle on a restructuring plan,
including the following areas:
�
�
�
�
�
the reduction of interest rates;
forgiveness of the default moratorium interest from 30 September 2014;
adjustment of principal payments in line with the Company’s revised cash flow projections;
an increase in capex limits; and
the ability to prepay with a discount if paid within 90 days after completion of the Rights Issue.
The preconditions to effect the creditors’ agreement included the removal of the 20% ownership limit and
the contribution of at least US$50M of new equity by TCL shareholders. In addition to the above, the
lenders’ amendments must be effective by 30 April 2015 (with provision for an extension of 30 days at the
option of a majority of the creditors).
In order to ensure a successful Rights Issue, the Board agreed that it would be beneficial to have a
“backstop shareholder”. Sierra Trading as a backstop shareholder has agreed to:
�
�
participate in the Rights Issue to the fullest extent permitted by its shareholding (20%);
commit additional capital; up to a maximum total participation of US$45M in order to ensure that TCL
raises at least the TT$ equivalent of US$50M through the Rights Issue.
In consideration of the backstop position, the Board has agreed to grant an exclusive right to Sierra Trading
to subscribe and purchase any shares in the Rights Issue which are not taken up by Eligible Shareholders,
up to an amount that, when combined with Sierra Trading’s existing shareholding in the Company, will not
exceed 40% of TCL's outstanding shares. Additionally, if Sierra Trading has not achieved a shareholding in
TCL of at least 35% through the purchase of shares in the Rights issue, then, subject to receiving all
required approvals, including shareholder approval, the Board has agreed to issue a private placement of
TCL shares in favour of Sierra Trading. It should be noted that for the latter scenario, the amount of the
share issue will be an amount that will permit Sierra Trading to achieve a shareholding of 35% of TCL's
outstanding shares.
49 | P a g e
SECTION 7: THE RESTRUCTURING PLAN (Continued)
7.1
THE RESTRUCTURING PLAN OVERVIEW
The restructuring effort has addressed a number of issues including employee related issues, obligations to
lenders, and it allows for shareholders’ participation in the recapitalization of the Company. In addition to
the above, funds raised will be used to address the most critical needs of the Company, including capex,
working capital and the payment of suppliers.
The Board estimates that the overall benefit to TCL of the restructuring plan to be recurring savings of
TT$50 M per year.
50 | P a g e
7.2
ACCOUNTANT’S REPORT ON THE CONSOLIDATED PROFORMA STATEMENT OF
FINANCIAL POSITION
51 | P a g e
7.3
STATEMENT OF PROFORMA FINANCIAL POSITION AS AT 1 APRIL 2015
Amounts in TT$000s
Assets
Per Audited
Consolidated
Financial
Statements
Proforma
31 December
2014
1 April
2015
1,736,030
1,736,030
70,240
70,240
Non-Current Assets
Property Plant and Equipment
Pension Plan asset
Receivables
6,049
6,049
347,771
347,771
2,160,090
2,160,090
Inventories
526,432
526,432
Receivables and prepayments
226,664
226,664
Deferred Tax assets
Current Assets
Assets held for distribution
Total assets
96,589
450,955
849,685
1,204,051
226
226
3,010,001
3,364,367
Equity and liabilities
Equity
Stated Capital
466,206
820,572
Unallocated ESOP shares
(25,299)
(25,299)
(228,187)
(228,187)
64,257
64,257
Other reserves
Retained earnings
Equity attributable to the parent
276,977
631,343
Non-controlling interests
(31,450)
(31,450)
Total equity
245,527
599,893
-
1,664,897
Non-current liabilities
Long term portion of borrowings
Pension plan liabilities
13,055
13,055
Other post-retirement benefits
50,800
50,800
Deferred tax liabilities
316,203
316,203
8,203
8,203
388,261
2,053,158
Current liabilities
Short term advances
Current portion of borrowings
Liabilities associated with assets
classified as held for sale
Total equity and liabilities
Memo: Net tangible assets per share
14,707
14,707
510,973
510,973
1,848,903
184,006
1,630
1,630
2,376,213
711,316
3,010,001
3,364,367
( TT$0.69)
TT$0.49
Net tangible asset value is equal to total assets of a company, minus any intangible assets such as goodwill, deferred tax
assets, pension plan surplus, less all liabilities and the par value of preferred shares.
52 | P a g e
SECTION 7: CONSOLIDATED PROFORMA STATEMENT OF FINANCIAL POSITION (Continued)
7.3 STATEMENT OF PROFORMA FINANCIAL POSITION (Continued)
The information in this section should be read in conjunction with the forward-looking statements on page 10.
NOTE 1. ASSUMPTIONS TO THE PROJECTED STATEMENT OF FINANCIAL POSITION
Basis of Compilation
The accompanying projected consolidated statement of financial position as at 1 April 2015 is prepared on a basis
consistent with International Financial Reporting Standards (IFRS).
The projected financial statements have been compiled using certain assumptions about future events and the
planned restructuring plan and initiatives contemplated by the Board.
Assumptions
1.
Net Proceeds of the Issue
The net proceeds of the Issue are assumed to be $354,365,776.20 as disclosed in this Information Memorandum.
It is assumed that there will be 374,647,704 issued ordinary shares after the Rights Issue.
2.
Debt
The recapitalization of the Company will be concurrent with the negotiation of debt agreement with the lenders.
It is assumed that the Company will no longer be in default with its lenders and as such, the debt will be
reclassified between current and long term liabilities, as the full quantum of the outstanding debt due would no
longer be deemed callable, and therefore treated as a short term liability.
53 | P a g e
SECTION 8: RISK FACTORS
Prior to deciding whether to apply for New Shares under the Rights Issue, Eligible Shareholders should read the
Information Memorandum in its entirely in order to gain an appreciation of the Company, its activities, operations,
financial position and prospects.
An investment in New Shares should be considered speculative. New Shares carry no guarantee with respect to the
payment of any dividends, returns on capital or the market value of those New Shares.
The risks included in this Section are the key risks identified by the Board as being specific to the Company and its
operations as at the date of this Information Memorandum and reasonably anticipated by the Board. It is important
to note that, although every effort has been made to provide a comprehensive description of the relevant risk, the
risks listed in this Section are not an exhaustive list of the risks relevant to the Company. The risks discussed below
also include forward-looking statements from which the Company’s actual results may differ substantially. See
cautionary statement regarding “Forward-Looking Statements” on page 10.
8.1
GENERAL INVESTMENT RISKS
Going concern considerations
On 29 September 2014, the Company suspended its principal debt repayments due under the Override
Agreement. This had the effect of creating a condition of default which rendered all outstanding debt
covered by this agreement immediately due, resulting in the reclassification of all long term debt to current
liabilities. As a result, $1.8 billion in outstanding debt obligations was classified as a current liability.
Hence the Group has a net working capital deficit of $1.5 billion as at 31 December 2014. The continued
agreement of the Company’s lenders to negotiate the restructuring plan with the Board is contingent on the
Rights Issue, and in particular, the backstop underwriting commitment in the amount of US $45M provided
by Sierra Holdings.
Changes in legislation and government regulation
Government legislation, including changes to the import regulations (such as the removal of the Common
External Tariff on cement) as well as the taxation system, may affect future earnings and the relative
attractiveness of investing in the Company.
Regional and Global Economic conditions
Economic conditions, both regional and global, may affect the performance of the Company. The
Company’s future possible revenue and share price can be affected by these conditions all of which are
beyond the control of the Company and the Directors. In addition, the Company’s ability to raise additional
capital, should it be required, may be affected.
The Company’s business is confined to a particular geographic region
The Company’s results of operations are highly dependent on the results of TCL and its operating
subsidiaries located in the CARICOM region. Adverse changes in the economies of one or more of the
nations located in such region (or in the economies of other major nations throughout the world) could have
a material adverse effect on the business, financial position, results of operations, liquidity and cash flows
of the Company.
54 | P a g e
SECTION 8: RISK FACTORS (Continued)
Reliance on key personnel
The Company’s performance is substantially dependent on its senior management and key technical
personnel. The loss of key management personnel could have a material adverse effect on the business and
consequently its financial performance.
The future success of the Company is also dependent on its ability to attract and retain competent
management and personnel. The inability to attract such personnel may adversely affect the business of the
Company.
Stock market conditions
As with all stock market investments, there are risks associated with an investment in the Company. Share
prices may rise or fall and the price of Shares might trade below or above the issue price for the New
Shares. General factors that may affect the market price of the New Shares include without limitation
economic conditions in Trinidad and Tobago, the CARICOM region and internationally, investor
sentiment, local and international share market conditions, changes in interest rates and the rate of inflation,
changes to government regulation, policy or legislation, changes which may occur to the taxation of the
TCL Group companies as a result of changes in Trinidad and Tobago and/ or regional taxation laws and
changes in exchange rates.
Liquidity risk
There can be no guarantee that there will continue to be an active market for the New Shares or that the
price of the New Shares will increase. There may be relatively few buyers or sellers of shares on the TTSE
at any given time. This may affect the volatility of the market price of the shares. This may result in
shareholders receiving a market price for their shares that is less or more than the price paid under the
Offer.
8.2
SPECIFIC INVESTMENT RISKS
The Company’s operating results may vary significantly from one reporting period to another and may
be adversely affected by the cyclical nature of the markets the Company serves.
The relative demand for the Company’s products is a function of the highly cyclical construction industry.
As a result, the Company’s revenue may be adversely affected by declines in its regional markets in the
construction industry generally. The Company’s results also may be materially affected by:
�
the level of commercial and residential construction in the Company’s regional markets, including
changes in the demand for new residential housing construction below current or historical levels;
�
the availability of funds for public or infrastructure construction from local, state and federal sources;
�
unexpected events that delay or adversely affect the Company’s ability to deliver cement or concrete
meeting to its customers’ requirements;
�
changes in interest rates and lending standards;
�
changes in the mix of the Company’s customers and business, which result in periodic variations in the
margins of jobs performed during any particular quarter;
�
the timing and cost of acquisitions and difficulties or costs encountered when integrating acquisitions
and or restructuring the Company’s operations;
55 | P a g e
�
the budgetary spending patterns of customers;
�
changes in fuel and energy prices
�
changes in construction and design costs;
�
power outages and other unexpected delays;
�
the Company’s ability to control costs and maintain quality;
�
employment levels; and
�
regional or general economic conditions.
As a result, the Company’s operating results in any particular quarter may not be indicative of the results
that can be expected for any other quarter. Furthermore, changes in trends in the cement and concrete
industry or in the Company’s geographic markets could have material adverse effects on its business,
financial condition, results of operations, liquidity and cash flows.
The Company’s net revenue attributable to infrastructure projects could be negatively impacted by a
decrease or delay in governmental spending.
The business of the Company depends, in part, on the level of governmental spending on infrastructure
projects in the markets in which the Company operates. Reduced levels of governmental funding for public
works projects, or delays in that funding; whether owing to reduced government revenue as a result of
suppressed energy prices worldwide or otherwise, could adversely affect the business, financial condition,
results of operations, liquidity and cash flows of the Company.
Trade union negotiations of employee contracts, work stoppages and other labour relations matters may
result in increases in the Company’s operating costs, disruptions in the Company’s business and
decreases in the Company’s earnings.
Generally, with the exception of management, all of the employees of the Company are represented by
trade unions. Trade unions negotiate employment contracts on behalf of their member employees, which
generally have terms of two to three years. If the Company is unable to negotiate acceptable new contracts
or extensions of existing contracts with these unions, the Company could experience work stoppages by the
affected employees. In addition, any new contracts or extensions could result in increased operating costs
attributable to trade union employees. If any such work stoppages were to occur, the Company could
experience a significant disruption of its operations and higher ongoing labor costs, which could materially
and adversely affect the business, financial position, results of operations, liquidity and cash flows of the
Company.
In addition, existing collective bargaining agreements may not prevent a strike or work stoppage at the
Company’s facilities in the future, and any such work stoppage could have a material adverse effect on the
Company’s earnings and financial condition.
Participation in defined benefit pension plans may impact the business, financial position, results of
operations, liquidity and cash flows of the Company.
Many of the Company’s subsidiaries currently have defined benefit pension plans. Such plans define the
amount of pension benefit that an employee will receive on retirement, usually dependent on one or more
factors such as age, years of service and compensation.
56 | P a g e
The Company is responsible for maintaining adequate funding of these pension plans. Should any actuarial
review of the defined benefit plans include a recommendation from an independent actuary for additional
funding because of changes in interest rates, mortality rates etc. the business, financial position, results of
operations, liquidity and cash flows of the TCL Group may be materially affected. Additionally, the
Company relies on agreements with representative trade unions with respect to the amount of employee
funding, and if the Company fails to achieve agreement, an additional funding burden could be placed on
the Company.
The Company’s operations are subject to various hazards that may cause personal injury or property
damage and increase its operating costs.
Operating cement-manufacturing plants, ready-mixed operations, packaging plants and mobile equipment
expose the Company’s employees, contractors, and others to hazards which can cause personal injury and
loss of life, damage to or destruction of property, plant and equipment and environmental damage.
Although the Company conducts training programs designed to reduce these risks, the Company cannot
eliminate them. The Company maintains insurance coverage in amounts it believes are consistent with
industry practice; however, this insurance may not be adequate to cover all losses or liabilities the
Company may incur in its operations, and the Company cannot ensure that it maintains insurance of the
types and levels that would always prevent uninsured losses arising . A partially or completely uninsured
claim, if successful and of sufficient magnitude, could have a material adverse effect on the Company.
The insurance policies the Company maintains are subject to varying levels of deductibles. Losses up to
the deductible amounts are accrued based on the Company’s estimates of the ultimate liability for claims
incurred and an estimate of claims incurred but not reported. If the Company were to experience insurance
claims or costs above its estimates, its business, financial position, results of operations, liquidity and cash
flows may be materially adversely affected.
There are risks related to the Company’s internal growth and operating strategy.
The Company’s ability to generate internal growth will be affected by, among other factors, its ability to:
�
attract new customers and retain existing customers;
�
differentiate itself in a competitive market by emphasizing new product development and value-added
products and services;
�
hire and retain employees;
�
reduce operating and overhead expenses; and
�
rearrange the debt and equity component of its capital structure
The Company’s inability to achieve internal growth could have a material adverse effect on its business,
financial position, results of operations, liquidity and cash flows.
The Company is dependent on information technology to support many facets of its business.
If the Company’s information systems are breached, destroyed or fail due to cyber-attack, unauthorized
access, natural disaster, or equipment breakdown, its business could be interrupted, proprietary information
could be lost or stolen, and the Company’s reputation could be damaged. The Company takes measures to
protect its information systems from such occurrences, but the Company cannot ensure that its efforts will
always prevent them. The Company could be negatively affected by any such occurrences.
57 | P a g e
The Company’s overall profitability is sensitive to price changes and minor variations in sales volumes.
Generally, the Company’s customers are price-sensitive. Prices for the Company’s products are subject to
changes in response to relatively minor fluctuations in supply and demand, the general economic
environment, and market conditions, all of which are beyond the Company’s control. Because of the fixedcost nature of its business, the Company’s overall profitability is sensitive to price changes and minor
variations in sales volumes.
The introduction into the market of substitutes for cement, concrete or aggregates and the development
of new construction techniques could have a material adverse effect on the business, financial position,
results of operations, liquidity and cash flows of the Company.
Materials such as plastic, aluminum, ceramics, glass, wood and steel can be used in construction as a
substitute for cement, concrete or aggregates. In addition, other construction techniques, such as the use of
dry wall, could decrease the demand for cement, concrete and/or aggregates. Further, research aimed at
developing new construction techniques and modern materials, may introduce new products in the future
that reduce the demand for cement, concrete and/or aggregates. The use of substitutes for cement, concrete
or aggregates could cause a significant reduction in the demand and prices for the Company’s products.
Major cement producers who operate within the CARICOM region can construct new plants designed to
compete with the Company.
Several major cement groups (e.g., LaFarge-Holcim, CEMEX and Argos) operate plants within the
CARICOM region and have the ability to install additional capacity, which may directly compete with the
Company’s regional plants. These competitors have greater financial, technical, marketing and other
resources than the Company, and if these competitors enter into the Company’s markets, the Company may
have difficulty competing. Even though there have been no announcements (lead times usually average five
years), should this happen, it could have a material adverse effect on the business, financial position, results
of operations, liquidity and cash flows of the Company.
The Company is exposed to counterparty credit risk.
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Company is exposed to credit risks from its operating
activities (primarily for trade receivables) and from its financing activities, including deposits with banks
and financial institutions, foreign exchange transactions and other financial instruments. The bankruptcy of
one or more of the Company’s counterparties, or the failure of one or more of its counterparties to perform
under their various contracts with the Company, could have a material adverse effect on its business,
financial position, results of operations, liquidity and cash flows.
The Company is subject to restrictions due to non-controlling interests in its consolidated subsidiaries.
The Company conducts certain portions of its business through subsidiaries. In some cases, third-party
shareholders hold non-controlling interests in these subsidiaries. Various disadvantages may result from the
participation of non-controlling shareholders, whose interests may not always be aligned with those of the
Company, in the management of such subsidiaries. Some of these disadvantages may result, among other
things, in the Company’s inability to implement organizational efficiencies and transfer cash and assets
from one subsidiary to another in order to allocate assets most effectively.
58 | P a g e
Governmental regulations, including environmental regulations, may result in increases in the
Company’s operating costs and capital expenditures and decreases in its earnings.
A wide range of local laws and regulations apply to the Company’s operations, land usage; street and
highway usage; noise levels; and health, safety and environmental matters. In many instances the Company
must have various certificates, permits or licenses in order to conduct its business. The Company’s failure
to maintain required certificates, permits or licenses or to comply with applicable governmental
requirements could result in substantial fines or possible revocation of its authority to conduct some of its
operations.
Governmental requirements that impact the Company’s operations include those relating to air quality,
solid and hazardous waste management and cleanup and water quality. These requirements are complex
and subject to change. The Company’s compliance with amended, new or more stringent requirements,
stricter interpretations of existing requirements, or the future discovery of environmental conditions may
require the Company to make unanticipated material expenditures.
Additionally, due to the industrial nature of the Company’s operations, emissions, spills, releases,
discharges, and/or deposits may occur. The Company has systems in place to address these events, if they
occur, that the Company believes enables it to meet the requirements of the appropriate regulatory
agencies. However, these events may still result in the Company facing regulatory actions and/or civil
liability. While the Company believes it has all material licenses and permits, or they are in the process of
being renewed, and operates in material compliance with these licenses and permits, there may be
circumstances in which the Company does not, thereby giving rise to the possibility of fines and penalties,
and/or other regulatory actions and civil liability.
The Company may incur material costs and losses as a result of claims that the Company’s products do
not meet regulatory requirements or contractual specifications.
The Company’s operations involve providing products that must meet building code or other regulatory
requirements and contractual specifications for durability, stress-level capacity, weight-bearing capacity
and other characteristics. If the Company fails or is unable to provide products meeting these requirements
and specifications, material claims may arise against the Company and its reputation could be damaged. In
the past, the Company has had significant claims of this kind asserted against it that have been resolved and
the Company expects that in the future there could be additional claims of this kind asserted against the
Company. If a significant product-related claim or other claims are resolved against the Company in the
future, such resolution may have a material adverse effect on the Company’s business, financial condition,
results of operations, liquidity and cash flows.
The Company is subject to litigation proceedings that could harm its business if an unfavorable ruling
were to occur.
From time to time the Company is and may become involved in litigation and other legal proceedings
relating to claims arising from the Company’s operations in the normal course of business. The Company
is currently subject to a number of significant legal proceedings including, but not limited to, those relating
to the matters discussed under “Section 9.3: Material Litigation.” The Company cannot ensure that these or
other legal proceedings will not materially affect the Company’s ability to conduct its business in the
manner that the Company expects or otherwise adversely affect the Company should an unfavorable ruling
occur.
59 | P a g e
Increasing insurance claims and expenses could lower the Company’s profitability and increase its
business risk.
As a result of the nature of the Company’s business, it is subject to product liability, property damage, and
personal injury claims and workers’ compensation claims from time to time. Increased premiums charged
by insurance carriers may increase the Company’s insurance expenses as coverage expires or cause the
Company to increase the level of its self-insurance. If the number or severity of claims self-insured by the
Company increases, the Company could suffer losses in excess of its reserves. An unusually large liability
claim or string of claims based on a failure repeated throughout the Company’s mass production process
may exceed its insurance coverage or result in direct damages if the Company were unable or elected not to
insure against certain hazards because of high premiums or other reasons. In addition, the availability of,
and the Company’s ability to collect on, insurance coverage is often subject to factors beyond its control.
Further, allegations relating to workers’ compensation violations may result in investigations by insurance
regulatory or other governmental authorities, which investigations may have a direct or indirect material
adverse effect on the Company’s ability to pursue certain types of business. This, in turn, could have a
material adverse effect on the Company’s business, financial position, results of operations, liquidity and
cash flows.
60 | P a g e
SECTION 9: OTHER INFORMATION
9.1
SHAREHOLDING OF MAJOR SHAREHOLDERS
SHAREHOLDING AS AT
DECEMBER 31, 2012
No.
SHAREHOLDING AS AT
DECEMBER 31, 2013
%
No.
%
SHAREHOLDING AS AT
DECEMBER 31, 2014
No.
%
Sierra Trading
49,953,027
20.00%
49,953,027
20.00%
49,953,027
20.00%
Republic Bank Limited
28,311,293
11.34%
27,629,386
11.06%
27,373,369
10.96%
National Insurance Board
25,367,032
10.16%
25,367,032
10.16%
25,367,032
10.16%
Sierra Trading is an indirect wholly-owned subsidiary of CEMEX that is incorporated under the laws of the
Cayman Islands, but which holds its administrative seat in The Netherlands.
Note: Neither the Company’s Directors nor its major shareholders have different voting rights.
9.2
RELATED PARTY TRANSACTIONS
The TCL Group has entered into related party transactions, with respect to the purchase and sale of product
with CEMEX. These transactions were done on an arm's length basis6. The following schedule reflects the
transactions for the past three fiscal years:
TT$ 000s
2014
2013
2012
2,343
492
-
19,487
13,648
31,191
715
435
-
5,647
-
-
Related Party Transactions
Sales
Purchases
Trade receivable
Trade payable
9.3
MATERIAL LITIGATION/ CLAIMS
From time to time, the Company is subject to various claims and litigation brought by employees,
customers and other third parties for, among other matters, personal injuries, property damage and product
defects that have, or allegedly have, resulted from the conduct of the Company’s operations. As a result of
these types of claims and litigation, the Company must periodically evaluate the probability of damages
being assessed against the Company and the range of possible outcomes. In each reporting period, if the
Company determines that the likelihood of damages being assessed against the Company is probable and if
it believes it can estimate a range of possible outcomes, then the Company will record a liability. The
amount of the liability will be based upon a specific estimate, if the Company believes a specific estimate
to be likely, or it will reflect the low end of its range of possible outcomes. Litigation is subject to inherent
uncertainties, and unfavorable rulings may occur.
.
Transactions were done on a market value basis
61 | P a g e
SECTION 9: OTHER INFORMATION (Continued)
9.3
MATERIAL LITIGATION/ CLAIMS (Continued)
The Company cannot assure you that these or other legal proceedings will not materially affect its ability to
conduct its business in the manner that it expects or otherwise adversely affect the Company should an
unfavorable ruling occur.
As of the date of this Information Memorandum, there are no material product defect claims pending against
the Company. Accordingly, the Company’s existing accruals for claims against the Company do not reflect
any material amounts relating to product defect claims. While the Company’s management is not aware of
any facts that would reasonably be expected to lead to material product defect claims against the Company
that would have a material adverse effect on its business, financial condition or results of operations, it is
possible that claims could be asserted against the Company in the future. Due to the inherent uncertainties
associated with estimating unasserted claims in its business, the Company cannot estimate the amount of any
future loss that may be attributable to unasserted product defect claims related to cement and pre-mixed
concrete.
A summary of material ongoing litigation/ claims follows:
Matter
Pre-Action Protocol –
Wrongful dismissal of Dr.
Rollin Bertrand
Legal Rep. Mr. Stuart
Young
TCL Trinidad v the
Board of Inland
Revenue
TCL Guyana Inc. v.
Attorney General of
Guyana
Legal Rep. Hughes ,
Fields & Stoby
CV2012-01912, H.C.A
S-587 of 2000 SHEIK
LISHA v. TCL
Legal Rep. M.G. Daly &
Partners
Details and Status
Claim for compensation re
wrongful dismissal.
The Board of Inland Revenue
has audited the Corporation Tax
Returns and raised assessments
adjusting the Tax Losses of the
company by $102.1 M in respect
of Tax Year 2007 and $284.4 M
in respect of Tax Year 2008.
Dispute re Terms of the MOU Corporate Tax Rate of 35%
(reduced to 30% from 1 January
2011) included in the MOU. A
rate of 45% (reduced to 40%
from 1 January 2011) will be
applicable if the concession of
the MOU is repealed.
Negligence / Unfair
Competition.
Amount of Claim
TT$9.5M
$102.1M and $284.4M - The
Company has lodged objections to
these assessments and awaits a
determination by the Board of Inland
Revenue. The Company is of the view
that its claim is well supported in law
and will continue to defend its
position in the resolution process.
Maintenance of 35% tax rate up to
2010 and 30% thereafter.
Should the matter be resolved in
favour of the Government, the amount
payable as at December 2014 amounts
to TT$23M (including interest).
$26,000 per month since or about the
year 2001, and interest estimated at
$3.7M.
The Company believes that the resolution of all litigation currently pending or threatened against
the Company or any of its subsidiaries will not materially exceed its existing accruals for those
matters.
62 | P a g e
SECTION 9: OTHER INFORMATION (Continued)
9.4
INTERESTS OF EXPERTS AND COUNSEL
There are no conflicts of interest between the Company and its experts and legal counsel as noted herein.
9.5
LICENCES AND REGULATORY CONSENTS
Refer to the schedule below:
63 | P a g e
Ernst & Young
Trinidad and Tobago
Tel: +1 868 628 1105
Fax: +1 868 622 1153
www.ey.com
SECTION 10: CONSENTS
The Directors
Southern Main Road
Claxton Bay
Dear Sirs
Re: Consent letter
In accordance with Bye - Law 41 of the Securities Act, 2012, we consent to being named in and to authorize the use
of the Independent Auditor’s report dated 24 February 2015 on the summary consolidated financial statement
extracts of Trinidad Cement Limited and its Subsidiaries (the “Group”) for the five years ended 31 December 2014
in the Information Memorandum to be filed by Trinidad Cement Limited (the “Company”) with the Trinidad and
Tobago Securities and Exchange Commission on 24 February 2015.
We have read the information memorandum and have no reason to believe there are any mis-representations in it
that may be derived from the summary consolidated financial statements of the Group which we have reported on.
We also confirm in accordance with Bye Law 42 of the Bye Laws that we have no interest in Trinidad Cement
Limited and are independent of the Company in all respects.
Yours faithfully
24 February 2015
Port of Spain
Trinidad and Tobago, W.I
64 | P a g e
SECTION 10: CONSENTS (Continued)
65 | P a g e
SECTION 11: DOCUMENTS AVAILABLE FOR INSPECTION
The following documents are available for inspection between 9:00 a.m. and 4:00p.m. from 10 March 2015 to 31
March 2015 at the office of the Lead Stockbroker or from the registered office of TCL.
(a) Certificate of Continuance, the Articles of Continuance, the Bye-Laws and the Articles of Amendment and
Special Resolutions relating to the increase in authorized share capital and related matters.
(b) Annual Reports for the five financial years ended 31 December 2014.
(c) Letter of Consent for inclusion of Accountant’s Report by Ernst & Young.
(d) Letter of Consent for inclusion of Accountant’s Report by PricewaterhouseCoopers.
(e) Receipt for the Information Memorandum from the TTSEC.
66 | P a g e
APPENDIX 1: PROVISIONAL LETTER OF ALLOTMENT
Rights Issue of 124,882,568
Ordinary Shares of No Par Value
At an Issue Price of TT$2.90 Per Share
To Shareholders on Record as at
9 March 2015
Dear Shareholder:
This letter is pursuant to the resolution of the Board of Directors of Trinidad Cement Limited passed on 6
February 2015 in respect of the issue and offer for sale, by way of a Rights Issue, of one (1) new ordinary
share of No Par Value for every two (2) ordinary shares of No Par Value held by shareholders (the Rights
Issue) as at the close of business on 9 March 2015 at an issue price of TT$2.90 per share, payable in full
on acceptance.
As a consequence thereof, you have been provisionally allotted the number of new shares as indicated
above.
The terms of the Rights Issue, material information relating thereto and the procedures for acceptance,
whether in whole or in part and contained in the Information Memorandum of which this letter is an
integral part.
Shareholders to whom the Foreign Investment Act, 1990 (the Act) is applicable, are required to supply
information prescribed in the First Schedule to the Act to the Minister of Finance. The requisite form to
do so is available at any stockbroker and should be lodged with your acceptance documents.
The form of receipt contained on the reverse of this Provisional Letter of Allotment will be completed by
Trinidad Cement Limited or any stockbroker and returned to the person lodging it.
By Order of the Board
Kathryna Baptiste
SECRETARY
APPENDIX 1: PROVISIONAL LETTER OF ALLOTMENT (Continued)
Acknowledgement of Receipt
(Tick [ ] box, where applicable.)
Receipt is hereby acknowledged of the following:
[ ] Form of Acceptance (Form A)
Number of Shares Accepted
Date
Remittance TT$
Signature of agent receiving form
APPENDIX 2: FORM OF ACCEPTANCE – FORM A
TTCD#
Rights Issue of 124,882,568
At an Issue Price of TT$2.90 Per share
To Shareholders on Record as at
9 March 2015
To be lodged on or before 4:00 pm
31 March 2015
TO: The Directors of Trinidad Cement Limited
Having paid to the company the sum of TT$ ______________being TT$2.90 per share on acceptance of
Ordinary Shares of No Par Value each in the Company. I/We hereby request that such share be allotted to
me/us and I/we agree to accept the said shares upon the terms and conditions of the Information
Memorandum dated 24 February 2015 and subject to the Articles of Continuance and Bye-Laws of
Trinidad Cement Limited. In the event that I/we are beneficial owners of Trinidad Cement Limited shares
at the TTCD I/We authorize you to deliver directly to the TTCD my allotment of shares and to credit the
number of shares mentioned in the Allotment Notification to my/your account at the TTCD.
DECLARATION BY INDIVIDUAL/COMPANIES
For the purpose of the Foreign Investment Act, 1990, I/we hereby declare that I/we am/are citizen (s) of
and resident in ___________________________ and that I/we are not accepting these shares as nominee
(s) of any foreign investor (s) as defined by the Foreign Investment Act, 1990.
Signature:
Signature:
Date:
Date:
Cheques are to be made payable to “TCL’S RIGHTS ISSUE”
FOR OFFICIAL USE ONLY
FOLIO
UNITS HELD
ENTITLEMENT
AGENCY
NO.OF SHARES ACCEPTED
APPENDIX 3: SOURCE OF FUNDS DECLARATION
BROKER:
DATE:
Name (First Name, Middle Name, Surname)
Date of Birth
National Identification No./DP No./Passport No.
Address
Country of Birth
Business/Residence Phone No.
Occupation/ Nature of Business
Local Resident
Other
CUSTOMER INFORMATION
PERSON CONDUCTING THIS TRANSACTION IF DIFFERENT THAN ABOVE
Name ( First Name, Middle Name, Surname)
Date of Birth
National Identification No./DP No./Passport No.
Address
Country of Birth
Business/Residence Phone No.
ACCOUNT INFORMATION
Equity Settlement a/c #:
DESCRIPTION OF TRANSACTION
Cash
Amount:
Currency:
Fixed Income Paper a/c #:
Currency:
Non-cash
Currency:
Amount:
Currency:
DECLARATION
I declare that the source of funds for this transaction is:
By reason of the requirements of the Proceeds of Crime Act 2000, West Indies Stockbrokers’ Limited policy requires it to be satisfied as to the
source of funds before accepting funds for investments or transfer or for the purchase of any other currency or instrument. Consent is hereby
given to West Indies Stockbrokers Limited to disclose information provided herein to law enforcement authorities.
Customer’s Signature or person conducting transaction
NOTE: This section is to be signed if the depositor is acting on behalf of a Third Party in a fiduciary capacity
(e.g. Attorney-at-law, Notary Public, Trustee, Accountant etc.)
I/We have made inquiry and to the best of my/our knowledge and belief the funds were not derived from or are being employed in any illegal
transaction by the person/company for whom/which I am acting.
Investor’s Name, Address and ID No.
Investor’s Signature
FOR COMPANY USE ONLY
Transaction taken by:
Name:
Transaction Accepted
Authorizing Officer:
Transaction declined
Name:
Remarks (continue on a separate sheet, if necessary)
Date:
Reviewed by Com pliance Officer
Print Name
Customer refused to sign form

Trinidad Cement Limited

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