core values - lasco jamaica · agency relationship with unicomer (barbados) limited (courts),...
TRANSCRIPT
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Annual Report | 2013
Care for our customersWe respect our customers’ time and privacy.
CommitmentWe are committed to achieving successfor our team, agents and shareholders.
IntegrityIn dealing with our customers, agents,staff and shareholders.
Continuous improvement of our processes
CORE VALUES
CO
RE
VALU
ES
VisionMission&
ViSiOn
To become a global corporate leader,through innovation and entrepreneurship.Driven by a passion for excellence and compassion for our fellowman, we will make LASCO a world name, synonymous with integrity, value and service.
MiSSiOn
To provide quality products and services to our customers, ensure profitability and promote employee development.
Being the best.. .Always.
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Annual Report | 2013LASCO Financial Services Limited
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notice of Annual General Meeting
23 Management Discussion and Analysis23 Background23 Operating Segments24 Our Industry25 Our Financial Performance26 Results of Operation28 Risk & Compliance Management Framework29 Outlook30 Key Events Subsequent to year End
GEnERAL inFORMATiOn4-22
Performance highlights and an introduction to our markets, business structure and strategy together with profiles of our Board of Directors and Management Team.
Operating and Financial Review23-30
A review of our businesses, our financial performance and outlook for 2013-2014.
Company Activities31-40
An explanation of our approach to corporate governance with key developments and marketing activities during the year.
Company Financials43-81
Detailed financial information for the year ended March 31, 2013.
4-6 Notice of Annual General Meeting7 Three Year Performance Highlights9 Shareholders’ Report11 Chairman’s Profile15 Directors’ Profiles18 Management Profiles21 Meet the LFSL Team
31 Marketing Department35 Shareholders’ Profile36 Directors’ Report37-38 Corporate Governance40 Corporate Data
Contents
Independent Auditors’ Report to the Members Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Shareholders’ Equity Consolidated Statement of Cash Flows Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Shareholders’ Equity Statement of Cash Flows Notes to the Financial Statements Proxy Form
43-4445
4647
484950515253-8082
NOTICE IS HEREBY GIVEN that the Annual General Meeting of LASCO FINANCIAL SERVICES LIMITED will be held at the Terra Nova All-Suite Hotel, 17 Waterloo Road, Kingston 10 on Monday, September 30, 2013 at 8:30 a.m. The proposed resolutions are as follows:
ORDINARY BUSINESS
Ordinary Resolutions
1. Stock Option Plan
“THAT the following resolution be considered by the members and if thought fit be passed as and ordinary resolution of the Company:
BE IT RESOLVED:
“THAT the directors be and are hereby authorized to enter into a stock option plan for up to but not more than 5% of the issued ordinary shares of the Company with such of the employees of the Company as the directors might determine upon such terms and conditions and subject to such rules and regulations as the directors shall in their absolute discretion determine and to execute such deeds agreements documentation or other assurances as might be required and to enter into such engagements and arrangements as might be necessary for the due operation and administration of such a plan.”
2. Audited Accounts
To consider and if thought fit, pass the following resolution: “THAT the Audited Accounts for the year ended March 31, 2013 and the Reports
of the Directors and Auditors, circulated with notice convening the meeting, be and are hereby adopted.”
3. DIVIDEND
To consider and if thought fit, pass the following resolution: “THAT the interim dividend of thirty cents ($0.30) on each ordinary share paid
on March 8, 2013 to shareholders on record at the close of business on February 18, 2013 be declared final and that no further dividend be paid in respect of the year under review.”
4. Election of Directors Article 97 of the Company’s Articles of Incorporation provides that one-third
of the Directors, if their number is not three (3) or a multiple of three (3), the number nearest one-third (1/3), shall retire from office at each Annual General Meeting and Article 98 of the Company’s Articles of Incorporation provides that the Directors to retire in every year shall be those who have been longest in office since their last election. The Directors retiring under these Articles are (Hon. Roald N. A. Henriques) and (Hon. Lascelles Chin) and being eligible, offer themselves for re-election.
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Annual Report | 2013LASCO Financial Services Limited
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The proposed resolutions are therefore as follows:
To consider and if thought fit pass the following resolution:
(i) “THAT Director, (Hon. Roald N. A. Henriques) retiring pursuant to Articles 97 and 98 of the Articles of Incorporation be and is hereby re-elected.”
To consider and if thought fit pass the following resolution:
(ii) “THAT Director, (Hon. Lascelles Chin), retiring pursuant to Articles 97 and 98 of the Articles of Incorporation be and is hereby re-elected.”
5. Directors Remuneration
To consider and if thought fit, pass the following resolution: “THAT, the Directors remuneration shall be such amount as the Board of
Directors, or any appropriate Committee of the Board of Directors, may determine, pursuant to Article 77 of the Company’s Articles of Incorporation.”
6. Appointment of Auditors and their Remuneration
To consider and if thought fit, pass the following resolution: “THAT Messrs BDO, having signified their willingness to serve, continue in office as Auditors of the Company until the conclusion of the next Annual General Meeting at a remuneration to be agreed with the Directors.”
Special Resolution
7. Increase the number of Board of Directors
It is desirable that the number of Directors be increased from six (6) to twelve (12) and that the Articles of the Company be amended to facilitate this, in consequence of which the following resolution is proposed as a special resolution of the company:
BE IT RESOLVED: “THAT Article 81 be and is hereby amended by deleting the word and number
“six (6)” and inserting in their stead the word and number “twelve (12)” so that the Article 81 shall henceforth read as follows:
81. Unless otherwise determined by a general meeting, the number of directors of the Company shall be not more than Twelve (12).”
Dated this 9th day of August, 2013BY ORDER OF THE BOARD OF DIRECTORS
Vincent A. ChenCOMPANY SECRETARY
NOTE: A Member of the Company entitled to attend and vote at this meeting is entitled to appoint another person as his/her Proxy to attend and vote in his/her stead, and a Proxy need not be a Member. A Form of Proxy is enclosed for your
convenience.
Notice of Annual General Meeting Notice of Annual General Meeting
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AD
Year ended 31March 2013
$’000
Year ended 31March 2012
$’000
Year ended 31March 2011
$’000REVENUE AND EXPENSES
Total Revenue
Administrative and other expenses
Selling and Promotion Expenses
Finance Cost
Net Profit
BALANCE SHEET
Cash and Cash Equivalents
Total Assets
Total Liabilities
Total Stockholder’s Equity
FINANCIAL RATIOS
Earnings Per Share (cents)
Book Value Per Share
Market Price Per Share (JSE closing price - J$)
Outstanding Shares*
Market Capitalisation (J$)
Dividend Per Share (Cents)
Dividends Paid
Dividend Pay Out Ratio
Price Earnings Ratio
Efficiency Ratio (admin exp./revenue)
Net Profit Growth (%growth)
Return on Average Equity
Return on Average Assets
Current Asset Ratio (times)
*Weighted Average
484,639 372,663 226,804
168,467 169,467 103,612
151,897 99,152 83,374
376 875 3,949
163,899 102,434 29,775
189,096 114,318 194,675
639,625 511,484 313,668
165,040 147,990 46,467
474,585 363,494 267,201
1.33 0.83 0.26
3.86 2.96 2.30
6.11 3.94 2.15
122,810,299 122,810,299 116,303,975
750,370,927 483,872,578 250,053,546
0.30 0.13 0.05
36,843 15,965 6,141
22.48% 15.59% 20.62%
5 5 8
34.76% 45.47% 45.68%
60% 244% 187%
39% 32% 22%
28% 25% 17%
3.0 2.5 5.8
Three Year Performance Highlights
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Annual Report | 2013
Dear Shareholders, Customers, Agents and Staff,
We are pleased to submit the results for LASCO Financial Services Limited for the year ended March 31, 2013. We had a good year and we owe it to your support, team effort and general goodwill for the Company.
This year we continued to drive significant improvements in all our business lines, building on the momentum achieved during the prior year. We grew Trading Income by 73% and Net Income by 60% though market conditions remained challenging and there were tremendous uncertainties affecting the macroeconomic environment. Our aggressive investments, however, have positioned us well.
KEY HIGHLIGHTS OF THE 2012/2013 FINANCIAL YEAR
We rationalized our agent network, closing non-performing branches and establishing branches in areas where there was a demand. This allowed us to maximize on the transactions in our target groups. We spent more time in our customers’ communities connecting with them and learning from them. Towards the end of the Financial Year we were able to cement the Agency relationship with Unicomer (Barbados) Limited (Courts), bringing to an end what was an inordinately long process. The five (5) Unicomer Branches in that territory will begin trading in the New Year. We expect to see the benefits in 2013/2014 and future periods.
Our strong quarterly gains made us the highlight of the Jamaica Stock Exchange (JSE) trading activities as investors took note of our performance. During the year, our stock price appreciated more than 50%. In December 2012, we were awarded 2nd Runner-Up in the category “JSE Best Practices for Best Performing Company (Junior Market).”
During the year, we continued to strengthen our team. We enhanced our Compliance Department, hiring a Chief Compliance Officer to give oversight to the expanding company. This allowed the Managing Director, who was previously the Compliance Officer, the time to focus on Business Development.
We are pleased that our strategies and investments gave us such astounding success during the Financial Year. This success allowed us to pay dividends to the tune of $53 Million; 13 cents per share in respect of Financial Year 2012 and 30 cents per share in respect of Financial Year 2013.
We are positioned for further growth in 2013/2014, as we go after more markets and more market share.
We appreciate your continued confidence and support.
Jacinth Hall-Tracey (Mrs.) MANAGING DIRECTOR
Hon. Lascelles Chin, O.J., C.D.EXECUTIVE CHAIRMAN
Shareholders' Report
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Chairman's Profile
Honourable Lascelles A. Chin, Founder and Executive Chairman of the LASCO Affiliated Companies, is one of Jamaica’s most distinguished and respected entrepreneurs, a pioneering exporter, outstanding philanthropist, and a much honoured leader in Jamaica and the Caribbean.
Born in Bog Walk, St. Catherine, from an early age, Lascelles Chin demonstrated that he possessed the skills and attributes to make him a successful businessman - hard work, determination, perseverance, clarity of vision and the ability to see obstacles as challenges.
His early working life also demonstrated that he had a very clear understanding of the importance of accumulating capital and remaining focussed on one’s vision. Thus, as early as 1958 when he worked as a lab technician in the Pharmacy at the University Hospital of the West Indies, he saved more than half of his weekly earnings of Seven Pounds Ten Shillings (£7.10).
Three years later, at the age of Twenty-three, with savings of one hundred and seventy-five pounds (£175.00) and a family to support, Lascelles Chin entered the business sector and began importing black pepper from the Far East and peas from Portugal and the United States. Through sheer determination, he was able to overcome many obstacles. Although his loan application for £1,000 was turned down by one bank, he emerged as Jamaica’s largest trader of black pepper. He then expanded his entrepreneurial activities to partner with the German Company Henkel Ltd.
Lascelles Chin also demonstrated his ability to focus on opportunities and not be discouraged or beaten by challenges and obstacles. In 1965, he was not deterred either, on learning of a plan to establish an adhesive plant in Jamaica, or by Government’s inevitable restriction on the
quantity of such products he would be able to import. Instead, he saw this as a crucial business opportunity and successfully convinced Henkel to enter into a joint partnership with him. He became the Chairman and Managing Director of the company’s operation in Jamaica and was able to make the Jamaican market into the highest per capita user of Henkel adhesives in the entire world.Full of entrepreneurial energy, and with an unerring ability to seek out business opportunities, it is not surprising that Lascelles Chin took advantage of opportunities in a variety of sectors including furniture, manufacturing, data processing, car rentals, horticulture, insurance brokerage, hair products, soya oil refining, and chicken processing. All his business acumen, work experience and expertise were brought to bear on the successful establishment of the LASCO Affiliated Companies in 1988. The Group now manufactures and distributes over 300 products with the LASCO brand name.
He currently serves as Chairman for the following Companies:
LASCO Distributors Limited
LASCO Manufacturing Limited
LASCO Financial Services Limited
Summit Development Limited
Charco Limited
Not forgetting his humble beginnings, Lascelles Chin has made his products affordable, investing in extensive research and development that takes him worldwide. With the advent of each new product, consumers throughout Jamaica and the Caribbean have seen the prices of competitive products tumbling and have rewarded LASCO with strong brand loyalty. The LASCO Affiliated Companies now export to most of the Caribbean, Central America, the United States, Canada and England.
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Chairman's Profile Chairman's Profile Lascelles Chin has shared his vision and energy with his colleagues in business through dynamic leadership of several organizations. These include serving as:
Past Chairman for:Jamaica Industrial Development Corporation (JIDC) National Productivity CouncilJamaica Exporters Association (JEA)National Industries Development CompanyBureau of Standards FoundationCaribbean Community of Retired Persons (CCRP)
Past Deputy Chairman for:Trade BoardJamaica Promotions Corporation (JAMPRO)Jamaica National Export Corporation
Founder and Past Chairman:Jamaica Shippers Council
Past DirectorBureau of Standards – Standards CouncilNational Commercial BankEx-Im BankIsland Victoria BankInstitute of Sports
Current DirectorUniversity of the West Indies School of Nursing Advisory BoardKings House Foundation
Recent Business Move To Benefit Wide Cross Section of Jamaicans
• In its Initial Public Offer (IPO) in September 2010, under the guidance of Hon. Lascelles
Chin, the LASCO Affiliated Companies insisted shares be reserved for some of the most vulnerable persons in the society as well as public sector groups – they comprised senior citizens who are a part of the Caribbean Community of Retired Persons (CCRP), teachers, nurses and police. That was an historic move in terms of share reservation for such select groups, during an IPO in Jamaica.
LASCO aimed to raise $415 million for the three companies, and within 3 minutes of the IPO on September 15, 2010, the shares were oversubscribed to the tune of over $950 million.
• In October 2010, LASCO became the first company in the history of Jamaica that had three affiliated companies listed at the same time on the Jamaica Stock Exchange. The historic triple-listing on the Jamaica Stock Exchange Junior Market introduced more than 1,500 new investors to the local stock exchange. General Manager of the Jamaica Stock Exchange (JSE), Marlene Street Forest says the LASCO triple listing contributed to increased buoyancy in the island’s Equities Market. The JSE has predicted that the triple - listing of the LASCO Affiliated Companies will result in a positive impact on Jamaica’s GDP, and trigger an increase in the creation of employment opportunities.
Among the accolades / achievements gained by Hon. Lascelles Chin are:
• 2013 – Named MoneyGram Brand Ambassador for Jamaica
• Inducted in the Private Sector of Jamaica’s Hall of Fame – October 27, 2011• Most Admired Business Leader – 2009 Inaugural CVM People’s Award
• Ranked in the Top Three Most Admired Non - Financial Company – 2009 Inaugural CVM People’s Award
• Ranked among the Top Five Most Admired Business Leaders - Gleaner Commissioned Bill Johnson Poll March 2006
• 2005 American Foundation for UWI Award - Outstanding Contribution to Business in the Caribbean and as a Caribbean Luminary
• 2004 Florida International University (FIU) Business Leader Award
• 2002 -The Agri-Business Award from the American Soybean Association, for active involvement in the Soybean Industry. This award has only been won by multinational companies such as Dupont, Monsanto and Dow, Bayer, Ciba Geigy, Zeneca
• Received the 4th highest civilian Jamaican recognition, the Order of Jamaica, in 2001 for his philanthropy and his contribution to the development of commerce/business
• 2001 Ernst & Young Entrepreneur of the Year Award -Retail and Distribution
• Jamaica Observer Business Leader of the Year 2000
• 1997 - Entrepreneurial Award from the Jamaican Institute of Management.
• Business Leader of the Year in 1996
• He was listed among top ten Personalities in Jamaica for 1996, 1999, 2000, 2001 and 2002 in the Jamaica Observer.
• 1992 - The Administrator of the Year Award from the Administrative Management Society;
• Conferred with the Honour of the Order of Distinction in the rank of Commander Class – 1986, for outstanding services to Industry and Commerce
• Highly sought-after motivational speaker by business groups, service clubs and tertiary institutions including the University of Florida
• Dynamic Chairmanship of several state agencies
• A Director for more than 15 companies
Listed among the top ten Personalities in Jamaica, Lascelles Chin continues to explore new horizons, his energy and creativity undiminished by his five decades in business. He continues to be a great believer in the importance of hard work to the optimum efficiency and in being as optimistic as possible, despite obstacles and hardships.
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Dr. Eileen Chin is a non-executive Director of the Company and the Managing Director of LASCO Manufacturing Limited.
She was born in Havana, Cuba and holds a medical degree from Havana University’s School of Medicine.
Dr. Chin migrated to Jamaica in 1998 and worked in various capacities in LASCO Affiliated companies including Marketing, Export, Central and SouthAmerican Sales.
Dr. Chin holds an MBA in Global Management and has specialist skills in compliance training and advanced negotiation skills training. She is a member of the Board of Directors of LASCO Distributors Limited.
Dr. Chin is married to Chairman, Lascelles Chin.
Mrs. Hall-Tracey was appointed Managing Director of LASCO Financial Services in 2009. She joined the Company at its inception in 2004 as General Manager. Mrs. Hall-Tracey has the responsibility for the overall performance of the Company and is responsible for its strategic direction. Her management experience spans over 23 years in the industries of Hotel Management, Retail and Corporate Banking and Financial Services.
She holds an MBA from the Edinburgh Business School and a Bachelor of Arts Degree with a Major in French & Economics from the University of the West Indies (Mona). In furtherance of her career development, Mrs. Hall-
Tracey also completed the Jamaican Securities Course, a Certificate in Marketing and Corporate Treasury and Cash Management administered by the Association of Financial Professionals which grants the CTP (Corporate Treasury Professional) designation. She has also attended and participated in numerous Anti Money Laundering and Compliance courses and training for the Industry.
Mrs. Hall-Tracey is currently a member of the Grace Morrison Foundation for early Childhood Development (GrantsPen & Shortwood communities). She is Past President of the Cambio Association of Jamaica, and member of the Jamaica Money Remitters Association.
Gary Peart joined Mayberry Investments Limited in May 2005 as Chief Executive Officer after developing his management techniques throughout the financial industry over the course of 15 years. During this time he gained experience in almost every business line, including Corporate Finance, Equity, Fixed Income and Treasury Management, all of which prepared him for his current role as CEO and Board member of several well-known Jamaican entities. Currently, Mr. Peart sits on the Board of Lasco Financial Services, Access Financial Services and Port
Authority of Jamaica; He is Chairman of the Board – Jamaica Bauxite Institute and Betting Gaming and Lotteries Commission. He is also an alternate Board member of the Jamaica Stock Exchange and President of the Jamaica Securities Dealers Association.
Beyond the business world, Mr. Peart provides support to the Mona School of Business as a member of the Investment Committee and a member of the Rotary Club of St. Andrew North. He is married to Cheryl and is the proud father of son Aaron.
DiRECTORS' PROFiLES
Directors' Profiles
A Chartered Accountant, a Fellow of the Association of Chartered Certified Accountants (U.K.) and a Fellow of the Institute of Chartered Accountants of Jamaica, Mr. Compton Rodney also holds a B.Sc. (Economics) degree from the University of London.
He is the Registrar of the Public Accountancy Board.
Mr. Rodney is Chairman of the Multicare Foundation, Director of the Sports Development Foundation, Secretary / Treasurer of
the American Chamber of Commerce (AMCHAM) and Honorary Treasurer of the Jamaica Olympic Association.He was the recipient of the 2009 Distinguished Members Award from the Institute of Chartered Accountants of Jamaica.
Mrs. Jacinth Hall-Tracey, BA (Hons.), MBA
Managing Director
Dr. Eileen Chin, MBA Non-Executive Director
Mr. Gary Peart, MBA Non-Executive Director and
Mentor to the board
Mr. Compton Rodney Non-Executive Director
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Annual Report | 2013LASCO Financial Services Limited
A former Senior Partner of Livingston, Alexander and Levy Attorneys-at-law, with over 48 years of experience in distinguished legal practice, Mr. R.N.A Henriques obtained a Bachelor of Laws degree (LL.B) and a Master of Laws (LL.M) degree from the University of London.
He was appointed a Queen’s Counsel in 1981 and in addition to his practice in Jamaica, practises in several Caribbean islands in the Eastern Caribbean Court of Appeal.
On many occasions he practises in the Privy Council, now the Supreme Court, in London.
He was appointed Chairman of the Jamaica Deposit Insurance Corporation in 2008 and Commissioner of the Financial Services Commission. In 2008, he was awarded the Order of Jamaica.
Directors' Profiles
Hon. R.N.A Henriques, O.J., Q.C. Non-Executive Director
“ It is not the content of a company’s values that correlates with performance, but the strength of conviction with which
it holds those values.”
Walter has over 25 years’ experience in loan administration & has worked for over eleven years at the National Housing Trust (NHT) as an Administrator, Arrears Recovery & Enforcement. He then spent two (2) years at Churches Credit Union Ltd., working in credit & five (5) at Sodality Credit Union Ltd with responsibility for credit, delinquency & perfecting loan securities. As a result of the merger, Mr. White worked briefly with COK Sodality Credit Union Ltd. before moving on to LASCO Financial Services.
A past student of CAST/UTECH, Mr. White has a BSc (Hons) in Production/Operations Management, a Diploma (Hons) in Industrial Management (IM), an Associate degree (Hons) in Management studies and an AAT (Association of Accounting Technicians) certification.
Since joining LFSL he has enhanced the loan policy and procedure, introduced new loan types, set up loan securities system, designed relevant documents for loan processing as well as created an arrears recovery and enforcement system for monitoring loans.
Mrs. Hall-Tracey was appointed to the Board in 2009. She joined the Company in 2004 as General Manager with the responsibility then, of two (2) start up companies – LASCO Financial Services Limited and LASCO Remittance Services Limited. The companies were amalgamated in 2010 and subsequently listed on the Jamaica Stock Exchange Junior Market.
Since inception, Mrs. Hall-Tracey who was the Compliance Officer, was responsible for implementing and overseeing the Anti-Money Laundering (AML ) programme and Risk Mitigation programme.
Under her leadership, the Company has grown its capital base from $3.2 million in 2010 to its present $474 million.
Mrs. Hall-Tracey oversees a team of 38 staff.
MAnAGEMEnT PROFiLES
Jacinth Hall-Tracey, BA (Hons.), MBAManaging Director
Marcia Walker MoneyGram Customer
Walter White, BSc (Hons.)Credit Manager
Debbie Brown Car Loan Recipient
Years ago, I used to collect remittances from elsewhere but I tried LASCO MoneyGram and it has really worked for me. Their locations are convenient, easy to find and the service is excellent. LASCO MoneyGram is also the first company I actually won something from and I appreciate that they are always giving back to their customers.
I had a car but it was always giving trouble and I needed a change. LASCO Financial Services came in and bridged the gap so that I could upgrade to my new car.
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Ms. Bernard joined our team in April 2011 as the Financial Accountant. Her expertise in the area of accounting and auditing has contributed significantly to the efficiencies of the business. She is a member of the Association of Chartered Certified Accountants (ACCA) and the Institute of Chartered Accountants of Jamaica (ICAJ). She works with “Team Accounts” to ensure accountability within the organization, monitors and implements internal controls and oversees efficient transaction processing and presentation of credible financial reports. Her undoubtedly keen treasury management continues to maximize on investment returns while reducing finance cost.
Ms. Bernard also provides solid advice and recommendations to ensure that the company meets its core values; care for our customers, commitment, integrity and continuous improvement of our processes.
Ms. Bernard is an invitee to the Board of Directors meetings, Assets and Liabilities Committee and Audit Committee. Atasha Bernard is also an active member of the Rotary Club of Kingston East and Port Royal and served as the club’s Treasurer for two (2) years.
Miss Leach has been a part of the LFSL team for over five years. She holds a BSc. (Hons.) in Economics and Statistics from the University of the West Indies, Mona, and has successfully completed the Jamaican Securities Certificate Course from UTECH/Jamaican Institute of Management. In her current position as Operations and Marketing Manager Ms. Leach demonstrates dynamic leadership and strong organizational skills.
Miss Leach’s strong leadership skills and attention to details has ensured the smooth operations of the business. She continues to contribute significantly to its success, working with department heads to enable an orderly work flow process. As the head of the marketing department, she works assiduously with the team to position the LFSL brand, distinguishing it from the competition. Her undiluted spirit of teamwork and camaraderie has aided the staff to function cohesively to attain targets, maintain top service delivery to customers and maintain a customer friendly atmosphere in the LFSL locations.
Miss Leach has oversight of the network of the LFSL branches.
Beverley Douglas joined LASCO Financial Services Limited in 2004. Mrs. Douglas is an accomplished professional with over thirty-one (31) years’ experience in the financial industry, seventeen (17) of which have been in remittance. She began with the Company as Remittance Manager and was promoted to her current post of Deputy General Manager, Remittance Services in 2012.
Mrs. Douglas has responsibilities for maintaining network partnerships and Business Development for Remittance Service. She has held several leadership positions with various financial organizations, covering areas such as Trade Finance, Banking Operations and Remittance Consultancy prior to joining LASCO Financial Services Limited.
Mrs. Douglas holds a Diploma in Management Studies & Business Administration from the University College of the Caribbean formerly Institute of Management Science and a Certificate in Business Studies from the University of the West Indies School of Continuing Studies, Kingston, Jamaica. She also holds several certificates in courses for Anti-Money Laundering and Compliance.
Denise E. West joined the LASCO Financial Services Limited in February, 2013. Miss West comes to our team with over twenty-four (24 years) experience in the financial services industry. She is an Attorney- At-Law and Company appointed Compliance Officer.
Miss West has extensive knowledge in the areas of banking, mortgage administration, conveyancing, compliance and operations. Prior to joining the LASCO Financial Services Miss West worked at Jamaica National Building Society as an Anti-Money Laundering Compliance Analyst-Attorney-at-Law in the Group Compliance Department. She also worked with the Victoria Mutual Building Society for over twenty (20) years where she was the Operations Manager for the Victoria Mutual- Liguanea Branch.
As part of the LASCO Financial Services strategic risk-based approach towards improving financial and operational efficiency, Miss West’s duties include building and implementing a robust Compliance Programme.
Miss West’s academic achievements includes a Certificate of Legal Education from the Norman Manley Law School, (U.W.I.-Mona). She is also the holder of a Bachelor of Laws Degree with Honours from the University of London, a BSc in Business & Professional Management with concentration in Human Resources from the Nova Southeastern University of Florida-(H. Wayne Huizenga Business School) and she is the holder of a Certificate in the Jamaican Securities Course and an Associate Degree in Business Administration from the Jamaican Institute of Management as well as a number of certifications in Anti-Money Laundering and Counter Financing of Terrorism.She is currently pursuing the Association of Certified Anti-Money Laundering Specialist Course.
MANAGEMENT PROFILES
Beverley Douglas, Dip MS, Cert. MSDeputy General Manager Remittance Services
Denise E. West, BSc, LLB (Hons.), CLEAttorney-At-Law / Chief Compliance Officer
Atasha Bernard, ACCA, CA Financial Accountant
Nordel Leach, BSc., Dip. Ed Operations & Marketing Manager
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Loans Department
Compliance Department
Red Hills Road Cambio Accounts Department
Operations & Marketing
“Team Accounts” is known for its efficiency. This department is the hub of controls, ensuring adherence to policies & procedures and providing a solid support for the company as a whole.
This Department has been established to assist the LASCO Financial Services Limited and each of its regulated entities in adhering to an anti-money laundering and counter financing of terrorism (AML/CFT) policy.
As a formidable unit, the O & M support team works well in ensuring that the company’s daily operations run smoothly and that the LFSL brand remains relevant and competitive
This team operates under a strict philosophy of friendly & personable customer service. They deliver speedy loan approvals, much to the delight of their customers.
(L-R): Marcia Orr (Filing Clerk), Oniel Lake (Agent Network Liaision Officer), Latoya Powell (Senior Compliance Clerk), Denise West (Attorney-At-Law / Chief Compliance Officer)
(L-R): Ramon Davis (Remittance Supervisor), Beverley Douglas (General Manager, Remittance Services)
(L-R): Walter White (Credit Manager), Kerri-Ann Rowe-Small (loans officer), Kaare Kelly(loans ofiicer), Racquel Millins (delinquency control officer)
(L - R): Tashell Bailey (Accounting Assistant), Kenneth Williams (Assistant Accountant), Simone Deacon (Accounting Assistant),Charmaine Vigilance (Accounting Assistant), Atasha Bernard (Financial Accountant)
(L-R): Maria Myrie (Executive Assistant to the Managing Director),Nordel Leach (Operations & Marketing Manager). Maria Campbell (Branch Network Supervisor), Matthew Blake (Marketing Officer)
(L - R) -Shauna Gaye-Whyte (Teller), Alison Wright (Senior Teller), Rickado Mundle (Teller), Telany Muir (Teller), Jennifer Grant (Foreign Currency Trader), Natalee Morris (Teller)
This team processes both retail and corporate FX trades daily. They do their jobs so proficiently and professionally that they have earned themselves the nickname ‘FX Currency Central’.
This team provides strong support for the group in their capacities and ensures all divisions are equally serviced.
Meet the LASCO Financial Services Team
Back row: Ackelyn Masters, Charmaine Vigilance, Simone Deacon. Tashell Bailey, Latoya Powell-Gordon, Laulene Lindo, Patrice Hylton, Violet Gallimore, Marcia Orr, Telany Muir, Jennifer Grant, Natalie Morris. Middle Row: Lauren Lawrence, Racquel Millins, Oniel Lake, Kaare Kelly, Rickado Mundle, Roleen Baker-Jackson, Kerri-Ann Rowe-Small, Joy Brown, Alison Wright, Maria Campbell, Shauna-Gaye Whyte, Matthew Blake, Dwayne Dobson, Kenneth Williams, Davin Melhado. Front row: Denise West, Francisca Anderson, Ruel Thompson, Atasha Bernard, Jacinth Hall-Tracey, Maria Myrie, Ramon Davis, Joel Gonzales, Beverley Douglas, Nordel Leach, Peter Hylton, Walter White.
Our corporate office team is the hub of the business and serves not only external customers, but internal staff as well.
Shared Services
Francisca Anderson (Human Resource Manager), Ruel Thompson (Security & Safety Manager) and Joel Gonzalez (Property Manager), Peter Hylton (MIS Manager).
(L-R) Laulene Lindo (office attendant), Ackelyn Masters (Teller), Dwayne Dobson (teller), Patrice Hylton (Senior Teller)
Duhaney Park Branch
Papine Branch
This branch opened in 2006 and was the ‘Branch of the Year’ for 2010-2011. With consistently great customer service, this branch has built a strong relationship with its customers and is a favourite among the residents of Papine and surrounding areas.
(L-R): Roleen Baker-Jackson (office attendant), Lauren Lawrence (teller), Joy Brown (Senior teller), Keisha Richards (teller)
Known as the bill payment transaction champions, this branch processes the most bill payments and is the last cambio out of Kingston. They officially opened their doors in 2009.
Remittance Department
The Team efficiently manages over 100 LASCO MoneyGram sub-agents islandwide and ensures excellent customer-service delivery is maintained within the agent network, as well as ensure recruitment of business prospects and provide technical support to all sub-agents in the LFSL’s network
Being the youngest Cambio branch, Ocho Rios is positioned for growth in the Tourism Mecca of the island.
Ocho Rios
(L-R): Patricia Wisdom, Alicia Wisdom and Janeen Pasmore
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Annual Report | 2013LASCO Financial Services Limited
23 24
MAnAGEMEnT DiSCUSSiOn & AnALYSiS
Incorporated in 2004, LASCO Financial Services Limited (LFSL) is a leading provider of retail financial services. It is licenced by The Bank of Jamaica (The BOJ) to operate as a Cambio Dealer and Remittance Service provider. LFSL is a primary agent for MoneyGram International in Jamaica and in Barbados through its subsidiary Lasco Financial Services Barbados Limited (LFSBL).
LFSL listed on the Jamaica Stock Exchange Junior market in 2010. Its management structure is Product Divisional; each product is managed by a Department Head and supported by shared services.
MISSION STATEMENTTo provide quality products & services to our customers, ensure profitability and promote employee development. Being the best … always.
Our primary business objective is to provide our customers with a network of financial services providers and branches
wherein they can speedily conduct money transfer, money exchange, pay bills, take out short and long term loans in the neighbourhood where they live, work or play.
In order to meet our stated objective and mission, we have developed and adhered to a comprehensive business strategy which drives sustainable value.
All our business segments must drive superior financial performance. All our strategies must drive growth or be innovative and give us competitive advantage. We continuously review our processes to ensure that we are productive and efficient and that we foster excellent relationships with our staff, customers and agents.
Our core business is Money Transfer through MoneyGram and Foreign Exchange services through our Cambios. We also have a division for Loans. Value added services are: phone top ups, bill payment DHL Courier service and cash disbursements for coffee farmers.
MONEY TRANSFERLFSL provides the service out of its own three (3) branches located in Kingston and through a network of 118 Sub-Agents islandwide. Our Sub-Agents profile includes Credit Unions, Cambios, Supermarkets, small financial services, Hardwares, Pharmacies, Post Offices and Haberdasheries. Although all parishes are covered, Kingston has the largest number of locations. All our Agent locations are licenced by the BOJ and perform money transfers for MoneyGram through LFSL. All Agents process receive transfers and some do outbound transfers.
CAMBIOLFSL has 4 branches licenced by the BOJ; three in Kingston and one in Ocho Rios. Our Cambios offer retail/walk-in foreign exchange services in USD, KYD, GBP, CAD and EURO. We trade in cash, wire transfers and drafts. We also supply foreign currency to the other LASCO affiliated companies and a core of businesses that require daily and weekly foreign currency to pay suppliers.
Through our Cambio branches we offer our customers the convenience of bill payments and phone card top-ups. In our Papine Branch, we pay the coffee farmers on behalf of a coffee farm. LASCO Cambio (our trade name), is the only Drive-Thru cambio in Jamaica where customers can conduct business from the privacy of their vehicles.
BACKGROUND
OPERATING SEGMENTS
LOANSThis service began as a unit to assist staff with short term unsecured loans to suit their needs. It has evolved into a full service lending unit, offering car loans, education loans, appliance loans and unsecured short term loans to the public. Our philosophy for loans is that they should be fast suited to personal
circumstances, easy to understand and affordable.
We manage a fair sized portfolio from a wide cross section of professionals. We offer our loans service through one branch only, in Kingston.
There is typically a correlation between the events in the economies of the US, CANADA & UK, which are the source of money transfer, and the performance of the local remittance industry. This relationship is normally positive. The graph below illustrates the Jamaican remittance inflows over the last 5 years, and makes the distinction between performance of the private remittance companies versus total remittances.
REMITTANCESRemittances though responsive to economic conditions are more responsive to the needs of those individuals dependent on them and the financial obligations that the senders have in Jamaica.
Jamaica’s remittance peaked in 2008 at $2,021.3 Billion USD but fell significantly in 2009 to $1.7 Billion then rose consistently to $2,037Billion in December 2012 surpassing the previous peak. Year over year 2012/13 inflows showed remittance companies growing by 2.2% while total remittance inflows grow 9%.
Our outlook for remittance is that it can be reasonably predicted. It is fairly stable and will be consistent for the next few years.
However, migration patterns are changing and second generation migrants are not as loyal and of course delivery channels have diversified.
New Delivery ChannelsThe latest technology, political and regulatory approvals make mobile wallets imminent.
Jamaica is a great market for the following reasons:
• High penetration of cell phones• Technologically savvy users• Love of high profile fads • Users are currently receiving cross border phone credit transfer
Jamaica does not possess the elements of successful mobile wallet markets for the following reasons:
• It is cash driven due to a large informal consumer market• Banking is very convenient• More than 70% of the population is banked though accounts are not satisfactorily serviced• Average phone card “top-up” is $100 despite falling call rates
There is no doubt that emerging technologies will in time replace cash. Companies such as ours must continuously review our target markets and ensure that we are flexible, data-centric and revolve our processes around the needs of our customers.
The Industry is comprised of 9 Remittance Service Providers (RSPs) with a branch network of 477 locations.
OUR INDUSTRY
Management Discussion & Analysis
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Annual Report | 2013LASCO Financial Services Limited
25 26
The following table presents selected financial data for the financial years (FY) ended March 31, 2013, 2012 and 2011; which have been derived from our financial statements (dollar amount in millions except per share data). The 2013 statement represents a consolidated report for LFSL and its subsidiary LFSBL.
OUR FINANCIAL PERFORMANCE
Management Discussion & AnalysisCAMBIOOur local foreign exchange market has faced speculation and its attendant volatility. This resulted in some earners making above normal spreads in some periods.
Based on data from the Cambio Market trades, there has been a steady increase in purchases over the last 3 years; the 2012/2011 growth registering a 15% increase. This expansion in cambio purchases is not necessarily indicative of the country’s increased earning power for foreign currency but could be an indication of persons reducing savings due to attractive rates. During the year, while the country awaited the much touted IMF deal, confidence in the economic programmes waned and some investors opted out of Jamaican Dollar savings and converted to USD, while businesses which rely on USD to fund their operations converted savings to ensure access to consistent supplies. Accordingly, this pressure on the dollar saw Jamaica’s NIR in November, reaching
its lowest point in 10 years to $1,078 Billion as among other things, the BOJ carried out intervention strategies to stem the rapid devaluation. The dollar opened the year at J$86.69: US$1:00 and closed the year at J$92.63: US$1.00. It lost $5.94 or 6.8% of its value over the year.
The Industry is comprised of 75 Cambio entities with a branch network of 168 locations.
LENDING INDUSTRYThis is a fiercely competitive industry wherein lies many formal and informal institutions, all competing for the consumer’s attention for unsecured loans.
In addition to banks and credit unions, there has been a proliferation of companies offering unsecured short term loans and microfinancing.
These institutions play a very important role in granting credit to a section of the society who would not necessarily qualify for loans from banks. Such loans are granted for consumption as well as small business opportunities. There is no comprehensive data on the value of this industry but as an indicator, the Jamaica Microfinancing Association comprising 8 members has an aggregated loan portfolio of approximately $6B JAD.
Financing consumers from the informal sector puts credit, savings and other basic financial opportunities within their reach.
Year ended 31March 2013
$000
Year ended 31March 2012
$000
Year ended 31March 2011
$000REVENUE AND EXPENSES
Total Revenue
Administrative and other expenses
Selling and Promotion Expenses
Finance Cost
Net Profit
BALANCE SHEET
Cash and Cash Equivalents
Total Assets
Total Liabilities
Total Stockholder’s Equity
FINANCIAL RATIOS
Prior to share split
Earnings Per Share (cents)
Book Value Per Share
Market Price Per Share (JSE closing price - J$)
Outstanding Shares*
Market Capitalisation (J$)
Dividend Per Share (Cents)
Dividends Paid
Dividend Pay Out Ratio
Price Earnings Ratio
Efficiency Ratio (admin exp./revenue)
Net Profit Growth (%growth)
Return on Average Equity
Return on Average Assets
Current Asset Ratio (times)
EFFECTS OF SHARE SPLIT
Earnings per share (cents)
Book value per share
Outstanding Shares *
Dividend per share (cents)
Dividends paid
*Weighted average
0.133
0.52
1,228,102,990
0.03
36,843
0.083
0.42
1,228,102,990
0.013
15,965
0.026
0.27
1,163,039,750
0.005
6,141
484,639 372,663 226,804
168,467 169,467 103,612
151,897 99,152 83,374
376 875 3,949
163,899 102,434 29,775
189,096 114,318 194,675
639,625 511,484 313,668
165,040 147,990 46,467
474,585 363,494 267,201
1.33 0.83 0.26
3.86 2.96 2.30
6.11 3.94 2.15
122,810,299 122,810,299 116,303,975
750,370,927 483,872,578 250,053,546
0.30 0.13 0.05
36,843 15,965 6,141
22.48% 15.59% 20.62%
5 5 8
34.76% 45.47% 45.68%
60% 244% 187%
39% 32% 22%
28% 25% 17%
3.0 2.5 5.8
Management Discussion & Analysis
RESULTS OF OPERATIONNotwithstanding the continued macroeconomic uncertainties and highly competitive conditions for our industry, all our business segments continue to make substantial progress.
REVENUE
Consolidated revenues increased by over 30% in this financial year, as we realised the gains from our investment in late 2011, to expand our remittance network through acquisition. This expansion wherein we added 88 locations to our then existing network of 70 contributed to an over 40% growth in revenues from this division.
SEGMENT RESULTS
Trading income across all lines in aggregate was over 70% more than 2012. Cambio saw the most significant growth, given the increased USD from the remittance business and increased foreign exchange gains. Growth in the loans division was a direct result of our strategy to broaden our reach to a larger demographic.Other operating income in prior year included a large one-off fair value gain on investment property of $90.3 Million. Excluding this gain, all other operating income increased by 4%.
NET PROFITThe group net profit of $163.9 Million increased 60% over the prior year. Earnings per share rose to $1.33 compared to $0.83 in 2012. The net profit of $163.9 Million includes an operating loss from our subsidiary LFSBL of $1.429 Million representing start-up costs for the Barbados remittance business.
LFSBL, though established during the 2013 financial year, only began trading in May of 2013; therefore, not reflecting any trading gains in the consolidated revenues.Management is confident that over the last financial year, LFSL achieved Superior Financial Performance as indicated in our Sustainable Value proposition.
EXPENSESOperating expenses increased $51.7 Million or 19% to $320.3 Million in 2013. The increase in current year expenses is primarily due to:
1. Increase in commissions from Remittance transactions
2. Increase in compensation and staff benefits and incentives. We expanded our staff complement, more particularly
TOTAL REVENUE $’000
600,000
400,000
200,000
2013 2012 2011
163,899
107,434
29,775201120122013
NET PROFIT
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Annual Report | 2013LASCO Financial Services Limited
27 28
in financial administration and enhanced and strengthened our Compliance Division so that we can better manage our expanding network and increasing number of transactions. This investment in Human Resources led to an increase in staff productivity during the financial year. Based on the average number of staff, contribution to revenues was J$12.7 Million per person compared to J$11.6 Million in the prior year.
Increased cost associated with the advertising and promotion of our Cambio Drive Thru facility and generally creating awareness for all our products and services.
Management continues to be vigilant concerning its expenses, by ensuring that the rate of growth of expenses remains below that of revenues. The efficiency ratio of administrative expenses to total revenue was 35% compared to 45% in the prior year.
We are proud to highlight that our operational strategies, in particular our treasury management, resulted in an even lower finance cost despite our expanded agent network and increased loan portfolio. There was a 57% reduction in finance costs, moving from $875,000 to $376,000. This was remarkable given the Real Time Gross settlement procedure instituted by The BOJ during the year.
BALANCE SHEETCash & Cash Equivalents
Cash at the end of the year was $189 Million compared to $114 Million for the previous year, a 65% increase. Most of the cash generated was largely from trading activities together with our concerted efforts to manage our operational expenditure.
Liquidity of the company remains healthy despite dividend payments of $53 Million and additions to property, plant and equipment and an expanded loan portfolio.
Cash from operating activities is significantly more than prior year. This is indicative of the strong trading income and managed operational cost.Investing activities also generated a net increase of $9.8 Million. There were acquisitions of assets and additions to leasehold improvements but these were offset by the $15 Million proceeds from the disposal of land.
Dividends
In 2013, we paid Dividends of $53 Million which is $47 Million more than the previous year. Given our remarkable performance, we paid dividends of 13cents per share in respect of financial year 2012 and 30cents in respect of March 2013 financial year; a 131% increase. We expect that we will be able to continue to pay dividends annually for the foreseeable future.
Shareholder’s EquityLFSL maintains a strong capital base to support the risks associated with its diversified businesses. LFSL’s Stockholder’s Equity as at March 2013 was $474 Million, compared to $363 Million of the previous year. This 30.5% increase was predominantly due to growth in Retained Earnings.
Management Discussion & Analysis Management Discussion & Analysis
Our stock price recorded a 55% increase during the financial year; opening at $3.94 and closing at $6.11.
Total AssetsTotal assets were $639 Million reflecting a growth of 25%. These assets include high cash balances, investment property and a strong loan portfolio.
Our net loan portfolio grew 62% to $91 Million. The portfolio growth was a result of our efforts to grow the contribution from this division and to expand our niche targets.
PORTFOLIO QUALITYWe are confident that our credit strategy is yielding the quality loans we desire. A substantial part of our portfolio is comprised of loans granted to the staff of the LASCO Affiliated Companies. As we operate currently from one location, our customer base is extended mainly to those persons to whom we do a direct sale.
Provision for loan losses have been increased 26% from $1.3 Million to $2.5 Million given that we are aware of the challenges facing our customers.
The Business lines in which we operate are highly competitive and subject to adverse fluctuations in the daily currency exchange rates, economic conditions of the source send countries for remittance and economic conditions of our borrowers. These risks among others can subject the Company’s Net Income and Revenues to wide fluctuations. These risks are however systemic to the Financial Services Industry and operational risks are a consequence of being in business.
Our philosophy therefore is that risk breeds innovation and once carefully evaluated, the impact can be controlled by appropriate management actions.
LASCO Financial Services Limited (LFSL) in its commitment to operating on the premise of good Corporate Governance and ethical principles has committed to operating in full compliance with all applicable laws and regulations, to prevent and detect money laundering and combat the financing of terrorism. LFSL further commits itself to the attainment of standards equivalent to international best practices in the areas of money laundering prevention and the counter financing of terrorism (MLP/CFT).
ANTI-MONEY LAUNDERING (AML)In acknowledging the importance of fighting financial crimes, fraud and
money laundering, as well as the need to protect the LFSL’s brand against the risk of financial damage, reputation, and regulatory sanctions, we have assigned the responsibility for AML to company appointed Chief Compliance Officer who is the designated Nominated Officer and who has the technical qualifications and sufficient professional expertise to carry out the requirements of the function. The Nominated Officer has full independence in performing her tasks and reports to the Board of Directors through the Audit Committee.
The primary responsibilities of this Officer include:
• Establishing a comprehensive customer due diligence process,
• Employing methods for ongoing monitoring of transactions; and a process for reporting threshold transactions and suspicious transactions to the Financial Investigations Division (Jamaica’s Designated Authority)
• Implementing appropriate AML/CFT regulatory controls which includes; employee training and sub-agents training;
RISK & COMPLIANCE MANAGEMENT FRAMEWORK
3.
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Annual Report | 2013LASCO Financial Services Limited
29 30
Kamille Adair-Morgan(Papine & Red Hills Road Cambio Customer)
Evon Redman MoneyGram Agent
As a Jamaican who pursues graduate studies overseas, LASCO Cambio is my choice to get the best rates as I travel abroad regularly. Their customer service is excellent and I really appreciate their VIP card which lets me benefit from special rates, discounts and premiums. I love LASCO Cambio.
Levon Electrical & Hardware has been a sub-agent with LASCO MoneyGram for over 5 years and finds the partnership extremely refreshing. LASCO Financial Services goes the extra mile in making their sub-agents and customers feel truly special. We salute you!
Management Discussion & Analysis• Implementing systems to assist with customers activity- monitoring to identify unusual patterns of activity, suspicious transactions, and a scanning
process to search client databases to minimize the risk of the LFSL knowingly doing business with sanctioned individuals or entities, corporate bodies or otherwise
At an Extraordinary General Meeting held June 26, 2013, the Shareholders of LASCO Financial Services Limited passed a resolution sub-dividing each share of no par value whether issued or unissued into 10 shares of no par value. The Ex-Date was July 5, 2013 and the Record date July 9, 2013 at which time the shares began trading at J$1.23. The numbers of issued
shares now stand at 1,288,102,990 and Earnings per share of $0.013 cents based on financial statements for year ended 31 March 2013.
The table below shows the company’s financial position and the Key Ratios prior and subsequent to the split.
The statements below are based on management’s expectations and involve risk and uncertainty that may cause results to differ materially from those projected. These statements should therefore be evaluated together with the uncertainties that affect our business, particularly those listed in the risk factors.
LFSL, though the largest MoneyGram Agent in Jamaica, is still seeking to substantially move its market share. The growth in foreign currency earnings from the increased remittances will also
directly impact the growth prospects for the Cambio business. The prospects for our loans business remains good even as we seek to carve out a bigger niche segment. Our activities in Barbados are experiencing good market adoption and its pace of growth is promising.
We could not have reached where we are without the loyalty of our customers, agents, staff and Board of Directors. We have positive expectations for the year ahead which should see continued competitive returns to our shareholders.
OUTLOOK
KEY EVENTS SUBSEQUENT TO YEAR END
Year ended 31March 2013
$000
Year ended 31March 2012
$000
Year ended 31March 2011
$000REVENUE AND EXPENSES
Total Revenue
Administrative and other expenses
Selling and Promotion Expenses
Finance Cost
Net Profit
BALANCE SHEET
Cash and Cash Equivalents
Total Assets
Total Liabilities
Total Stockholder’s Equity
FINANCIAL RATIOS
Prior to share split
Earnings Per Share (cents)
Book Value Per Share
Market Price Per Share (JSE closing price - J$)
Outstanding Shares*
Market Capitalisation (J$)
Dividend Per Share (Cents)
Dividends Paid
Dividend Pay Out Ratio
Price Earnings Ratio
Efficiency Ratio (admin exp./revenue)
Net Profit Growth (%growth)
Return on Average Equity
Return on Average Assets
Current Asset Ratio (times)
EFFECTS OF SHARE SPLIT
Earnings per share (cents)
Book value per share
Outstanding Shares *
Dividend per share (cents)
Dividends paid
*Weighted average
0.133
0.52
1,228,102,990
0.03
36,843
0.083
0.42
1,228,102,990
0.013
15,965
0.026
0.27
1,163,039,750
0.005
6,141
484,639 372,663 226,804
168,467 169,467 103,612
151,897 99,152 83,374
376 875 3,949
163,899 102,434 29,775
189,096 114,318 194,675
639,625 511,484 313,668
165,040 147,990 46,467
474,585 363,494 267,201
1.33 0.83 0.26
3.86 2.96 2.30
6.11 3.94 2.15
122,810,299 122,810,299 116,303,975
750,370,927 483,872,578 250,053,546
0.30 0.13 0.05
36,843 15,965 6,141
22.48% 15.59% 20.62%
5 5 8
34.76% 45.47% 45.68%
60% 244% 187%
39% 32% 22%
28% 25% 17%
3.0 2.5 5.8
-
31 32
Annual Report | 2013LASCO Financial Services Limited
25Marketing
LASCO Financial Services connect. . . through i ts Marketing Department
-
Annual Report | 2013LASCO Financial Services Limited
33 3425Marketing
-
LASCO Financial Services Limited
35 36
Annual Report | 2013
Shareholders' Profile as at March 31, 2013
Name1. East West (St. Lucia) Limited2. Lascelles A. Chin 3. Michael A. Campbell4. Huixiong Liao
5. Wayne M. Chin
6. Joel Izquierrdo Gonzalez
7. Mayberry Managed Clients Account8. Mayberry Investments Limited. Pension Scheme9. Guardian Life Limited/Pensions Fund
10. MF&G Trust & Finance Ltd. A/C#57
Name Primary Holder
1. Jacinth Hall-Tracey2. Compton Rodney3. Roald N.A. Henriques4. Lascelles Chin5. East West (St. Lucia)6. Gary Peart7. Eileen Chin
Name Primary Holder
1. Atasha Bernard2. Vincent Chen
138,8000.00375,00037,873,14860,177,04639,70010,106
0.000.00
0.000.00
Senior OfficerSenior Officer
0.08180.000.305330.8449.000.03230.0082
60,177,04637,873,1481,236,328
799,080493,037
1,292,1171,302,465
260,0001,562,4651,451,500
84,7841,536,2841,229,637
845,475
792,941
980,000
49.0030.841.010.650.391.041.120.211.331.180.071.251.000.71
0.65
0.80
* Anna L. Chang-Liao
*Hilda Gonzalez-Rosales
*Hilda Gonzalez-Rosales
* Connected Party
*Liudmila Gonzales Diaz
Joint Holders
Position *Connected Party
Position *Joint Holder
Percentage
Percentage
Percentage
Volume
Units
Units
LASCO Financial Services LimitedTop Ten Shareholders as at March 31, 2013
LASCO Financial Services LimitedShareholdings of Directors and Connected Parties as at March 31, 2013
LASCO Financial Services LimitedShareholdings of Senior Officers and Connected Parties as at March 31, 2013
The Directors are pleased to present their report for LASCO Financial Services Limited (“LFSL”) for the financial year ended March 31, 2013.
FINANCIAL RESULTS The Consolidated Statement of Comprehensive Income shows total Comprehensive Income for the year of $164M. LFSL listed its shares on the Junior Market of the Jamaica Stock Exchange on October 12, 2010 and for this reason is entitled to a remission of Corporate Income Tax for a period of ten years from the date of listing as follows:
Years 1–5 100% Years 6–10 50%
DIRECTORSThe Directors of the Company as at March 31, 2013 are Hon. Lascelles Chin O.J., C.D (Executive Chairman); Mrs. Jacinth Hall-Tracey (Managing Director); Dr. Eileen Chin (Non-Executive); Mr. Gary Peart (Non-Executive); Mr. Compton Rodney (Non-Executive); and Hon. Roald Henriques, Q.C., O.J. (Non-Executive).
In accordance with Article 97 and 98 of the Articles of Incorporation of the Company, Directors Hon. Roald N. A. Henriques and Hon. Lascelles Chin shall retire by rotation and being eligible, will offer themselves for re-election.
AUDITORSThe Auditors of the Company, BDO, of 26 Beechwood Avenue, Kingston 10, Jamaica, have expressed their willingness to continue in office as Auditors of the Company until the conclusion of the next Annual General Meeting.
DIVIDENDOn March 8, 2013 an interim dividend of Thirty Cents (0.30¢) per share was paid to shareholders on record as at February 18, 2013 and is proposed to be the final dividend in respect of the financial year ended March 31, 2013.
THANK YOUWe wish to thank our members of staff, as well as the MoneyGram agents who continue to provide fast and efficient service to our customers. Thanks also to all our Corporate and retail Cambio customers who continue to support our business and our shareholders for their confidence in the company
Dated this 9th day of August, 2013FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Vincent A. Chen SECRETARY
Directors' Reportas at March 31, 2013
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Annual Report | 2013LASCO Financial Services Limited
37 38
Corporate Governance
Mr. Compton Rodney Non-Executive Director
Mr. Gary Peart, MBA Non-Executive Director
Hon. Lascelles Chin, O.J., C.D. Executive Director
Corporate Governance and Ethical Principles are fundamental elements in the operation of LASCO Financial Services Limited. The Board of Directors of the Company is responsible for overseeing management’s monitoring of the business operations, thereby ensuring accountability, objectivity and transparency in the Company’s activities. In fulfilling its obligation, the Board ensures that the Company is managed and operated within the framework of the established policies and procedures and importantly, ensures compliance with the rules of the Jamaica Stock Exchange and the laws and regulations of the country. This is all in an effort to protect the interests of the Company and its stakeholders.The directors are kept abreast of the operations of the Company and are provided at their director’s meetings with detailed quarterly reports on the company’s
activities.As part of the governance structure, major financial decisions are approved by the full board. The directors also offer advice to the management.At the end of the period under review, March 31, 2013, the board comprised six directors (two executive and four non-executive directors), all successful and experienced professionals.In keeping with the Articles of Incorporation of the Company, the longest serving directors are required to retire and can be re-elected by the members at the annual general meeting of the Company.
Board Sub-committeesThe Board has three sub-committees, the Audit and Compliance Committee, the Assets and Liabilities Committee and the Compensation Committee. The members are appointed by the full Board of Directors; however, any board member
may attend sub-committee meetings.In an effort to maintain a level of objectivity, all three committees are chaired by non-executive directors and are comprised of a majority of non-executive directors.
The Audit and Compliance CommitteeThe Committee is guided by its established terms of reference and has the responsibility to assist the board in overseeing the Company’s financial reporting, auditing process and legal compliance.
The Committee members, Compton Rodney (Committee Chairman), Gary Peart and Lascelles Chin meet quarterly to:
(i) Analyze the interim financial statements required by the Jamaica Stock Exchange (JSE) before they are submitted to the Board of Directors for approval and
Corporate Governance
the subsequent submission to the JSE. It also reviews the audited financial statements at the end of each year and ensures that the financial activities are accurately reported.
(ii) Examine, discuss and approve the internal audit plan for the year and to review the internal audit report which should include an overall assessment of the internal control, risk, financial reporting, compliance and corporate governance environments of the Company.
(iii) Examine, discuss and approve the external auditors’ plan and review and discuss the Auditors’ Management Letter to the Company.
(iv) Recommend to the board the annual fee to be paid to the auditors.
The Committee mandates the internal auditor to: - assess the financial operating procedures - check the accuracy of the financial
records - ensure compliance with accounting
regulations and internal controls - detect fraud - recommend improvements to internal
controls
In keeping with the practice of good governance, the internal auditor reports to the committee at its quarterly meeting. This facilitates the maintenance and improvement of organizational procedures and controls for tracking the company’s income and expenditures.
The Managing Director and the Financial Accountant are invited to the meetings to answer questions that the members may have.For the financial period under review the committee and by extension, the Board of Directors, appointed Mayo Holdings Limited to function on a co-sourcing basis to provide internal audit services.
The Compensation CommitteeThe role of the Compensation Committee is to advise the board on all matters relating to the compensation of the Executive Chairman, the Managing Director and the non-executive members of the board.
The Committee, whose members are Gary Peart (Committee Chairman), Compton Rodney and Lascelles Chin ensures that the pay programmes are appropriate and supportable and aligned with the overall business strategy.
The Committee meets annually to assess the performance of the Executive Chairman and the Managing Director and for the financial year under review, the committee convened as required and made its recommendation to the full board of Directors.
The Executive Chairman does not participate in the discussions and agreements concerning his compensation
The Assets and Liabilities Committee The primary goal of the Assets and Liabilities Committee is to evaluate, monitor and advise the board on all matters relating to risk including imbalances in the capital structure of the company.
In light of the controls in place, the Committee is now required to meet four times for the year. The Committee reviews the annual financial plan of the Company and recommends its acceptance by the board.
The members are Compton Rodney (Committee Chairman), Gary Peart and Lascelles Chin.
The Managing Director and Financial Accountant are invited to the meetings to answer any questions that the Committee may have.
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Annual Report | 2013LASCO Financial Services Limited
39 40
Below is a summary of the attendance recorded in respect of the meetings for the financial year ended March 31, 2013.
Meetings AGM BOD Compensation Audit ALCO Committee Committee No. of Meetings 1 4 1 5 4Lascelles Chin 1 4 1 4 2Jacinth Hall-Tracey 1 4 - 5 4Eileen Chin 1 4 - - -Roald N.A. Henriques - 3 - 4 3Compton Rodney 1 4 1 5 4Gary Peart 1 3 1 4 3
The following table outlines the Composition of each Committee.
Meetings Compensation Audit ALCO Committee Committee
Lascelles Chin √ √ √
Gary Peart* √ √ √
Compton Rodney** √ √ √
Jacinth Hall-Tracey - - -
Eileen Chin - - -
Roald N.A. Henriques - - -
The board of LASCO Financial Services Limited is dedicated to the practice of good governance and will continue in its efforts to achieve increased shareholders’ confidence and maximize shareholders’ value.
* Chairman - Compensation Committee **Chairman - Assets and Liabilities Committee - Audit Committee
Corporate Governance
REGISTERED OFFICELASCO Financial Services Limited27 Red Hills Road Kingston 10 Jamaica, W.I.Tel: (876) 960-7473 (876) 920-0322Fax: (876) 960-4595
Website: www.lascojamaica.com
DIRECTORS
ExecutiveHon. Lascelles Chin, O.J., C.D.Chairman
Mrs. Jacinth Hall-TraceyManaging Director
Non-ExecutiveDr. Eileen Chin, MBAMr. Gary Peart, MBAMr. Compton RodneyHon. R.N.A. Henriques, Q.C., O.J.
Company SecretaryMr. Vincent A. Chen
Senior OfficersHon. Lascelles Chin, O.J., C.D.Executive Chairman Mrs. Jacinth Hall-TraceyManaging Director
Mr. Vincent ChenCompany Secretary
Ms. Atasha BernardFinancial Accountant
Attorneys-At-LawMr. Vincent ChenChen, Green & Company 6 Haining Road Kingston 5Jamaica, W.I.
BankersCIBC FirstCaribbean International Bank Jamaica Limited 23-27 Knutsford BoulevardKingston 5Jamaica, W.I.
Bank of Nova Scotia Jamaica LimitedCnr. of Duke & Port Royal Streets KingstonJamaica, W.I.
National Commercial BankJamaica Limited,94 Half Way Tree Road, Kingston 19, Jamaica, W.I.
AuditorsBDO26 Beechwood Avenue Kingston 5Jamaica, W.I.
Registrar and Transfer AgentsJamaica Central Securities Depository 40 Harbour StreetKingstonJamaica, W.I.
Corporate Dataas at March 31, 2013
-
41
Year Ended 31 March 2013
2013
Independent Auditors’ Report to the Members
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Shareholders’ Equity
Consolidated Statement of Cash Flows
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Shareholders’ Equity
Statement of Cash Flows
Notes to the Financial Statements
43-44
45
46
47
48
49
50
51
52
53-80
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
4443
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
4645
Consolidated Statement of Comprehensive incomeYear Ended 31 March 2013
Consolidated Statement of Financial PositionYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
4847
Consolidated Statement of Changes in Shareholders' EquityYear Ended 31 March 2013
Consolidated Statement of Cash FlowsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
5049
Statement of Comprehensive incomeYear Ended 31 March 2013
Statement of Financial PositionYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
5251
Statement of Changes in Shareholder's EquityYear Ended 31 March 2013
Statement of Cash FlowsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
5453
notes to the Financial StatementsYear Ended 31 March 2013
notes to the Financial StatementsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
5655
notes to the Financial StatementsYear Ended 31 March 2013
notes to the Financial StatementsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
5857
notes to the Financial StatementsYear Ended 31 March 2013
notes to the Financial StatementsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
6059
notes to the Financial StatementsYear Ended 31 March 2013
notes to the Financial StatementsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
6261
notes to the Financial StatementsYear Ended 31 March 2013
notes to the Financial StatementsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
6463
notes to the Financial StatementsYear Ended 31 March 2013
notes to the Financial StatementsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
6665
notes to the Financial StatementsYear Ended 31 March 2013
notes to the Financial StatementsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
6867
notes to the Financial StatementsYear Ended 31 March 2013
notes to the Financial StatementsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
7069
notes to the Financial StatementsYear Ended 31 March 2013
notes to the Financial StatementsYear Ended 31 March 2013FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
7271
notes to the Financial StatementsYear Ended 31 March 2012
notes to the Financial StatementsYear Ended 31 March 2012FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTS
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
7473
FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTSnotes to the Financial Statements
Year Ended 31 March 2013notes to the Financial Statements
Year Ended 31 March 2013
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
7675
FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTSnotes to the Financial Statements
Year Ended 31 March 2013notes to the Financial Statements
Year Ended 31 March 2013
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
7877
FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTSnotes to the Financial Statements
Year Ended 31 March 2013notes to the Financial Statements
Year Ended 31 March 2013
-
Annual Report | 2013LASCO Financial Services Limited
LASCO Financial Services Limited LASCO Financial Services Limited
8079
FinAnCiAL STATEMEnTS FinAnCiAL STATEMEnTSnotes to the Financial Statements
Year Ended 31 March 2013notes to the Financial Statements
Year Ended 31 March 2013
-
Annual Report | 2013LASCO Financial Services Limited
81 82
I/We
of
being a Member/Members of the above-named Company, hereby appoint
of
or failing him/her,
of
as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at the Terra Nova All –Suite Hotel, 17 Waterloo Road, Kingston 10 on Monday, September 30, 2013 and at any adjournment thereof.
I desire this form to be used for/against the resolutions.
Signed this day of 2013
Signature:
Unless otherwise directed the proxy will vote as he thinks fit.
NOTES: 1. When completed, this form must be received by the Registrar of the Company at the address given below, not less than forty-eight (48) hours before the time for holding the meeting.
2. The Proxy Form should bear stamp duty of $100.00 which may be adhesive and duly cancelled by the person signing the proxy form.
3. If the appointer is a Corporation, this Form of Proxy must be executed under its common seal or under the hand of an officer or attorney duly authorized in writing.
LASCO FINANCIAL SERVICES LIMITEDANNUAL GENERAL MEETING
FORM OF PROXY
Send to: The Registrar and Transfer Agent Jamaica Central Securities Depository 40 Harbour Street Kingston
PostageStamp
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Annual Report | 2013LASCO Financial Services Limited
83 84
Notes Notes
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29 Red Hills Road, Kingston 10 Jamaica, W.I.
Website: www.lascojamaica.com