Audit wrongly states ISP earnings as 32c
ISP Finance earned $40 million for 2016 or earnings per share of 46 cents based on an average of 87 million shares in issue for the year, but the audited statement reported only 32 cents based on a non-existence average of 126.5 million.
The company only issued 105 million shares hence it is not possible for the average to be greater.
The above error along with glaring errors elsewhere in the financial system at large raise the question about the investing public being adequately protected, in spite of regulators in place to do police the system?
Auditors are required to use care and due diligence in undertaking their duties to ensure that the companies they audit maintain proper records that will give a fair view of a company’s profit and financial position. Users of audited statement is not expected to see glaring errors in them. It raises questions about the quality of the audit and the management of the company as well.
Knutsford Express’ audited reports for 2014 and 2015, were filled with errors or questionable treatment of transactions, raising questions about the accuracy of the entire reports.
The earnings per share for 2014 was overstated due to inaccurate computation of the average number of shares issued in 2013, while showing earnings per share of $1.07 for 2014. The income statement erroneously stated by way of note, that “using the weighted average number of shares at end of 2015 would result in earnings being 50 cents for 2014.” Since no new share were issued in 2015 there can be no there is no need for a computation of an average and there can be no change to the earnings for 2014 if the correct average was computed for 2014 in the first place.
The report had further stated “During January 2014, the company raised additional capital of $99,862,700 from its initial public offering of 99,999,003 shares for its enlistment on the Jamaica Stock Exchange Junior Market”. The company in fact issued 26 million bonus shares in 2013 while the public offering was for 20,000,000 ordinary shares, only 4,867,338 new shares were offered by the company while 15,132,662 shares existing shares were sold to the public in the IPO by shareholders. At the time the IPO, 95,132,662 ordinary shares were already issued, the average number of shares should be approximately 60 million rather than 46.8 million used to compute the 2014 EPS, which would have worked out around 83 cents.
According to ISP Finance prospectus, 1n January 2007 the company was incorporated with an authorised share capital of 10,000 ordinary shares at J$1 per share. In June 2007 the company’s authorised share capital was increased to 5,000,000 ordinary shares with all being subscribed for at $1 each.
On February 11, 2016 the company’s authorised share capital was increased to 105,000,000 ordinary shares. Of the 100,000,000 ordinary share increase, 51,017,500 shares were allotted to Gencorp Limited at J$2 per each being the same price at which shares were offered in the IPO. Of the balance just over 48.98 million units were offered to the general public in the IPO.
Modest rise in junior market
Trading on the junior market fell off sharply on Thursday from Wednesday’s levels, as demand declined below the previous day leaving the market index inching up by just 1.16 points to end at 2,991.64.
Market activity ended with only 15 securities trading, similar to the total on Wednesday with advancing and declining stocks ending at a 5 each. A total of 243,100 units valued at $4,441,436 passed through the market, compared to 699,545 units valued at $3,810,910 on Wednesday.
The junior market ended trading with an average of 16,207 units for an average value of $296,096 traded, compared to 46,636 units for an average value of $254,061 on the previous trading day. The average volume and value for the month to date ended at 138,835 units and $1,338,271. On the immediate preceding trading day, the average volume and value for the month to date, were 144,675 units and $1,385,643. The average volume and value for February, ended at 223,938 units and $1,379,459.
Trading ended with 10 stocks had bids higher than their last sale prices and 4 ended with lower offers, than the last sale.
At the close of the market on Thursday, AMG Packaging climbed $1 and closed at $6 with 27,916 units changing hands, CAC 2000 lost 5 cents and closed at $7.80 with 31,239 shares trading, Caribbean Cream dropped 8 cents in trading 1,733 units to end at $7.90, Derrimon Trading ended at $8.50 with 3,994 shares changing hands, Honey Bun had 3,952 shares changing hands, rose 70 cents and closed at $7.30. Iron Rock Insurance traded 7,256 shares to end at $3.84, Jamaican Teas traded just 320 shares to close at $7.99, Jetcon Corporation dropped $1 and closed trading with 21,970 shares being exchanged, to end at $11, Knutsford Express lost 11 cents to end at $42 with 80,146 shares changing hands, Lasco Distributors ended with 22,522 units trading at $6.70, Lasco Financial fell 40 cents, with 20,000 shares changing hands, to end at $3.60, Lasco Manufacturing closed with 2,420 units changing hands at $5, after falling 5 cents, Main Event closed at $5 with 11,724 shares changing hands, Medical Disposables climbed 75 cents to $6 with 4,808 units trading and Paramount Trading had 3,100 shares changing hands, to close with a rise of 20 cents at $3.80.
Sharp price moves push stocks down – Tuesday
Trading levels in main market ended at 5,715,510 units valued at $62,017,146 compared to 2,602,058 units valued at $19,772,383 at the close on Monday. Trading in the US dollar market accounted for 375,830 units valued at US$112,160.
The All Jamaica Composite Index declined 652.58 points to close at 244,600.84 the JSE Market Index fell 594.58 points to finish at 222,859.09 and the JSE US dollar market index gained 5.36 points to close at 215.57.
IC bid-offer Indicator| At the end of trading in the main and US dollar markets, the Investor’s Choice bid-offer indicator reading shows 9 stocks with bids higher than their last selling prices and 5 with lower offers.
The main market ended trading with an average of 122,740 units, compared to an average of 53,047 units on Monday. The average volume for the month to date ended at 136,817 units versus 150,894 units on the prior trading day. The average volume and value for February ended at 223,938 units and $1,379,459.
In market activity, Berger Paints slid $1.95 to $11.05, with 92,502 shares changing hands, Cable and Wireless lost 1 cent to close at $1.29 with trades of 255,042 shares, Caribbean Cement closed $1.20 lower to $31 with an exchange of 38,790 units. Carreras traded at $72, gaining $3 with 25,245 shares exchanged, Grace Kennedy advanced 90 cents to $43.90 with 170,701 units changing owners, Jamaica Broilers traded 124,547 shares at $15.99, for a loss of 1 cent, Jamaica Producers closed at $16 with 143,221 shares exchanged, Jamaica Stock Exchange closed 53 cents lower at $7, with trades of 861,904 units. JMMB Group closed at $16.81, losing 19 cents with 62,377 units traded, Kingston Properties closed at $16.35 trading 2,250 shares, Kingston Wharves lost 25 cents to close at $31.50, with 133,133 units changing hands, Mayberry Investments closed 10 cents lower at $4.60 with an exchange of 63,659 shares, NCB Financial Group gained 40 cents to close at $61.90, after exchanging 39,418 shares, 1834 Investments closed at $1.50, losing 10 cents trading 24,112 units, Palace traded 900 units at $200, Pan Jamaican closed at $35, with a loss of 1 cent trading 59,159 shares. Pulse Investments closed at $8.40, losing 5 cents with an exchange of 2,654 units, Radio Jamaica gained 30 cents to close at $1.90 exchanging 30,300 shares, Sagicor Group closed at $33.50 trading 151,851 shares, Sagicor Real Estate fund lost 6 cents to close at $10.50 with 184,285 shares traded, Scotia Group was down 99 cents, to close at $38.01, with 513,417 units exchanged, Scotia Investments traded $1.95 higher to $40 with a mere 1,000 units changing hands, Supreme Ventures advanced 35 cents to $6.35 trading 4,710 shares. Proven closed at 30 US cents, gaining 1 cent with an exchange of 375,830 ordinary shares and JMMB Group 7.5% preference share lost 1 cent to close at $1.08 with trades of 2,730,333 units.
Junior market index jumps – Tuesday
Market activity ended with 25 securities trading, up from 23 on Monday as 9 stocks rose and 11 declined. A total of 4,031,077 units valued at $23,768,156 passed through the market, compared to 1,062,024 units valued at $5,541,349 on Monday.
The junior market ended trading with an average of 161,243 units for an average value of $950,726 traded, compared to 46,175 units for an average value of $240,928 on the previous trading day. The average volume and value for the month to date, ended at 149,577 units and $1,439,528. On the immediate preceding trading day, the average volume and value for the month to date, were 148,963 units and $1,463,968. The average volume and value for February, ended at 223,938 units and $1,379,459.
Trading ended with 5 stocks had bids higher than their last sale prices and 2 ended with lower offers, than the last sale.
At the close of the market on Tuesday, AMG Packaging rose by 40 cents and closed at $5.80 with 56,426 units changing hands, Blue Power traded 1,885 units to close at $36.50, CAC 2000 rose 25 cents and closed at $7.85 with 3,000 shares trading, Cargo Handlers ended trading with 1,600 shares at $21, Caribbean Flavours traded 30,000 units to end at $14, Caribbean Producers lost 28 cents in trading 10,000 units at $3.67, Consolidated Bakeries ended with 385,100 shares changing hands, to close at $3. Derrimon Trading lost 38 cents and ended at $8.22 with 138,796 shares changing hands, Dolphin Cove gained $1 and closed trading with 61,739 shares, at $19, General Accident price closed trading with 96,697 shares at $2.80, Honey Bun gained closed with 19,383 shares changing hands at $6.60, after rising by 10 cents, Iron Rock had 31,714 units changing hands to close at $3.84 with a rise of 54 cents, ISP Finance traded 8,000 shares and rose 25 cents to a new high at $12.50, Jamaican Teas fell 75 cents in trading 135,911 shares to close at $7.25, Jetcon Corporation lost 15 cents and closed trading with 62,090 shares being exchanged, to end at $11.85, Key Insurance lost 51 cents to end at $2.99 with 1,000 shares changing hands, KLE Group ended at $3.05 with 145,856 shares changing hands after rising by 25 cents, Lasco Distributors lost 40 cents and ended with 1,014,970 units trading at $6.60, Lasco Financial lost 50 cents with 209,152 shares changing hands, to end at $3.50, Lasco Manufacturing closed with 1,403,493 units changing hands at $4.79, after losing 21 cents, Main Event gained 1 cents and closed at $5 with 31,565 shares changing hands, Medical Disposables lost 75 cents in trading 27,800 shares to close at $5.25, Paramount Trading had 17,000 shares changing hands, to close with a loss of 15 cents at $3.65 and tTech fell 48 cents and ended with 118,000 units changing hands at $6.27.