NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

1 NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

2 3 NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT


Neal & Massy: A Force for Good

The Most Responsible and Profitable

Investment Holding / Management Company

in the Caribbean Basin

This we know. This we believe. To this we commit.

Our Vision Statement


In 2010, the Group’s Executive Committee reflected on our Vision Statement. After contemplating who we are and what we stand

for, we then asked: “What is our vision for the future of the Neal & Massy Group of Companies?”

Intrinsic to Neal & Massy’s long-term success has been the legacy of a tremendous history in the Caribbean business community

founded on our commitment to integrity and our greatest asset: an incredible pool of human resources, imbued with our

unshakeable core values. However, now more than ever, we dare not be complacent about our accomplishments or assume that

the past assures our future. Continuous self-examination and a focus on reinventing ourselves must remain paramount if we are

to remain relevant to an ever-changing context.

The environments in which we operate continue to manifest socio-economic and political challenges; and each day we learn

about how crime, corruption and greed threaten to undermine our very societal fabric. At the same time, as individuals, we are

increasingly awakening to our hunger for work that is meaningful, that supports a purpose greater than ourselves. In this time

in which we live, our fellow employees, our community at large and indeed our neighbouring countries need more inspiring and

powerful examples of corporate good.

It is against this background that we are excited to share with you the new vision to which the Neal & Massy Group of

Companies aspires.

Neal & Massy: A Force for Good

The Most Responsible and Profitable

Investment Holding / Management Company in the Caribbean Basin

This short statement holds great meaning, which we wish to share with our many stakeholders. Who we are has not changed.

Our core values remain the same. This vision emphasises these values and serves as a beacon for how we strive to operate as a

Group of Companies.

The Group has always been an exemplar for its values of integrity and ethical business practices, care for its customers and

employees, its commitment to grow and deliver superior value for its shareholders and, being a responsible citizen, protecting and

giving back to the environment and communities in which it operates.

Our vision for the future of the Group holds strong those fundamental values and directs us towards growth as a Group of

Companies with managed investments throughout the Caribbean Basin, including non-English speaking countries which border

the Caribbean Sea. When comparing us to a peer group, which would include companies from across the Caribbean & Central

American region, the Neal & Massy Group’s vision is to be the most responsible and profitable company.

Within the next few years, Neal & Massy will be taking bold and innovative actions to drive profitability and growth. To succeed,

we must continue to display the principles of good management and leadership, which have always supported our success. We

will grow to be the most profitable Group of Companies in the region and we will do so responsibly, based on our shared Vision,

core Values and a management model that has proven successful across diverse industries and many cultures while operating in

relatively small, fragmented markets. In so doing, Neal & Massy will be the employer and partner of choice–bar none.

Our continued profitability and growth will be the oxygen that fuels the flames of the Force for Good, rendering this vision the

source of our distinctive competitive advantage. It is our conviction that no matter where Neal & Massy operates in the world –

people will sense our passion for and unwavering commitment to this vision to serve some greater good or higher purpose and will

want to be associated with it. We acknowledge the many great things that have occurred throughout Neal & Massy’s rich past…

and we declare that the future will be even better!

This we know. This we believe. To this we commit.

left to right seated:

Judith Bowen, Senior Vice President & Senior Legal Counsel; Gervase Warner, President & Group Chief Executive Officer;

Paula Rajkumarsingh, Executive Vice President & Chief Financial Officer; Earl Boodasingh, Executive Vice President & Executive Chairman,

Food Group: Food/Consumer Distribution & Logistics and Food Retailing

left to right standing:

Linford Carrabon, Senior Vice President & Executive Chairman, Energy & Industrial Gases Business Unit;

Deo Persaud, Executive Chairman Neal & Massy Guyana Group; Angela Hamel-Smith, Group Human Resources Manager;

Frere Delmas, Senior Vice President & Executive Chairman, Food Retailing Business Unit;

David O’Brien, Senior Vice President & Executive Chairman, Automotive & Industrial Equipment Business Unit;

G. Anthony King, Executive Vice President & Executive Chairman, Financial, Property & Other Business Unit;

Keith Thomas, Senior Vice President & Executive Chairman, Information, Technology & Communications/Other Services Business Unit

missing:

Ralph Taylor, President & Managing Director, Almond Resorts Inc.

Executive Committee

Introducing Our New Vision Statement


MIAMI

UK

BARBADOS

TRINIDAD & TOBAGO

JAMAICA

GUYANA

AUTOMOTIve & INDUSTRIAl eqUIpMeNT

eNeRGY & INDUSTRIAl GASeS

FOOD GROUp

TOURISM/HOSpITAlITY

FINANCIAl, pROpeRTY & OTHeR

INFORMATION TeCHNOlOGY & COMMUNICATIONS/ OTHeR SeRvICeS

ANTIGUA

ST lUCIA

BAHAMAS


Table of Contents

Reports

Corporate Information 12

Notice of Meeting 13

Chairman’s Report 14

Chief Executive Officer’s Report 16

Chief Financial Officer’s Report 20

Segment Review 24

Board of Directors 42

Directors’ Report 46

Management Proxy Circular 49

Financials

Independent Auditor’s Report 1

Consolidated Statement of Financial Position 2

Consolidated Income Statement 4

Consolidated Statement

of Comprehensive Income 6

Consolidated Statement of Changes in Equity 7

Consolidated Statement of Cash Flow 8

Notes to the Consolidated

Financial Statements 10


Directors

A. Lok Jack, Chairman

E.G. Warner, President & Group CEO

R. Balgobin

R. Bermudez

E. Boodasingh

G. Cave

A.C. Fields

G.A. King

W.P. Lucie-Smith

Paula Rajkumarsingh

B.W. Young

Secretary

Althea E. Thompson

Assistant Secretary

Camille Mascall

Registered Office

63 Park Street

P.O. Box 544

Port of Spain

Trinidad and Tobago, West Indies

Telephone: (868) 625-3426

Facsimile: (868) 627-9061

E-Mail: [email protected]

Website: www.neal-and-massy.com

Corporate Information

Registrar and Transfer Office

A.E. Thompson

63 Park Street

Port of Spain

Auditors

PricewaterhouseCoopers

11-13 Victoria Avenue

Port of Spain

Group Principal Bankers

Citibank (Trinidad & Tobago) Limited

12 Queen’s Park East

Port of Spain

First Caribbean International Bank

(Trinidad & Tobago) Limited

74 Long Circular Road

Maraval

First Citizens Bank Limited

9 Queen’s Park East

Port of Spain

RBTT Bank Limited

55 Independence Square

Port of Spain

Republic Bank Limited

11-17 Park Street

Port of Spain

Scotiabank Trinidad & Tobago Limited

Scotia Centre

56-58 Richmond Street

Port of Spain

CO

RPO

RA

TE IN

FOR

MA

TIO

NN

OTIC

E OF M

EETING

TO ALL SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the Eighty-Seventh Annual Meeting of Shareholders of Neal & Massy Holdings Limited (“the

Company”) will be held at the Belmont Salon, Hilton Trinidad, Lady Young Road, Port of Spain, Trinidad on Friday 18th February

2011 at 10:00 a.m. for the following purposes:

1 To receive and consider the Report of the Directors and the Audited Financial Statements for the financial year ended 30th

September, 2010 together with the Report of the Auditors thereon, and to note the final dividend.

2 To elect Directors.

3 To appoint Auditors and authorise the Directors to fix their remuneration and expenses for the ensuing year.

The text of the proposed resolution in relation to Item 2 is set out below as Schedule A.

BY ORDER OF THE BOARD

Althea E. Thompson

Company Secretary

14th December 2010

Notes

1 No service contracts were entered into between the Company and any of its Directors.

2 A member of the Company entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote

in his or her stead. Such proxy need not also be a member of the Company.

3 Attached is a Proxy Form which must be completed, signed and then deposited with the Secretary of the Company not less

than 48 hours before the time fixed for holding the Meeting.

SCHEDuLE A

Text of Proposed Resolution to be considered at the Annual Meeting of Shareholders of Neal & Massy Holdings Limited (the

“Company”) to be held on Friday 18th February, 2011.

Ordinary Resolution

Resolved:-

1 “THAT, in accordance with the requirements of paragraph 4.6.1 of By-Law No. 1 of the Company, Mr. Robert Bermudez be

and is hereby elected a Director of the Company to hold office until the close of the third Annual Meeting of the Shareholders

of the Company following this election”

2 “THAT, in accordance with the requirements of paragraph 4.8 of By-Law No. 1 of the Company, Mr. Brian Young who attained

the age of seventy two years be and is hereby elected a Director of the Company to hold office until the close of the next

Annual Meeting of the Shareholders of the Company following this election”

Notice of Meeting


Arthur Lok JackChairman

Group Third Party Revenue remained flat at $8.3 billion (2009: $8.3 billion).

Profits After Tax decreased from $484 million to $306 million, resulting in the

total EPS declining by $1.40 or 31%. This significant decline in EPS was, in the

main, attributed to losses from Almond Resorts, together with one-time write-

offs pertaining to the discontinuation of Bahamas Supermarkets Limited and

Warrens Motors (in Barbados), which together constituted a loss of $1.95 per

share. The Board of Directors has declared a final dividend of 86 cents per share,

which when added to the 40 cents interim dividend, will make up a total dividend

for the current year of $1.26 (2009: $1.40), which reflects a 40% Payout of EPS

versus 31% in 2009.

Regional economic recovery remains fragile on account of weak external

demand and improvement prospects of regional economies remain closely linked

to the speed and intensity of the economic recovery in the US and Europe. For

the most part, Caribbean economies either contracted or experienced lower rates

of growth in 2010; and the sharp decline in tourism continues to hurt regional

tourism-dependent economies including Barbados and the Bahamas. Recovery

has been further hindered by a number of consequential factors, including reduced

foreign direct investment flows and increasing unemployment rates.

Moderate improvement in the tourism industry in Barbados, the mainstay of its

economy, is expected for 2011 following on the 3% increase in stay-over tourist

arrivals in 2010. The country faces continuing challenges from high public debt,

increasing unemployment and unsustainable government deficits. New fiscal

measures to increase government revenue will continue to put strain on consumer

and business spending.

Growth in the Trinidad and Tobago economy slowed because of the marked

reduction in activity in the construction and energy sectors, however nascent

recovery is visible in these sectors, for 2011, and Neal & Massy is well-positioned to

identify and seize opportunities. Commodity price improvements signal a greater

Chairman’s Report

level of activity in the petrochemical sector, when compared to

the last two years and a greater level of interest in the upstream

industry show promise for a rebound in the energy sector. In the

construction sector, stagnation is anticipated to continue until

mid-2011, with signs of an upturn in the latter part of the year.

In May 2010, General Elections were called and the government

changed hands with the People’s Partnership as the ruling party.

In their national budget presentation a fiscal deficit of 5.5% was

predicted for 2010/11.

While growth in Jamaica has also slowed and the fiscal

measures required for the IMF support are onerous, the economy

has stabilized. Interest rates have fallen below 10%, the currency

has appreciated slightly and inflation has also been contained.

On a positive note, fuelled by strong commodity prices and

increased gold and oil exploration, Guyana’s economy continued

to improve in 2010; and once again our operations in Guyana

have performed superbly.

The economic slowdown currently being experienced is not

the first time that the Group’s resilience has been tested. The

corporate culture of the Neal & Massy Group was built from

and out of hardship and a commitment to the value of prudent

financial management. It was in the “depression-era” year of

1932 when Harry Neal and Charles Massy decided to form a

partnership to combine the strengths of their respective service

and sales businesses out of which came the Neal & Massy Group

which owns 70 subsidiary companies across the region 78 years

later. In October this year we commemorated the Group’s

history and released the publication of a hard-cover collection

of narratives from past leaders, including Sidney Knox, George

Phillips, Jesus Pazos and Bernard Dulal-Whiteway reflecting

the pillars which made the Group successful throughout each

era – such as customer service excellence, financial prudence,

mentorship and consensus building, executing tough decisions

with integrity, engendering individual responsibility, sustainable

growth, succession planning and increasing shareholder value.

Consistent with these values the Group’s executive is

continuing to focus on growth opportunities and to invest in

the expansion of existing businesses, for example, Industrial

Gases Limited will start construction of a new CO2 plant in the

upcoming year. Having taken necessary decisions to shed loss-

making investments in Bahamas Supermarkets and Warrens

Motors, 2011 will therefore be a year of transformation for

the Group, as the positive effects of difficult decisions and

restructuring initiatives get reflected in forthcoming results.

The strength of the Statement of Financial Position of our

diversified Group, coupled with a conservative approach to doing

business, and an ability to focus on what’s important leaves us

well positioned to take advantage of any upturn in the markets

in which we operate.

2010 is the Group’s first year under the leadership of Gervase

Warner, who was appointed CEO following the passing of

Bernard Dulal-Whiteway. I would like to commend Gervase and

his team of Executives for their astute and practical leadership

and take this opportunity to also extend my gratitude to the

Board for their guidance and leadership. As always, my gratitude

goes out to the employees of Neal and Massy who work hard

every day to ensure that the Group continues to grow and

develop.

CH

AIR

MA

N’S R

EPOR

T


E. Gervase WarnerPresident &

Group Chief Executive Officer

financial years, and in the last quarter of 2010, the Neal & Massy

Board took the decision to dispose of these investments. Attempts

to turn around these companies proved unsuccessful as important

structural disadvantages were too significant to overcome. The

Group took the decision to exit these investments in order to

curtail future losses. Operating Losses and discontinuation costs,

incurred in the sale of Bahamas Supermarkets and Warrens

Motors, reduced the Group’s EPS by $1.22.

The Group has also cut costs and initiated restructuring

efforts at other operations. The overhead costs and manpower

levels at Pres-T-Con were substantially cut, and cost reduction

and restructuring efforts are well underway at Almond Resorts.

ARI’s management contract with the Smugglers Cove hotel in

St Lucia was terminated effective December 15, 2010, putting

an end to ongoing credit risk and allowing us to better focus

on improving the results of the Almond Morgan Bay hotel, also

in St Lucia. As part of the restructuring effort at Almond, the

ARI Board will explore all options for restructuring and turning

around the performance of the hotel group, including property

improvements and deploying a team to assist with Revenue

production and operations improvements to the hotels.

These Operating Losses and the provision for doubtful debts

from Pres-T-Con, Cool Petroleum and Almond Resorts had a

further negative impact on the Group’s results by reducing its

EPS by more than $0.87.

Despite these challenges, the Group remains strong. The

disciplined management of working capital continued from

2009 into 2010, as Inventories and Receivables remained

unchanged. As a result, Cash, however, grew 19%, from $958

million to $1.14 billion, while the Group’s Debt to Equity ratio

was reduced.

Looking to the future

Earlier in this Annual Report, we introduced our new Vision

Statement:

The Neal & Massy Group: A Force for Good – the

Most Responsible and Profitable Investment Holding/

Management Company in the Caribbean Basin.

Consistent with this vision, throughout the 2011 financial

year the Group will continue to review non-productive and/or

Recap of 2010

2010 was a tumultuous year in which the economic recession that plagued many

Caribbean countries impacted on the Neal & Massy Group. It was also an important

transition year, as the Group implemented many initiatives to clean up exposures

to risks and unprofitable operations. As a result, we enter the 2011 Financial Year

well poised to resume profitable growth.

In our previous Annual Report we explained the difficulties faced by the Group

in 2009 and the “significant turnaround efforts being undertaken at Dacosta

Mannings Inc (DMI), Almond Resorts Inc (ARI) and Bahamas Supermarkets Limited

(BSL).” (2009 Annual Report) The turnaround of DMI was successful and the

company contributed positively to 2010 Earnings. However, we did not anticipate

the depth of the economic recession and increasing competitive intensity in Food

Retailing in the Bahamas, which overcame the Group’s efforts to turn around

BSL. We were also disappointed by the extended decline in tourism revenues,

with increased operational losses in the ARI hotels, which were exacerbated by

providing against receivables due under an ARI management contract from a hotel

in St Lucia.

The snap election that was called in Trinidad and Tobago, with its ensuing period

of uncertainty and economic contraction, has prolonged the downturn in the

local construction industry, to the detriment of Pres-T-Con. Our results were also

adversely affected by provisions for sums owing to NM Insertech for significant

work on the World GTL plant construction, which have gone unpaid. This occurred

after Petrotrin acquired the financing Bond for the project from Credit Suisse, and

put World GTL Trinidad and Tobago into receivership.

The Group has responded to these developments with great urgency. We initiated

and, at the time of preparing this report, have completed divestment of some

operations which have been negatively impacting the Group. Both Warrens Motors

and Bahamas Supermarkets have incurred continued losses over the last several

non-strategic assets for productive deployment or divestment

as it focuses its efforts on Growth. To this end, a new Senior

Vice President has been recruited. Thomas Pantin, who was

most recently the Group CEO for The Office Authority Limited

and before that the Regional Director/CEO for Courts Trinidad,

Barbados and Guyana, will join the Group as the SVP of Special

Projects and Growth.

The Group has several exciting prospects for growth which

it is pursuing and evaluating, including potential acquisitions

and investments in the Energy Sector, further expansion of

the Hi-Lo and Supercentre supermarkets, opportunities in the

growing Guyanese economy and potentially with a Group in the

Dominican Republic.

In 2011, we have launched five management initiatives, which

we will continue to emphasise throughout the Group:

Growth

Customer Service

Re-focus on Shareholder Value Added

Efficiency Improvements

Corporate and Business Unit Strategy

Growth: Despite the challenging economic conditions in Jamaica,

Barbados and Trinidad and Tobago, the Group has identified

opportunities for growth. Some are more immediate while others

will take a few years to come to fruition. Each Business Unit has

been given a growth mandate and is exploring opportunities

locally and internationally. In addition, we have initiated an

international expansion effort at the corporate centre and will be

visiting Latin and Central American countries in 2011 to explore

and develop investment opportunities.

Customer Service: The Group embarked upon a Customer Service

Improvement initiative in 2010. Sharon Jemmott was transferred

from Neal & Massy Wood Group to become the Corporate

Customer Service Manager and spearhead the initiative across

the Group. The executive leadership teams at Hi-Lo and Neal

& Massy Automotive have enrolled in pilot programmes to

implement the new Customer Service Management System,

which was developed internally during the 2010 financial year.

Chief Executive Officer’s Report

CEO

’S REPO

RT


Recap of 2010

2010 was a tumultuous year in which the economic recession

that plagued many Caribbean countries impacted on the Neal

& Massy Group. It was also an important transition year, as the

Group implemented many initiatives to clean up exposures to

risks and unprofitable operations. As a result, we enter the 2011

Financial Year well poised to resume profitable growth.

In our previous Annual Report we explained the difficulties

faced by the Group in 2009 and the “significant turnaround

efforts being undertaken at Dacosta Mannings Inc (DMI), Almond

Resorts Inc (ARI) and Bahamas Supermarkets Limited (BSL).”

(2009 Annual Report) The turnaround of DMI was successful and

the company contributed positively to 2010 Earnings. However,

we did not anticipate the depth of the economic recession and

increasing competitive intensity in Food Retailing in the Bahamas,

which overcame the Group’s efforts to turn around BSL. We were

also disappointed by the extended decline in tourism revenues,

with increased operational losses in the ARI hotels, which were

exacerbated by providing against receivables due under an ARI

management contract from a hotel in St Lucia.

The snap election that was called in Trinidad and Tobago, with

its ensuing period of uncertainty and economic contraction, has

prolonged the downturn in the local construction industry, to the

detriment of Pres-T-Con. Our results were also adversely affected

by provisions for sums owing to NM Insertech for significant work

on the World GTL plant construction, which have gone unpaid.

This occurred after Petrotrin acquired the financing Bond for

the project from Credit Suisse, and put World GTL Trinidad and

Tobago into receivership.

The Group has responded to these developments with great

urgency. We initiated and, at the time of preparing this report,

have completed divestment of some operations which have

been negatively impacting the Group. Both Warrens Motors

and Bahamas Supermarkets have incurred continued losses over

the last several financial years, and in the last quarter of 2010,

the Neal & Massy Board took the decision to dispose of these

investments. Attempts to turn around these companies proved

unsuccessful as important structural disadvantages were too

significant to overcome. The Group took the decision to exit

these investments in order to curtail future losses. Operating

Losses and discontinuation costs, incurred in the sale of Bahamas

Supermarkets and Warrens Motors, reduced the Group’s EPS by

$1.22.

The Group has also cut costs and initiated restructuring

efforts at other operations. The overhead costs and manpower

levels at Pres-T-Con were substantially cut, and cost reduction

and restructuring efforts are well underway at Almond Resorts.

ARI’s management contract with the Smugglers Cove hotel in

St Lucia was terminated effective December 15, 2010, putting

an end to ongoing credit risk and allowing us to better focus

on improving the results of the Almond Morgan Bay hotel, also

in St Lucia. As part of the restructuring effort at Almond, the

ARI Board will explore all options for restructuring and turning

around the performance of the hotel group, including property

improvements and deploying a team to assist with Revenue

production and operations improvements to the hotels.

These Operating Losses and the provision for doubtful debts

from Pres-T-Con, Cool Petroleum and Almond Resorts had a

further negative impact on the Group’s results by reducing its

EPS by more than $0.87.

Despite these challenges, the Group remains strong. The

disciplined management of working capital continued from

2009 into 2010, as Inventories and Receivables remained

unchanged. As a result, Cash, however, grew 19%, from $958

million to $1.14 billion, while the Group’s Debt to Equity ratio

was reduced.

Looking to the future

Earlier in this Annual Report, we introduced our new Vision

Statement:

The Neal & Massy Group: A Force for Good – the

Most Responsible and Profitable Investment Holding/

Management Company in the Caribbean Basin.

Consistent with this vision, throughout the 2011 financial

year the Group will continue to review non-productive and/or

non-strategic assets for productive deployment or divestment

as it focuses its efforts on Growth. To this end, a new Senior

Vice President has been recruited. Thomas Pantin, who was

most recently the Group CEO for The Office Authority Limited

and before that the Regional Director/CEO for Courts Trinidad,

Barbados and Guyana, will join the Group as the SVP of Special

Projects and Growth.

The Group has several exciting prospects for growth which

Chief Executive Officer’s Report

CEO

’S R

EPO

RT

Five Management Initiatives

Growth

Explore Growth opportunities

locally and internationally

Corporate and Business unit Strategy/Development

Develop strategy to fulfil our vision,

train internal resources and plan for the future

Customer Service

Re-Focus on SVA

Efficiency Improvements

Enhance Customer Service

across the Group

Measure strength of the Group’s earnings

after its cost of all Capital

Focus on efficiency and productivity


With the acquisition of BS&T, the Group inherited some

under-performing companies, including Bahamas Supermarkets,

Warren Motors, Dacosta Mannings and Almond Resorts. Major

turnaround efforts continued throughout 2010 for these

companies, and Dacosta Mannings contributed positively to the

Group’s profits.

Closure costs for Warrens Motors and Bahamas Supermarkets

and further impairment losses on the operating assets resulted

in a $30 million operating loss in Warren Motors Inc, compared

to $14 million loss in the previous period. The net asset value of

Bahamas Supermarket Ltd at the end of the last financial year

was $27 million; in first quarter of this financial year the Group

invested a further $52.2 million by way of a cash injection of $35

million and a guarantee given to Royal Bank of Canada for $17.2

million, for a Bahamas Supermarkets Loan. On 10 November,

2010, the holding company in which the Group had invested, sold

its investment in Bahamas Supermarkets Ltd for $1.00 and Neal

& Massy wrote off the value of its investment at the financial year

ended 2010. The Cool Petroleum Ltd investment was also written

off, as this company is seeking another cash equity partner.

In the Automotive & Industrial Equipment Business Unit, Pres-T-

Con was the hardest hit by the contraction of the construction

Impact of the loss-making Companies

Profit before Tax $ EPS $ EPS $

2010 2009 2010 2009

Total Group 487,831 658,967 3.13 4.53

-26% -31%

Discontinued operations

Warrens Motors Inc. (30,062) (13,760) (0.31) (0.15)

Bahamas Supermarkets Ltd. (87,818) (19,515) (0.91) (0.20)

(117,880) (33,275) (1.22) (0.35)

Continuing operations reported in 2010 605,711 692,242 4.35 4.88

Year on Year changes % -13% -11%

Other loss-making Companies

Pres-T-Con (12,530) 16,080 (0.06) 0.09

Cool Petroleum Ltd. (7,280) (11,569) (0.08) (0.12)

Almond Resorts Inc. (102,040) (26,164) (0.73) (0.14)

(121,850) (21,653) (0.87) (0.17)

727,561 713,895 5.22 5.05

Year on Year changes % 2% 3%

Paula RajkumarsinghExecutive Vice President &

Chief Financial Officer

Financial Review

Highlights

• GroupThirdPartyRevenueremainedflatat$8.3billion

• ProfitBeforeTaxdeclinedby12.5%,from$692millionin2009to$606

million in 2010

• ProfitAfterTaxdeclinedby18%,from$517millionto$424million

• Thelossesfromdiscontinuedoperationswere$118million.

• EarningsPerSharefromcontinuingoperationswas$4.35–10.9%lower

than in 2009 when EPS was $4.88

• GroupDebtdeclinedby$197millionto$1,978million

• GroupCashincreasedfrom$958millionto$1,138million.

• DebttoEquityRatioimproved,from79%in2009to66%in2010

• CurrentRatioalsoimproved,from1.25in2009to1.28in2010

Profit and Loss

The Group revenue from continuing operations remained at $8.3 billion

while the Profit Before Tax (PBT) declined by 12.5%, and EPS from continuing

operations declined by 10.9%. The delay in the turnaround of some of the

troubled companies in the Group has significantly impacted the results for

2010. The Group had five loss-making companies in 2010, two of which are

shown in the held for sale category (Discontinued Operations) at the end of

September 2010. The Board approved the disposal of Warrens Motors Inc. and

Bahamas Supermarkets Ltd. in the last quarter of 2010, and both disposals will

be completed in the new financial year. Other loss-making companies included

Pres-T-Con, Cool Petroleum Ltd. and Almond Resorts. The impact of these

companies is shown in the table on the following page.

Chief Financial Officer’s Report

CFO

’S REPO

RT


Revenue by Operating Country (%)

58.7 50.751.6

2008 2009 2010

100 %

23.8 34.734.1

9.3 7.0

7.2 7.06.7

1.0

=$7.7B =$8.3B =$8.3B

0.20.6

7.4

Segment Information

Financial Review

Highlights

• GroupThirdPartyRevenueremainedflatat$8.3billion

• ProfitBeforeTaxdeclinedby12.5%,from$692millionin

2009 to $606 million in 2010

• ProfitAfterTaxdeclinedby18%,from$517millionto

$424 million

• Thelossesfromdiscontinuedoperationswere$118

million.

• EarningsPerSharefromcontinuingoperationswas$4.35

– 10.9% lower than in 2009 when EPS was $4.88

• GroupDebtdeclinedby$197millionto$1,978million

• GroupCashincreasedfrom$958millionto$1,138million.

• DebttoEquityRatioimproved,from79%in2009to66%

in 2010

• CurrentRatioalsoimproved,from1.25in2009to1.28in

2010

Profit and Loss

The Group revenue from continuing operations remained at $8.3

billion while the Profit Before Tax (PBT) declined by 12.5%, and

EPS from continuing operations declined by 10.9%. The delay in

the turnaround of some of the troubled companies in the Group

has significantly impacted the results for 2010. The Group had

five loss-making companies in 2010, two of which are shown

in the held for sale category (Discontinued Operations) at the

end of September 2010. The Board approved the disposal of

Warrens Motors Inc. and Bahamas Supermarkets Ltd. in the last

quarter of 2010, and both disposals will be completed in the new

financial year. Other loss-making companies included Pres-T-Con,

Cool Petroleum Ltd. and Almond Resorts. The impact of these

companies is shown in the table on the following page.

With the acquisition of BS&T, the Group inherited some

under-performing companies, including Bahamas Supermarkets,

Warren Motors, Dacosta Mannings and Almond Resorts. Major

turnaround efforts continued throughout 2010 for these

companies, and Dacosta Mannings contributed positively to the

Group’s profits.

Closure costs for Warrens Motors and Bahamas Supermarkets

and further impairment losses on the operating assets resulted

in a $30 million operating loss in Warren Motors Inc, compared

to $14 million loss in the previous period. The net asset value of

Bahamas Supermarket Ltd at the end of the last financial year

was $27 million; in first quarter of this financial year the Group

invested a further $52.2 million by way of a cash injection of $35

million and a guarantee given to Royal Bank of Canada for $17.2

million, for a Bahamas Supermarkets Loan. On 10 November,

2010, the holding company in which the Group had invested, sold

its investment in Bahamas Supermarkets Ltd for $1.00 and Neal

& Massy wrote off the value of its investment at the financial year

ended 2010. The Cool Petroleum Ltd investment was also written

off, as this company is seeking another cash equity partner.

In the Automotive & Industrial Equipment Business Unit, Pres-

T-Con was the hardest hit by the contraction of the construction

industry in Trinidad and Tobago. This company underwent

significant restructuring in the earlier part of this year and it

is expected to not record any further losses in 2011. Efforts to

turnaround Almond Resorts are continuing but were impacted

by the downturn in UK, US and European economies, which

contributed to the decline in the Tourism sector in Barbados and

St Lucia. Losses for the year included a provision for amounts

receivable from Smugglers Cove and other impairments, as well

as additional expenses in relation to maintenance and energy

costs.

The prevailing economic environment throughout the region

continued to adversely impact the rest of the Group, resulting in a

marked slowdown in business activity. Key operating companies

such as United Insurance, Hi-Lo Food Stores and Neal & Massy

Automotive Ltd, had marginal growth revenues. Good growth

was seen in both our Finance & Property and Food Group

Business Units. While economic conditions in Jamaica were

particularly difficult, our Jamaican subsidiaries have continued to

generate good profits. Guyana is the only economy that showed

growth in 2010, and this was reflected in the strong operating

performance of our Guyana-based subsidiaries.

Group-wide cost reduction initiatives helped the Automotive &

Industrial Equipment, Information Technology & Communications,

Chief Financial Officer’s Report

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Guyana

Jamaica

Barbados

Trinidad & Tobago


that customer service is a critical, differentiating, success factor

and will continue its efforts to deliver continually improving

performance in its “Drive to Customer Service Excellence”. A

continued focus on cost and inventory management resulted

in a marginal increased profit, despite a decline in vehicle sale

revenue.

City Motors (1986) Limited continued to be adversely

affected by uncompetitive new-vehicle pricing from the supplier–

Peugeot—but was able to remain profitable by offering product

support to the vehicles in operation, coupled with prudent

expense control.

Tobago Services Limited suffered a major decline in revenue

as a consequence of the slow-down in economic activity in

Tobago, yet managed to maintain its profitability through the

addition of the Caterpillar spare parts line and rigorous control

of operating expenses.

Master Serv has managed to maintain its overall sales

levels but has suffered from reduced margins caused by price

competition affecting “after-market” parts and battery sales.

Activities at the service centres have also been reduced as

customers are servicing at wider intervals.

Best Auto has improved profitability from last year and

continues to hold a respectable position in the market for

European cars. Improvement in the service facilities has also met

with positive feedback from our customers.

2010 was particularly challenging for Automotive

Components Limited (ACL), with an increase in competing

products on the local market. Competitive pricing and other

strategies were implemented to maintain market share. ACL also

faced challenges in the export arena, as markets in the CARICOM

region were particularly hard hit by the ongoing global crisis.

ACL was able to maintain sales revenue at a level slightly

above the previous year, while achieving growth in profit. Special

emphasis was also placed on improved management of HSSE

and human resources.

Tracmac Engineering Limited performed creditably,

considering the continued decline in the construction sector

over the year. The diversified business operations within the

Company secured compensatory increases in specific sectors for

the downfall in other areas. 2010 was the first full year as the

dealer for International Truck, and the sales and general response

have been more than satisfactory. The Company also reduced its

operating cost and inventory levels and improved its cash flow.

Tracmac was successful in obtaining ISO 9001:2008 certification,

a major step toward achieving excellence in operational efficiency

and overall customer service.

The Pres-T-Con Group (Pres-T-Con, Rabco Construction and

Pres-T-Con Equipment) continued to be affected by the global

recession, as well as changes in Government and the stagnation

of the construction industry. Similarly, there has been little activity

in petrochemical and infrastructure developmental projects.

In spite of substantial retrenchment (labourers and staff)

adjustments and implementation of various cost savings and

reduction of expenditure measures, Pres-T-Con Group incurred

losses in 2010. The Government has signalled its intention to

accelerate the implementation of its Public Sector Investment

Programme (PSIP) Budget with the initiation of the super-

highway project to Point Fortin in the immediate future. It is

reasonable to expect that tenders would not be realised until

the second or third quarter of the 2011 Financial Year.

Pres-T-Con Group continues to maintain its position as the

leading manufacturer of pre-stressed concrete products and

deep foundations installation contractor in Trinidad and Tobago

and throughout the Caribbean. The Company will continue to

aggressively pursue new projects, both locally and regionally,

and is closely managing its expenditure and reviewing methods

for improving safety and efficiency.

David O’BrienSenior Vice President &

Executive Chairman

Automotive & Industrial Equipment Business Unit

In 2010, the Automotive & Industrial Equipment Business Unit continued to

be affected by stagnant economic activity impacting mainly construction and

industrial equipment sales. However, our market share for new vehicles has

improved, while the overall market has declined. In many areas, new products

were introduced that yielded great market success; they were Husquvarna

Outdoor Power Equipment, Power Master Maintenance Free and Power Master

Platinum batteries. The market has also been excited by new vehicle models such

as the Hyundai Tuscon, Sonata, Subaru Legacy and Nissan’s luxury crossover,

the Murano.

In Automotive, customer service initiatives and service facility improvements

have proven to be successful, and these will be areas of continued focus. Tracmac

Engineering and Neal & Massy Automotive joined Automotive Components

Limited in gaining ISO: 9001 – 2008 certification.

Hyundai was a major sponsor in the FIFA 2010 U17 Women’s World Cup.

Support of our neighbouring football team, Caledonia AIA, continues.

Overall, operating asset levels have been maintained while operating cost-

containment initiatives continued. The Business Unit is well prepared at this time

for growth opportunities, both locally and regionally.

Neal & Massy Automotive Limited maintained its market leadership in what

was a significantly reduced market for new cars. Nissan continued its position

as the number one brand in the country and steady Hyundai sales positioned

the brand in fourth place. Sales were impacted by a low supply of high demand

vehicles, such as the Hyundai Tucson and the Nissan Qashqai. One of our

objectives for the upcoming year will be to expand our lines.

Within the context of contracting market conditions, management continued

its focus on delivering improved customer service. In this regard, customer areas

in the Morvant and Port of Spain service departments were upgraded, processes

were redesigned and ISO certification achieved. Management is keenly aware

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large machinery items. The Services area experienced a large

downturn in opportunities. The integration process for NMESL

and NM Insertech (Caribbean) Limited was completed, and is

already producing cost synergies.

Neal & Massy Energy Resources Limited (NMERL), the

production operation arm of Neal & Massy Energy Limited, had

a very successful year. Oil sales to Petrotrin and realised oil prices

were both above budget. Effective cost management continues

as the Company recovered from the low oil price environment of

the previous year, thus resulting in NMERL delivering a positive net

profit for the year. The Company embarked on a number of Quality

and HSSE initiatives, including continuing improvements toward

full compliance with OSHA requirements, as well as measuring,

monitoring and reducing the Company’s carbon footprint so as

to reduce the impact of operations on the environment.

NMERL also has held discussions to provide input in the

planning of the new fiscal regime for the petroleum industry,

and is near to completion on finalising the terms and conditions

for the renewal of the Moruga West Joint-Venture licence. The

Company’s growth initiatives are focused on the implementation

of an Enhanced Oil Recovery project in the next year.

NM Supply Chain Integrators Limited continued to focus

on providing best-in-class services to its clients, while maintaining

a Zero Lost Time Incident record. The Company performed well

in spite of the low growth in the energy sector. Strategies to

expand outside of the energy-based industries and throughout

the region are being explored for the upcoming year.

Industrial Gases Limited experienced a disappointing year

because of low demand for all product types, inconsistent supply

of product and unplanned plant maintenance. The issue of

the long-term reliability of oxygen, nitrogen and argon will be

resolved with the proposed start-up of a relocated Air Separation

Plant by our joint venture partner, Air Liquide, in the first quarter

of 2011. In addition, the production capacity and reliability

of high quality, food-grade carbon dioxide supplies will be

significantly increased with the commissioning of a refurbished

plant in the second quarter of 2011.

Trintogas Carbonics Limited had a very successful year,

principally because it supplemented the shortfall in IGL’s carbon

dioxide supplies.

Caribbean Industrial Gases Limited (CIG) continues to

perform well, exceeding contractual obligations for plant

reliability, product volumes and quality. However, an unplanned

major mechanical equipment overhaul negatively affected the

Company’s overall profitability.

NM Petrochemicals Services Limited again exceeded

budgeted expectations, due mainly to planned catalyst change

outs at the ammonia and methanol process plants. However,

methanol sales were significantly reduced because of the general

decline in the manufacturing and services sectors.

Gas Products Limited (GPL) enjoyed another year of strong

operational and financial performance. Despite a difficult

Jamaican economy, GPL exceeded its earnings and SVA targets.

For a third consecutive year, GPL was recognised as the industry

leader in safety practices. Continued progress was made in

expanding the customer base for non-cooking applications and

this segment now accounts for 4% of total volume. Significant

cash was generated and this satisfied the full capital expenditure

requirement and maintained the accelerated debt re-payment

schedule. Several key initiatives were undertaken during the year

to build a high performance culture in GPL.

Linford CarrabonSenior Vice President &

Executive Chairman

Energy & Industrial Gases Business Unit

2010 presented a major challenge for most of the companies in the Business Unit

as reduced activity in the upstream and downstream energy sectors continued,

following on the trend that began in 2009. A challenging environment, however,

did not hamper the Business Unit’s strong HSSE performance, with a number of

individual companies reaching significant safety milestones during the year.

Clients in the oil, gas and petrochemical sectors continued essential

maintenance activities and the companies in the Business Unit did not experience

significant growth in new business. Nonetheless, the E&IG Business Unit is well-

poised to capitalise on the expected upsurge in the regional energy sector.

Neal & Massy Wood Group (NMWG) continued servicing its major clients;

bpTT’s Strategic Outsourcing Contract Agreement (SOCA), BGT&T’s Engineering

Contract and Methanex Trinidad Limited’s maintenance contract. NMWG met its

performance expectations, despite the tough conditions of the energy market.

The Company’s HSSE achievements in the year included the completion of 5

million man-hours without a Lost Time Incident and being the first Company to

achieve the Energy Chamber’s Safe to Work (STOW) certification. NMWG also

received ISO 9000 certification in 2010.

NM Insertech (Caribbean) Ltd had difficult year, overall, with a downturn in

projects and significant reduction in valve service work. One of the Company’s

significant successes was the ongoing Electrical and Instrumentation construction

work for a refinery project and the building of an air separation unit. The

financial performance was seriously affected by the receivership of the World

GTL Trinidad and Tobago gas-to-liquids plant. NM Insertech continues to be a

significant supplier of specialised technical resources and technical equipment

for the energy-based industries in Trinidad and Tobago and the region.

Neal & Massy Energy Services Limited (NMESL) also experienced a

challenging year because of the reduced capital spend of the customer base in

the energy industries. The Products area saw some delays in the purchase of

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H.D. Hopwood Limited again had a very successful year in

Jamaica, despite challenging economic conditions. Recognising

the impact of the drastic slow-down in the economy, greater

emphasis was placed on cost control and efficiency improvements

throughout the Company’s operations.

During the year, the Company opened a new distribution

warehouse in Montego Bay and strengthened the van sales

operations. Both actions were part of an overall strategy of

moving closer to the consumer. The Company also continued

with a number of initiatives to promote employee engagement

and build leadership competencies.

Melville Shipping Limited (MSL) adapted well to the

prevailing economic conditions and leveraged its understanding

of the key success factors of the shipping industry to drive

growth. This resulted in the achievement of a creditable financial

performance. As MSL seeks to build on its expertise and expand

its range of services, the Company forges ahead maintaining its

position as an industry leader and improving its reputation within

the industry for customer service excellence.

Huggins Shipping & Customs Brokerage Limited mirrored

the financial performance of the previous year despite a very

difficult period with fewer projects being executed locally. The

management team continues to explore new business models in

an effort to respond to the changed economic environment, so

that the Company maintains its position as the preferred customs

brokerage provider in the energy sector, and is positioned for

growth in 2011.

Booth Steamship improved its results considerably over the

prior year because of an increase in the overall volume of cargo

handled by the Company and excellent control of expenses.

In this financial year, Neal & Massy Incorporated and

BS&T International Development LC were merged into one

operational Business Unit. There were some one-off restructuring

costs but the combined entity will now focus on procurement

and distribution, and serve as a marketing office for food and

food-related products, electronics and industrial parts. This

Company now stands poised as a growth engine within the

Food Group.

Earl BoodasinghExecutive Vice President &

Executive Chairman

Food Group: Food/Consumer Distribution & Logisticsand Food Retailing

The Food/Consumer Distribution and Logistics Business Unit operates in Trinidad

and Tobago, Barbados and Jamaica. Despite the continuous GDP contraction of

these three economies during the financial year, it is satisfying to report that the

team was able to exceed their budgeted targets and prior year performance.

Working closely with our international and local suppliers we were able to

deliver value to our retailers and institutional customers by critically analysing

the changing needs of the embattled Caribbean consumer and implementing

solutions that work.

Marketing & Distribution (M&D) was able to deliver growth, despite the

slow-down of the Trinidad and Tobago economy, as noted above.

M&D’s integrated Quality and HSSE management systems continue to be

subject to rigid audit programmes, increased inspections and ongoing training.

The Company will be implementing a comprehensive Customer Service

Management system in the new financial year.

M&D’s management team remains focused on the evolution of our business

model to drive efficiencies, improve execution and ensure relevance in a changing

marketplace. For 2010, the Company was recognised as “Distributor of the Year”

by both Procter & Gamble and ConAgra Foods.

SBI Distribution Incorporated (SBI) again delivered a strong performance

during the year under review. Sales volumes were not achieved due to the

prevailing economic recession in Barbados; however, tight control of expenses,

receivables and inventory ensured that budgeted targets were achieved. A major

achievement during the year was the amalgamation of the Agro Chemicals

business in February. Agro Chemicals is a profitable business and a positive

contribution is expected for 2011, in spite of the challenges facing the agricultural

industry. In addition, SBI strengthened its management team by hiring senior

personnel in the areas of Pharmaceutical, Down Trade, Human Resources and

Business Analysis.

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Super Centre Limited, our chain of seven supermarkets and

convenience stores in Barbados, delivered earnings ahead of

the previous year and exceeded expectations. These gains were

made primarily in the last quarter of the financial year through an

increase in tourists visiting the island during the June to August

vacation period.

To offer greater value to customers, an Every Day Low Price

marketing strategy was deployed with success through a greater

focus on direct importation, lower prices for larger quantity

packs and special offers supported by local distributors across

the supply chain.

In 2011, support for local Barbadian agriculture will be

greatly enhanced through the creation of a Centralised Produce

Procurement Facility which will allow for greater expansion in the

provision of quality fresh fruit and vegetables, from both local

and regional sources. This facility can also supply other buyers

such as cruise ships and hotels.

Super Centre is seeking planning permission to modernise the

Sunset Crest store, including additional parking and storage,

and plans are being developed for new store models in strategic

locations across the island.

Knights Pharmacies (a division of Super Centre) had a

successful year but is seeking new ways to diversify its services so

as to empower patients to better manage their health between

visits to their doctors. The division is also formulating a more

efficient system for dispensing prescription drugs.

Peronne Manufacturing, our meat processing operation

met expectations for the year but achieved this through a

reduction in overhead expenses. Product margins were lower

than expected, especially in the second half of the financial year

because of increases in both raw materials and utilities. In 2011,

Peronne will further target the food service and retail sectors,

while expanding its range of processed meats.

Gablewoods Supermart Limited (Associate Company),

through its operating subsidiary Consolidated Foods, was able

to increase its revenue meaningfully in the year, despite the

recessionary circumstances in St Lucia. The strategy to expand

sales through its “warehouse store” concept contributed to

this gain, while higher tourist arrivals also played a role in

augmenting sales. A new competitor opened in October 2010,

but initial indications are that the Company’s product-sourcing

and pricing, together with its experience and strong team will

allow it to effectively compete and grow.

Frere DelmasSenior Vice President &

Executive Chairman

Food Retailing

Trinidad and Tobago and Barbados continue to face their respective challenges

due to negative effects of the global recessionary environment. Despite these

circumstances, Food Retailing increased its annual sales. The strategic decision to

focus on cost containment and enhancing the gross profit margin through various

initiatives yielded positive results, with an improvement in operating profit.

The outlook for the Food Retailing is positive, given the expectations of

incremental economic recovery globally and regionally in the coming years. Our

strategic plans, both short- and long-term, involve modernisation of existing

stores and the expansion of our current retail footprint. Also, we will be prudent

in our approach to selecting acquisition/investment opportunities in new markets

and business models to drive future growth.

TDL Retail (Hi-Lo Food Stores, LB’s and FoodMasters) had a relatively

successful year and achieved a marginal improvement in both its revenue and

profitability, despite increased competition for the limited available customer

spend. Encouragingly, in the latter half of the year, transaction/customer count

showed a steady and sustained improvement as the Every Day Low Price (GO

LO) marketing campaign, introduced to reduce the cost of the average basket

of goods, found favour with the chain’s customers.

Hi-Lo enrolled as one of the two companies in a Neal & Massy corporate

initiative to improve customer service across the Group. Significant progress has

been made in identifying gaps in Hi-Lo’s operations against the customer service

management system that was created for the Group. Making use of feedback

from customers and staff, Hi-Lo embarked on a comprehensive programme to

improve customer service. The effects of this initiative will be seen in the coming

years.

The upgrading of stores continued during the year with the refurbishment

of the Diego Martin and Ridgewood Arima stores, which was well-received by

customers.

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G. Anthony KingExecutive Vice President &

Executive Chairman

Financial, Property & Other

united Insurance Company Limited, which is based in Barbados, provides

primary insurance cover in 13 territories as well as inward re-insurance for certain

international markets. The southern Caribbean region was again spared the impact

of a major catastrophe in 2010; however sizable claims occurred in the inward

re-insurance programme, such as the earthquake in Chile and wind storms in

Europe, which detracted from achieving higher underwriting profits. The prevailing

economic conditions have continued to fuel a very competitive environment with

limited growth in written premium. The investment portfolio improved over the

2008/2009 year and contributed meaningfully to the year’s results, even though

net results were lower than the previous year.

Despite the very competitive environment, United has continued to raise its

brand awareness in the regional marketplace, with emphasis on its reputation

for service and security. This has been reinforced by once again being awarded

A.M. Best’s “A- Excellent” rating. This rating is the highest for a Caribbean-centric

Insurer. While in excess of 60% of premium revenue is earned beyond the shores

of Barbados, the Company continues to seek ways to diversify its portfolio.

General Finance Corporation Limited (GFC), the Group’s financing business

in Trinidad, recorded improved profits over 2009 despite a decline in the volume of

new business. In anticipation of a reduction in revenue, measures were successfully

implemented to substantially reduce the Fixed Deposit portfolio and the associated

cost of funds to the Company, while containing operating expenses at 2009 levels.

Loan impairment losses net of recoveries did, however, increase, as certain recovery

action being taken will not be realised until the coming year.

Neal & Massy Remittance Services Limited, operating in the Trinidad and

Tobago market, experienced an increase in the number of transactions over 2009,

although of reduced value. Accordingly, there was a decrease in the value of

foreign currency available for trading. Despite this, however, profits were in line

with expectations given the prevailing economic conditions.

Magna Rewards Inc (and subsidiaries) is a loyalty services

Company operating in seven Caricom countries with 1.35

million customers, and providing services to 130 retail partners.

Albeit below the year before, Magna’s results across the region

reflected a good performance despite the slowdown in consumer

spending at its retail partners, while still showing growth in

profitability in Trinidad and Jamaica.

The Company’s loyalty processing services, which extend to

loyalty schemes in addition to the Magna card, have continued to

expand with our largest customers, and this growth is expected

to continue in 2011. The Company expects to derive other areas

of growth from expanding our database capabilities and utilising

this data to generate new revenue streams.

The Company also owns MediCard Ltd in Trinidad, which

also performed creditably, and is working towards introducing

MediCard in Barbados.

S.P. Musson, our primary property-related business in

Barbados, recorded profits in excess of budget this year and last

year due to sales of a higher number of house lots at three of

its developments. Occupancy levels of its tenanted properties

remained high, although rent increases are not generally

achievable in the current economic climate. The Company’s real

estate arm, Musson Realty, continues to grow slowly in a very

competitive market.

Nealco Properties Limited, our primary property management

business in Trinidad, grew its trading profit over the previous year

despite a shortfall in its budgeted revenue. However, this was

adversely affected by the impairment of an investment property

which is to be disposed of in the coming year and the decline

of net profits.

The revenue shortfall was due to the continued flat rental

market and somewhat reduced intra-group income. Nonetheless,

the Company placed major emphasis on its customer service

strategies aimed at maintaining an occupancy level above 90%,

and instituted cost containment measures within its budgeted

objectives. Emphasis was also placed on maintenance and

upgrades with significant HSSE content.

The Company will continue to focus principally on its activity

as a commercial landlord and on the development one of its

investment properties for the year ahead.

Nealco Real Estate Limited (NREL) continues to maintain

its reputation as the leader in the Trinidad real estate market,

expanding its client base and building market share. The

Company closed the year with revenue and earnings above the

previous year and ahead of expectations.

The Company’s newly designed website at www.

nealcorealestate.com was recently launched, and it offers

online listings, including photographs, and listings from other

brokers as well as valuable real estate advice and information.

NREL’s experience, integrity and professionalism in the real estate

market augurs well for continued performance in an extremely

competitive market.

Roberts Manufacturing Co. Limited, a Barbados-based

manufacturer and exporter to the region of margarines and

cooking oil, produced improved results for the year under review

as a result of lower commodity input costs and reduced expenses.

Improved production planning with analysis of future contracts

for raw material purchasing and production efficiencies continue

to show benefits. Unfortunately, in the latter half of the year

higher costs in water and energy impacted on the savings gained

in production. The extended period permitting the removal of

the Common External Tariff in Trinidad and the OECS markets

on soybean oil, has again this year impacted export sales of

that product. For the year ahead, the Company will continue to

identify ways of reducing controllable costs and to balance the

higher costs of raw materials and other production inputs with

product pricing and promotion through its distributors.

Dacosta Mannings Inc in Barbados comprises two main

divisions. One is the retailing of consumer goods such as

furniture, appliances and household hardware and the other

is the distribution of automotive supplies, lubricants, bulk fuels

and LPG; it is also a shipping agency.

After a number of changes to the business in the prior year,

such as discontinuing the sale of lumber supplies, rationalisation

of certain retail outlets and the consolidation of the Company’s

warehousing, results for the year under review were much

improved over the prior year.

For the coming year, a number of additional improvements are

to be made to the retail operations, including its procurement and

inventory processes, as well as supplementary cost avoidance

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united Insurance Company Limited, which is based in

Barbados, provides primary insurance cover in 13 territories as

well as inward re-insurance for certain international markets.

The southern Caribbean region was again spared the impact of

a major catastrophe in 2010; however sizable claims occurred in

the inward re-insurance programme, such as the earthquake in

Chile and wind storms in Europe, which detracted from achieving

higher underwriting profits. The prevailing economic conditions

have continued to fuel a very competitive environment with

limited growth in written premium. The investment portfolio

improved over the 2008/2009 year and contributed meaningfully

to the year’s results, even though net results were lower than

the previous year.

Despite the very competitive environment, United has

continued to raise its brand awareness in the regional

marketplace, with emphasis on its reputation for service and

security. This has been reinforced by once again being awarded

A.M. Best’s “A- Excellent” rating. This rating is the highest for

a Caribbean-centric Insurer. While in excess of 60% of premium

revenue is earned beyond the shores of Barbados, the Company

continues to seek ways to diversify its portfolio.

General Finance Corporation Limited (GFC), the Group’s

financing business in Trinidad, recorded improved profits

over 2009 despite a decline in the volume of new business.

In anticipation of a reduction in revenue, measures were

successfully implemented to substantially reduce the Fixed

Deposit portfolio and the associated cost of funds to the

Company, while containing operating expenses at 2009 levels.

Loan impairment losses net of recoveries did, however, increase,

as certain recovery action being taken will not be realised until

the coming year.

Neal & Massy Remittance Services Limited, operating in

the Trinidad and Tobago market, experienced an increase in the

number of transactions over 2009, although of reduced value.

Accordingly, there was a decrease in the value of foreign currency

available for trading. Despite this, however, profits were in line

with expectations given the prevailing economic conditions.

Magna Rewards Inc (and subsidiaries) is a loyalty services

Company operating in seven Caricom countries with 1.35

million customers, and providing services to 130 retail partners.

Ralph TaylorPresident & Managing Director

Almond Resorts Inc.

Tourism / Hospitality

The fiscal year ended 30 September, 2010 continued to reflect the challenges

faced by the hotel industry worldwide. The performance of Almond Resorts

Incorporated was affected by the economic climate, reduced rates and a lack

of improvement in occupancy levels. Declines in our major source market, the

United Kingdom, were offset by significant increases in our business from the

USA and Canada.

The Company fell short of its forecast, which anticipated recovery in the

economies of our source markets, improved consumer confidence and increased

demand for travel. There have been increased losses from the prior period,

particularly at Almond Beach Village, where the much needed and anticipated

refurbishment did not materialise.

Losses for the year include provision for amounts receivable from Smugglers

Cove and reflect Revenue reduction and increases in maintenance and energy

costs. Losses in prior period were buffered by other income from Tourism Industry

Relief Fund (TIRF), which the Government of Barbados created to assist the hotel

industry, and interest refunds of $2.5 million from the Bank.

Refurbishment plans for the Almond Beach Village property have been

completed and funding has been secured. These improvements will be

implemented throughout the year, taking hotel operations into consideration. In

2011, major initiatives will also be undertaken to improve Revenue production

and Operations performance at the hotels. Together with the Government’s

support for tourism and market diversification, we expect a slow but improved

turnaround of the Almond performance, the benefits of which will take some

months to materialise but should be fully reflected in 2012 results.

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Enterprise Content Management solutions enabled an increase

in the Company’s market share in the Eastern Caribbean region.

Additionally, further market penetration was attained in most

sectors through the delivery of new technologies in tandem with

some key partners including HP, Oracle, Avaya and Smart. Bill

presentment and payment service Surepay, which launched an

on-line version in the latter part of the year, was also pivotal to

the overall performance of the Company.

ILLuMINAT (Jamaica) Limited delivered growth in profit and

surpassed its budgeted SVA and FCF, despite having to adjust

its planned strategies subsequent to the Government’s debt

exchange programme and other measures that reduced product

sales to all targeted sectors. A greater focus on professional

services to banking and other adversely affected sectors delivered

a 60% increase in services revenues. Notable solution sales

during the year were three major managed services projects, two

significant mobility solution implementations and a Government

education project. These achievements were buoyed by the

efforts to improve services delivery and responsiveness, resulting

in excess of 85% of quarterly survey respondents giving excellent

ratings to its services teams. The coming year will see a similar

approach to the market coupled with the launch of two niche

offerings in identified growth segments.

Nealco Datalink Limited had a challenging year, given

the downturn in its target market, the US. The Company did,

however, obtain a pilot, extra-regional, call centre contract in

a growing segment of the industry, and will pursue further

penetration of this and other niche, growth segments through

partnerships in the coming year.

The performance of Three Sixty Communications in fiscal

2010 was hampered in the first half of the year by volatility

in the inbound international voice market and significant

lags in intervention by the regulatory authority. The Company

rebounded in the second half with strong performances and

growth in its data services segment. The achievement of major

milestones including a domestic voice concession from the

telecoms authority, a domestic interconnection agreement with

TSTT and a nationwide pole-sharing agreement with T&TEC;

which will position the Company for future growth and its

emergence as a multiple service telecommunications provider.

Keith ThomasSenior Vice President &

Executive Chairman

Information Technology & Communications/Other Services

The N&M ITC businesses closed the year achieving its budgeted profit and

delivering strong, above-budget SVA and FCF contributions. Its year-on-year

profit was marginally down, following its doubling of profits over the prior three

years.

Despite a significant contraction in Government spending, Illuminat (T&T) Limited

exceeded its budgeted profit, SVA and FCF mainly due to a strong recurring revenue

base and a diverse services portfolio. Notable revenue-earning successes during the

year were projects executed in the energy, retail and health sectors. The Company

also saw improvements in its client service ratings and its project management (PM)

practice received the distinction of being the only Caribbean Company recognised

in an international publication on PM practice. In the coming year the Company will

focus on protecting and growing its recurring and professional services revenue bases,

continued improvement of its customer delivery and satisfaction, the introduction

of niche offerings in its domestic market and extra-regional, geographic expansion

through one of its well-honed solution offerings.

Pereira & Company Limited continued to execute on its geographic

diversification strategy, delivering profit and SVA growth. Regional growth was

achieved through the extension of the Diebold Service Contract to the Eastern

Caribbean and the launch of the OCE brand in Jamaica. The Company also

continued to receive outstanding service rating feedback from its clients and

partners and, during the year, rolled out its quality assurance programme, meeting

its quality target of 90%. In the coming year the Ricoh brand will be launched

in Jamaica and Barbados, while the growing Office Interiors division is expected

to see further growth, mainly from its Haworth line of systems furniture.

Illuminat Barbados and Eastern Caribbean also performed well,

notwithstanding major project postponements and challenges with the economies

in the various territories. Significant achievements in the financial sector with

NCR Self Service systems and in the Government and Commercial sectors with

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contributed to the positive results of the Company. Raising the

bar in the two areas of aftermarket service and customer service

will be the strategic initiatives for the Company in 2011.

NM Security Solutions Incorporated (NMSS) fulfilled on its

promise and recorded excellent growth in the year. Guarding

Services’ strong performance is likely to continue in 2011, and

there are encouraging signals for improved performances in

Cash Services.

The continued improvement of NM Services Limited (NMSL)

in the remittance, shipping and hire purchase business arising

from equipment financing, has enabled the Company to achieve

very satisfactory results.

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Deo PersaudExecutive Chairman

Neal & Massy Guyana Group

Guyana Group

The Guyana Group achieved its financial targets for the fiscal year on account

of solid performances of all the subsidiaries. The Group continued to manage

its corporate services centrally and this allowed us to focus on efficiency

improvements in key areas of our business.

Demerara Oxygen Company Limited (DOCOL) continued to execute on

its LPG strategic plan with particular emphasis on distribution and exhibition

excellence. Bulk storage for LPG was improved with the addition of a 30,000-gallon

tank on our premises. During the year the electrical system was redesigned and

replaced; and a new electrical generator was ordered. The Company continued

to strengthen its HSSE culture by way of internal and external audits and risk

assessments. Safety first, customer growth and improved efficiency continue to

be the key drivers for the business.

Associated Industries Limited (Ainlim) achieved another year of strong

performance. The capital goods segment of our business benefited from

investments made in the gold mining sector which was fuelled by the high price of

gold on the world market. Strategically we have expanded our product offerings

which we expect would be the catalyst for continued growth. In addition, we

have embarked on a Customer Relationship Management (CRM) initiative to

further enhance the level of service offered to our customers.

Trading & Distribution Incorporated (TDI) recorded satisfactory earnings

growth during the year through improved operational efficiencies and good

growth in its major consumer food lines. Consumer demand is still in a recovery

mode and this may persist for some time. In the meantime, the Company will

focus on improving its distribution coverage through all channel types and be

better able to manage in-trade distribution of its product range

CCS Guyana Limited (CCS) continued to build its capacity in the Electronic

Security business and executed some significant contracts during the year. Good

performances in the Communication and Security Division and the CCS Store


The Guyana Group achieved its financial targets for the fiscal

year on account of solid performances of all the subsidiaries.

The Group continued to manage its corporate services centrally

and this allowed us to focus on efficiency improvements in key

areas of our business.

Demerara Oxygen Company Limited (DOCOL) continued

to execute on its LPG strategic plan with particular emphasis

on distribution and exhibition excellence. Bulk storage for LPG

was improved with the addition of a 30,000-gallon tank on our

premises. During the year the electrical system was redesigned

and replaced; and a new electrical generator was ordered. The

Company continued to strengthen its HSSE culture by way of

internal and external audits and risk assessments. Safety first,

customer growth and improved efficiency continue to be the

key drivers for the business.

Associated Industries Limited (Ainlim) achieved another

year of strong performance. The capital goods segment of our

business benefited from investments made in the gold mining

sector which was fuelled by the high price of gold on the world

market. Strategically we have expanded our product offerings

which we expect would be the catalyst for continued growth.

In addition, we have embarked on a Customer Relationship

Management (CRM) initiative to further enhance the level of

service offered to our customers.

Trading & Distribution Incorporated (TDI) recorded

satisfactory earnings growth during the year through improved

operational efficiencies and good growth in its major consumer

food lines. Consumer demand is still in a recovery mode and this

may persist for some time. In the meantime, the Company will

focus on improving its distribution coverage through all channel

types and be better able to manage in-trade distribution of its

product range

CCS Guyana Limited (CCS) continued to build its capacity

in the Electronic Security business and executed some

significant contracts during the year. Good performances in

the Communication and Security Division and the CCS Store

contributed to the positive results of the Company. Raising the

bar in the two areas of aftermarket service and customer service

will be the strategic initiatives for the Company in 2011.

NM Security Solutions Incorporated (NMSS) fulfilled on its

promise and recorded excellent growth in the year. Guarding

Services’ strong performance is likely to continue in 2011, and

there are encouraging signals for improved performances in

Cash Services.

The continued improvement of NM Services Limited (NMSL)

in the remittance, shipping and hire purchase business arising

from equipment financing, has enabled the Company to achieve

very satisfactory results.

Associate Companies

Banks Holdings Limited (BHL) recorded reduced consolidated

profits for the year ended 31 August, 2010 as against the

previous year. This result is mainly due to two factors: continued

low crop and commodity pricing related to its citrus business in

Belize and the one-off, exceptional charges incurred by Pine Hill

Dairy for major changes in its plant and equipment. Otherwise,

the local Banks Brewery and Barbados Bottling Company, with

its carbonated beverages, had reasonably strong performances

given the economic environment within which they operated.

The overseas associates, apart from Belize, recorded improved

results.

During the year BHL completed negotiations for the purchase,

installation and commissioning of a new state-of-the-art brewery

to be located on Company-owned lands in the Newton area of

Christ Church. This facility includes packaging lines for both glass

and cans, and places Barbados as perhaps the sole facility in the

Caribbean capable of packaging beverages in paper, plastic,

glass or cans. Construction of the buildings to house the new

plant began subsequent to the year-end after obtaining all the

regulatory approvals. Commercial production is planned for the

third quarter of calendar year 2011.

Signia Financial Group Incorporated in Barbados performed

well in 2010, with increased profits over 2009. The loan portfolio

increased by over 20%, with the largest growing sector being

Commercial. Loan portfolio growth drove higher interest income.

The Company’s bad debt write-offs and delinquency ratios

continue to be well managed.

Foreign Exchange trading was flat, with a decline in the supply

of foreign currency in the market, together with the narrowing

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Segment Review

of spreads because of increased competition. Brokerage fees

from equity trading continued to decline as trading volumes

continued to be low.

Caribbean Airport Services Limited (CAS) is a 49% Seawell

Air Services Ltd, 51% LIAT joint venture which provides ground

handling services at Antigua’s International Airport. Its services

are similar to those provided by Seawell in Barbados. For the

period under review, CAS reported increased revenue and

net income over the previous year which had itself reflected

a marked improvement given the Company’s earlier years of

a break-even position. By demonstrating improved service the

Company expects to capture additional business in the coming

year, which will further improve financial performance.

Medina Foods Incorporated of Montreal, Canada,

provides consultancy services and food-safety audit services

to food processors and producers with food safety assurance

programmes. A key area of its business is the audit of airline

caterers worldwide on behalf of many major airlines, through a

Barbados international business company, Medina International.

Medina’s results have grown favourably in recent years and

returned to growth this year after lower airline activity caused

a reduction in profits in 2009.

Tower Hill Merchants PLC, based in the UK, is a supplier of

various commodity goods primarily to the Caribbean, with sugar

being the main commodity. Despite restricted global availability

of certain key food ingredients, the Company successfully

consolidated on the previous year’s growth in profitability and

delivered another strong trading performance. The outlook

for 2011 promises to be highly competitive as difficult market

conditions, particularly in the sugar markets, are indicated, but

the Company is expected to fare reasonably well given its strong

base of customers and supplier relationships.

The Trinidad and Tobago operations of Group 4 Securicor (G4S)

performed on target led by excellent results in the manned services

division. In Barbados, the business continued to face contracting

market conditions with a resulting focus by management on cost

and efficiencies. The branch in Grenada performed satisfactorily,

whilst St Lucia’s results continue to be marginal.

Health, Safety, Security and the Environment (HSSE)

HSSE continued to be an area of great focus for the Group,

with major emphasis on the deepening of HSSE processes and

procedures.

Efforts were made to improve the HSSE audit function and

a number of auditing training and workshop sessions were

conducted in November and December of 2009. Attendees

included all HSSE personnel and other relevant employees from

across subsidiary companies. Audit findings suggested that there

were HSSE issues to be addressed in some of the companies and

corrective actions have since been initiated. A further review

of the reports in many cases indicated that further orientation

for auditors is necessary. To this end, additional training and

workshops will be provided in 2011, prior to starting a new

round of audits.

A major area of concern within the Group has been the

management of incidents, from recognition and response

through to investigation and corrective actions. This was clearly

evident from the increase in the Days Away From Work Case

(DAFWC) figure over the previous year. Assessment of the

case management process showed that there was need for

skills development in this area. Training in this competency

was delivered early in the year. This training, combined with

increasing accountability through a requirement for reporting of

all incidents with investigation reports where applicable, resulted

in a marked reduction in DAFWCs.

A programme has been initiated in which HSSE managers will

convene monthly meetings, similar to those held in Trinidad, as

well as quarterly meetings, which the Group HSSE manager will

attend. The roll-out of this plan started in Barbados in October

2010. A similar session was held in Guyana in November 2010,

and the same will be done for Jamaica in 2011.

The group HSSE Steering Committee was revamped, with

Linford Carrabon, Executive Chairman, Energy & Industrial Gases

Business Unit, as Chairman. The committee comprises member

CEOs from across the Group in Trinidad and Tobago and also

includes the HSSE Manager for Neal & Massy Wood Group.

Customer Service Initiative

Neal & Massy believes that excellence in customer service is

essential to the long-term success of the Company. This is one

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1 Arthur Lok Jack

Chairman

Trinidad & Tobago Citizen

In 1998, Arthur Lok Jack was elected to the Board of Neal

& Massy Holdings Limited and was appointed Chairman

in June 2004. He is also the Executive Chairman of the

Associated Brands Group of Companies, Chairman of

Guardian Holdings Limited and serves on the Boards of many

other Caribbean companies. In 2001, he was voted Master

Entrepreneur of the year and in 2002, he was awarded an

Honorary Doctorate of Laws and recognized as a Caribbean

Luminary by the University of the West Indies. Mr. Lok Jack

is also a recipient of the prestigious Chaconia Medal (Gold)

for his contribution to business development in Trinidad

and Tobago. In 2004 he was inducted into Queen’s Royal

College (Alma Mater) Hall of Honour and in November 2009,

he was inducted into the Trinidad & Tobago Chamber of

Industry and Commerce’s Business Hall of Fame.

2 E. Gervase Warner

President & Group CEO

Trinidad & Tobago Citizen

E. Gervase Warner is the President and Group CEO of the

Neal & Massy Group of Companies. Prior to his appointment

in 2009, he served as the Executive Chairman of the Group’s

Energy & Industrial Gases Business Unit.

Mr. Warner holds an MBA from the Harvard Graduate

School of Business Administration and BSE Degrees in

Electrical Engineering and Computer Science Engineering

from the University of Pennsylvania.

Prior to joining the Neal & Massy Group, Mr. Warner was

a partner with the international management consulting

firm, McKinsey & Company Inc., where he last led the firm’s

client services in the Caribbean region. He has extensive

experience in the petroleum, financial and ITC sectors and

currently serves on the Trinidad & Tobago Board of Citigroup

Merchant Bank Limited and the Arthur Lok Jack Graduate

School of Business.

Mr. Warner has over 20 years of international experience

working in the USA, Latin America and the Caribbean.

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3 Dr. Rolph Balgobin

Trinidad and Tobago Citizen

Dr. Rolph Balgobin is the Chairman of Quicksilver

Convenience Ltd. and a director of several companies and

charities. He is an Independent Senator in the Parliament

of The Republic of Trinidad and Tobago and holds business

degrees from the University of the West Indies, the University

of Manchester and the University of Cambridge.

4 Robert Bermudez


Robert Bermudez is the Chairman of the Bermudez Group

of Companies. He is also associated with several other

corporate bodies in and out of Trinidad and Tobago.

5 Earl Boodasingh


Earl Boodasingh is an Executive Vice President and Executive

Chairman of Neal & Massy’s Food Group.

Mr. Boodasingh joined the Neal & Massy Group in

1981 and has held many senior positions across the

Group throughout his tenure. His career within the group

began at Neal & Massy Industries Limited as a Cost and

Management Accountant. He went on to hold the positions

of Financial Comptroller and Financial Director for a number

of companies and major divisions, including the Marketing

& Distribution Division and the Hi-Lo Food Stores Division.

He later served as CEO for both divisions, consecutively. In

2003 he was appointed as the Transition Manger for H.D

Hopwood & Company Limited in Jamaica.

In 2005, Mr. Boodasingh was appointed as the Executive

Chairman of the Neal & Massy Automotive & Industrial

Equipment Business Unit. In 2007, he assumed the position

of Executive Chairman of the Group’s Retail, Distribution &

Logistics Business Unit.

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6 Geoffrey Cave

Barbados Citizen

Geoffrey Cave is the Chairman of the Board of Directors

of Cave Shepherd & Co. Limited – a Barbados-based

corporation with subsidiary and associate companies located

across the region.

Mr. Cave joined Cave Shepherd, which was a family-run

business at the time, in 1963 and was later appointed as

the company’s Managing Director then elected as Chairman.

He has enjoyed a distinguished career in business, serving as

Director and Chairman of several leading private and public

organizations in Barbados.

In 2000, Mr. Cave was awarded the Barbados Centennial

Honour and the Caribbean Master Entrepreneur Award

the following year. In the Queen’s New Years’ Honour’s

List in 2003, he was appointed Commander of the Most

Excellent Order of the British Empire and in October 2007

the University of the West Indies conferred on him an

Honorary Degree of Doctor of Laws (LLD). More recently, in

October 2009, he was appointed an Independent Senator

by the Governor General of Barbados.

7 Sir Allan Fields

Barbados Citizen

Sir Allan Fields joined the Neal & Massy board in 1998 to

2008, and was reappointed in 2009. He was the Chairman

of the Barbados Shipping & Trading Co. Ltd. (BS&T).

Formally trained in Mechanical Engineering, he has served

as Managing Director of Lucas Industries Barbados’s

operations, BS&T and Banks (Barbados) Breweries Ltd.

Sir Allan serves on many Boards in Barbados, including the

Barbados National Insurance Corporation, First Caribbean

International Bank, the Barbados Employers Confederation

and the YMCA.

He is also Past President of the Private Sector Organization

and Chairman of Banks Holdings Limited, Barbados Dairy

Industries Ltd, Cable & Wireless (Barbados) Ltd. and the

Commonwealth Business Association. He was Barbados’

non-resident Ambassador to the Peoples Republic of China

from 2003 to 2008 and served as an Independent Senator

in the Barbados Parliament.

8 G. Anthony King

Barbados Citizen

G. Anthony King has been the Group Chief Executive Officer

of the Barbados Shipping & Trading Company Limited

(BS&T) since October 1, 2004. He is a Group Executive

Vice President and Chairman of the Financial, Property and

Other Business Unit of the Neal & Massy Group.

Mr. King is also a Director of other publicly traded

companies in Barbados such as Banks Holdings Limited,

Almond Resorts Inc. and the Barbados National Bank.

His business career spans almost 35 years, 23 of which

were spent with the Neal & Massy Group. Prior to his

departure to take up the BS&T appointment, he led Neal &

Massy’s Eastern Caribbean Group of Companies.

He has been associated with various private sector

organisations, as a Past President of the Barbados Chamber

of Commerce & Industry, as well as a Director of the

Caribbean Association of Industry and Commerce (CAIC).

He continues to participate in the community as a Trustee

of the Barbados Youth Business Trust, the Chairman of

the Tourism Development Corporation in Barbados and a

Director of the Barbados Private Sector Association.

9 William Lucie-Smith


William Lucie-Smith is a Chartered Accountant by profession

and a former Senior Partner of PricewaterhouseCoopers

(Trinidad) where he headed its Corporate Finance and

Recoveries practice. Mr. Lucie-Smith has accumulated

extensive experience in mergers and acquisitions, taxation

and valuations and holds an MA degree from Oxford

University in Philosophy, Politics and Economics. He

currently serves as a non-Executive Director on a number

of Boards including Republic Bank and Sagicor Financial

Corporation.

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10 Paula Rajkumarsingh


Paula Rajkumarsingh is a Corporate Financial Executive, with

over 10 years of experience at a senior management level,

and the Group’s Chief Financial Officer. She is currently a

Director on the Parent Board of First Caribbean International

Bank in Barbados and First Caribbean International Bank

in Trinidad & Tobago. She is also a Director of a private

Equity Fund (DevCap) and served on the board of Sugar

Manufacturing Company for four years.

11 Brian Young

Jamaica Citizen

Mr. Young is the Chairman of Neal & Massy Group (Jamaica)

Limited, Cool Petroleum Limited, an associate company of

Neal & Massy Holdings Limited and Chairman of the Audit

Committee of Neal & Massy Holdings Limited.

A former Senior Partner of PricewaterhouseCoopers

(Jamaica), Mr. Young has held his position on the Board

of Neal & Massy Holdings Limited for the past 15 years.

He is highly experienced in the areas of corporate finance,

mergers and acquisitions, insolvency and management

information systems, with 45 years of management

consultancy experience.

Mr. Young is currently on the Boards of Trinidad Cement

Limited, Caribbean Cement Company Limited, Bermudez

Holdings Limited, Trade Winds Jamaica Limited and has

served on many Jamaican Government teams.


Set out below are the Directors, Senior Officers and their connected persons with interests in the shares of Neal & Massy Holdings

Limited, a Director’s non-beneficial interest in shares and the holders of the ten (10) largest blocks of shares in the Company as at

30 September 2010.

Directors and Senior Officers Shareholding Connected Persons Shareholdings

Rolph Balgobin 5,000 1,500

Robert Bermudez 14,820 13,029

Earl Boodasingh 147,384 Nil

Geoffrey Cave Nil Nil

Allan Fields 1,000 Nil

Gerald Anthony King 75,000 Nil

Arthur Lok Jack Nil 100,981

William Lucie-Smith Nil 17,897

Paula Rajkumarsingh 106,902 Nil

Elliot Gervase Warner 42,262 Nil

Brian Young Nil Nil

Judith Bowen 26,513 Nil

Linford Carrabon 178,627 Nil

Frere Delmas 752 Nil

Angela Hamel-Smith 57,081 Nil

Christian Maingot 4,605 Nil

David O’Brien 21,632 Nil

Doodnauth Persaud 9,519 Nil

Keith Thomas 58,922 Nil

Althea Thompson Nil Nil

Director’s Non-Beneficial Interest

Paula Rajkumarsingh, a Director (together with Curtis Lee Poy) holds a non-beneficial interest in 1,357,846 shares as a co-trustee

of the Neal & Massy Group Profit Sharing Plan.

Directors’, Senior Officers’ and Connected Persons’ Interests

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The Directors have pleasure in submitting their Report and the Audited Financial Statements for the financial year ended 30th

September 2010

Principal activities

The main activity is that of a Holding Company.

Financial results for the year $000’s

Profit attributable to shareholders 301,365

Dividends paid (139,835)

Profit retained for the year 161,530

Other movements on revenue reserves 51,799

Balance brought forward 2,162,708

Retained earnings at end of year 2,376,037

Dividends

The Directors declared a final dividend of 86 cents per share, making a total dividend of $1.26 per share for the financial year. The

final dividend will be paid on 17th January 2011 to shareholders whose names appear on the Register of members of the Company

at the close of business on 30th December 2010.

Directors

Pursuant to paragraph 4.6.1 of By-Law No. 1 of the Company Mr. Robert Bermudez retires from the Board by rotation and being

eligible offers himself for re-election until the close of the third Annual Meeting following this appointment.

Pursuant to paragraph 4.8 of By-Law No. 1 of the Company, Mr. Brian Young having attained the age of seventy two years and

being eligible offers himself for re-election until the close of the next Annual Meeting following this appointment.

Directors’, Senior Officers’ & Connected Persons’ Interests

These should be read as part of this report.

Auditors

The Auditors, PricewaterhouseCoopers, retire and being eligible offer themselves for re-appointment.

BY ORDER OF THE BOARD

Althea E. Thompson

Company Secretary

14th December 2010

Directors’ Report


Set out below are the Directors, Senior Officers and their connected persons with interests in the shares of Neal & Massy Holdings

Limited, a Director’s non-beneficial interest in shares and the holders of the ten (10) largest blocks of shares in the Company as at

30 September 2010.

Directors and Senior Officers Shareholding Connected Persons Shareholdings

Rolph Balgobin 5,000 1,500

Robert Bermudez 14,820 13,029

Earl Boodasingh 147,384 Nil

Geoffrey Cave Nil Nil

Allan Fields 1,000 Nil

Gerald Anthony King 75,000 Nil

Arthur Lok Jack Nil 100,981

William Lucie-Smith Nil 17,897

Paula Rajkumarsingh 106,902 Nil

Elliot Gervase Warner 42,262 Nil

Brian Young Nil Nil

Judith Bowen 26,513 Nil

Linford Carrabon 178,627 Nil

Frere Delmas 752 Nil

Angela Hamel-Smith 57,081 Nil

Christian Maingot 4,605 Nil

David O’Brien 21,632 Nil

Doodnauth Persaud 9,519 Nil

Keith Thomas 58,922 Nil

Althea Thompson Nil Nil

Director’s Non-Beneficial Interest

Paula Rajkumarsingh, a Director (together with Curtis Lee Poy) holds a non-beneficial interest in 1,357,846 shares as a co-trustee

of the Neal & Massy Group Profit Sharing Plan.

Holders of the ten (10) largest blocks of Shares

Name of Registered Shareholder Number of Shares

National Insurance Board 19,681,662

RBTT Trust Limited 8,762,164

RBTT Nominee Services Limited 8,517,301

Republic Bank Limited 7,371,923

Trinidad & Tobago Unit Trust Corporation 5,822,298

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Management Proxy Circular

Republic of Trinidad and Tobago

The Companies Act, Ch. 81:01

[Section 144]

1 Name of Company: Neal & Massy Holdings Limited

Company No. N-20(C)

2 Particulars of Meeting

Eighty-Seventh Annual Meeting of Shareholders of the above named Company to be held at the Belmont Salon, Hilton Trinidad,

Lady Young Road, Port of Spain, Trinidad at 10:00 a.m. on Friday 18th February, 2011.

3 Solicitation

It is intended to vote the Proxy solicited hereby (unless the shareholder directs otherwise) in favour of all resolutions specified

therein.

4 Any Director’s statement submitted pursuant to Section 76(2)

No statement has been received from any Director pursuant to Section 76(2) of the Companies Act, Ch. 81:01.

5 Any Auditor’s statement submitted pursuant to Section 171(1)

No statement has been received from the Auditors of the Company pursuant to Section 171(1) of the Companies Act, Ch.

81:01.

6 Any Shareholder’s proposal submitted pursuant to Sections 116(a) and 117(2)

No proposal has been received from any Shareholder pursuant to Sections 116(a) and 117(2) of the Companies Act, Ch.

81:01.

Date Name and Title Signature

14th December 2010 Althea E. Thompson

Company Secretary

Directors Report

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Independent Auditor’s Report

To the Shareholders of Neal & Massy Holdings Limited

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of Neal & Massy Holdings Limited and its subsidiaries (the

‘Group’) which comprise the consolidated statement of financial position as of 30 September 2010 and the consolidated income

statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated

statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with

International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control

relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due

to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in

the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit

in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan

and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the

financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant

to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit

also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of

the Group as of 30 September 2010, and of its financial performance and its cash flows for the year then ended in accordance

with International Financial Reporting Standards.

PricewaterhouseCoopers

Port of Spain, Trinidad, West Indies

17 December 2010

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Notes 2010 2009

$ $

ASSETS

Non-current assets

Property, plant and equipment 6 2,819,108 2,892,044

Goodwill 7 168,003 170,698

Other intangible assets 8 35,070 35,070

Investments in associated companies and joint ventures 9 453,282 512,723

Long term investments 11 389,412 393,996

Deferred income tax assets 12 85,331 76,009

Installment credit and other loans 13 142,642 173,810

Retirement benefit assets 14 213,899 203,900

4,306,747 4,458,250

Current assets

Inventories 15 1,053,753 1,080,355

Installment credit and other loans 13 130,105 137,845

Trade and other receivables 16 1,591,343 1,553,804

Financial assets at fair value through profit or loss 11 77,963 106,278

Cash and cash equivalents 17 1,137,935 957,933

3,991,099 3,836,215

Assets of disposal group classified as held for sale 33 13,584 –

4,004,683 3,836,215

Total assets 8,311,430 8,294,465

EQuITY

Capital and reserves attributable to equity holders of the Company

Share capital 18 538,220 522,154

Retained earnings 2,376,037 2,162,708

Other reserves 82,639 66,813

2,996,896 2,751,675

Non-controlling interests 20 453,016 478,073

Total equity 3,449,912 3,229,748

Notes 2010 2009

$ $

LIABILITIES

Non-current liabilities

Borrowings 21 1,319,159 1,547,134

Deferred income tax liabilities 12 99,909 96,316

Customers’ deposits 22 166 296

Provisions for other liabilities and charges 23 313,360 347,177

1,732,594 1,990,923

Current liabilities

Trade and other payables 24 1,387,316 1,421,858

Liabilities on insurance contracts 25 725,134 617,494

Customers’ deposits 22 285,969 342,813

Current income tax liabilities 71,425 63,406

Borrowings 21 659,080 628,223

3,128,924 3,073,794

Total liabilities 4,861,518 5,064,717

Total equity and liabilities 8,311,430 8,294,465

The notes on pages 10 to 96 are an integral part of these consolidated financial statements.

On 14 December 2010, the Board of Directors of Neal & Massy Holdings Limited authorised these consolidated financial statements

for issue.

Director Director

E.G. Warner A. Lok Jack

Consolidated Statement of Financial Position

FINA

NC

IAL PIO

SITION

As at 30 September 2010

Expressed in thousands of Trinidad & Tobago dollars

FIN

AN

CIA

L PO

SITI

ON


Notes 2010 2009

$ $

Continuing Operations

Revenue 5 8,262,960 8,338,470

Operating profit before finance costs 26 671,990 758,533

Finance costs - net 28 (76,978) (101,974)

Share of profit of associated companies and joint ventures 9 10,699 35,683

Profit before income tax 605,711 692,242

Income tax expense 29 (181,765) (175,386)

Profit for the year from continuing operations 423,946 516,856

Discontinued operations

Loss for the year from discontinued operations 33 (117,880) (33,275)

Profit for the year 306,066 483,581

Profit attributable to:

Equity holders of the Company 301,365 435,412

Non-controlling interests 4,701 48,169

306,066 483,581

Notes 2010 2009

$ $

Earnings per share from continuing and discontinued operations attributable to

the equity holders of the Company during the year (expressed in TT$ per share)

Basic earnings per share

- from continuing operations 30 4.35 4.88

- from discontinued operations 30 (1.22) (0.35)

3.13 4.53

Diluted earnings per share

- from continuing operations 30 4.35 4.88

- from discontinued operations 30 (1.22) (0.35)

3.13 4.53

Dividends per share 19 1.26 1.40

Dividends paid per share 19 1.40 1.40


Consolidated Income Statement

INC

OM

E STATEM

ENT

For the year ended 30 September 2010


INC

OM

E ST

ATE

MEN

T


Notes 2010 2009

$ $

Profit for the year 306,066 483,581

Other comprehensive income:

Available for sale financial assets 11 1,705 (7,860)

Actuarial gains/(losses) on defined benefit pension plans 14 48,129 (102,111)

Currency translation differences 19,511 (20,289)

Other movements 4,193 (3,959)

Other comprehensive income / (loss) for the year 73,538 (134,219)

Total comprehensive income for the year 379,604 349,362

Attributable to:

Equity holders of the company 372,526 307,443

Non-controlling interests 7,078 41,919

Total comprehensive income for the year 379,604 349,362


Share Other Retained

Note Capital Reserves Earnings Total

$ $ $ $

Balance at 1 October 2008 512,573 100,870 1,957,274 2,570,717

Currency translation differences – (24,041) – (24,041)

Other reserve movements – (10,016) 9,022 (994)

Net loss not recognised in

consolidated income statement – – (99,613) (99,613)

Profit attributable to shareholders – – 435,412 435,412

Employee share option plan

- value of employee services 2,543 – – 2,543

Issue of shares under stock

- option plan 6,200 – – 6,200

Issue of shares for the

acquisition of BS&T 838 – – 838

Dividends paid – – (139,387) (139,387)

Balance at 30 September 2009 522,154 66,813 2,162,708 2,751,675

Balance at 1 October 2009 522,154 66,813 2,162,708 2,751,675

Currency translation differences – 18,593 – 18,593

Other reserve movements – (2,767) 1,236 (1,531)

Net profit not recognised in

consolidated income statement – – 50,563 50,563

Profit attributable to shareholders – – 301,365 301,365

Employee share option plan

- value of employee services 18 250 – – 250

Issue of shares under stock

- option plan 18 15,816 – – 15,816

Dividends paid (139,835) (139,835)

Balance at 30 September 2010 538,220 82,639 2,376,037 2,996,896


Consolidated Statement of Changes in EquityConsolidated Statement of Comprehensive Income

CH

AN

GES IN

EQu

ITYC

OM

PREH

ENSI

VE

INC

OM

E

Year ended 30 September 2010



Notes 2010 2009

$ $

Cash flows from operating activities

Operating profit before finance costs 671,990 758,533

Operating loss from discontinued operations before finance costs 33 (29,756) (8,062)

Adjustments for:

Dividends received from associated companies 9 22,408 32,617

Depreciation 6 217,443 218,932

Impairment of goodwill 7 2,846 3,699

Gain on sale of property, plant and equipment (33,739) (14,854)

Increase in provision for installment credit and other loans 13 2,400 2,472

Decrease in market value of investments 11 1,771 3,714

Employee share option scheme provision 18 250 2,543

Employee retirement and other benefits 1,469 1,175

Earnings before interest, tax, depreciation and amortisation 857,082 1,000,769

Provisions and other movements (3,986) 2,060

Changes in working capital:

Decrease in inventories 17,163 227,659

(Increase)/decrease in trade and other receivables (27,016) 142,046

Decrease/(increase) in installment credit and other loans 38,908 (11,231)

Increase/(decrease) in trade and other payables 68,662 (85,077)

Decrease in customers’ deposits 22 (56,974) (6,898)

Cash generated from operations 893,839 1,269,328

Finance costs 28 (77,283) (107,672)

Taxation paid (162,855) (174,613)

Net cash provided by operating activities 653,701 987,043

Notes 2010 2009

$ $

Cash flows from investing activities

Proceeds from sale of property, plant and equipment 107,144 61,342

Proceeds from sale of other investments 11 58,932 12,132

Purchase of property, plant and equipment 6 (223,201) (247,068)

Net increase in other investments and investments in

associated companies and joint ventures (24,216) (109,994)

Investing activities – Bahamas Supermarkets Ltd (35,768) –

Net cash used in investing activities (117,109) (283,588)

Cash flows from financing activities

Net (decrease)/increase in medium and long term borrowings (256,243) 16,603

Issue of shares 15,816 7,038

Dividends paid to shareholders 19 (139,835) (139,387)

Dividends paid to minorities 20 (32,449) (26,191)

Net cash used in financing activities (412,711) (141,937)

Net increase in cash, cash equivalents 123,881 561,518

Cash, cash equivalents and bank overdrafts at beginning of the year 920,300 362,632

Effects of exchange rate changes on cash and bank overdrafts 2,418 (3,850)

Cash, cash equivalents and bank overdrafts at the end of the year 1,046,599 920,300

Cash and short term funds 17 1,137,935 957,933

Bank overdrafts and other short term borrowings 21 (91,336) (37,633)

1,046,599 920,300


Consolidated Statement of Cash Flows

CA

SH FLO

WS



CA

SH F

LOW

S


1 General information

Neal & Massy Holdings Limited (the “Company”), was incorporated in the Republic of Trinidad and Tobago in 1923. The

address of its registered office is 63 Park Street, Port of Spain, Trinidad. The Group is engaged in trading, manufacturing, service

industries and finance in Trinidad and Tobago, the wider Caribbean region and the United States of America. The Company

has a primary listing on the Trinidad and Tobago Stock Exchange. These consolidated financial statements were authorised for

issue by the board of directors on 14 December 2010.

The principal subsidiaries are as follows:

Percentage

Country of of equity

incorporation capital held

Automotive & Industrial Equipment

Neal & Massy Automotive Limited Trinidad and Tobago 100%

City Motors (1986) Limited Trinidad and Tobago 100%

Tracmac Engineering Limited Trinidad and Tobago 100%

Automotive Components Limited Trinidad and Tobago 100%

Tobago Services Limited Trinidad and Tobago 100%

Master Serv Limited Trinidad and Tobago 100%

Associated Industries Limited Guyana 100%

Warren Motors Inc Barbados 100%

Energy & Industrial Gases

Neal & Massy Energy Limited Trinidad and Tobago 100%

Neal & Massy Energy Services Limited Trinidad and Tobago 100%

Neal & Massy Energy Resources Limited Trinidad and Tobago 100%

NM Insertech (Caribbean) Ltd Trinidad and Tobago 100%

Insertech (Aruba) N.V. Aruba 100%

Neal & Massy Supply Chain Integrators Trinidad and Tobago 51%

Industrial Gases Limited Trinidad and Tobago 57.3%

Trintogas Carbonics Limited Trinidad and Tobago 100%

NM Petrochemicals Services Limited Trinidad and Tobago 100%

Gas Products Limited Jamaica 100%

Demerara Oxygen Company Limited Guyana 92.9%

1 General information (continued)

The principal subsidiaries are as follows: (continued)

Percentage



Food Retailing

Trading and Distribution Limited Trinidad and Tobago 100%

Hi-Lo Food Stores Division Trinidad and Tobago 100%

Arvee Food Master Limited Trinidad and Tobago 100%

Athabasca Limited Trinidad and Tobago 100%

Super Centre Barbados 100%

Peronne Manufacturing Barbados 100%

Food/Consumer Distribution and Logistics

Marketing & Distribution Division Trinidad and Tobago 100%

Huggins Shipping and Customs Brokerage Limited Trinidad and Tobago 100%

Melville Shipping Limited Trinidad and Tobago 100%

Neal & Massy Inc USA 100%

HD Hopwood & Company Limited Jamaica 100%

T. Geddes Grant (Barbados) Limited Barbados 100%

Trading & Distribution Inc Guyana 92.9%

NM Services Limited Guyana 92.9%

Neal & Massy Guyana Limited Guyana 92.9%

Trident Forwarding Barbados 100%

SBI Distribution Barbados 100%

Agro Chemicals Barbados 100%

Roberts Manufacturing Barbados 100%

Booth Steamship Barbados 100%

Cargo Handlers Barbados 100%

Retail & Distribution International St. Lucia 100%

BS&T International Inc Barbados 100%

Knights Limited Barbados 99.7%

Notes to the Consolidated Financial Statements

NO

TES



NO

TES




Percentage




Almond Resorts Inc Barbados 51%

Casuarina Holdings Barbados 49.4%

Information Technology and Communications and Other

Illuminat Trinidad and Tobago Limited Trinidad and Tobago 100%

Illuminat (Antigua) Limited Antigua 100%

Illuminat (Barbados) Limited Barbados 100%

Illuminat (Jamaica) Limited Jamaica 100%

CCS Guyana Limited Guyana 92.9%

Three Sixty Communications Limited Trinidad and Tobago 75%

Nealco Datalink Limited Trinidad and Tobago 100%

Pereira & Company Limited Trinidad and Tobago 100%

NM Security Solutions Guyana 92.9%

Seawell Air Services Barbados 100%

BCB Communications Barbados 51%

Dacosta Manning Inc Barbados 100%

Financial, Property and Other

NM Remittance Services Limited Trinidad and Tobago 100%

General Finance Corporation Limited Trinidad and Tobago 100%

United Insurance Company Limited Barbados 100%

Magna Rewards Inc Barbados 90%

Magna Rewards (Jamaica) Inc Jamaica 51.3%

Magna Rewards (St Lucia) Inc St Lucia 51.3%

Magna Rewards (Trinidad) Inc Trinidad and Tobago 51.3%

Magna Rewards Caribbean Inc Barbados 51.3%



Percentage



Financial, Property and Other (continued)

Nealco Real Estate Limited Trinidad and Tobago 100%

Arrow Developers Limited Barbados 100%

Nealco Properties Limited Trinidad and Tobago 100%

Pres-T-Con Limited Trinidad and Tobago 63.1%

PEL Enterprises Barbados 100%

Neal & Massy (Barbados) Limited Barbados 100%

Inter Regional Reinsurance Co Limited Cayman 100%

The Auto Dome Barbados 100%

SP Mussons Son & Co Limited Barbados 100%

Sunset Crest Holdings Barbados 100%

Wimcal Limited Barbados 100%

Warrens Realty Barbados 100%

Other

Neal & Massy Limited Trinidad and Tobago 100%

Barbados Shipping & Trading Co. Limited Barbados 97.2%

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards

(“IFRS”) under the historical cost convention as modified by the revaluation of available-for-sale financial assets, financial

assets and financial liabilities (including derivative instruments) at fair value through profit or loss.


NO

TESNO

TES




2 Summary of significant accounting policies (continued)

2.1 Basis of preparation (continued)

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.

It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The

areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant

to the consolidated financial statements are disclosed in Note 4.

(a) New and amended standards adopted by the Group

The Group has adopted the following new and amended IFRS as of 1 October 2009:

• IAS1(Revised).‘Presentationoffinancialstatements’–effective1January2009.

The revised standard prohibits the presentation of items of income and expenses (that is,‘non-owner changes

in equity’) in the statement of changes in equity, requiring ‘non-owner changes in equity’ to be presented

separately from owner changes in equity in a statement of comprehensive income. As a result the Group

presents in the consolidated statement of changes in equity all owner changes in equity, whereas all non-

owner changes in equity are presented in the consolidated statement of comprehensive income. Comparative

information has been re-presented so that it is in conformity with the revised standard. As the change in

accounting policy only impacts presentation aspects, there is no impact on earnings per share.

• IAS1(Amendment),‘Presentationoffinancialstatements’(effectivefrom1January2009).

The amendment is part of the IASB’s annual improvements project published in May 2008. The amendment

clarifies that some rather than all financial assets and liabilities classified as held for trading in accordance with

IAS 39, ‘Financial instruments: Recognition and measurement’ are examples of current assets and liabilities

respectively. The Group applied the IAS 39 (Amendment) from 1 October 2009.

• IFRS2(Amendment),‘Share-basedpayment’(effective1January2009).

This deals with vesting conditions and cancellations. It clarifies that vesting conditions are service conditions

and performance conditions only. Other features of a share-based payment are not vesting conditions. These

features would need to be included in the grant date fair value for transactions with employees and others

providing similar services; they would not impact the number of awards expected to vest or valuation thereof

subsequent to grant date. All cancellations, whether by the entity or by other parties, should receive the same

accounting treatment. The Group has adopted IFRS 2 (amendment) from 1 October 2009. The amendment

does not have a material impact on the Group‘s financial statements.



(a) New and amended standards adopted by the Group (continued)

• IFRS7(Amendment),‘Financialinstruments–Disclosures’(effective1January2009).

The amendment requires enhanced disclosures about fair value measurement and liquidity risk. In particular,

the amendment requires disclosure of fair value measurements by level of a fair value measurement hierarchy.

As the change in accounting policy only results in additional disclosures, there is no impact on earnings per

share.

• IFRS8replacesIAS14,‘Segmentreporting’,andalignssegmentreportingwiththerequirementsoftheUS

standard SFAS 131, ‘Disclosures about segments of an enterprise and related information’. The new standard

requires a ‘management approach’, under which segment information is presented on the same basis as

that used for internal reporting purposes. In addition, the segments are reported in a manner that is more

consistent with the internal reporting provided to the chief operating decision-maker. It did not have a material

impact on the Group’s consolidated financial statements.

• IAS19(Amendment),‘Employeebenefits’(effectivefrom1January2009).

The amendment is part of the IASB’s annual improvements project published in May 2008:

– The amendment clarifies that a plan amendment that results in a change to the extent of which benefit

promises are affected by future salary increases is a curtailment, while an amendment that changes

benefits attributable to past service gives rise to a negative past service cost if it results in a reduction in

the present value of the defined benefit obligation.

– The definition of return on plan assets has been amended to state that plan administration costs are

deducted in the calculation of return on plan assets only to the extent that such costs have been excluded

from measurement of the defined benefit obligation.

– The distinction between short term and long term employee benefits will be based on whether benefits

are due to be settled within or after 12 months of employee service being rendered.

– IAS 37, ‘Provisions, contingent liabilities and contingent assets, requires contingent liabilities to be disclosed,

not recognised. IAS 19 has been amended to be consistent.


NO

TESNO

TES






(a) New and amended standards adopted by the Group (continued)

The Group applied IAS 19 (Amendment) from 1 October 2009.

• IAS27(Revised),‘Consolidatedandseparatefinancialstatements’,(effectivefrom1July2009).

The revised standard requires the effects of all transactions with non-controlling interests to be recorded in

equity if there is no change in control and these transactions will no longer result in goodwill or gains and

losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is

re-measured to fair value, and a gain or loss is recognised in profit or loss. The Group applied IAS 27 (Revised)

from 1 October 2009.

• IAS 28 (Amendment), ‘Investments in associates’ (and consequential amendments to IAS 32, ‘Financial

Instruments: Presentation’, and IFRS 7, ‘Financial instruments: Disclosures’) (effective from 1 January 2009).

The amendment is part of the IASB’s annual improvements project published in May 2008. An investment

in associate is treated as a single asset for the purposes of impairment testing. Any impairment loss is not

allocated to specific assets included within the investment, for example, goodwill. Reversals of impairment

are recorded as an adjustment to the investment balance to the extent that the recoverable amount of the

associate increases. The Group applied IAS 28 (Amendment) to impairment tests related to investments in

subsidiaries and any related impairment losses from 1 October 2009.

• IAS39(Amendment),‘Financialinstruments:Recognitionandmeasurement’(effectivefrom1January2009).

The amendment is part of the IASB’s annual improvements project published in May 2008. The definition of

financial asset or financial liability at fair value through profit or loss as it relates to items that are held for

trading is also amended. This clarifies that a financial asset or liability that is part of a portfolio of financial

instruments managed together with evidence of an actual recent pattern of short-term profit making is included

in such a portfolio on initial recognition. The Group applied the IAS 39 (Amendment) from 1 October 2009.

It did not have an impact on the Group’s consolidated income statement.

• IAS36(Amendment),‘Impairmentofassets’(effectivefrom1January2009).

The amendment is part of the IASB’s annual improvements project published in May 2008. Where fair value

less costs to sell is calculated on the basis of discounted cash flows, disclosures equivalent to those for value-

in-use calculations should be made. The Group applied the IAS 36 (Amendment) and provided the required

disclosure where applicable for impairment tests from 1 October 2009.



(b) Standards, amendments and interpretations effective in 2009 but not relevant

The following interpretations and amendments to existing standards have been published and are mandatory for

the Group’s accounting periods beginning on or after 1 January 2009 or later periods but are not relevant for the

Group’s operations:

• IFRS3(Revised),‘Businesscombinations’(effectivefrom1July2009).

• IAS20(Amendment),‘Accountingforgovernmentgrantsanddisclosureofgovernmentassistance’(effective

from 1 January 2009).

• IAS 31 (Amendment), ‘Interests in joint ventures’ (and consequential amendments to IAS 32 and IFRS 7)

(effective from 1 January 2009).

• IAS29(Amendment),‘Financialreportinginhyperinflationaryeconomies’(effectivefrom1January2009).

• IAS32(Amendment),‘Financialinstruments:Presentation’,andIAS1(Amendment),‘Presentationoffinancial

statements’ – ‘Puttable financial instruments and obligations arising on liquidation’ (effective from 1 January

2009).

• IAS41(Amendment),‘Agriculture’(effectivefrom1January2009).

The amendment is part of the IASB’s annual improvements project published in May 2008.

• IFRIC18,‘Transferstoassetsfromcustomers’(effective1July2009).

(c) Standards, amendments and interpretations that are not yet effective and have not been early adopted

by the Group:

The following standards, amendments and interpretations to existing standards have been published and are

mandatory for the Group’s accounting periods beginning on or after 1 January 2009 or later periods.


NO

TESNO

TES







by the Group: (continued)

• IFRS2(Amendment),‘Groupcash-settledshare-basedpaymenttransactions’(effectivefrom1January2010).

In addition to incorporating IFRIC 8, ‘Scope of IFRS 2’, and IFRIC 11, ‘IFRS 2 – Group and treasury share

transactions’, the amendments expand on the guidance in IFRIC 11 to address the classification of Group

arrangements that were not covered by the interpretation. The new guidance is not expected to have a

material impact on the Group’s financial statements. The Group will apply IFRS 2 (amendments) from 1

October 2010.

• IFRS5(Amendment),‘Measurementofnon-currentassets(ordisposalgroups)classifiedasheld-for-sale’.

The amendment is part of the IASB’s annual improvements project published in April 2009. The amendment

provides clarification that IFRS 5 specifies the disclosures required in respect of non-current assets (or disposal

groups) classified as held for sale or discontinued operations. It also clarifies that the general requirement

of IAS 1 still apply, particularly paragraph 15 (to achieve a fair presentation) and paragraph 125 (sources of

estimation uncertainty) of IAS 1. The Group will apply IFRS 5 (amendment) from 1 January 2010. It is not

expected to have a material impact on the Group’s financial statements.

• IFRS8,‘OperatingSegments’(effective1January2010),

Minor textual amendment to the standard and amendment to the basis for conclusions, to clarify that an

entity is required to disclose a measure of segment assets only if that measure is regularly reported to the

chief operating decision-maker. The amended guidance is not expected to have a material impact on the

Group’s financial statements.

• IFRS9,‘FinancialInstruments’(effective1January2013).

This is the first part of a new standard on classification and measurement of financial assets that will replace IAS

39. IFRS 9 has two measurement categories: amortised cost and fair value. All equity instruments are measured

at fair value. A debt instrument is at amortised cost only if the entity is holding it to collect contractual cash

flows and the cash flows represent principal and interest. Otherwise it is at fair value through profit or loss.





• IAS1(Amendment),‘Presentationoffinancialstatements’.

The amendment is part of the IASB’s annual improvements project published in April 2009. The amendment

provides clarification that the potential settlement of a liability by the issue of equity is not relevant to its

classification as current or non-current. By amending the definition of current liability, the amendment permits

a liability to be classified as non-current (provided that the entity has an unconditional right to defer settlement

by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the

fact that the entity could be required by the counterparty to settle in shares at any time. The Group will

apply IAS 1 (amendment) from 1 October 2010. It is not expected to have a material impact on the Group’s

financial statements.

• IAS7,‘Statementofcashflows’(effective1January2010).

Amendment to require that only expenditures that result in a recognised asset in the statement of financial

position can be classified as investing activities. The Group will apply IAS 7 (amendment) from 1 October 2010.

• IAS17,‘Leases’(effective1January2010).

Deletion of specific guidance regarding classification of leases of land, so as to eliminate inconsistency with

the general guidance on lease classification. As a result, leases of land should be classified as either finance or

operating, using the general principles of IAS 17. It is not expected to have a material impact on the Group’s

financial statements.

• IAS24(Revised),‘RelatedPartyDisclosures’(effective1January2010).

This amendment removes the requirement for government-related entities to disclose details of all transactions with

the government and other government-related entities. It clarifies and simplifies the definition of a related party.

• IAS32(Amendment),‘Financialinstruments:Presentation’(effectivefrom1February2010).

The amendment addresses the accounting for rights issues (rights, options or warrants) that are denominated

in a currency other than the functional currency of the issuer. Prior to the amendment, such rights issues

were accounted for as derivative liabilities. The amendment states that, if such rights are issued pro-rata to an

entity’s existing shareholders for a fixed amount of any currency, they should be classified as equity, regardless

of the currency in which the exercise price is denominated.


NO

TESNO

TES








• IAS36,‘ImpairmentofAssets’(effective1January2010).

Amendment to clarify that the largest cash-generating unit (or group of units) to which goodwill should be

allocated for the purposes of impairment testing is an operating segment as defined by paragraph 5 of IFRS

8, ‘Operating segments’ (that is, before the aggregation of segments with similar economic characteristics

permitted by paragraph 12 of IFRS 8). The Group will apply the amendment from 1 October 2010.

• IAS38(Amendment),‘IntangibleAssets’(effective1January2010).

The amendment is part of the IASB’s annual improvements project published in April 2009. The Group will

apply IAS 38 (amendment) from the date IFRS 3 (revised) is adopted. The amendment clarifies guidance in

measuring the fair value of an intangible asset acquired in a business combination and it permits the grouping

of intangible assets as a single asset if each asset has similar useful economic lives. The amendment will not

result in a material impact on the Group’s Financial Statements.

• IAS39,‘FinancialInstruments:RecognitionandMeasurement’(effective1January2010).

It is not expected to have a material impact on the Group’s financial statements.

• IFRIC19,‘Extinguishingfinancialliabilitieswithequityinstruments’(effective1July2010).

This interpretation clarifies the accounting when an entity renegotiates the terms of its debt with the result

that the liability is extinguished through the borrower issuing its own equity instruments to the lender. A gain

or loss is recognised in the income statement based on the fair value of the equity instruments compared to

the carrying amount of the debt.

• IFRIC14,‘Prepaymentsofaminimumfundingrequirement’(effective1January2011).

This amendment will have a limited impact, as it applies only to entities that are required to make minimum

funding contributions to a defined benefit pension plan. It removes an unintended consequence of IFRIC 14

related to voluntary pension prepayments when there is a minimum funding requirement.


2.2 Consolidation

(a) Subsidiaries

Subsidiaries are all entities over which the Group has power to govern the financial and operating policies generally

accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential

voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls

another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They

are de-consolidated from the date that control ceases.

The Group uses the purchase method of accounting to account for the acquisition of subsidiaries. The cost of

an acquisition is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or

assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and

liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at

the acquisition date, irrespective of the extent of any non-controlling interest . The excess of the cost of acquisition

over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost

of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised in

the consolidated income statement.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are

eliminated. Unless cost cannot be recovered unrealised losses are also eliminated and considered an impairment

indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure

consistency with the policies adopted by the Group.

Although the Group has only a 49.4% effective ownership interest in a company, this entity is treated as a

subsidiary, as the Group is able to govern the financial and operating policies of the company by virtue of an

agreement with the other investors.

(b) Transactions with non-controlling interests

The Group applies a policy of treating transactions with non-controlling interests as transactions with parties

external to the Group. Disposals to non-controlling interests result in gains and losses for the Group that are

recorded in the consolidated income statement. Purchases from non-controlling interests result in goodwill, being

the difference between any consideration paid and the relevant share acquired of the carrying value of net assets

of the subsidiary.


NO

TESNO

TES





2.2 Consolidation (continued)

(c) Associates and Joint Ventures

Associates are all entities over which the Group has significant influence but not control, generally accompanying

a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using

the equity method of accounting and are initially recognised at cost. The Group’s investment in associates includes

goodwill (net of any accumulated impairment loss) identified on acquisition.

The Group’s share of its associates’ post acquisition profits or losses is recognised in the consolidated income

statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-

acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of

losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables,

the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of

the associate. Joint ventures are also accounted for using the equity method. The Group discontinues the use of

the equity method from the date on which it ceases to have joint control over, or have significant influence in, a

jointly controlled entity.

Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to

the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction

provides evidence of an impairment of the asset transferred. Accounting policies of associates and joint ventures

have been changed where necessary to ensure consistency with the policies adopted by the Group.

2.3 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating

decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance

of the operating segments, has been identified as the Board of Neal & Massy Holdings Limited and Executive Committee

that makes strategic decisions.

2.4 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of

the primary economic environment in which the entity operates (“the functional currency”). The consolidated

financial statements are presented in Trinidad and Tobago dollars, which is the Company’s functional and Group’s

presentation currency.


2.4 Foreign currency translation (continued)

(b) Transactions and balances

Foreign currency transactions are translated into the functional and presentation currency using the exchange rates

prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such

transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated

in foreign currencies are recognised in the consolidated income statement.

Translation differences on non-monetary financial assets and liabilities, such as equities held at fair value through

profit or loss are recognised as part of the fair value gain or loss. Translation differences on non-monetary items

such as equities classified as available-for-sale financial assets are included in other reserves in equity.

Translation differences on debt securities and other monetary financial assets measured at fair value are included

in foreign exchange gains and losses.

(c) Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary

economy) that have a functional currency different from the presentation currency are translated into the presentation

currency as follows:

i) assets and liabilities for each statement of financial position presented are translated at the closing rate at

the date of that statement of financial position;

ii) income and expenses for each income statement are translated at average exchange rates (unless this average

is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,

in which case income and expenses are translated at the dates of the transactions); and

iii) all resulting exchange differences are recognised as a separate component of equity.

When a foreign operation is sold, exchange differences that were recorded in equity are recognised in the

consolidated income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities

of the foreign entity and translated at the closing rate.


NO

TESNO

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2.5 Property, plant and equipment

Property, plant and equipment including land and buildings are stated at historical cost less depreciation. Historical

cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only

when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item

can be measured reliably. The carrying amount of the replaced part is de-recognised. All other repairs and maintenance

are charged to the consolidated income statement during the financial period in which they are incurred.

Interest costs on borrowings to finance the construction of property, plant and equipment are capitalised during

the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are

expensed.

Land is not depreciated.

Depreciation is provided on the straight-line basis at rates estimated to write-off the cost of each asset over its

expected useful life. In the case of motor vehicles, depreciation is based on cost less an estimated residual value. The

estimated useful lives of assets are reviewed periodically, taking account of commercial and technological obsolescence

as well as normal wear and tear, and depreciation rates are adjusted if appropriate.

Current rates of depreciation are:

Freehold and leasehold properties - 2% to 20%

Plant and equipment - 5% to 33.3%

Furniture, fixtures and motor vehicles - 10% to 25%

Rental assets - 25%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial

position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is

greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are included

in the consolidated income statement.

Investment property, principally comprising freehold office buildings, is held for long-term rental yields and is not

occupied by the Group. Investment property is carried at historical cost.


2.6 Intangible assets

(a) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net

identifiable assets of the acquired subsidiary/associate company at the date of acquisition. Goodwill represents the

goodwill acquired on acquisition of subsidiaries. Goodwill on acquisition of associates is included in “Investments

in associated companies and joint ventures”. Separately recognised goodwill is tested annually for impairment

and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains

and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made

to those cash-generating units or groups of cash-generating units that are expected to benefit from the business

combination in which the goodwill arose. Neal & Massy Holdings Limited allocates goodwill to each business

segment in each country in which it operates (Note 7).

(b) Computer Software

Costs associated with the maintenance of existing computer software programmes are expensed as incurred.

Development costs that are directly attributable to the design and testing of identifiable and unique software

products controlled by the Group are recognised as intangible assets when the following criteria are met:

• itistechnicallyfeasibletocompletethesoftwareproductsothatitwillbeavailableforuse;

• itcanbedemonstratedhowthesoftwareproductwillgenerateprobablefutureeconomicbenefits;

• adequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorsellthesoftware

product are available.

Directly attributable costs that are capitalised as part of the software product include the software development

employee costs and an appropriate portion of relevant overheads.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred.

Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Computer software development costs recognised as assets are amortised over their estimated useful lives,

which does not exceed three years.


NO

TESNO

TES





2.7 Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets

that are subject to amortisation are reviewed for impairment losses whenever events or changes in circumstances

indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which

the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair

value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest

levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than

goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

2.8 Financial assets

Classification

The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss,

loans and receivables, held-to-maturity and available-for-sale. The classification depends on the purpose for which the

financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(a) Financial assets at fair value through profit or loss

This category has two sub-categories: financial assets held for trading, and those designated at fair value through

profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of

selling in the short term or if so designated by management. Derivatives are also categorised as held for trading

unless they are designated as hedges. Assets in this category are classified as current assets if they are either held

for trading or are expected to be realised within 12 months of the statement of financial position date.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an

active market. They are included in current assets, except for maturities greater than 12 months after the statement

of financial position date. These are classified as non-current assets. Loans and receivables are classified as ‘trade

and other receivables and installment credit and other loans’ in the consolidated statement of financial position.

(c) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in

any of the other categories. They are included in non-current assets unless management intends to dispose of the

investment within 12 months of the statement of financial position date.


2.8 Financial assets (continued)

(d) Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed

maturities that the Group’s management has the positive intention and ability to hold to maturity. Held-to-maturity

financial assets are included in non-current assets.

(e) Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date - the date on which the Group

commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for

all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through

profit or loss are initially recognised at fair value and transaction costs are expensed in the consolidated income

statement. Financial assets are de-recognised when the rights to receive cash flows from the investments have

expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried

at fair value. Unlisted equity securities for which fair values cannot be reliably measured have been recognised at

cost less impairment. Loans and receivables and held-to-maturity investments are carried at amortised cost using

the effective interest method.

Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-

for-sale are analysed between translation differences resulting from changes in amortised cost of the security and

other changes in the carrying amount of the security. The translation differences are recognised in the consolidated

income statement, and other changes in carrying amount are recognised in equity. Changes in the fair value of

monetary securities classified as available-for-sale and non-monetary securities classified as available-for-sale are

recognised in equity.

When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments

recognised in equity are included in the consolidated income statement as ‘gains and losses from investment

securities’. Interest on available-for-sale securities calculated using the effective interest method is recognised

in the consolidated income statement. Dividends on available-for-sale equity instruments are recognised in the

consolidated income statement when the Group’s right to receive payments is established.


NO

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2.8 Financial assets (continued)

(e) Recognition and measurement (continued)

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active

(and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use

of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted

cash flow analysis, applicable price/earnings or price/cash flow ratios refined to reflect the specific circumstances

of the issuer and option pricing models making maximum use of market inputs and relying as little as possible on

entity-specific inputs.

The Group assesses at each statement of financial position date whether there is objective evidence that a

financial asset or a group of financial assets is impaired. In the case of equity securities classified as available-for-

sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator

that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative

loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss

on that financial asset previously recognised in the income statement – is removed from equity and recognised in

the consolidated income statement. Impairment losses recognised in the consolidated income statement on equity

instruments are not reversed through the consolidated income statement. Impairment testing of trade receivables

is described in Note 2.10.

2.9 Inventories

Inventories are stated at the lower of cost or net realisable value. Cost is determined using the first-in, first-out (“FIFO”)

or the weighted average cost method. The cost of finished goods and work in progress comprise raw materials, direct

labour, other direct costs and related production overheads, but excludes interest expense. Net realisable value is the

estimate of the selling price in the ordinary course of business, less the costs of completion and selling expenses.

2.10 Trade receivables

Trade receivables are recognised at fair value less provision for impairment. A provision for impairment of trade receivables

is established when there is objective evidence that the Group will not be able to collect all amounts due according

to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter

bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade

receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the

present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is

recognised in the consolidated income statement within ‘selling, general and administrative expenses’.


2.11 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments

and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the consolidated statement

of financial position.

2.12 Share capital

Ordinary shares with discretionary dividends are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net

of tax, from the proceeds.

Where any Group company purchases the Company’s shares, the consideration paid including any attributable

incremental external costs net of income taxes is deducted from total shareholders’ equity as treasury shares until

they are cancelled. Where such shares are subsequently sold or re-issued, any consideration received is included in

shareholders’ equity.

2.13 Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective

interest rate method.

2.14 Insurance

(i) Insurance and reinsurance contracts

Insurance and reinsurance contracts are defined as those containing significant insurance risk at the inception

of the contract, or those where at the inception of the contract there is a scenario with commercial substance

where the level of insurance risk may be significant. The significance of insurance risk is dependent on both the

probability of an insured event and the magnitude of its potential effect. Once a contract has been classified as

an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the insurance risk

reduces significantly during the period.


NO

TESNO

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2.14 Insurance (continued)

(i) Insurance and reinsurance contracts (continued)

In the normal course of business, the Group seeks to reduce the losses to which it is exposed that may cause

unfavourable underwriting results by re-insuring a certain level of risk with reinsurance companies. Reinsurance

premiums are accounted for on a basis consistent with that used in accounting for the original policies issued and

the terms of the reinsurance contracts. The Group may receive a ceding commission in connection with ceded

reinsurance, which is earned as incurred.

Reinsurance contracts ceded do not relieve the Group from its obligations to policyholders. The Group remains

liable to its policyholders for the portion re-insured, to the extent that the reinsurers do not meet the obligations

assumed under the reinsurance agreements.

(ii) Amounts receivable from reinsurance companies

Included in accounts receivable on the statement of financial position, are amounts receivable from reinsurance

companies, which consist primarily of amounts due in respect of ceded insurance liabilities. Recoverable amounts

are estimated in a manner consistent with the outstanding claims reserve or settled claims associated with the

re-insured policies and in accordance with the relevant reinsurance contract.

If amounts receivable from reinsurance companies are impaired, the Group reduces the carrying amount

accordingly and recognises an impairment loss in the consolidated income statement. A reinsurance asset is

impaired if there is objective evidence that the Group may not receive all, or part, of the amounts due to it under

the terms of the reinsurance contract.

2.15 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at

amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised

in the consolidated income statement over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the

liability for at least 12 months after the statement of financial position date.


2.16 Current and deferred income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement

of financial position date in the countries where the Group’s subsidiaries, associates and joint ventures operate and

generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations

in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the

basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the

tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the

deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other

than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the

statement of financial position date and are expected to apply when the related deferred income tax asset is realised

or the deferred income tax liability is settled.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates,

except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that

the temporary difference will not reverse in the foreseeable future.

The principal temporary differences arise from depreciation on property, plant and equipment, retirement benefits and

tax losses carried forward. Deferred tax assets relating to the carry forward of unused tax losses are recognised to the

extent that it is probable that future taxable profit will be earned against the unused tax losses which can be utilised.

2.17 Employee benefits

(a) Pension obligations

Group companies operate various pension plans. The majority of the Trinidad and Tobago resident employees

are members of either the Neal & Massy Group Pension Fund Plan, the Retirement Income Security Plan or the T.

Geddes Grant Limited Pension Fund Plan.

The Neal & Massy Group Pension Fund Plan, contributions to which were frozen on 31 January 1990, is a defined

contribution plan whose assets are held separately from those of the Group in an independently administered

fund. The most recent actuarial valuation, at 31 March 2008, revealed that the plan is adequately funded. There

are certain benefits payable by the Neal & Massy Group Pension Fund Plan which fall within the scope of IAS 19

(revised) – Employee Benefits.

The Retirement Income Security Plan incorporates an employee stock ownership plan which is funded by

contributions made by the employer, and a deferred annuity savings plan which is funded by the employees.

Contributions to the Plan are accounted for on the accrual basis and the assets are held separately from those of

the Group in independently administered funds.


NO

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2.17 Employee benefits (continued)

(a) Pension obligations (continued)

T. Geddes Grant Limited Pension Fund Plan is a defined contribution plan whose assets are held separately

from those of the Group in an independently administered fund. Contributions to the plan are accounted for on

the accrual basis and are reviewed by independent actuaries on the basis of triennial valuations.

The majority of the employees of the overseas companies participate in either defined contribution or defined

benefit pension plans which are separate from the Trinidad and Tobago plans.

A defined benefit plan is a pension plan that defines an amount of pension benefit to be provided, usually

as a function of one or more factors such as age, years of service or compensation. A defined contribution plan

is a pension plan under which the Group pays fixed contributions into a separate entity (a fund) and will have no

legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all

employees benefits relating to employee service in the current and prior periods.

The liability recognised in the consolidated statement of financial position in respect of defined benefit pension

plans is the present value of the defined benefit obligation at the statement of financial position date less the fair

value of plan assets and past service costs. The defined benefit obligation is calculated annually by independent

actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by

discounting the estimated future cash outflows using interest rates of government securities that are denominated

in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of

the related pension liability.

Actuarial gains and losses arising from experience adjustments, changes in actuarial assumptions and

amendments to pension plans are charged or credited to retained earnings immediately.

Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional

on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-

service costs are amortised on a straight-line basis over the vesting period.

(b) Other post-employment obligations

Certain Group companies provide post-retirement healthcare benefits to their retirees. The entitlement to these

benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a

minimum service period. The expected costs of these benefits are accrued over the period of employment using the

same accounting methodology as used for defined benefit pension plans. Actuarial gains and losses arising from

experience adjustments, and changes in actuarial assumptions are recognised immediately in retained earnings.

These obligations are valued annually by independent qualified actuaries.


2.17 Employee benefits (continued)

(c) Share-based compensation

The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services

received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed

over the vesting period is determined by reference to the fair value of the options granted, excluding the impact

of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting

conditions are included in assumptions about the number of options that are expected to become exercisable. At

each statement of financial position date, the entity revises its estimates of the number of options that are expected

to become exercisable. It recognises the impact of the revision of original estimates, if any, in the consolidated

income statement, with a corresponding adjustment to equity. The proceeds received net of any directly attributable

transaction costs are credited to share capital when the options are exercised.

(d) Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date,

or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises

termination benefits when it is demonstrably committed to either: terminating the employment of current employees

according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result

of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the statement

of financial position date are discounted to present value.

(e) Bonus plans

A liability for employee benefits in the form of bonus plans is recognised in other provisions when there is no

realistic alternative but to settle the liability and at least one of the following conditions are met:

• thereisaformalplanandtheamountstobepaidaredeterminedbeforethetimeofissuingthefinancial

statements; or

• pastpracticehascreatedavalidexpectationbyemployeesthattheywillreceiveabonus/profitsharingand

the amount can be determined before the time of issuing the financial statements.

Liabilities for bonus plans are expected to be settled within 12 months and are measured at the amounts expected

to be paid when they are settled.


NO

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2.18 Provisions

Provisions for dismantlement costs, restructuring costs, legal claims and all other provisions are recognised when: the

Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow

of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not

recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is

determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an

outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation

using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the

obligation. The increase in the provision due to passage of time is recognised as interest expense.

2.19 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the

ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts and

after eliminating sales within the Group. The Group recognises revenue when the amount of revenue can be reliably

measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met

for each of the Group’s activities as described below.

(a) Sale of goods – wholesale

The Group manufactures and sells a range of products in the wholesale market. Sales of goods are

recognised when a Group entity has delivered products to the wholesaler, the wholesaler has full discretion

over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the

wholesaler’s acceptance of the products. Delivery does not occur until the products have been shipped to the

specified location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the

wholesaler has accepted the products in accordance with the sales contract, the acceptance provisions have

lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

Sales are recorded based on the price specified in the sales contracts, net of the estimated volume discounts

and returns at the time of sale. Accumulated experience is used to estimate and provide for the discounts and

returns.


2.19 Revenue recognition (continued)

(b) Sale of goods – retail

The Group operates a retail outlets for selling a range of products. Sales of goods are recognised when a Group

entity sells a product to the customer. Retail sales are usually in cash or by credit card.

(c) Sale of services

The Group is engaged in providing a number of services.These services are provided on a time and material basis

or as a fixed-price contract, with contract terms generally ranging from less than one year to three years.

Revenue from time and material contracts, typically from delivering design services, is recognised under the

percentage-of-completion method. Revenue is generally recognised at the contractual rates. For time contracts,

the stage of completion is measured on the basis of labour hours delivered as a percentage of total hours to be

delivered. For material contracts, the stage of completion is measured on the basis of direct expenses incurred as

a percentage of the total expenses to be incurred.

Revenue from fixed-price contracts for delivering design services is also recognised under the percentage-of-

completion method. Revenue is generally recognised based on the services performed to date as a percentage of

the total services to be performed.

Revenue from fixed-price contracts is generally recognised in the period the services are provided, using a

straight-line basis over the term of the contract.

If circumstances arise that may change the original estimates of revenues, costs or extent of progress toward

completion, estimates are revised. These revisions may result in increases or decreases in estimated revenues or

costs and are reflected in income in the period in which the circumstances that give rise to the revision become

known by management.

(d) Interest income

Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the

Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted

at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.

Interest income on impaired loan and receivables is recognised using the original effective interest rate.

(e) Dividend income is recognised when the shareholder’s right to receive payment is established.


NO

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2.20 Leases

Group is the lessee

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as

operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged

to the consolidated income statement on a straight-line basis over the period of the lease.

Group is the lessor

When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable.

The difference between the gross receivable and the present value of the receivable is recognised as unearned finance

income. Lease income is recognised over the term of the lease using the net investment method, which reflects a

constant periodic rate of return. Assets leased out under operating leases are included in property, plant and equipment

in the statement of financial position. They are depreciated over their expected useful lives on a basis consistent with

similar owned property, plant and equipment. Rental income (net of any incentives given to lessees) is recognised on

a straight-line basis over the lease term.

2.21 Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in

the period in which the dividends are approved by the Board of Directors.

2.22 Installment credit and other loans

Installment credit and other loans are stated at principal outstanding net of unearned finance charges and specific

allowance for loan losses. An allowance for loan impairment is established if there is objective evidence that the Group

will not be able to collect all amounts due according to the original contractual terms of loans.

The amount of the provision is the difference between the carrying amount and the recoverable amount, being the

present value of expected cash flows, including amounts recoverable from guarantees and collateral, discounted at the

original effective interest rate of loans.

If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release

of the provision is credited as a reduction of the provision for loan losses.

Interest from installment credit is recognised as it accrues on the amortised rate of the reducing balance amount at

the annual percentage rate. Interest earned on other forms of financing is calculated as is appropriate to individual

transactions.


2.23 Non-current assets (or disposal groups) held-for-sale

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered

principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying

amount and fair value less costs to sell if their carrying amount is to be recovered principally through a sale transaction

rather than through continuing use.

3 Financial risk management

3.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks. The Group’s aim therefore is to achieve an appropriate

balance between risk and return and minimise potentially adverse effects on the Group’s financial performance. This

is achieved by the analysis, evaluation, acceptance and management of the Group’s risk exposure.

The Board of Directors is ultimately responsible for the establishment and oversight of the Group’s risk management

framework. The main financial risks of the Group relate to the availability of funds to meet business needs, the risk

of default by counterparties to financial transactions, and fluctuations in interest and foreign exchange rates. The

treasury function manages the financial risks that arise in relation to underlying business needs and operates within clear

policies and stringent parameters. The function does not operate as a profit center and the undertaking of speculative

transactions is not permitted.

The Group’s principal financial liabilities comprise bank loans, operating overdrafts and trade payables, which are

used to finance Group operations. There are various financial assets such as trade receivables, investments, loans

receivable, cash and short term deposits which emanate from its operations. The main risks arising from the Group’s

financial instruments are credit risk, liquidity risk, foreign currency risk and interest rate risk.

The following contains information relative to the Group’s exposure to each of the above risks, including quantitative

disclosures.

(a) Market risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures.

Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments

in foreign operations.


NO

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3 Financial risk management (continued)

3.1 Financial risk factors (continued)

(a) Market risk (continued)

(i) Currency risk

The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect

to the US dollar. The Group manages its foreign exchange risk by ensuring that the net exposure in foreign

assets and liabilities is kept to an acceptable level by monitoring currency positions as well as holding foreign

currency balances.

The values of debt, investments and other financial liabilities, denominated in currencies other than

the functional currency of the entities holding them, are subject to exchange rate movements. The foreign

exchange positions at 30 September 2010 relate mainly to USD loans. The single largest USD loan as at year

end amounted to US$91,000 (2009: US$ 101,000). A 2% change in USD rates would lead to a TT$11,605

(2009: TT$12,851) loss in the consolidated income statement.

(ii) Interest rate risk

The Group’s exposure to changes in market interest rates relates primarily to the long term debt obligations,

with floating interest rates. The exposure to interest rate risk on cash held on deposit is not significant.

At the end of 2010, interest rates were fixed on approximately 50% of the borrowings (2009: 42%). The

impact on the consolidated income statement to a 50 basis points change in floating interest rates is $7,718

in 2010 and $6,191 in 2009.

(iii) Price risk

The Group is exposed to equity securities price risk because of investments held by the Group and classified on

the consolidated statement of financial position as available-for-sale. The Group is not exposed to commodity

price risk.

(b) Credit risk

The Group is exposed to credit risk, which is the risk that may arise from its customers, clients and counterparties

failing to discharge their contractual obligations. The credit exposures arise primarily from the Group’s receivables

on sales, investments and cash held on deposit at various financial institutions.

The Group has no significant concentrations of credit risk and trades mainly with recognised, creditworthy

third parties. It is the Group’s policy that all customers trading on credit terms are subject to credit verification

procedures. These procedures are elements of a structured credit control system and include an analysis of each



(b) Credit risk (continued)

customer’s creditworthiness and the establishments of limits before credit terms are set. In addition, receivable

balances are monitored on an ongoing basis with the result, that the Group’s exposure to bad debts is not significant.

The maximum exposure is the carrying amount as disclosed in Note 3.1 (c).

With respect to credit risk arising from the other financial assets of the Group, namely cash and cash equivalents

and available-for-sale financial investments, the Group’s exposure to credit risk arises principally from default of

the counterparty.

(c) Liquidity risk

Liquidity risk is the risk which may arise if the Group is unable to meet the obligations associated with its financial

liabilities when they fall due.

The Group’s liquidity risk management process is measured and monitored by senior management. This process

includes monitoring current cash flows on a frequent basis, assessing the expected cash inflows as well as ensuring

that the Group has adequate committed lines of credit to meet its obligations.

Following is an analysis of the undiscounted contractual cash flows payable under financial liabilities.

Undiscounted cash flows will differ from the carrying amounts.


NO

TESNO

TES






(c) Liquidity risk (continued)

Maturity analysis of financial liabilities

More than Contractual Carrying

2010 < 1 year 1- 5 years 5 yrs cash flows amount

Financial Liabilities:

Bank overdraft and other

short term borrowings 91,336 – – 91,336 91,336

Other borrowings 662,126 1,288,789 453,517 2,404,432 1,886,903

Customers’ deposits 291,581 191 – 291,772 286,135

Trade payables 633,104 – – 633,104 633,104

Liabilities on insurance contract 725,134 – – 725,134 725,134

Total 2,403,281 1,288,980 453,517 4,145,778 3,622,612

More than Contractual Carrying

2009 < 1 year 1- 5 years 5 yrs cash flows amount

Financial Liabilities:

Bank overdraft and other

short term borrowings 37,633 – – 37,633 37,633

Other borrowings 664,114 1,409,566 385,166 2,458,846 2,137,724

Customers’ deposits 360,927 335 – 361,262 343,109

Trade payables 677,272 – – 677,272 677,272

Liabilities on insurance contract 617,494 – – 617,494 617,494

Total 2,357,440 1,409,901 385,166 4,152,507 3,813,232


3.2 Capital Risk Management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in

order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure

to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may vary the amount of dividends paid to shareholders,

return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by Total

capital. Net debt is calculated as total borrowings (current and non current borrowings) less cash and cash equivalents.

Total Capital is calculated as total equity as shown in the consolidated statement of financial position plus net debt.

2010 2009

$ $

Total borrowings (Note 21) 1,978,239 2,175,357

Less: Cash & Cash Equivalents (Note 17) (1,137,935) (957,933)

Net debt 840,304 1,217,424

Total equity 3,449,912 3,229,748

Total capital 4,290,216 4,447,172

Gearing ratio 20% 27%

3.3 Fair value estimation

The Group uses the following hierarchy for determining and disclosing the fair value of financial assets and liabilities

recorded at fair value in the consolidated financial statements based upon the level of judgement associated with the

inputs used to measure their fair value. The hierarchical levels, from lowest to highest based on the amount of subjectivity

associated with the inputs to fair valuation of these assets and liabilities are as follows:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement

date. The types of assets carried at level 1 fair value are equity and debt securities listed in active

markets.

Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either

directly or indirectly. These inputs are derived principally from or corroborated by observable market data by

correlation or other means at the measurement date and for the duration of the instruments’ anticipated

life.


NO

TESNO

TES





3.3 Fair value estimation (continued)

Level 2 – (continued)

The assets generally included in this fair value hierarchy are time deposits, foreign exchange and interest

rate derivatives and certain investment funds. Foreign exchange derivatives and interest rate derivatives

are valued using corroborated market data. The liabilities generally included in this fair value hierarchy

consist of foreign exchange derivatives and options on equity securities.

Level 3 – Inputs that are unobservable for the asset or liability for which there are no active markets to determine

a price. These financial instruments are held at cost being the fair value of the consideration paid for the

acquisition of the investments, and are regularly assessed for impairment.

The fair value of financial instruments traded in active markets is based on quoted market prices at the

statement of financial position date. The quoted market price used for financial assets held by the Group

is the current bid price.

The fair value of financial instruments that are not traded in an active market is determined by using

valuation techniques. The Group uses a variety of methods and makes assumptions that are based on

market conditions existing at each statement of financial position date. Quoted market prices or dealer

quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted

cash flows, are used to determine fair value for the remaining financial instruments.

The nominal value less impairment provision of trade receivables and payables are assumed to

approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by

discounting the future contractual cash flows at the current market interest rate that is available to the

Group for similar financial instruments.


3.3 Fair value estimation (continued)

The following table presents the Group’s assets and liabilities that are measured at fair value at 30 September 2010

Level 1 Level 2 Level 3 Total

Assets

Financial assets at fair value through

profit or loss

- Trading securities 77,963 – – 77,963

Available-for-sale financial assets

- Equity securities 19,085 – 665 19,750

- Debt investments 5,561 – – 5,561

102,609 – 665 103,274

4 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including

expectations of future events that are believed to be reasonable under the circumstances.

4.1 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,

seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material

adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Estimated impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy

stated in Note 2.6. The recoverable amounts of cash-generating units have been determined based on value-in-use

calculations. These calculations require the use of estimates.


NO

TESNO

TES




4 Critical accounting estimates and judgements (continued)

4.1 Critical accounting estimates and assumptions (continued)

(b) Income taxes

The Group is subject to income taxes in several jurisdictions. Significant judgement is required in determining the

provision for income taxes. There are many transactions and calculations for which the ultimate tax determination

is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues

based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is

different from the amounts that were initially recorded, such differences will impact the income tax and deferred

tax provisions in the period in which such determination is made.

(c) Fair value of financial instruments

The fair value of financial instruments that are not traded in an active market is determined by using valuation

techniques. The Group uses its judgement to select a variety of methods and make assumptions that are mainly

based on market conditions existing at each statement of financial position date. The Group has used discounted

cash flow analysis for various available-for-sale financial assets that were not traded in active markets.

(d) Revenue recognition

The Group uses the percentage-of-completion method in accounting for its sales of services. Use of the percentage-

of-completion method requires the Group to estimate the services performed to date as a proportion of the total

services to be performed.

4.2 Critical judgements in applying the entity’s accounting policies

(a) Defined benefit pension plan

Certain actuarial and economic assumptions used in determining defined benefit pension obligations and pension

plan assets include: discount rates, long-term rates of return for plan assets, market estimates and rates of future

compensation increases. Material changes in overall financial performance and the carrying amount of the pension

obligations may arise because of revised assumptions to reflect updated historical information and updated economic

conditions, in the material assumptions underlying this estimate.

The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should

be used to determine the present value of the estimated future cash outflows, expected to be required to settle the

pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high

quality bonds that are denominated in the currency in which the benefits will be paid, and that have the terms to

maturity approximating the terms of the related pension liability.

4 Critical accounting estimates and judgements (continued)

4.2 Critical judgements in applying the entity’s accounting policies (continued)

(b) Liabilities on insurance contracts

Outstanding claims consist of estimates of the ultimate cost of claims incurred that have not been settled at the

statement of financial position date, whether reported or not, together with related claims handling costs. Significant

delays may be experienced in the notification and settlement of certain types of general insurance claims, such as

general liability business.

Estimates are calculated using methods and assumptions considered to be appropriate to the circumstances of

the Company and the business undertaken. This provision, while believed to be adequate to cover the ultimate cost

of losses incurred, may ultimately be settled for a different amount. It is continually reviewed and any adjustments

are recorded in operations in the period in which they are determined.

5 Segment information

Management has determined the operating segments based on the reports reviewed by the Executive Committee and the

Board of Directors of Neal & Massy Holdings Limited.

The Committee considers the business from both a geographic and business unit perspective. Geographically, management

considers the performance of operating companies in Trinidad and Tobago, Barbados and Guyana.

At 30 September 2010, the Group is organized into six main business segments: (1) Automotive & Industrial Equipment; (2)

Energy & Industrial Gases; (3) Food Group; (4) Information Technology and Communications (ITC); (5) Tourism/Hospitality; (6)

Financial Property and Other.

The Committee assesses the performance of the operating segments based on a measure of profit before tax, profit after

tax and asset utilization.

Automotive & Industrial Equipment

This segment derives its revenue mainly from the sale of new and used vehicles, spare parts and industrial equipment and also

includes the manufacturing and sale of pre-stressed concrete products and the installation of deep foundations.

Energy & Industrial Gases

This segment derives its revenue from the sale of gas and the provision of electrical, instrumentation and construction services

for offshore platforms. Revenue is also generated from the supply of technical resources, valve services and technical equipment

to the energy-based industry in Trinidad and Tobago and the region.


NO

TESNO

TES





NO

TESNO

TES



A

uto

mo

tive

En

erg

y &

Fin

anci

al

&

Ind

ust

rial

In

du

stri

al

Foo

d

To

uri

sm/

Pro

per

ty

G

ran

d

Eq

uip

men

t G

ases

G

rou

p

ITC

H

osp

ital

ity

& O

ther

O

ther

To

tal

$

$ $

$ $

$ $

$

Sal

es

1,34

3,52

7 68

6,52

5 4,

286,

784

532,

374

288,

014

1,12

5,51

1 22

5 8,

262,

960

Ope

ratin

g pr

ofit/

(loss

)

segm

ent

resu

lt 13

5,83

0 11

3,90

0 29

2,31

4 73

,111

(3

5,10

7)

145,

388

(53,

446)

67

1,99

0

Fina

nce

cost

s –

Net

(Not

e 28

) (4

91)

(3,3

09)

(10,

903)

(1

,768

) (2

9,19

2)

30,1

97

(61,

512)

(7

6,97

8)

Shar

e of

res

ults

of

asso

ciat

es

and

join

t ve

ntur

es b

efor

e ta

x (N

ote

9)

756

28,3

45

11,6

55

5,12

4 (3

7,74

1)

2,13

6 42

4 10

,699

Pro

fit/

(lo

ss)

bef

ore

inco

me

tax

136,

095

138,

936

293,

066

76,4

67

(102

,040

) 17

7,72

1 (1

14,5

34)

605,

711

Taxa

tion

(37,

569)

(4

5,44

7)

(65,

486)

(1

6,75

0)

(89)

(4

4,84

7)

28,4

23

(181

,765

)

Pro

fit

/(lo

ss)

for

the

year

98

,526

93

,489

22

7,58

0 59

,717

(1

02,1

29)

132,

874

(86,

111)

42

3,94

6

The

segm

ent

asse

ts a

nd li

abili

ties

at 3

0 Se

ptem

ber

2010

and

cap

ital e

xpen

ditu

re f

or t

he y

ear

then

end

ed a

re a

s fo

llow

s:

Ass

ets

Tota

l ass

ets

767,

080

635,

161

1,52

2,01

2 35

0,87

5 82

7,74

4 3,

100,

095

1,10

8,46

3 8,

311,

430

Ass

ocia

tes

and

join

t ve

ntur

es

4,22

2 10

4,13

7 22

2,39

9 21

,489

58

,108

27

,620

15

,307

45

3,28

2

Tota

l lia

bilit

ies

525,

655

239,

595

700,

197

163,

445

561,

824

1,37

3,09

5 1,

297,

707

4,86

1,51

8

Cap

ital e

xpen

ditu

re

88,7

63

38,2

04

35,2

16

29,0

97

6,87

5 21

,638

3,

408

223,

201

Oth

er s

egm

ent

item

s in

clud

ed in

the

con

solid

ated

inco

me

stat

emen

t ar

e as

fol

low

s:

Dep

reci

atio

n (N

ote

6)

64,7

30

20,9

78

46,1

30

28,2

92

23,9

21

29,1

28

1,07

1 21

4,25

0

Dep

reci

atio

n –

disc

ontin

ued

oper

atio

ns

3,19

3 –

– –

– –

– 3,

193

67

,923

20

,978

46

,130

28

,292

23

,921

29

,128

1,

071

217,

443

Impa

irmen

t of

goo

dwill

(Not

e 7)

90

6 –

1,43

1 –

– 50

9 –

2,84

6

5 Segment information (continued)

Food Group

This segment derives its revenue mainly from the sale of retail, wholesale foods, general merchandise and distribution and

logistics operations.

ITC

This segment derives its revenue mainly from the sale and rental of technology-based solutions and office interiors and the

provision of long-distance communications.


This segment derives its revenue from its hotel operations in the tourism sector in Barbados and St. Lucia.

Financial, Property and Other

This segment includes an insurance company and a financing company that accept deposits for fixed terms and the grant

of installment credit secured on specific equipment and goods and mortgage loans and also undertakes insurance premium

financing and leasing. In addition, revenue is generated from consultancy and property management services.

The major shift in the operating segments from the prior year was Pres-T-Con being included in a segment “Financial, Property

and Other.” This entity is now included in “Automotive & Industrial Equipment” to be consistent with how the Committee

monitors and manages the Group.

The Group’s retirement benefit assets are deemed unallocated and are not considered to be segment assets but rather are

managed by head office. The amount is included in the “Other” segment.

The segment results for the year ended 30 September 2010 are as follows:



NO

TESNO

TES



5 Se

gm

ent

info

rmat

ion

(con

tinue

d)

T

he s

egm

ent

resu

lts f

or t

he y

ear

ende

d 30

Sep

tem

ber

2009

are

as

follo

ws:

A

uto

mo

tive

En

erg

y &

Fin

anci

al

&

Ind

ust

rial

In

du

stri

al

Foo

d

To

uri

sm/

Pro

per

ty

G

ran

d

Eq

uip

men

t G

ases

G

rou

p

ITC

H

osp

ital

ity

& O

ther

O

ther

To

tal

$

$ $

$ $

$ $

$

Sal

es

1,46

5,68

6 68

0,79

8 4,

254,

271

531,

514

287,

179

1,11

7,84

8 1,

174

8,33

8,47

0

Ope

ratin

g pr

ofit/

(loss

) seg

men

t re

sult

168,

443

157,

395

278,

507

69,7

48

(139

) 14

8,77

4 (6

4,19

5)

758,

533

Fina

nce

cost

s –

Net

(Not

e 28

) (9

,682

) (2

3,05

3)

(14,

026)

(1

,854

) (1

9,81

0)

21,4

45

(54,

994)

(1

01,9

74)

Shar

e of

res

ults

of

asso

ciat

es

and

join

t ve

ntur

es b

efor

e ta

x (N

ote

9)

672

20,4

86

15,1

94

3,11

7 (6

,215

) 2,

626

(197

) 35

,683

Pro

fit

/ (lo

ss)

bef

ore

inco

me

tax

159,

433

154,

828

279,

675

71,0

11

(26,

164)

17

2,84

5 (1

19,3

86)

692,

242

Taxa

tion

(44,

657)

(3

9,65

8)

(65,

711)

(1

7,16

8)

6,34

3 (4

3,29

2)

28,7

57

(175

,386

)

Pro

fit

/ (lo

ss)

for

the

year

11

4,77

6 11

5,17

0 21

3,96

4 53

,843

(1

9,82

1)

129,

553

(90,

629)

51

6,85

6

The

segm

ent

asse

ts a

nd li

abili

ties

at 3

0 Se

ptem

ber

2009

and

cap

ital e

xpen

ditu

re f

or t

he y

ear

then

end

ed a

re a

s fo

llow

s:

Tota

l ass

ets

854,

767

617,

479

1,47

4,29

8 33

9,86

3 85

3,55

7 3,

127,

584

1,02

6,91

7 8,

294,

465

Ass

ocia

tes

and

join

t ve

ntur

es

3,68

2 96

,613

24

8,24

7 18

,299

10

4,59

0

26,

160

15,1

32

512,

723

Tota

l lia

bilit

ies

569,

646

278,

491

706,

515

178,

132

527,

313

1,46

1,35

5 1,

343,

265

5,06

4,71

7

Cap

ital e

xpen

ditu

re

99,3

28

20,4

62

31,0

21

35,3

35

29,6

04

26,8

18

4,50

0 24

7,06

8

Oth

er s

egm

ent

item

s in

clud

ed in

the

con

solid

ated

inco

me

stat

emen

t ar

e as

fol

low

s:

Dep

reci

atio

n (N

ote

6)

65,3

34

19,7

26

46,0

61

27,1

46

24,2

67

32,1

15

1,65

7 21

6,30

6

Dep

reci

atio

n –

disc

ontin

ued

oper

atio

ns

2,62

6 –

– –

– –

– 2,

626

67

,960

19

,726

46

,061

27

,146

24

,267

32

,115

1,

657

218,

932

Impa

irmen

t of

goo

dwill

(Not

e 7)

89

8 85

5 1,

431

– –

515

– 3,

699 5 Segment information (continued)

Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also

be available to unrelated third parties.

Capital expenditure comprises additions to property, plant and equipment (Note 6).

The Group’s six business segments operate in two main geographical areas, even though they are managed on a regional

basis.

The main operations occur in the home country of the Company. The areas of operation are principally trading,

manufacturing, service industries and finance.

Total Capital

Sales Assets Expenditure

2010 2009 2010 2009 2010 2009

$ $ $ $ $ $

Trinidad and Tobago 4,185,515 4,305,491 3,709,229 3,408,487 149,204 156,446

Barbados 2,870,026 2,842,360 3,820,758 4,151,461 43,004 69,988

Guyana 582,375 562,428 264,166 240,341 13,707 4,106

Other 625,044 628,191 517,277 494,176 17,286 16,528

8,262,960 8,338,470 8,311,430 8,294,465 223,201 247,068



NO

TESNO

TES



6 Pr

op

erty

, pla

nt

and

eq

uip

men

t (c

ontin

ued)

Fixt

ure

s &

C

apit

al

Fr

eeh

old

In

vest

men

t Le

aseh

old

Pl

ant

and

R

enta

l M

oto

r W

ork

in

Pr

op

erty

Pr

op

erty

Pr

op

erty

Eq

uip

men

t A

sset

s V

ehic

les

Pro

gre

ss

Tota

l

$

$ $

$ $

$ $

$

Yea

r en

ded

30

Sep

tem

ber

200

8

Cos

t 1,

860,

262

321,

222

153,

522

1,07

5,51

6 29

0,47

3 30

5,25

1 17

,000

4,

023,

246

Acc

umul

ated

dep

reci

atio

n (5

3,26

4)

(9,1

99)

(52,

758)

(6

90,6

86)

(132

,193

) 17

7,91

8)

– (1

,116

,018

)

Net

boo

k am

ount

1,

806,

998

312

,023

10

0,76

4 38

4,83

0 15

8,28

0 12

7,33

3 17

,000

2,

907,

228

Yea

r en

ded

30

Sep

tem

ber

200

9

Ope

ning

net

boo

k am

ount

1,

806,

998

312,

023

100,

764

384,

830

158,

280

127,

333

17,0

00

2,90

7,22

8

Add

ition

s 27

,437

7,

867

5,53

2 49

,085

10

3,78

8 40

,992

12

,367

24

7,06

8

Fair

valu

e ad

just

men

ts

500

– 20

0 –

– –

– 70

0

Dis

posa

ls a

nd a

djus

tmen

ts

(3,5

47)

7,52

4 22

,038

(7

0,62

9)

(17,

335)

33

,513

(1

5,58

4)

(44,

020)

Dep

reci

atio

n ch

arge

(1

8,53

0)

(838

) (7

,768

) (7

3,70

8)

(68,

474)

(4

9,61

4)

– (2

18,9

32)

Clo

sing

net

boo

k am

ount

1,

812,

858

326,

576

120,

766

289,

578

176,

259

152,

224

13,7

83

2,89

2,04

4

At

30 S

epte

mb

er 2

009

Cos

t 1,

880,

271

339,

210

195,

792

927,

647

320,

395

455,

390

13,7

83

4,13

2,48

8

Acc

umul

ated

dep

reci

atio

n (6

7,41

3)

(12,

634)

(7

5,02

6)

(638

,069

) (1

44,1

36)

(303

,166

) –

(1,2

40,4

44)

Net

boo

k am

ount

1,

812,

858

326,

576

120,

766

289,

578

176,

259

152,

224

13,7

83

2,89

2,04

4

Yea

r en

ded

30

Sep

tem

ber

201

0

Ope

ning

net

boo

k am

ount

1,

812,

858

326,

576

120,

766

289,

578

176,

259

152,

224

13,7

83

2,89

2,04

4

Add

ition

s 7,

639

8,93

5 6,

366

47,6

34

96,2

16

31,3

04

25,1

07

223,

201

Dis

posa

ls a

nd a

djus

tmen

ts

(15,

854)

(2

4,74

4)

(256

) 23

,945

(2

0,27

5)

(26,

846)

(1

1,86

5)

(75,

895)

Dep

reci

atio

n ch

arge

(1

8,59

4)

(945

) (7

,129

) (7

7,99

3)

(71,

426)

(4

1,35

6)

– (2

17,4

43)

Tran

sfer

red

to d

ispo

sal g

roup

cla

ssifi

ed f

or s

ale

– –

(126

) (9

77)

– (1

,696

) –

(2,7

99)

Clo

sing

net

boo

k am

ount

1,

786,

049

309,

822

119,

621

282,

187

180,

774

113,

630

27,0

25

2,81

9,10

8

At

30 S

epte

mb

er 2

010

Cos

t 1,

873,

790

324,

504

197,

870

1,03

5,76

4 34

8,50

4 39

2,79

4 27

,025

4,

200,

251

Acc

umul

ated

dep

reci

atio

n

(87,

741)

(1

4,68

2)

(78,

249)

(7

53,5

77)

(167

,730

) (2

79,1

64)

– (1

,381

,143

)

Net

boo

k am

ount

1,

786,

049

309,

822

119,

621

282,

187

180,

774

113,

630

27,0

25

2,81

9,10

8

The

fair

valu

e of

the

inve

stm

ent p

rope

rtie

s am

ount

ed to

$74

2,87

2 (2

009:

$74

2,87

2) a

s va

lued

by

an in

depe

nden

t, p

rofe

ssio

nally

qua

lified

val

uer t

akin

g in

to c

onsi

dera

tion

curr

ent

repl

acem

ent

cost

s, la

nd t

ax v

alua

tions

and

oth

er v

alua

tion

tech

niqu

es.

D

epre

ciat

ion

expe

nse

of $

115,

067

(200

9: $

112,

784)

has

bee

n ch

arge

d in

cos

t of g

oods

sol

d an

d $1

02,3

76 (2

009:

$10

6,14

8) in

‘sel

ling,

gen

eral

and

adm

inis

trat

ion

expe

nses

’ (N

ote

26).

Ba

nk b

orro

win

gs a

re s

ecur

ed o

n la

nd a

nd b

uild

ings

for

the

val

ue o

f $5

26,0

08 (2

009:

$58

4,07

7).

Th

e pr

oper

ty r

enta

l inc

ome

earn

ed b

y th

e G

roup

dur

ing

the

year

fro

m it

s in

vest

men

t pr

oper

ties,

am

ount

ed t

o $3

5,78

7 (2

009:

$34

,604

). D

irect

ope

ratin

g ex

pens

es

aris

ing

on t

he in

vest

men

t pr

oper

ties

amou

nted

to

$17,

970

(200

9: $

16,5

42).



NO

TESNO

TES



7 Goodwill

2010 2009

$ $

At 1 October

Cost 213,197 212,931

Accumulated impairment (45,194) (42,233)

Net book amount 168,003 170,698

Year ended 30 September

Opening net book amount 170,698 169,106

Adjustments 151 5,291

Impairment charge (Note 26) (2,846) (3,699)

Closing net book amount 168,003 170,698

Goodwill is allocated to the Group’s cash-generating units (“CGUs”) identified according to country of operation and business

segment.

A segment-level summary of the goodwill allocation is presented below.

2010 2009

$ $

Trinidad Trinidad

and Tobago Overseas and Tobago Overseas

Automotive & Industrial Equipment 30,698 – 31,604 –

Energy & Industrial Gases 31,817 2,485 31,817 2,485

Food Group 12,283 49,883 13,714 49,883

Financial Property & Other – 39,861 – 40,219

Other – 976 – 976

Total 74,798 93,205 77,135 93,563

The recoverable amount of CGUs is determined based on value-in-use calculations. These calculations use pre-tax cash flow

projections based on financial budgets approved by management covering a five-year period.

7 Goodwill (continued)

Key assumptions used for value-in-use calculations:

Trinidad

and Tobago Overseas

Growth rate¹ 0 - 3% 2 - 6.5%

Discount rate² 8.51 - 11.1% 8.3 - 11.3%

¹ Weighted average growth rate used to extrapolate cash flows beyond the budget period

² Pre-tax discount rate applied to the cash flow projections

These assumptions have been used for the analysis of each CGU within the business segment. Management determined the

budgeted gross margin based on past performance and its expectations for the market development. The weighted average

growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect

specific risk relating to the relevant segments.

8 Other Intangible Assets

Intangibles represent brands and have been recognised at fair value at the acquisition date. These assets are expected to have

an indefinite life and no impairment has been recorded during the periods presented.

2010 2009

$ $

Year ended 30 September

Cost 35,070 35,070

Accumulated impairment – –

Net book amount 35,070 35,070


9 Investments in associated companies and joint ventures

2010 2009

$ $

Investment and advances 382,660 442,030

Share of post acquisition reserves 70,622 70,693

453,282 512,723

Balance at beginning of year 512,723 515,034

Additional investments 61,083 20,266

Share of results before tax 10,699 35,683

Share of tax (13,548) (7,547)

Dividends received (22,408) (32,617)

Loans and advances – 6,637

Exchange differences 1,286 2,101

Transferred to disposal group classified as held for sale (Note 33) (87,818) (19,515)

Other (8,735) (7,319)

Balance at end of year 453,282 512,723

The share of results before tax includes $766 (2009 : $766) representing the impairment charge for goodwill in respect of

acquisition of associates. Investments in associates at 30 September 2010 include goodwill of $10,113 (2009 : $10,879), net

of accumulated impairment of $5,926 (2009 : $5,160).

The principal associate is Banks Holdings Limited which is incorporated in Barbados.

2010 2009

$ $

Investments and advances 177,949 177,939

Share of post acquisition reserves (1,117) 4,171

176,832 182,110

The market value of shares in Banks Holdings Limited as at 30 September 2010 is $158,567 (2009 : $169,528)

9 Investments in associated companies and joint ventures (continued)

The Group has investments in associated companies whose year ends are not coterminous with 30 September 2010. These

are principally:

Country Reporting

Of Incorporation Year End

Banks Holdings Limited Barbados 31 August

Neal & Massy Wood Group Limited Trinidad and Tobago 31 December

G4S Holdings Trinidad Limited Trinidad and Tobago 31 December

G4S Security Services (Barbados) Limited Barbados 31 December

CMA CGM Trinidad Limited Trinidad and Tobago 31 December

10 Credit quality of financial assets

Credit quality – investments

Sub-

Low Standard Standard

Risk Risk Risk Impaired

$ $ $ $

Investments

2010 254,585 212,783 7 –

2009 243,872 256,402 – –


NO

TESNO

TES




10 Credit quality of financial assets (continued)

Credit quality – other financial assets

Past Due Provision

Fully but not For

Performing Impaired Impaired Impairment

$ $ $ $

2010

Installment credit and other loans 233,373 24,836 20,436 (5,898)

Trade receivables 472,294 318,308 130,494 (134,737)

705,667 343,144 150,930 (140,635)

Past Due Provision

Fully but not For

Performing Impaired Impaired Impairment

$ $ $ $

2009

Installment credit and other loans 274,977 38,275 6,030 (7,627)

Trade receivables 515,650 345,013 72,044 (76,608)

790,627 383,288 78,074 (84,235)

The credit quality of other investments has been analysed into the following categories:

Low Risk - These comprise Sovereign Debt Investments where there has been no history of default.

Standard - These investments are current and have been serviced in accordance with the terms and conditions of the

underlying agreements.

Sub-Standard - These investments are either greater than 90 days in arrears but are not considered to be impaired or have

been restructured in the past year.

Impaired - These investments are non-performing.

11 Long term investments and financial assets at fair value through profit or loss

Financial

Available assets at

for sale fair value

financial Held to Loans and through profit

assets maturity Receivables Total or loss

$ $ $ $ $

2010

Beginning of the year 29,600 315,835 48,561 393,996 106,278

Exchange differences 94 996 153 1,243 335

Adjustments to Opening Balance – 305 – 305 –

Change in market value/

impairment charge (5,947) – – (5,947) 4,176

Additions – 22,484 1,732 24,216 –

Disposals (141) (22,975) (2,990) (26,106) (32,826)

Net gains transferred from equity

to other comprehensive income 1,705 – – 1,705 –

End of the year 25,311 316,645 47,456 389,412 77,963


NO

TESNO

TES




11 Long term investments and financial assets at fair value through profit or loss (continued)

Financial

Available assets at

for sale fair value

financial Held to Loans and through profit

assets maturity Receivables Total or loss

$ $ $ $ $

2009

Beginning of the year 35,996 250,221 50,610 336,827 98,037

Exchange differences 444 3,195 699 4,338 1,242

Adjustments to Opening Balance 2,346 (247) (948) 1,151 (706)

Change in market value/

impairment charge (58) – – (58) (3,656)

Additions – 62,666 1,666 64,332 18,759

Disposals (1,268) – (3,466) (4,734) (7,398)

Net losses transferred from equity

to other comprehensive income (7,860) – – (7,860) –

End of the year 29,600 315,835 48,561 393,996 106,278

Financial assets at fair value through profit or loss are presented within ‘operating activities’ as part of changes in working

capital in the statement of cash flows.

Changes in fair value of financial assets at fair value through profit or loss are recorded in ‘other income’ in the operating

profit before finance costs in the consolidated income statement.

2010 2009

$ $

Financial assets include the following:

Bonds and treasury bills 356,421 358,424

Quoted securities 96,985 126,658

Unquoted securities 783 3,581

Other 13,186 11,611

467,375 500,274

The fair value of held to maturity financial assets amounts to $346,259.

12 Deferred income tax

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against

current tax liabilities and when the deferred income taxes relate to the same fiscal authority.

Deferred income taxes are calculated in full on temporary differences under the liability method using a principal tax rate

of 25% (2009: 25%).

The movement in the deferred income tax account is as follows:

Deferred income tax liabilities

2010 2009

$ $


Charge for the year 5,353 8,797

Exchange adjustment 511 (1,741)

Other movements (2,271) (3,055)


The movement in the deferred tax liabilities during the year ended 30 September 2010 is as follows:

Charge to

Consolidated

Income

Statement Other

30.09.09 (Note 29) Movements 30.09.10

$ $ $ $

Accelerated tax depreciation 46,803 1,668 (955) 47,516

Pension plan surplus 48,241 3,094 (691) 50,644

Other 1,272 591 (114) 1,749

96,316 5,353 (1,760) 99,909


NO

TESNO

TES




12 Deferred income tax (continued)

The movement in the deferred tax liabilities during the year ended 30 September 2009 is as follows:

Charge to

Consolidated

Income

Statement Other

30.09.08 (Note 29) Movements 30.09.09

$ $ $ $

Accelerated tax depreciation 44,009 4,480 (1,686) 46,803

Pension plan surplus 49,108 2,664 (3,531) 48,241

Other (802) 1,653 421 1,272

92,315 8,797 (4,796) 96,316

Deferred income tax assets

The movement in the deferred tax assets during the year ended 30 September 2010 is as follows:

2010 2009

$ $


Credit for the year 19,426 16,043

Other movements (10,104) (320)



Deferred income tax assets (continued)

The movement in the deferred tax asset during the year ended 30 September 2010 is as follows:

(Charge) /

Credit to

Consolidated

Income

Statement Other

30.09.09 (Note 29) Movements 30.09.10

$ $ $ $

Accelerated depreciation 48,174 (4,411) 1,827 45,590

Tax losses carried forward 23,639 24,645 (15,396) 32,888

Other 4,196 (808) 3,465 6,853

76,009 19,426 (10,104) 85,331

The movement in the deferred tax assets during the year ended 30 September 2009 is as follows:

(Charge) /

Credit to

Consolidated

Income

Statement Other

30.09.08 (Note 29) Movements 30.09.09

$ $ $ $

Accelerated depreciation 10,522 19,598 18,054 48,174

Tax losses carried forward 49,764 (3,988) (22,137) 23,639

Other – 433 3,763 4,196

60,286 16,043 (320) 76,009


NO

TESNO

TES





Deferred income tax assets (continued)

Deferred income tax assets are recognised for tax losses carry-forward to the extent that the realisation of the related tax

benefit through the future taxable profits is probable.

13 Installment credit and other loans

These represent the installment credit and other loans granted mainly by General Finance Corporation Limited.

2010 2009

$ $

Amounts due within one year 136,004 145,471

Between two and five years 139,466 171,121

Over five years 3,175 2,690

278,645 319,282

Provision for losses (5,898) (7,627)

272,747 311,655

Due within one year (130,105) (137,845)

142,642 173,810

13 Installment credit and other loans (continued)

13.1 Sectorial analysis of installment credit and other loans

2010 2009

$ $

Consumer 109,281 118,500

Manufacturing 9,896 13,866

Distribution 31,305 34,748

Construction 34,535 48,264

Transport 30,239 29,247

Agriculture 1,906 1,814

Petroleum 1,065 672

Residential mortgages 355 530

Other 54,165 64,014

272,747 311,655

13.2 Provision for losses

2010 2009

$ $


Charge for the year 2,400 2,472

Amount written off net of recoveries (4,129) (13,955)


The maximum exposure to credit risk at the reporting date is the carrying value of the installment credit and other

loans. The Group holds $323,117 (2009: $336,076) of collateral as security.


NO

TESNO

TES




14 Retirement benefit assets

2010 2009

$ $

Neal & Massy Group Pension Fund Plan 189,471 188,350

Overseas plans – Other 24,428 15,550

213,899 203,900

The pension plans were valued by an independent actuary using the projected unit credit method.

Neal & Massy Group Pension Fund Plan

The amounts recognised in the statement of financial position are as follows:

2010 2009

$ $

Fair value of plan assets 1,207,711 1,121,556

Present value of obligation (908,593) (878,909)

299,118 242,647

Unutilisable asset (109,647) (54,297)

Asset in the statement of financial position 189,471 188,350

The movement in the defined benefit obligation over the year is as follows:

2010 2009

$ $

Opening present value of defined benefit obligation 878,909 781,301

Current service cost 16,087 14,278

Interest cost 64,766 66,237

Actuarial losses/ (gains) on obligation (16,106) 49,740

Benefits paid (35,063) (32,647)

Closing present value of defined benefit obligation at 30 September 908,593 878,909


NO

TESNO

TES



14 Retirement benefit assets (continued)

Neal & Massy Group Pension Fund Plan (continued)

The movement in the fair value of plan assets of the year is as follows:

2010 2009

$ $

Opening fair value of plan assets 1,121,556 1,106,472

Expected return on plan assets 93,843 92,664

Actuarial gains / (losses) on plan assets 27,349 (44,974)

Employer contributions 25 41

Benefits paid (35,062) (32,647)

Closing fair value of plan assets at 30 September 1,207,711 1,121,556

The amounts recognised in the consolidated income statement are as follows:

2010 2009

$ $



Expected return on plan assets (93,843) (92,664)

Total included in other income (12,990) (12,149)

2010 2009

$ $

Actuarial (gains)/losses recognised in other

comprehensive income (before tax) (43,455) 94,714

Cumulative actuarial gains recognised in other

comprehensive income (before tax) (140,481) (97,025)



2010 2009

$ $

Actual return on plan assets 121,192 47,690

Movement in the asset recognised in the statement of financial position:

2010 2009

$ $

Asset at beginning of year 188,350 186,541

Net pension income 12,990 12,149

Actuarial losses (11,895) (10,382)

Contributions paid 26 42

Asset at end of year 189,471 188,350

The principal actuarial assumptions used were:

2010 2009

Per annum Per annum

Discount rate 7.5% 8.0%

Future salary increases 7.0% 7.0%

Expected return on plan assets 7.85% 8.50%

Future pension increases – post retirement 5.0% 5.0%

The assumption with regard to the expected return on plan assets has been developed with reference to the average portfolio

rate expected to be earned by the Fund on the underlying asset mix over the lifetime of the obligations net of allowances for

investment expenses.

Assumptions regarding future mortality experience are set based on advice from published statistics and experience in each

territory.


Plan assets are comprised as follows:

2010 2009

Local Equities/Mutual Funds 34% 60%

Local Bonds/Mortgages 26% 15%

Foreign investments 27% 13%

Deferred annuities/insurance policy 6% 8%

Short term securities 7% 4%

The average life expectancy in years of a pensioner retiring at age 60 is as follows:

2010 2009

Male 82 81

Female 86 85

2010 2009 2008 2007 2006

$ $ $ $ $

Plan asset 1,207,711 1,121,556 1,106,472 1,024,355 992,710

Defined benefit obligation (908,593) (878,909) (781,301) (812,160) (784,151)

Surplus 299,118 242,647 325,171 212,195 208,559

Experience adjustments on plan liabilities (10,934) (13,317) (18,576) (14,133) 34,260

Experience adjustments on plan assets 27,349 (44,974) 16,942 (25,750) (227,056)


NO

TESNO

TES





Overseas plans - Other (continued)


2010 2009

$ $

Fair value of plan assets 172,407 156,808

Present value of the defined benefit obligation (104,354) (90,046)

68,053 66,762

Unrecognised asset (43,625) (51,292)

Unrecognised past service cost – 80

Asset recognised in the statement of financial position 24,428 15,550


2010 2009

$ $




Past service benefit – non-vested benefits 80 78

Total included in other income (5,707) (3,493)

Actual return on plan assets 12,577 1,117


Overseas plans - Other (continued)

Movement in the asset recognised in the consolidated statement of financial position:

2010 2009

$ $

Asset at beginning of year 15,550 32,430

Decrease/(increase) in recognisable asset 7,667 (16,514)

Loss recognised in other comprehensive income (8,286) (680)

Net pension income 5,707 3,493

Contributions paid 2,177 1,788

Exchange adjustment 1,613 (4,967)

Asset at end of year 24,428 15,550

2010 2009

$ $

Actuarial losses recognised in other

comprehensive income (before tax) (8,286) (680)

Cumulative actuarial losses recognised in other

comprehensive income (before tax) 26,184 27,183


2010 2009

Equities 30% 27%

Real Estate 2% 2%

Government of Jamaica Securities 21% 22%

Bonds 7% 7%

Short term deposits/Money Market/Cash 8% 10%

Fixed income 26% 26%

Other 5% 6%


NO

TESNO

TES





Overseas plans - BS& T


2010 2009

$ $

Fair value of plan assets 431,733 440,754

Present value of the defined benefit obligation (455,690) (509,750)

Liability in the statement of financial position (23,957) (68,996)


2010 2009

$ $




Gains on curtailments / settlements – (2,827)

Expense recognised in the profit or loss 13,257 8,752

Actual return on plan assets 8,873 (10,695)

The liability recognised in the consolidated statement of financial position is included in provisions for other liabilities and

charges:

2010 2009

$ $

(Liability)/asset at beginning of year (68,996) 16,284

Income/(loss) recognised in other comprehensive income 49,222 (85,071)

Net pension expense (13,257) (8,752)

Contributions paid 9,152 9,290

Exchange adjustment (78) (747)

Liability at end of year (23,957) (68,996)



2010 2009

Cash and cash equivalents 3% 3%

Bonds 8% 8%

Mortgage loans 1% 2%

Real estate 14% 14%

Equities 67% 71%

Other 6% 2%


2010 2009

Per annum Per annum

Discount rates 7.5% 7.5%

Expected return on plan assets 8.0% 8.0%

Future salary increases 5.0% 5.0%

Future NIS increases 3.5% 3.5%

Future pension increases – 2.75%

Assumptions regarding future mortality experience are set based on advice from published statistics and experience in each

territory.


NO

TESNO

TES





The average life expectancy in years of a pensioner retiring at age 60 is as follows:

2010 2009

Male 82 81

Female 86 86

Neal & Massy Post Retirement Group Health Plan

The medical liability amounted to $16,023 (2009: $13,108) and is included in the provision for liabilities and other charges on

the consolidated statement of financial position. The post retirement group health plan was valued by an independent actuary

using the projected unit credit method.

The staff costs recognised in the consolidated income statement amounted to $1,825 and (2009: $1,493) representing

both current service costs and interest costs for the year.

The financial and demographic assumptions have been based on market expectations at the date of the statement of

financial position, for the period over which the obligations are to be settled.


2010 2009

Per annum Per annum

Discount rate 7.5% 8.0%

Medical Claims inflation 5.0% 5.0%

The expected mortality before and after retirement is GAM 94.

The effect of a 1% movement in the assumed medical premium escalation is as follows:

Increase Decrease

Effect on the aggregate of the current service cost and interest cost 397 (303)

Effect on the defined benefit obligation 2,824 (2,214)


BS&T Post Retirement Medical Scheme

The medical liability amounted to $61,223 (2009: $55,944) and is included in the provision for liabilities and other charges on

the consolidated statement of financial position. The post retirement medical scheme was valued by an independent actuary

using the projected unit credit method.

The staff costs recognised in the consolidated income statement amounted to $6,150 and (2009: $5,696) representing

both current service costs and interest costs for the year.

The medical claim inflation assumption was based on the experience of the BS&T’s self insured arrangement and the medical

and personal index component of the Retail Price Index.


2010 2009

Per annum Per annum

Discount rate 7% 7.5%

Medical Claims inflation 4.5% 4%

The expected mortality before and after retirement is GAM 94.

The effect of a 1% movement in the assumed medical premium escalation is as follows:

Increase Decrease

Effect on the aggregate of the current service cost and interest cost 2,469 (1,680)

Effect on the defined benefit obligation 23,259 (16,355)


NO

TESNO

TES




15 Inventories

2010 2009

$ $

Finished goods and goods for resale 737,056 805,722

Goods in transit 170,225 134,021

Raw materials and consumables 122,548 112,815

Work in progress 23,924 27,797

1,053,753 1,080,355

The cost of inventories recognised as expense and included in “cost of sales” amounted to $5,260 (2009: $5,409).

16 Trade and other receivables

2010 2009

$ $

Trade receivables 921,096 932,707

Less: provision for impairment of receivables (134,737) (76,608)

Trade receivables - net 786,359 856,099

Other debtors and prepayments 804,984 697,705

1,591,343 1,553,804

Given the short-term nature of the trade and other receivables, the fair value approximates the carrying amount of these

assets.

There is no concentration of credit risk with respect to trade receivables, as the Group has a large number of customers,

regionally dispersed.

16 Trade and other receivables (continued)

Aging analysis – financial assets

Past Due But Not Impaired

<30 days 31- 60 days 61- 90 days > 90 days Total

$ $ $ $ $

2010

Installment credit and other loans 17,151 3,704 1,462 2,519 24,836

Trade receivables 67,915 104,480 58,243 87,670 318,308

Total 85,066 108,184 59,705 90,189 343,144

Past Due But Not Impaired

<30 days 31- 60 days 61- 90 days > 90 days Total

$ $ $ $ $

2009

Installment credit and other loans 15,285 4,271 2,674 16,045 38,275

Trade Receivables 39,286 125,621 76,984 103,122 345,013

Total 54,571 129,892 79,658 119,167 383,288

Provision for impairment

Provision Written off unused

Opening for during provisions Closing

balance impairment the year reversed balance

$ $ $ $ $

2010

Installment credit and other loans 7,627 2,400 (3,074) (1,055) 5,898

Trade receivables 76,608 69,333 (3,770) (7,434) 134,737

Other debtors and prepayments 854 1,801 (461) – 2,194

85,089 73,534 (7,305) (8,489) 142,829


NO

TESNO

TES




16 Trade and other receivables (continued)

Provision Written off unused

Opening for during provisions Closing

balance impairment the year reversed balance

$ $ $ $ $

2009

Installment credit and other loans 19,110 2,682 (5,286) (8,879) 7,627

Trade receivables 64,233 25,563 (6,882) (6,306) 76,608

Other debtors and prepayments 10,141 – (779) (8,508) 854

93,484 28,245 (12,947) (23,693) 85,089

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned

above.

17 Cash and cash equivalents

2010 2009

$ $

Cash at bank and in hand 755,176 516,478

Short-term bank deposits 382,759 441,455

1,137,935 957,933

The effective interest rate on short-term bank deposits was 2% (2009: 4%); these deposits have an average maturity of 90 days.

17 Cash and cash equivalents (continued)

Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement:

2010 2009

$ $

Cash and cash equivalents 1,137,935 957,933

Bank overdrafts (61,336) (37,633)

Other short term borrowings (30,000) –

(91,336) (37,633)

1,046,599 920,300

18 Share capital

Number Ordinary

Of Shares Shares Total

# $ $

At 30 September 2008 95,968 512,573 512,573

Employee share option scheme

- value of services provided – 2,543 2,543

Share option exercised 172 6,200 6,200

Acquisition of subsidiary 17 838 838

At 30 September 2009 96,157 522,154 522,154

At 30 September 2009 96,157 522,154 522,154

Employee share option scheme

- value of services provided – 250 250

Share option exercised 438 15,816 15,816

At 30 September 2010 96,595 538,220 538,220

The total authorised number of ordinary shares is unlimited with no par value. All issued shares are fully paid.


NO

TESNO

TES




18 Share capital (continued)

The number of issued shares at 30 September 2008 excludes 3,500,000 treasury shares held by the Barbados Shipping &

Trading Limited. These shares were acquired with the acquisition of Barbados Shipping & Trading Limited and the fair value of

these shares as at 1 March 2008 has been deducted from shareholders equity.

Share options

Effective 1 October 2004, the Parent company introduced an executive share option plan. Share options will be granted to

individuals employed by the Parent company or its subsidiaries in a senior capacity including directors holding any executive

office with the company or any of its subsidiaries. Options are granted at the average market price of the shares in the calendar

month prior to the beginning of the applicable performance period and are exercisable at that price. Options are exercisable

beginning three years from the date of grant and have a contractual option term of three years. When the options are exercised,

the proceeds received net of any transaction costs are credited to share capital.

Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

2010 2009

Average Average

Exercise Exercise

Price in $ Options price in $ Options

At 1 October – 2,768 – 2,211

Granted – – 58.33 756

Forfeited – (502) – (27)

Exercised – (438) – (172)

At 30 September 1,828 2,768

Out of the 1,828 thousand outstanding options, 827 thousand options were exercisable.

Share options outstanding at the end of the year have the following expiry date and exercise prices:

18 Share capital (continued)

Expiry date – 1 October Exercise Options

Price $ 2010 2009

2010 34.90 – 196

2011 49.39 483 483

2012 37.03 344 585

2013 47.52 558 748

2014 58.33 443 756

1,828 2,768

The fair value of options granted during 2010 determined using the Binomial valuation model was $0.58. The significant inputs

into the model were share price of $49.00 at the grant date, exercise price shown above, standard deviation of expected share

price returns of 6%, option life disclosed above, and annual risk-free interest rate of 5.5%, and expected volatility 6%. No

options were granted in 2010.

19 Dividends per share

2010 2009

$ $

Interim paid – 40 cents per share (2009 – 40 cents) 40,038 39,863

Final paid – 100 cents per share (2009 – 100 cents) 99,797 99,524

139,835 139,387

On 14 December 2010, the Board of Directors of Neal & Massy Holdings Limited declared a final dividend per share of 86 cents,

bringing the total dividends per share for the financial year ended 30 September 2010 to $1.26 (2009: $1.40).


NO

TESNO

TES




21 Borrowings (continued)

The exposure of the Group’s borrowings to interest rate changes and the contractual repricing dates at the statement of

financial position dates are as follows:

2010 2009

$ $

6 months or less 91,336 37,633

6-12 months 567,744 590,590

1-5 years 1,040,145 1,184,349

Over 5 years 279,014 362,785

1,978,239 2,175,357

The carrying amount and fair value of the non-current borrowings are as follows:

Carrying Amount Fair Value

2010 2009 2010 2009

$ $ $ $

Fixed interest mortgage loans 479,101 480,006 479,101 480,006

Other secured advances 539,919 476,464 550,726 493,746

Unsecured advances 867,883 1,181,254 867,863 1,181,254

1,886,903 2,137,724 1,897,690 2,155,006

The carrying amounts of short-term borrowings and current borrowings approximate their fair value. The fair values are

based on cash flows discounted using a rate based on the borrowing rate of 6% (2009: 6%)


NO

TESNO

TES



20 Non-controlling interests

2010 2009

$ $


Disposals – (10,000)

Share of net profit of subsidiaries 4,701 48,169

Dividends paid (32,449) (26,191)

Investment 1,590 –

Other movements 1,101 (10,401)


21 Borrowings

2010 2009

$ $

Fixed interest mortgage loans 479,101 480,006

Other secured advances 539,919 476,464

Unsecured advances 867,883 1,181,254

Bank overdrafts and other short term borrowings 91,336 37,633

Total borrowings 1,978,239 2,175,357

Less short term borrowings (659,080) (628,223)

Medium and long term borrowings 1,319,159 1,547,134

Short-term borrowings comprise:

Bank overdrafts and other short term borrowings 91,336 37,633

Current loan installments 567,744 590,590

659,080 628,223

Total borrowings include secured liabilities of $775,970 (2009: $816,654). Bank borrowings are secured by the land and

buildings of the Group (Note 6).


21 Borrowings (continued)

2010 2009

$ $

The maturity of borrowings is as follows:

Payable within one year 567,744 590,590

Payable between two and five years 1,040,145 1,184,349

Payable between six and ten years 181,286 354,557

Payable over ten years 97,728 8,228

1,886,903 2,137,724

Interest charges on secured and unsecured loans vary from 2.54% to 12.75% (2009 - 5% to 12.5%) per annum.

The effective interest rates in 2010 were as follows:

2010 2009

uS$ TT$ Other uS$ TT$ Other

% % % % % %

Fixed interest mortgage loans 3.3-10.2 8-10 5.75 – 8-10 –

Other secured advances 4.29-12 8.5-10.5 5.25-6.3 6-9 6-15 5.5

Unsecured advances 2.54-12 2.85-10.5 4-4.75 5-8 6-9 4-5.5

Bank overdrafts and other

short term borrowings – 8.75-9 9-18.35 8.7-10.5 9-12 12.2

The carrying amounts of short-term borrowings and current borrowings approximate their fair value.

The carrying amounts of the Group’s borrowings are denominated in the following currencies:

2010 2009

$ $

US dollars 903,743 958,108

Barbados dollars 638,153 761,547

Trinidad & Tobago dollars 345,007 418,069

1,886,903 2,137,724

22 Customers’ deposits

These represent the deposits for fixed terms accepted mainly by General Finance Corporation Limited.

2010 2009

$ $

Payable within one year 285,969 342,813

Payable between one and five years 166 296

286,135 343,109

Sectorial analysis of deposit balances

Private sector 30,635 35,758

Consumers 255,500 307,351

286,135 343,109

23 Provisions for other liabilities and charges

The Company maintains a self-insured program covering portions of Group life and consequential loss insurance. The amounts

in excess of the self-insured levels are fully insured; subject to certain limitations and exclusions. The Company accrues its

estimated liability for these self insured programs, including estimates for insured but not reported claims, based on known

claims and past claims history. The remaining balance for provisions for other liabilities and charges stem from accruals for

outstanding tax claims or assessments.

24 Trade and other payables

2010 2009

$ $

Trade creditors 633,104 677,272

Other creditors and accruals 754,212 744,586

1,387,316 1,421,858


NO

TESNO

TES




25 Liabilities on insurance contracts

The major classes of general insurance written by the Group’s insurance operations include motor, property, and other

miscellaneous types of general insurance. Risks under these policies usually cover a twelve month duration. Liabilities are

comprised as follows:

2010 2009

$ $

Outstanding claims 361,134 352,698

Unearned premiums 364,000 264,796

725,134 617,494

Movement in outstanding claims reserve may be analysed as follows:

Insurance Reinsurers’ Insurance Reinsurers’

Liabilities Share Liabilities Share

2010 2010 2009 2009

$ $ $ $

Beginning of the year 352,698 90,613 382,436 143,638

Exchange adjustment 1,196 287 5,227 1,836

Claims incurred 195,669 19,095 178,604 (11,276)

Claims paid (188,429) 3,173 (213,569) (43,585)

361,134 113,168 352,698 90,613

25 Liabilities on insurance contracts (continued)

Movement in the unearned premium reserve may be analysed as follows:

Insurance Reinsurers’ Insurance Reinsurers’

Liabilities Share Liabilities Share

2010 2010 2009 2009

$ $ $ $

Beginning of the year 264,798 154,915 257,984 152,944

Exchange adjustment 834 489 3,298 1,955

Premiums written in the year 770,341 496,488 638,641 333,224

Premiums earned in the year (671,973) (378,872) (635,127) (333,208)

364,000 273,020 264,796 154,915

The reinsurers’ share of outstanding claims and unearned premium reserves are included in accounts receivable. Claims reserves

comprise provisions for claims reported by policyholders and claims incurred but not yet reported and are established to cover

the ultimate cost of settling the liabilities in respect of claims that have occurred and are estimated based on known facts at

the statement of financial position date. Outstanding claims reserves are not discounted for the time value of money.

The principal assumption underlying the estimates is past claims development experience. This includes assumptions in

respect of average claims costs and claims numbers for each accident year. In addition, larger claims are separately assessed

by loss adjusters. Judgement is used to assess the extent to which external factors such as judicial decisions and government

legislation affect the estimates. The ultimate liabilities will vary as a result of subsequent developments. Differences resulting

from reassessment of the ultimate liabilities are recognized in subsequent periods.


NO

TESNO

TES




26 Operating profit before finance costs

2010 2009

$ $

Revenue 8,262,960 8,338,470

Cost of sales (5,799,491) (5,818,314)

Gross profit 2,463,469 2,520,156

Selling, general and administrative expenses (1,921,366) (1,878,293)

Other income 129,887 116,670

671,990 758,533

Selling, general and administrative expenses include the following:

Administration staff costs 688,723 687,378

Depreciation 99,183 103,523

Impairment of goodwill 2,846 3,699

Directors’ fees 1,518 1,518

Operating lease rentals 40,761 38,979

Administrative staff costs:

Continuing operations 688,723 687,378

Discontinued operations 5,047 5,024

693,770 692,402

Depreciation:

Continuing operations 99,183 103,523

Discontinued operations 3,193 2,625

102,376 106,148

27 Staff costs

2010 2009

$ $

Wages and salaries and termination benefits 902,669 903,070

Share options granted to directors and employees 250 2,543

Pension costs 14,432 15,081

917,351 920,694

Average number of persons employed by the Group during the year:

Full time 7,967 7,734

Part time 1,982 2,190

9,949 9,924

28 Finance costs - Net

2010 2009

$ $

Interest expense 168,322 209,295

Interest income (91,344) (107,321)

Finance costs – net, continuing operations 76,978 101,974

Finance costs – net, discontinued operations 305 5,698

77,283 107,672


NO

TESNO

TES




29 Income tax expense

2010 2009

$ $

Trinidad and Tobago subsidiaries 114,853 129,034

Overseas subsidiaries 67,437 46,051

Associated companies 13,548 7,547

Deferred taxation (Note 12) (14,073) (7,246)

181,765 175,386

The Group’s effective tax rate of 30% (2009 – 25%) differs from the statutory Trinidad and Tobago tax rate of 25% as

follows:

2010 2009

$ $

Profit before taxation 605,711 692,242

Tax calculated at a tax rate of 25% 151,428 173,061

Effect of different tax rates in other countries 18,368 10,859

Income not subject to tax/expenses not deductible for tax purposes (6,312) (7,927)

Business levy/green fund levy/withholding taxes 7,395 5,551

Other adjustments 6,410 (8,104)

Adjustments to prior year tax provisions 4,476 1,946

Tax charge 181,765 175,386

There is no tax charge or credit relating to the components of other comprehensive income.

30 Earnings per share

Basic

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted

average number of ordinary shares in issue during the year.

30 Earnings per share (continued)

Basic (continued)

2010 2009

$ $

Profit attributable to shareholders – continuing operations 419,245 468,687

Profit attributable to shareholders – discontinued operations (117,880) (33,275)

301,365 435,412

Weighted average number of ordinary shares in issue 96,390 96,069

Basic earnings per share – continuing operations 4.35 4.88

Basic earnings per share – discontinued operations (1.22) (0.35)

3.13 4.53

Weighted average number of ordinary shares

for diluted earnings per share 96,390 96,109

Diluted earnings per share – continuing operations 4.35 4.88

Diluted earnings per share – discontinued operations (1.22) (0.35)

3.13 4.53

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume

conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares: share

options. For the share options, a calculation is done to determine the number of shares that could have been acquired at fair

value (determined as the average annual market share price of the Company’s shares) based on the monetary value of the

subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the

number of shares that would have been issued assuming the exercise of the share options.


NO

TESNO

TES




30 Earnings per share (continued)

Basic (continued)

2010 2009

Profit attributable to equity holders of the Company 301,365 435,412

Weighted average number of ordinary shares in issue (thousands) 96,390 96,069

Adjustments for:

share options (thousands) – 36

Weighted average number of ordinary shares for diluted earnings per share (thousands) 96,390 96,109

Diluted earnings per share ($ per share) 3.13 4.53

31 Contingencies

At 30 September 2010 the Group had contingent liabilities in respect of bank and other guarantees and other matters arising

in the ordinary course of business from which it is anticipated that no material liabilities will arise. In the ordinary course of

business the Group has given guarantees amounting to $264,908 (2009: $298,589) to third parties of which $126,000 (2009:

$126,000) amount relates to Cool Petroleum Limited.

A guarantee of $33,814 (“guaranteed sum”) was given by Neal & Massy in October 2009 to the Royal Bank of Canada

(“RBC”) as collateral security for loans given by RBC Holdings Limited (“BSLH”) and Bahamas Supermarkets Limited (“BSL”).

The other five shareholders of BSLH agreed to indemnify Neal & Massy in respect of the guaranteed sum to the extent of their

respective proportionate shareholdings in BSLH. RBC called the loans in October 2010 and agreed to accept the guaranteed

sum in settlement of all liabilities and obligations of BSLH and BSL under the two loan agreements. Neal & Massy’s exposure

was for the sum of $17,236 as all the other five shareholders paid their respective proportionate share of the guaranteed sum

to RBC. This is included in trade and other payables in the statement of financial position.

Group companies are defendants in various legal actions. In the opinion of the directors, after taking appropriate legal

advice, the outcome of such actions will not give rise to any significant loss. However, the Group has pending tax appeals with

The Board of Inland Revenue for the Income Years 1998 and 2001.

32 Commitments

Capital commitments

Capital expenditure contracted at the statement of financial position date but not yet incurred is as follows:

2010 2009

$ $

Property, plant and equipment 31,969 13,063

Operating lease commitments - where a Group Company is the lessee:

The Group leases various retail outlets, offices and warehouses under non-cancellable operating lease agreements. The leases

have varying terms, escalation clauses and renewal rights.

The Group also leases various plant and machinery under cancellable operating lease agreements. The Group is required to

give a six-month notice for the termination of these agreements.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

2010 2009

$ $

No later than 1 year 31,878 23,224

Later than 1 year and no later than 5 years 99,442 76,335

Later than 5 years 66,259 80,052

197,579 179,611

Operating lease commitments - where a Group company is the lessor:

2010 2009

$ $

Less than one year 82,005 86,991

One year to five years 50,908 73,721

132,913 160,712


NO

TESNO

TES




33 Assets of disposal group classified as held for sale

Warrens Motors

The assets and liabilities related to Warrens Motors Inc have been presented as held for sale following the decision by the parent

Board in August 2010 to dispose of the business. The transaction is expected to be completed by January 2011.

Analysis of the results is as follows:

2010 2009

$ $

Revenue 72,778 87,529

Operating loss before finance costs (29,757) (8,062)

Finance costs – net (305) (5,698)

Loss before tax (30,062) (13,760)

Tax – –

Loss for the year (30,062) (13,760)

Assets of disposal group classified as held for sale:

2010

$

Property plant and equipment 2,799

Inventories 10,785

Other current assets –

Total Assets 13,584

There are no liabilities of disposal group classified as held for sale.

33 Assets of disposal group classified as held for sale (continued)

Warrens Motors (continued)

Analysis of the cash flows is as follows:

2010 2009

$ $

Operating cash flows 17,090 8,030

Investing cash flows 666 (5,055)

Financing cash flows – –

Total Cash Flows 17,756 2,975

Bahamas Supermarkets Limited

Bahamas Supermarkets Limited is an associated company of the Neal & Massy Group in the Food Retailing business in the

Bahamas. The effective ownership was 31% and the Group’s investment in that entity has been presented as held for sale

following the approval by the Group’s Board on 28 September 2010. The transaction was completed on 10 November 2010.

Analysis of the results is as follows:

2010 2009

$ $

Share of loss (87,818) (19,515)

Tax – –

Share of loss for the year (87,818) (19,515)

Analysis of the cash flows is as follows:

2010 2009

$ $

Investing cash flows (35,768) –


NO

TESNO

TES




34 Related party transactions

The ultimate parent of the Group is Neal & Massy Holdings Limited (incorporated in Trinidad and Tobago).

The following transactions were carried out with related parties:

2010 2009

$ $

i) Sales of goods and services:

Sales of goods:

- Associates 84,614 91,435

Goods are sold on the basis of the price lists in force with non-related parties.

ii) Purchases of goods and services:

Purchases of goods:

- Associates 17,089 17,257

Goods are bought on the basis of the price lists in force with non-related parties.

iii) Key management compensation:

Salaries and other short-term employee benefits 55,975 56,406

Post-employment benefits 3,638 3,666

Share-based payments 250 2,543

59,863 62,615

iv) Year-end balances arising from sales/purchases of goods/services:

Receivables from related parties:

Associates 4,727 4,652

Payables to related parties:

Associates 697 2,052

Goods purchased from entities controlled by non-executive Directors 54,267 59,892

34 Related party transactions (continued)

2010 2009

$ $

v) Loans to associates:

Beginning of year 54,190 54,755

Loans advanced during year – 6,637

Loans repayments received – (7,107)

Interest charged 976 1,193

Interest received (751) (1,288)

Other movements (39,165) –

End of the year 15,250 54,190

Included in other movements is a write off of a loan receivable balance from Bahamas Supermarkets Limited.

vi) Loans from associates:


Loans advanced during year – –

Loans repayments received – (3,090)

Interest charged 49 219

Interest received (128) (98)

Other movements 3 –


vii) Total loans to other related parties:


Loans advanced during year 60 75

Loan repayments received (511) (1,272)

Interest charged 1,321 1,328

Interest received (19) (761)


The loans to associates are due on demand and carry interest rates between 4.2 % – 12.5%.

Notes to the Consolidated Financial StatementsN

OTESN

OTE

S




34 Related party transactions (continued)

viii) Goods are purchased from entities controlled by non-executive directors of the Company on normal commercial terms

and conditions. The purchases during the current year amounted to $54,267 (2009: $59,892).

ix) Commitments and contingencies

The related party guarantee in relation to Cool Petroleum Limited is described in Note 31.

NO

TES


98

Documents

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT