Neal and Massy Annual Report 2010 Full

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT
Our Vision Statement
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.
Introducing Our New Vision Statement
In 2010, the Groups 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 & Massys 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
Executive Committee
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 Groups vision is to be the most responsible and profitable company.
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 OBrien, 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.
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 choicebar 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 & Massys rich past and we declare that the future will be even better!
This we know. This we believe. To this we commit.
AUTOMOTIve & INDUSTRIAl eqUIpMeNT
UK
MIAMI
BAHAMAS
eNeRGY & INDUSTRIAl GASeS FOOD GROUp TOURISM/HOSpITAlITY FINANCIAl, pROpeRTY & OTHeR INFORMATION TeCHNOlOGY & COMMUNICATIONS / OTHeR SeRvICeS
JAMAICA
ANTIGUA
ST lUCIA BARBADOS
TRINIDAD & TOBAGO
GUYANA
Table of Contents Reports

Corporate Information Notice of Meeting Chairmans Report Chief Executive Officers Report Chief Financial Officers Report Segment Review Board of Directors Directors Report Management Proxy Circular 12 13 14 16 20 24 42 46 49
Financials
Independent Auditors Report Consolidated Statement of Financial Position Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flow Notes to the Consolidated Financial Statements 10 6 7 8 1 2 4
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Corporate Information
CORPORATE INFORMATION
Notice of Meeting
NOTICE OF MEETING
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
Registrar and Transfer Office

A.E. Thompson 63 Park Street Port of Spain
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 2 3 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. To elect Directors. To appoint Auditors and authorise the Directors to fix their remuneration and expenses for the ensuing year.
Auditors
PricewaterhouseCoopers 11-13 Victoria Avenue Port of Spain
Group Principal Bankers

Citibank (Trinidad & Tobago) Limited 12 Queens Park East Port of Spain First Caribbean International Bank
The text of the proposed resolution in relation to Item 2 is set out below as Schedule A. BY ORDER OF THE BOARD
Secretary
Althea E. Thompson
Althea E. Thompson Company Secretary 14th December 2010 Notes 1 2 3 No service contracts were entered into between the Company and any of its Directors. 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. 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.
Assistant Secretary
Camille Mascall
(Trinidad & Tobago) Limited 74 Long Circular Road Maraval
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: nmh@neal-and-massy.com Website: www.neal-and-massy.com
Republic Bank Limited 11-17 Park Street Port of Spain Scotiabank Trinidad & Tobago Limited Scotia Centre 56-58 Richmond Street Port of Spain 2 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 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 RBTT Bank Limited 55 Independence Square Port of Spain First Citizens Bank Limited 9 Queens Park East Port of Spain
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Arthur Lok Jack Chairman
CHAIRMANS 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 Peoples 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 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 writeoffs 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 has appreciated slightly and inflation has also been contained. On a positive note, fuelled by strong commodity prices and increased gold and oil exploration, Guyanas 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 Groups 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 Groups 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 Groups 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 whats important leaves us well positioned to take advantage of any upturn in the markets in which we operate. 2010 is the Groups 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.
Chairmans Report
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E. Gervase Warner President & Group Chief Executive Officer
CEOS REPORT
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 Groups EPS by $1.22. The Group has also cut costs and initiated restructuring
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 Officers Report

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 Groups 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
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. ARIs 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 Groups 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 Groups 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
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Chief Executive Officers Report

CEOS REPORT
Five Management Initiatives
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 Groups 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 Groups 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. ARIs 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 Groups 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 Groups Debt to Equity ratio was reduced.
Growth
Explore Growth opportunities locally and internationally
Customer Service
Enhance Customer Service across the Group
Re-Focus on SVA
Measure strength of the Groups earnings after its cost of all Capital
Efficiency Improvements
Focus on efficiency and productivity
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
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Corporate and Business unit Strategy/Development

Develop strategy to fulfil our vision, train internal resources and plan for the future
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Paula Rajkumarsingh Executive Vice President & Chief Financial Officer
CFOS REPORT
Impact of the loss-making Companies

Profit before Tax $ 2010 2009 EPS $ 2010 EPS $ 2009
Total Group
487,831 -26%
658,967
3.13 -31%
4.53
Chief Financial Officers Report

Financial Review Highlights Group Third Party Revenue remained flat at $8.3 billion Profit Before Tax declined by 12.5%, from $692 million in 2009 to $606 million in 2010 Profit After Tax declined by 18%, from $517 million to $424 million The losses from discontinued operations were $118 million. Earnings Per Share from continuing operations was $4.35 10.9% lower than in 2009 when EPS was $4.88 Group Debt declined by $197 million to $1,978 million Group Cash increased from $958 million to $1,138 million. Debt to Equity Ratio improved, from 79% in 2009 to 66% in 2010 Current Ratio also improved, from 1.25 in 2009 to 1.28 in 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.
Discontinued operations Warrens Motors Inc. Bahamas Supermarkets Ltd. (30,062) (87,818) (117,880) (13,760) (19,515) (33,275) (0.31) (0.91) (1.22) (0.15) (0.20) (0.35)
Continuing operations reported in 2010 Year on Year changes %
605,711 -13%
692,242
4.35 -11%
4.88
Other loss-making Companies Pres-T-Con Cool Petroleum Ltd. Almond Resorts Inc. (12,530) (7,280) (102,040) (121,850) 16,080 (11,569) (26,164) (21,653) (0.06) (0.08) (0.73) (0.87) 0.09 (0.12) (0.14) (0.17)
727,561 Year on Year changes % 2%
713,895
5.22 3%
5.05
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 Groups 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-TCon was the hardest hit by the contraction of the construction
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Chief Financial Officers Report

CFOS REPORT
Segment Information
Financial Review Highlights Group Third Party Revenue remained flat at $8.3 billion Profit Before Tax declined by 12.5%, from $692 million in 2009 to $606 million in 2010 Profit After Tax declined by 18%, from $517 million to $424 million The losses from discontinued operations were $118 million. Earnings Per Share from continuing operations was $4.35 10.9% lower than in 2009 when EPS was $4.88 Group Debt declined by $197 million to $1,978 million Group Cash increased from $958 million to $1,138 million. Debt to Equity Ratio improved, from 79% in 2009 to 66% in 2010 Current Ratio also improved, from 1.25 in 2009 to 1.28 in 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.
Groups 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, PresT-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
2008 2009 2010
Revenue by Operating Country (%)

100 % =$7.7B =$8.3B =$8.3B
Other Guyana Jamaica
1.0 7.2 9.3
0.6 6.7 7.0
0.2 7.0 7.4
Barbados
23.8
34.1
34.7
Trinidad & Tobago
58.7
51.6
50.7
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
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,
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David OBrien Senior Vice President & Executive Chairman
SEGMENT REVIEW
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 Peugeotbut was able to remain profitable by offering product
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 superhighway 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.
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 Nissans 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 Womens World Cup. Support of our neighbouring football team, Caledonia AIA, continues. Overall, operating asset levels have been maintained while operating costcontainment 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
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
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Linford Carrabon Senior Vice President & Executive Chairman
SEGMENT REVIEW
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
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 Companys 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.
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 Units 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 wellpoised to capitalise on the expected upsurge in the regional energy sector. Neal & Massy Wood Group (NMWG) continued servicing its major clients; bpTTs Strategic Outsourcing Contract Agreement (SOCA), BGT&Ts Engineering Contract and Methanex Trinidad Limiteds maintenance contract. NMWG met its performance expectations, despite the tough conditions of the energy market. The Companys 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 Chambers 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 Companys 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
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 Companys 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 Companys 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 IGLs carbon dioxide supplies.
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Earl Boodasingh Executive Vice President & Executive Chairman
SEGMENT REVIEW
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 Companys 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
Food Group: Food/Consumer Distribution & Logistics and 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&Ds 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&Ds 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.
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.
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Frere Delmas Senior Vice President & Executive Chairman
SEGMENT REVIEW
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
but initial indications are that the Companys product-sourcing and pricing, together with its experience and strong team will allow it to effectively compete and grow.
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, LBs 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 chains 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-Los 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.
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,
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G. Anthony King Executive Vice President & Executive Chairman
SEGMENT REVIEW
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, Magnas 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 Companys loyalty processing services, which extend to loyalty schemes in addition to the Magna card, have continued to
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 Companys 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. NRELs 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 Companys 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
Financial, Property & Other
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 Companys 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.
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 years 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. Bests 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 Groups 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.
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Financial, Property & Other

SEGMENT REVIEW
Ralph Taylor President & Managing Director Almond Resorts Inc.
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 years 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. Bests 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 Groups 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. 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 Governments 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.
Tourism / Hospitality
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Keith Thomas Senior Vice President & Executive Chairman
SEGMENT REVIEW
Enterprise Content Management solutions enabled an increase in the Companys 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 Governments debt exchange programme and other measures that reduced product 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 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.
Information Technology & Communications /Other Services
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Deo Persaud Executive Chairman Neal & Massy Guyana Group
SEGMENT REVIEW
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)
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
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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Segment Review
SEGMENT REVIEW SEGMENT REVIEW
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.
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 Antiguas 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 Companys earlier years of
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
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 Companys 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
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. Medinas 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 years 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 Lucias results continue to be marginal. Health, Safety, Security and the Environment (HSSE)
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Board of Directors
BOARD OF DIRECTORS
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 Queens Royal College (Alma Mater) Hall of Honour and in November 2009, he was inducted into the Trinidad & Tobago Chamber of Industry and Commerces Business Hall of Fame.
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.
Robert Bermudez Trinidad and Tobago Citizen 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.
Earl Boodasingh Trinidad and Tobago Citizen Earl Boodasingh is an Executive Vice President and Executive Chairman of Neal & Massys 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 Groups Retail, Distribution & Logistics Business Unit.
5 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 Groups 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 firms 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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10
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43
Board of Directors
BOARD OF DIRECTORS BOARD OF DIRECTORS
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 companys 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 Queens New Years Honours 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.
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 & Massys 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.
10 Paula Rajkumarsingh Trinidad and Tobago Citizen Paula Rajkumarsingh is a Corporate Financial Executive, with over 10 years of experience at a senior management level, and the Groups 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.
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 Barbadoss 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. 9 William Lucie-Smith Trinidad and Tobago Citizen 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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45
Directors Report
DIRECTORS REPORT
Directors, Senior Officers and Connected Persons Interests

DIRECTORS REPORT
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 Profit attributable to shareholders Dividends paid Profit retained for the year Other movements on revenue reserves Balance brought forward Retained earnings at end of year 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 $000s 301,365 (139,835) 161,530 51,799 2,162,708 2,376,037
Set out below are the Directors, Senior Officers and their connected persons with interests in the shares of Neal & Massy Holdings Limited, a Directors 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 Rolph Balgobin Robert Bermudez Earl Boodasingh Geoffrey Cave Allan Fields Gerald Anthony King Arthur Lok Jack William Lucie-Smith Paula Rajkumarsingh Elliot Gervase Warner Brian Young Judith Bowen Linford Carrabon Frere Delmas Angela Hamel-Smith Christian Maingot David OBrien Doodnauth Persaud Keith Thomas Althea Thompson Directors 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. Shareholding 5,000 14,820 147,384 Nil 1,000 75,000 Nil Nil 106,902 42,262 Nil 26,513 178,627 752 57,081 4,605 21,632 9,519 58,922 Nil Connected Persons Shareholdings 1,500 13,029 Nil Nil Nil Nil 100,981 17,897 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Althea E. Thompson Company Secretary 14th December 2010
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Directors Report
DIRECTORS; REPORT
Management Proxy Circular

MANAGEMENT PROXY
Set out below are the Directors, Senior Officers and their connected persons with interests in the shares of Neal & Massy Holdings Limited, a Directors 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 Rolph Balgobin Robert Bermudez Earl Boodasingh Geoffrey Cave Allan Fields Gerald Anthony King Arthur Lok Jack William Lucie-Smith Paula Rajkumarsingh Elliot Gervase Warner Brian Young Judith Bowen Linford Carrabon Frere Delmas Angela Hamel-Smith Christian Maingot David OBrien Doodnauth Persaud Keith Thomas Althea Thompson Directors 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. Shareholding 5,000 14,820 147,384 Nil 1,000 75,000 Nil Nil 106,902 42,262 Nil 26,513 178,627 752 57,081 4,605 21,632 9,519 58,922 Nil Connected Persons Shareholdings 1,500 13,029 Nil Nil Nil Nil 100,981 17,897 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Republic of Trinidad and Tobago The Companies Act, Ch. 81:01 [Section 144]
Name of Company: Company No.
Neal & Massy Holdings Limited N-20(C)
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.
Solicitation It is intended to vote the Proxy solicited hereby (unless the shareholder directs otherwise) in favour of all resolutions specified therein.
Any Directors 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.
Any Auditors 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.
Any Shareholders 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 Holders of the ten (10) largest blocks of Shares Name of Registered Shareholder National Insurance Board RBTT Trust Limited RBTT Nominee Services Limited Republic Bank Limited Trinidad & Tobago Unit Trust Corporation Number of Shares 19,681,662 8,762,164 8,517,301 7,371,923 5,822,298 14th December 2010
Name and Title
Signature
Althea E. Thompson Company Secretary
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Independent Auditors Report

AuDITORS 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. Managements 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. Auditors 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 auditors 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 entitys 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 entitys 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
50
Consolidated Statement of Financial Position

FINANCIAL POSITION
As at 30 September 2010 Expressed in thousands of Trinidad & Tobago dollars
FINANCIAL PIOSITION
Notes
2010 $
2009 $
Notes
2010 $
2009 $
ASSETS Non-current assets Property, plant and equipment Goodwill Other intangible assets Investments in associated companies and joint ventures Long term investments Deferred income tax assets Installment credit and other loans Retirement benefit assets 6 7 8 9 11 12 13 14 2,819,108 168,003 35,070 453,282 389,412 85,331 142,642 213,899 4,306,747 2,892,044 170,698 35,070 512,723 393,996 76,009 173,810 203,900 4,458,250
LIABILITIES Non-current liabilities Borrowings Deferred income tax liabilities Customers deposits Provisions for other liabilities and charges 21 12 22 23 1,319,159 99,909 166 313,360 1,732,594 1,547,134 96,316 296 347,177 1,990,923
Current liabilities Trade and other payables Liabilities on insurance contracts Customers deposits 24 25 22 1,387,316 725,134 285,969 71,425 21 659,080 3,128,924 Total liabilities Total equity and liabilities 4,861,518 8,311,430 1,421,858 617,494 342,813 63,406 628,223 3,073,794 5,064,717 8,294,465
Current assets Inventories Installment credit and other loans Trade and other receivables Financial assets at fair value through profit or loss Cash and cash equivalents 15 13 16 11 17 1,053,753 130,105 1,591,343 77,963 1,137,935 3,991,099 Assets of disposal group classified as held for sale 33 13,584 4,004,683 Total assets 8,311,430 1,080,355 137,845 1,553,804 106,278 957,933 3,836,215 3,836,215 8,294,465
Current income tax liabilities Borrowings
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.
EQuITY Capital and reserves attributable to equity holders of the Company Share capital Retained earnings Other reserves 18 538,220 2,376,037 82,639 2,996,896 Non-controlling interests Total equity 20 453,016 3,449,912 522,154 2,162,708 66,813 2,751,675 478,073 3,229,748 E.G. Warner Director A. Lok Jack Director
Consolidated Income Statement

For the year ended 30 September 2010
INCOME STATEMENT
INCOME STATEMENT
Expressed in thousands of Trinidad & Tobago dollars
Notes
2010 $
2009 $
Notes
2010 $
2009 $
Continuing Operations Revenue 5 8,262,960 8,338,470
Earnings per share from continuing and discontinued operations attributable to the equity holders of the Company during the year (expressed in TT$ per share)
Operating profit before finance costs Finance costs - net Share of profit of associated companies and joint ventures
26 28 9
671,990 (76,978) 10,699
758,533 (101,974) 35,683
Basic earnings per share - from continuing operations - from discontinued operations 30 30 4.35 (1.22) 3.13 4.88 (0.35) 4.53
Profit before income tax Income tax expense Profit for the year from continuing operations 29
605,711 (181,765) 423,946
692,242 (175,386) 516,856 Diluted earnings per share - from continuing operations - from discontinued operations 30 30 4.35 (1.22) 3.13 4.88 (0.35) 4.53
Discontinued operations Loss for the year from discontinued operations Profit for the year 33 (117,880) 306,066 (33,275) 483,581 Dividends per share 19
1.26
1.40
Profit attributable to: Equity holders of the Company Non-controlling interests 301,365 4,701 306,066 435,412 48,169 483,581
Dividends paid per share
19
1.40
1.40
Consolidated Statement of Comprehensive Income

COMPREHENSIVE INCOME
Year ended 30 September 2010 Expressed in thousands of Trinidad & Tobago dollars
Consolidated Statement of Changes in Equity

CHANGES IN EQuITY
Notes
2010 $
2009 $ Note
Share Capital $
Other Reserves $
Retained Earnings $ Total $
Profit for the year
306,066
483,581 Balance at 1 October 2008 512,573 100,870 (24,041) (10,016) 1,957,274 9,022 2,570,717 (24,041) (994)
Other comprehensive income: Available for sale financial assets Actuarial gains/(losses) on defined benefit pension plans Currency translation differences Other movements Other comprehensive income / (loss) for the year Total comprehensive income for the year 11 14 1,705 48,129 19,511 4,193 73,538 379,604 (7,860) (102,111) (20,289) (3,959) (134,219) 349,362
Currency translation differences Other reserve movements Net loss not recognised in consolidated income statement Profit attributable to shareholders Employee share option plan - value of employee services Issue of shares under stock
(99,613) 435,412
(99,613) 435,412
2,543
2,543
Attributable to: Equity holders of the company Non-controlling interests Total comprehensive income for the year 372,526 7,078 379,604 307,443 41,919 349,362
- option plan Issue of shares for the acquisition of BS&T Dividends paid Balance at 30 September 2009
6,200
6,200
838 522,154
66,813
(139,387) 2,162,708
838 (139,387) 2,751,675
Balance at 1 October 2009 Currency translation differences Other reserve movements Net profit not recognised in consolidated income statement Profit attributable to shareholders Employee share option plan - value of employee services Issue of shares under stock - option plan Dividends paid Balance at 30 September 2010 18 18
522,154
66,813 18,593 (2,767)
2,162,708 1,236
2,751,675 18,593 (1,531)
50,563 301,365
50,563 301,365
250
250
15,816
(139,835)
15,816 (139,835) 2,996,896
538,220
82,639
2,376,037
Consolidated Statement of Cash Flows

CASH FLOWS
CASH FLOWS
Notes
2010 $
2009 $
Notes
2010 $
2009 $
Cash flows from operating activities Operating profit before finance costs Operating loss from discontinued operations before finance costs Adjustments for: Dividends received from associated companies Depreciation Impairment of goodwill Gain on sale of property, plant and equipment Increase in provision for installment credit and other loans Decrease in market value of investments Employee share option scheme provision Employee retirement and other benefits Earnings before interest, tax, depreciation and amortisation Provisions and other movements Changes in working capital: Decrease in inventories (Increase)/decrease in trade and other receivables Decrease/(increase) in installment credit and other loans Increase/(decrease) in trade and other payables Decrease in customers deposits Cash generated from operations Finance costs Taxation paid Net cash provided by operating activities 28 22 17,163 (27,016) 38,908 68,662 (56,974) 893,839 (77,283) (162,855) 653,701 227,659 142,046 (11,231) (85,077) (6,898) 1,269,328 (107,672) (174,613) 987,043 13 11 18 9 6 7 22,408 217,443 2,846 (33,739) 2,400 1,771 250 1,469 857,082 (3,986) 32,617 218,932 3,699 (14,854) 2,472 3,714 2,543 1,175 1,000,769 2,060 33 671,990 (29,756) 758,533 (8,062)
Cash flows from investing activities Proceeds from sale of property, plant and equipment Proceeds from sale of other investments Purchase of property, plant and equipment Net increase in other investments and investments in associated companies and joint ventures Investing activities Bahamas Supermarkets Ltd Net cash used in investing activities (24,216) (35,768) (117,109) (109,994) (283,588) 11 6 107,144 58,932 (223,201) 61,342 12,132 (247,068)
Cash flows from financing activities Net (decrease)/increase in medium and long term borrowings Issue of shares Dividends paid to shareholders Dividends paid to minorities Net cash used in financing activities 19 20 (256,243) 15,816 (139,835) (32,449) (412,711) 16,603 7,038 (139,387) (26,191) (141,937)
Net increase in cash, cash equivalents Cash, cash equivalents and bank overdrafts at beginning of the year Effects of exchange rate changes on cash and bank overdrafts
123,881 920,300 2,418
561,518 362,632 (3,850)
Cash, cash equivalents and bank overdrafts at the end of the year Cash and short term funds Bank overdrafts and other short term borrowings 17 21
1,046,599 1,137,935 (91,336) 1,046,599
920,300 957,933 (37,633) 920,300
Notes to the Consolidated Financial Statements

NOTES
NOTES
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.
General information (continued)
The principal subsidiaries are as follows: (continued) Percentage Country of incorporation Food Retailing of equity capital held
The principal subsidiaries are as follows: Percentage Country of incorporation Automotive & Industrial Equipment Neal & Massy Automotive Limited City Motors (1986) Limited Tracmac Engineering Limited Automotive Components Limited Tobago Services Limited Master Serv Limited Associated Industries Limited Warren Motors Inc Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Guyana Barbados 100% 100% 100% 100% 100% 100% 100% 100% of equity capital held
Trading and Distribution Limited Hi-Lo Food Stores Division Arvee Food Master Limited Athabasca Limited Super Centre Peronne Manufacturing
Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Barbados Barbados
100% 100% 100% 100% 100% 100%
Food/Consumer Distribution and Logistics Marketing & Distribution Division Huggins Shipping and Customs Brokerage Limited Melville Shipping Limited Neal & Massy Inc HD Hopwood & Company Limited T. Geddes Grant (Barbados) Limited Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago USA Jamaica Barbados Guyana Guyana Guyana Barbados Barbados Barbados Barbados Barbados Barbados St. Lucia Barbados Barbados 100% 100% 100% 100% 100% 100% 92.9% 92.9% 92.9% 100% 100% 100% 100% 100% 100% 100% 100% 99.7%
Energy & Industrial Gases Neal & Massy Energy Limited Neal & Massy Energy Services Limited Neal & Massy Energy Resources Limited NM Insertech (Caribbean) Ltd Insertech (Aruba) N.V. Neal & Massy Supply Chain Integrators Industrial Gases Limited Trintogas Carbonics Limited NM Petrochemicals Services Limited Gas Products Limited Demerara Oxygen Company Limited Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Aruba Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Jamaica Guyana 100% 100% 100% 100% 100% 51% 57.3% 100% 100% 100% 92.9%
Trading & Distribution Inc NM Services Limited Neal & Massy Guyana Limited Trident Forwarding SBI Distribution Agro Chemicals Roberts Manufacturing Booth Steamship Cargo Handlers Retail & Distribution International BS&T International Inc Knights Limited
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NOTES
NOTES
The principal subsidiaries are as follows: (continued) Percentage Country of incorporation Tourism / Hospitality Almond Resorts Inc Casuarina Holdings Barbados Barbados 51% 49.4% of equity capital held
The principal subsidiaries are as follows: (continued)
Percentage Country of incorporation Financial, Property and Other (continued) of equity capital held
Nealco Real Estate Limited Information Technology and Communications and Other Illuminat Trinidad and Tobago Limited Illuminat (Antigua) Limited Illuminat (Barbados) Limited Illuminat (Jamaica) Limited CCS Guyana Limited Three Sixty Communications Limited Nealco Datalink Limited Pereira & Company Limited NM Security Solutions Seawell Air Services BCB Communications Dacosta Manning Inc Trinidad and Tobago Antigua Barbados Jamaica Guyana Trinidad and Tobago Trinidad and Tobago Trinidad and Tobago Guyana Barbados Barbados Barbados 100% 100% 100% 100% 92.9% 75% 100% 100% 92.9% 100% 51% 100% Other Neal & Massy Limited Financial, Property and Other NM Remittance Services Limited General Finance Corporation Limited United Insurance Company Limited Magna Rewards Inc Magna Rewards (Jamaica) Inc Magna Rewards (St Lucia) Inc Magna Rewards (Trinidad) Inc Magna Rewards Caribbean Inc Trinidad and Tobago Trinidad and Tobago Barbados Barbados Jamaica St Lucia Trinidad and Tobago Barbados 100% 100% 100% 90% 51.3% 51.3% 51.3% 51.3% 2.1 Basis of preparation 2 Summary of significant accounting policies Barbados Shipping & Trading Co. Limited Arrow Developers Limited Nealco Properties Limited Pres-T-Con Limited PEL Enterprises Neal & Massy (Barbados) Limited Inter Regional Reinsurance Co Limited The Auto Dome SP Mussons Son & Co Limited Sunset Crest Holdings Wimcal Limited Warrens Realty
Trinidad and Tobago Barbados Trinidad and Tobago Trinidad and Tobago Barbados Barbados Cayman Barbados Barbados Barbados Barbados Barbados
100% 100% 100% 63.1% 100% 100% 100% 100% 100% 100% 100% 100%
Trinidad and Tobago Barbados
100% 97.2%
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.
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.
12
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NOTES
Summary of significant accounting policies (continued)
2.1
Basis of preparation (continued)
2.1
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 Groups 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 (continued)
IFRS 7 (Amendment), Financial instruments Disclosures (effective 1 January 2009). 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.
(a) New and amended standards adopted by the Group The Group has adopted the following new and amended IFRS as of 1 October 2009:
As the change in accounting policy only results in additional disclosures, there is no impact on earnings per share.
IAS 1 (Revised). Presentation of financial statements effective 1 January 2009. 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 nonowner 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.
IFRS 8 replaces IAS 14, Segment reporting, and aligns segment reporting with the requirements of the US 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 Groups consolidated financial statements.
IAS 19 (Amendment), Employee benefits (effective from 1 January 2009). The amendment is part of the IASBs annual improvements project published in May 2008:
IAS 1 (Amendment), Presentation of financial statements (effective from 1 January 2009). The amendment is part of the IASBs 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. 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.
IFRS 2 (Amendment), Share-based payment (effective 1 January 2009). 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 Groups financial statements.
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.
14
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NOTES
2.1
2.1
(a) New and amended standards adopted by the Group (continued)
(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 applied IAS 19 (Amendment) from 1 October 2009.
the Groups accounting periods beginning on or after 1 January 2009 or later periods but are not relevant for the Groups operations:
IAS 27 (Revised), Consolidated and separate financial statements, (effective from 1 July 2009). 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 31 (Amendment), Interests in joint ventures (and consequential amendments to IAS 32 and IFRS 7) (effective from 1 January 2009). IAS 20 (Amendment), Accounting for government grants and disclosure of government assistance (effective from 1 January 2009). IFRS 3 (Revised), Business combinations (effective from 1 July 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 IASBs 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.
IAS 29 (Amendment), Financial reporting in hyperinflationary economies (effective from 1 January 2009).
IAS 32 (Amendment), Financial instruments: Presentation, and IAS 1 (Amendment), Presentation of financial statements Puttable financial instruments and obligations arising on liquidation (effective from 1 January 2009).
IAS 41 (Amendment), Agriculture (effective from 1 January 2009). The amendment is part of the IASBs annual improvements project published in May 2008.
IAS 39 (Amendment), Financial instruments: Recognition and measurement (effective from 1 January 2009). The amendment is part of the IASBs 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 Groups consolidated income statement.
IFRIC 18, Transfers to assets from customers (effective 1 July 2009).
(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 Groups accounting periods beginning on or after 1 January 2009 or later periods.
IAS 36 (Amendment), Impairment of assets (effective from 1 January 2009). The amendment is part of the IASBs 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 valuein-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.
16
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NOTES
2.1
2.1
(c) Standards, amendments and interpretations that are not yet effective and have not been early adopted by the Group: (continued)
IFRS 2 (Amendment), Group cash-settled share-based payment transactions (effective from 1 January 2010). 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 Groups financial statements. The Group will apply IFRS 2 (amendments) from 1 October 2010.
IAS 1 (Amendment), Presentation of financial statements. The amendment is part of the IASBs 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
IFRS 5 (Amendment), Measurement of non-current assets (or disposal groups) classified as held-for-sale. The amendment is part of the IASBs 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 Groups financial statements.
apply IAS 1 (amendment) from 1 October 2010. It is not expected to have a material impact on the Groups financial statements.
IAS 7, Statement of cash flows (effective 1 January 2010). 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.
IAS 17, Leases (effective 1 January 2010). 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 Groups financial statements.
IFRS 8, Operating Segments (effective 1 January 2010), 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 Groups financial statements.
IAS 24 (Revised), Related Party Disclosures (effective 1 January 2010). 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.
IFRS 9, Financial Instruments (effective 1 January 2013). 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.
IAS 32 (Amendment), Financial instruments: Presentation (effective from 1 February 2010). 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 entitys 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.
18
19

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NOTES
2.1
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
IAS 36, Impairment of Assets (effective 1 January 2010). 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.
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
IAS 38 (Amendment), Intangible Assets (effective 1 January 2010). The amendment is part of the IASBs 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 Groups Financial Statements.
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 Groups 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
IAS 39, Financial Instruments: Recognition and Measurement (effective 1 January 2010). It is not expected to have a material impact on the Groups financial statements.
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
IFRIC 19, Extinguishing financial liabilities with equity instruments (effective 1 July 2010). 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.
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
IFRIC 14, Prepayments of a minimum funding requirement (effective 1 January 2011). 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.
the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary.
20
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NOTES
2.2
Consolidation (continued)
2.4
Foreign currency translation (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 Groups investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition. The Groups 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 postacquisition movements are adjusted against the carrying amount of the investment. When the Groups 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 Groups 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.
(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.
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 Groups 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 Companys functional and Groups presentation currency.
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.
22
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NOTES
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 assets 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.
2.6
Intangible assets (a) Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Groups 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
Current rates of depreciation are: Freehold and leasehold properties Plant and equipment Furniture, fixtures and motor vehicles Rental assets 2% to 20% 5% to 33.3% 10% to 25% 25%
products controlled by the Group are recognised as intangible assets when the following criteria are met:
it is technically feasible to complete the software product so that it will be available for use; it can be demonstrated how the software product will generate probable future economic benefits; adequate technical, financial and other resources to complete the development and to use or sell the software product are available.
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. An assets carrying amount is written down immediately to its recoverable amount if the assets 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. 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.
24
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NOTES
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 assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assets 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 (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 Groups 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
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.
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
(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.
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 availablefor-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
(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.
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
(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.
consolidated income statement when the Groups right to receive payments is established.
26
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NOTES
2.8
Financial assets (continued)
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
(e) Recognition and measurement (continued)
and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the consolidated statement of financial position.
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 arms 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-forsale, 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. 2.14 Insurance (i) 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. 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. 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 assets 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. 2.13 Trade payables Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method. 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 Companys 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.
28
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NOTES
2.14 Insurance (continued)
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
(i)
Insurance and reinsurance contracts (continued)
of financial position date in the countries where the Groups subsidiaries, associates and joint ventures operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations
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.
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.
(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.
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
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.
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.
30
31

NOTES
NOTES
2.17 Employee benefits (continued)
2.17 Employee benefits (continued)
(a) Pension obligations (continued)
(c) Share-based compensation The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services
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 pastservice costs are amortised on a straight-line basis over the vesting period.
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: there is a formal plan and the amounts to be paid are determined before the time of issuing the financial statements; or past practice has created a valid expectation by employees that they will receive a bonus/profit sharing and the amount can be determined before the time of issuing the financial statements.
(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.
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.
32
33

NOTES
NOTES
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 (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
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 Groups 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 Groups activities as described below.
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-ofcompletion 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.
(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 wholesalers 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.
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 shareholders right to receive payment is established.
34
35

NOTES
NOTES
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.
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.
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. 3.1 Financial risk factors The Groups activities expose it to a variety of financial risks. The Groups aim therefore is to achieve an appropriate balance between risk and return and minimise potentially adverse effects on the Groups financial performance. This is achieved by the analysis, evaluation, acceptance and management of the Groups risk exposure. The Board of Directors is ultimately responsible for the establishment and oversight of the Groups risk management framework. The main financial risks of the Group relate to the availability of funds to meet business needs, the risk 2.21 Dividend distribution Dividend distribution to the Companys shareholders is recognised as a liability in the Groups financial statements in the period in which the dividends are approved by the Board of Directors. 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. 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. (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. The Groups 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 Groups financial instruments are credit risk, liquidity risk, foreign currency risk and interest rate risk. The following contains information relative to the Groups exposure to each of the above risks, including quantitative disclosures. 3 Financial risk management
36
37

NOTES
NOTES
Financial risk management (continued)
3.1
Financial risk factors (continued)
3.1
(a) Market risk (continued)
(b) Credit 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.
customers 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 Groups 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 Groups 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 Groups liquidity risk management process is measured and monitored by senior management. This process
(ii) Interest rate risk The Groups 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.
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.
(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 Groups 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 Groups 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
38
39

NOTES
NOTES
3.1
3.2
Capital Risk Management The Groups objectives when managing capital are to safeguard the Groups ability to continue as a going concern in
(c) Liquidity risk (continued)
order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
Maturity analysis of financial liabilities
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. More than Contractual cash flows Carrying amount 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
< 1 year
1- 5 years
5 yrs
Financial Liabilities: Bank overdraft and other short term borrowings Other borrowings Customers deposits Trade payables Liabilities on insurance contract Total 91,336 662,126 291,581 633,104 725,134 2,403,281 1,288,789 191 1,288,980 453,517 453,517 91,336 2,404,432 291,772 633,104 725,134 4,145,778 91,336 1,886,903 286,135 633,104 725,134 3,622,612 Total borrowings (Note 21) Less: Cash & Cash Equivalents (Note 17) Net debt Total equity Total capital More than 2009 < 1 year 1- 5 years 5 yrs Contractual cash flows Carrying amount 3.3 Financial Liabilities: Bank overdraft and other short term borrowings Other borrowings Customers deposits Trade payables Liabilities on insurance contract Total 37,633 664,114 360,927 677,272 617,494 2,357,440 1,409,566 335 1,409,901 385,166 385,166 37,633 2,458,846 361,262 677,272 617,494 4,152,507 37,633 2,137,724 343,109 677,272 617,494 3,813,232 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. 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: Gearing ratio 1,978,239 (1,137,935) 840,304 3,449,912 4,290,216 20% 2,175,357 (957,933) 1,217,424 3,229,748 4,447,172 27% 2010 $ 2009 $
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.
40
41

NOTES
NOTES
3.3
Fair value estimation (continued)
3.3
Fair value estimation (continued)
Level 2 (continued)
The following table presents the Groups assets and liabilities that are measured at fair value at 30 September 2010
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. Assets Financial assets at fair value through profit or loss - Trading 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. Available-for-sale financial assets - Equity securities - Debt investments 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. (a) Estimated impairment of goodwill 4.1 Critical accounting estimates and assumptions 4 Critical accounting estimates and judgements
Level 1
Level 2
Level 3
Total
77,963
77,963
19,085 5,561 102,609
665 665
19,750 5,561 103,274
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.
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.
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.
42
43

NOTES
NOTES
Critical accounting estimates and judgements (continued)
Critical accounting estimates and judgements (continued)
4.1
Critical accounting estimates and assumptions (continued)
4.2
Critical judgements in applying the entitys accounting policies (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.
(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
(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. 5
are recorded in operations in the period in which they are determined.
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.
(d) Revenue recognition The Group uses the percentage-of-completion method in accounting for its sales of services. Use of the percentageof-completion method requires the Group to estimate the services performed to date as a proportion of the total services to be performed.
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)
4.2
Critical judgements in applying the entitys 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.
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.
44
45

NOTES
NOTES
(76,978)
(181,765)
223,201
214,250
3,193
217,443 1,071 29,128 28,292 46,130 20,978 67,923 23,921
8,311,430
453,282
8,262,960
Food Group Other $ This segment derives its revenue mainly from the sale of retail, wholesale foods, general merchandise and distribution and logistics operations.
(61,512)
(114,534)
(53,446)
(86,111)
4,861,518
671,990
605,711
423,946
Grand
10,699
1,071
1,108,463
1,297,707
(44,847)
29,128
3,100,095
1,125,511
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.
The segment assets and liabilities at 30 September 2010 and capital expenditure for the year then ended are as follows:
Hospitality
(89)
(102,040)
(102,129)
(29,192)
(35,107)
(37,741)
1,373,095
132,874
Financial
Property
30,197
& Other
145,388
177,721
27,620
21,638
2,136
23,921
6,875
827,744
Tourism/
Tourism / Hospitality This segment derives its revenue from its hotel operations in the tourism sector in Barbados and St. Lucia.
288,014
(16,750)
(1,768)
561,824
58,108
29,097
28,292
163,445
350,875
73,111
Financial, Property and Other This segment includes an insurance company and a financing company that accept deposits for fixed terms and the grant Food
(10,903)
(65,486)
46,130
700,197
35,216
1,522,012
4,286,784
292,314
financing and leasing. In addition, revenue is generated from consultancy and property management services.
293,066
227,580
222,399
11,655
Group
(45,447)
(3,309)
239,595
38,204
20,978
Energy &
Industrial
686,525
113,900
and Other. This entity is now included in Automotive & Industrial Equipment to be consistent with how the Committee monitors and manages the Group.
138,936
(37,569)
(491)
635,161
104,137
28,345
93,489
Gases
64,730
4,222
525,655
88,763
3,193
Automotive
& Industrial
Equipment
1,343,527
135,830
The Groups 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: and joint ventures before tax (Note 9)
136,095
767,080
98,526
756
Profit/(loss) before income tax
Depreciation discontinued operations
Finance costs Net (Note 28)
Share of results of associates
Operating profit/(loss)
Profit /(loss) for the year
Associates and joint ventures
Depreciation (Note 6)
segment result
Taxation
Total assets
Assets
Capital expenditure
Total liabilities
Impairment of goodwill (Note 7)

47
46
Sales
906
The major shift in the operating segments from the prior year was Pres-T-Con being included in a segment Financial, Property
Other segment items included in the consolidated income statement are as follows:
1,431
of installment credit secured on specific equipment and goods and mortgage loans and also undertakes insurance premium
532,374
76,467
59,717
21,489
ITC
5,124
509
ITC
28,423
15,307
3,408
225
424
2,846
Total
Segment information (continued)
NOTES
48
The segment results for the year ended 30 September 2009 are as follows:
Year ended 30 September 2010
Automotive & Industrial Equipment $ $ $ $ $ $ $ Gases Group ITC Hospitality & Other Other Industrial Food Tourism/ Property Grand Total $
Energy &
Financial
Sales Operating profit/(loss) segment result Finance costs Net (Note 28) Share of results of associates and joint ventures before tax (Note 9) Profit / (loss) before income tax Taxation Profit / (loss) for the year 114,776 115,170 213,964 53,843 (44,657) (39,658) (65,711) (17,168) 159,433 154,828 279,675 71,011 (26,164) 6,343 (19,821) 672 20,486 15,194 3,117 (6,215) 2,626 172,845 (43,292) 129,553 (9,682) (23,053) (14,026) (1,854) (19,810) 21,445 168,443 157,395 278,507 69,748 (139) 148,774
1,465,686
680,798
4,254,271
531,514
287,179
1,117,848
1,174 (64,195) (54,994)
8,338,470 758,533 (101,974)
(197) (119,386) 28,757 (90,629)
35,683 692,242 (175,386) 516,856
The segment assets and liabilities at 30 September 2009 and capital expenditure for the year then ended are as follows: Total assets Associates and joint ventures Total liabilities Capital expenditure 99,328 20,462 569,646 278,491 3,682 96,613 248,247 706,515 31,021 854,767 617,479 1,474,298 339,863 18,299 178,132 35,335 853,557 104,590 527,313 29,604 3,127,584 26,160 1,461,355 26,818 1,026,917 15,132 1,343,265 4,500 8,294,465 512,723 5,064,717 247,068
Other segment items included in the consolidated income statement are as follows: Depreciation (Note 6) Depreciation discontinued operations 2,626 67,960 Impairment of goodwill (Note 7) 898 65,334 19,726 19,726 855 46,061 46,061 1,431 27,146 27,146 24,267 24,267 32,115 32,115 515 1,657 1,657 216,306 2,626 218,932 3,699
Other 8,262,960 8,338,470 8,311,430 8,294,465 223,201 247,068 625,044 628,191 517,277 494,176 17,286 16,528
basis.
Guyana 582,375 562,428 264,166 240,341 13,707 4,106
Barbados 2,870,026 2,842,360 3,820,758 4,151,461 43,004 69,988
Trinidad and Tobago 4,185,515 4,305,491 3,709,229 3,408,487 149,204 156,446 2010 $ $ $ $ $ $ Sales 2009 2010 Assets 2009 2010 Capital Expenditure 2009 Total
be available to unrelated third parties.
manufacturing, service industries and finance.
Capital expenditure comprises additions to property, plant and equipment (Note 6).
The Groups six business segments operate in two main geographical areas, even though they are managed on a regional
Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also
The main operations occur in the home country of the Company. The areas of operation are principally trading,
NOTES
49
NOTES
50
Property, plant and equipment (continued)
Fixtures & Freehold Investment Property $ $ $ $ $ $ $ Property Property Equipment Assets Vehicles Progress Total $ Leasehold Plant and Rental Motor Work in
Year ended 30 September 2010
Capital
Year ended 30 September 2008 Cost Accumulated depreciation Net book amount 1,806,998 312,023 100,764 384,830 158,280 127,333 (53,264) (9,199) (52,758) (690,686) (132,193) 177,918) 1,860,262 321,222 153,522 1,075,516 290,473 305,251 17,000 17,000 4,023,246 (1,116,018) 2,907,228
Year ended 30 September 2009 Opening net book amount Additions Fair value adjustments Disposals and adjustments Depreciation charge Closing net book amount 1,812,858 326,576 120,766 (18,530) (838) (7,768) (3,547) 7,524 22,038 (70,629) (73,708) 289,578 500 200 27,437 7,867 5,532 49,085 1,806,998 312,023 100,764 384,830 158,280 103,788 (17,335) (68,474) 176,259 127,333 40,992 33,513 (49,614) 152,224 17,000 12,367 (15,584) 13,783 2,907,228 247,068 700 (44,020) (218,932) 2,892,044
At 30 September 2009 Cost Accumulated depreciation Net book amount 1,812,858 (67,413) (12,634) 326,576 1,880,271 339,210 195,792 (75,026) 120,766 927,647 (638,069) 289,578 320,395 (144,136) 176,259 455,390 (303,166) 152,224 13,783 13,783 4,132,488 (1,240,444) 2,892,044
Year ended 30 September 2010 Opening net book amount Additions Disposals and adjustments Depreciation charge Transferred to disposal group classified for sale Closing net book amount 1,812,858 7,639 (15,854) (18,594) 1,786,049 326,576 8,935 (24,744) (945) 309,822 120,766 6,366 (256) (7,129) (126) 119,621 289,578 47,634 23,945 (77,993) (977) 282,187 176,259 96,216 (20,275) (71,426) 180,774 152,224 31,304 (26,846) (41,356) (1,696) 113,630 13,783 25,107 (11,865) 27,025 2,892,044 223,201 (75,895) (217,443) (2,799) 2,819,108
At 30 September 2010 Cost Accumulated depreciation Net book amount 1,873,790 (87,741) 1,786,049 324,504 (14,682) 309,822 197,870 (78,249) 119,621 1,035,764 (753,577) 282,187 348,504 (167,730) 180,774 392,794 (279,164) 113,630 27,025 27,025 4,200,251 (1,381,143) 2,819,108
The fair value of the investment properties amounted to $742,872 (2009: $742,872) as valued by an independent, professionally qualified valuer taking into consideration current replacement costs, land tax valuations and other valuation techniques. Depreciation expense of $115,067 (2009: $112,784) has been charged in cost of goods sold and $102,376 (2009: $106,148) in selling, general and administration expenses (Note 26). Bank borrowings are secured on land and buildings for the value of $526,008 (2009: $584,077). The property rental income earned by the Group during the year from its investment properties, amounted to $35,787 (2009: $34,604). Direct operating expenses arising on the investment properties amounted to $17,970 (2009: $16,542).
NOTES
51

NOTES
NOTES
Goodwill
Goodwill (continued)
2010 $
2009 $
Key assumptions used for value-in-use calculations:
Trinidad At 1 October Cost Accumulated impairment Net book amount 213,197 (45,194) 168,003 212,931 (42,233) 170,698 Growth rate Discount rate 0 - 3% 8.51 - 11.1% 2 - 6.5% 8.3 - 11.3% and Tobago Overseas
Year ended 30 September Opening net book amount Adjustments Impairment charge (Note 26) Closing net book amount 170,698 151 (2,846) 168,003 169,106 5,291 (3,699) 170,698
Weighted average growth rate used to extrapolate cash flows beyond the budget period 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
Goodwill is allocated to the Groups cash-generating units (CGUs) identified according to country of operation and business segment.
specific risk relating to the relevant segments.
A segment-level summary of the goodwill allocation is presented below.
Other Intangible Assets Intangibles represent brands and have been recognised at fair value at the acquisition date. These assets are expected to have
2010 $ Trinidad and Tobago Overseas Trinidad and Tobago
2009 $
an indefinite life and no impairment has been recorded during the periods presented.
2010 Overseas Year ended 30 September $
2009 $
Automotive & Industrial Equipment Energy & Industrial Gases Food Group Financial Property & Other Other Total
30,698 31,817 12,283 74,798
2,485 49,883 39,861 976 93,205
31,604 31,817 13,714 77,135
2,485 49,883 40,219 976 93,563
Cost Accumulated impairment Net book amount
35,070 35,070
35,070 35,070
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.
52
53

NOTES
NOTES
Investments in associated companies and joint ventures
Investments in associated companies and joint ventures (continued)
2010 $
2009 $
The Group has investments in associated companies whose year ends are not coterminous with 30 September 2010. These are principally:
Investment and advances Share of post acquisition reserves
382,660 70,622 453,282
442,030 70,693 512,723 Banks Holdings Limited
Country Of Incorporation
Reporting Year End
Barbados Trinidad and Tobago Trinidad and Tobago Barbados Trinidad and Tobago
31 August 31 December 31 December 31 December 31 December
Balance at beginning of year Additional investments Share of results before tax Share of tax Dividends received Loans and advances Exchange differences Transferred to disposal group classified as held for sale (Note 33) Other Balance at end of year
512,723 61,083 10,699 (13,548) (22,408) 1,286 (87,818) (8,735) 453,282
515,034 20,266 35,683 (7,547) (32,617) 6,637 2,101 (19,515) (7,319) 512,723
Neal & Massy Wood Group Limited G4S Holdings Trinidad Limited G4S Security Services (Barbados) Limited CMA CGM Trinidad Limited
10 Credit quality of financial assets
Credit quality investments
SubThe 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). Low Risk $ Standard Risk $ Standard Risk $ Impaired $
The principal associate is Banks Holdings Limited which is incorporated in Barbados.
Investments 2010 2010 $ 2009 $ 2009 254,585 243,872 212,783 256,402 7
Investments and advances Share of post acquisition reserves
177,949 (1,117) 176,832
177,939 4,171 182,110
The market value of shares in Banks Holdings Limited as at 30 September 2010 is $158,567 (2009 : $169,528)
54
55

NOTES
NOTES
10 Credit quality of financial assets (continued)
11 Long term investments and financial assets at fair value through profit or loss
Credit quality other financial assets Available Past Due Fully Performing $ 2010 Installment credit and other loans Trade receivables 233,373 472,294 705,667 24,836 318,308 343,144 20,436 130,494 150,930 (5,898) (134,737) (140,635) 2010 Beginning of the year Exchange differences Adjustments to Opening Balance Past Due Fully Performing $ 2009 Installment credit and other loans Trade receivables 274,977 515,650 790,627 38,275 345,013 383,288 6,030 72,044 78,074 (7,627) (76,608) (84,235) but not Impaired $ Impaired $ Provision For Impairment $ Change in market value/ impairment charge Additions Disposals Net gains transferred from equity to other comprehensive income End of the year 1,705 25,311 316,645 47,456 1,705 389,412 (5,947) (141) 22,484 (22,975) 1,732 (2,990) (5,947) 24,216 (26,106) 29,600 94 315,835 996 305 48,561 153 393,996 1,243 305 but not Impaired $ Impaired $ Provision For Impairment $ for sale financial assets $ Held to maturity $ Loans and Receivables $ Total $
Financial assets at fair value through profit or loss $
106,278 335
4,176 (32,826)
77,963
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.
56
57

NOTES
NOTES
11 Long term investments and financial assets at fair value through profit or loss (continued)
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 Financial 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%).
Available for sale financial assets $ Held to maturity $ Loans and Receivables $ Total $
assets at fair value through profit or loss $
The movement in the deferred income tax account is as follows:
Deferred income tax liabilities 2009 Beginning of the year Exchange differences Adjustments to Opening Balance Change in market value/ impairment charge Additions Disposals Net losses transferred from equity to other comprehensive income End of the year (7,860) 29,600 315,835 48,561 (7,860) 393,996 106,278 The movement in the deferred tax liabilities during the year ended 30 September 2010 is as follows: (58) (1,268) 62,666 1,666 (3,466) (58) 64,332 (4,734) (3,656) 18,759 (7,398) 35,996 444 2,346 250,221 3,195 (247) 50,610 699 (948) 336,827 4,338 1,151 98,037 1,242 (706) Balance at beginning of year Charge for the year Exchange adjustment Other movements Balance at end of year 96,316 5,353 511 (2,271) 99,909 92,315 8,797 (1,741) (3,055) 96,316 2010 $ 2009 $
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. 30.09.09 2010 $ 2009 $ Accelerated tax depreciation Financial assets include the following: Bonds and treasury bills Quoted securities Unquoted securities Other 356,421 96,985 783 13,186 467,375 358,424 126,658 3,581 11,611 500,274 Pension plan surplus Other 46,803 48,241 1,272 96,316 $
Charge to Consolidated Income Statement (Note 29) $ Other Movements $ 30.09.10 $
1,668 3,094 591 5,353
(955) (691) (114) (1,760)
47,516 50,644 1,749 99,909
The fair value of held to maturity financial assets amounts to $346,259.
58
59

NOTES
NOTES
12 Deferred income tax (continued)
The movement in the deferred tax liabilities during the year ended 30 September 2009 is as follows:
Deferred income tax assets (continued)
Charge to Consolidated Income Statement 30.09.08 $ (Note 29) $ Other Movements $ 30.09.09 $
The movement in the deferred tax asset during the year ended 30 September 2010 is as follows:
(Charge) / Credit to Consolidated Income Statement Other Movements $ 30.09.10 $
Accelerated tax depreciation Pension plan surplus Other
44,009 49,108 (802) 92,315
4,480 2,664 1,653 8,797
(1,686) (3,531) 421 (4,796)
46,803 48,241 1,272 96,316 Accelerated depreciation Tax losses carried forward
30.09.09 $
(Note 29) $
48,174 23,639 4,196 76,009
(4,411) 24,645 (808) 19,426
1,827 (15,396) 3,465 (10,104)
45,590 32,888 6,853 85,331
Deferred income tax assets
Other
The movement in the deferred tax assets during the year ended 30 September 2010 is as follows: The movement in the deferred tax assets during the year ended 30 September 2009 is as follows: 2010 $ 2009 $ (Charge) / Credit to Balance at beginning of year Credit for the year Other movements Balance at end of year 76,009 19,426 (10,104) 85,331 60,286 16,043 (320) 76,009 30.09.08 $ Consolidated Income Statement (Note 29) $ Other Movements $ 30.09.09 $
Accelerated depreciation Tax losses carried forward Other
10,522 49,764 60,286
19,598 (3,988) 433 16,043
18,054 (22,137) 3,763 (320)
48,174 23,639 4,196 76,009
60
61

NOTES
NOTES
13 Installment credit and other loans (continued)
Deferred income tax assets (continued)
13.1 Sectorial analysis of installment credit and other loans
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.
2010 $
2009 $
Consumer 13 Installment credit and other loans These represent the installment credit and other loans granted mainly by General Finance Corporation Limited. Manufacturing Distribution Construction 2010 $ 2009 $ Transport Agriculture Petroleum Amounts due within one year Between two and five years Over five years 136,004 139,466 3,175 278,645 Provision for losses (5,898) 272,747 Due within one year (130,105) 142,642 145,471 171,121 2,690 319,282 (7,627) 311,655 (137,845) 173,810 13.2 Provision for losses Residential mortgages Other
109,281 9,896 31,305 34,535 30,239 1,906 1,065 355 54,165 272,747
118,500 13,866 34,748 48,264 29,247 1,814 672 530 64,014 311,655
2010 $
2009 $
Balance at beginning of year Charge for the year Amount written off net of recoveries Balance at end of year
7,627 2,400 (4,129) 5,898
19,110 2,472 (13,955) 7,627
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.
62
63

NOTES
NOTES
14 Retirement benefit assets
14 Retirement benefit assets (continued)
2010 $
2009 $
Neal & Massy Group Pension Fund Plan (continued)
The movement in the fair value of plan assets of the year is as follows: Neal & Massy Group Pension Fund Plan Overseas plans Other 189,471 24,428 213,899 188,350 15,550 203,900 2010 $ 2009 $
The pension plans were valued by an independent actuary using the projected unit credit method.
Opening fair value of plan assets Expected return on plan assets
1,121,556 93,843 27,349 25 (35,062) 1,207,711
1,106,472 92,664 (44,974) 41 (32,647) 1,121,556
Neal & Massy Group Pension Fund Plan
Actuarial gains / (losses) on plan assets Employer contributions
The amounts recognised in the statement of financial position are as follows:
Benefits paid Closing fair value of plan assets at 30 September 2010 $ 2009 $ The amounts recognised in the consolidated income statement are as follows:
Fair value of plan assets Present value of obligation
1,207,711 (908,593) 299,118
1,121,556 (878,909) 242,647 (54,297) 188,350 Current service cost Interest cost Expected return on plan assets
2010 $
2009 $
Unutilisable asset Asset in the statement of financial position
(109,647) 189,471
16,087 64,766 (93,843) (12,990)
14,278 66,237 (92,664) (12,149)
The movement in the defined benefit obligation over the year is as follows:
Total included in other income
2010 $
2009 $
2010 $
2009 $
Opening present value of defined benefit obligation Current service cost Interest cost Actuarial losses/ (gains) on obligation Benefits paid Closing present value of defined benefit obligation at 30 September
878,909 16,087 64,766 (16,106) (35,063) 908,593
781,301 14,278 66,237 49,740 (32,647) 878,909
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)
64
65

NOTES
NOTES
2010 $
2009 $
Plan assets are comprised as follows:
2010 Actual return on plan assets 121,192 47,690 Local Equities/Mutual Funds Movement in the asset recognised in the statement of financial position: Local Bonds/Mortgages Foreign investments 2010 $ 2009 $ Deferred annuities/insurance policy Short term securities 34% 26% 27% 6% 7%
2009
60% 15% 13% 8% 4%
Asset at beginning of year Net pension income Actuarial losses Contributions paid Asset at end of year
188,350 12,990 (11,895) 26 189,471
186,541 12,149 (10,382) 42 188,350 Male 82 86 81 85 2010 2009 The average life expectancy in years of a pensioner retiring at age 60 is as follows:
The principal actuarial assumptions used were:
Female
2010 Per annum
2009 Per annum 2010 $ 2009 $ 2008 $ 2007 $ 2006 $
Discount rate Future salary increases Expected return on plan assets Future pension increases post retirement
7.5% 7.0% 7.85% 5.0%
8.0% 7.0% 8.50% 5.0% Plan asset Defined benefit obligation Surplus Experience adjustments on plan liabilities 1,207,711 (908,593) 299,118 (10,934) 27,349 1,121,556 (878,909) 242,647 (13,317) (44,974) 1,106,472 (781,301) 325,171 (18,576) 16,942 1,024,355 (812,160) 212,195 (14,133) (25,750) 992,710 (784,151) 208,559 34,260 (227,056)
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.
Experience adjustments on plan assets
66
67

NOTES
NOTES
Overseas plans - Other (continued)
Overseas plans - Other (continued)
Movement in the asset recognised in the consolidated statement of financial position:
2010 $
2009 $
2010 $
2009 $
Fair value of plan assets Present value of the defined benefit obligation
172,407 (104,354) 68,053
156,808 (90,046) 66,762 (51,292) 80 15,550
Asset at beginning of year Decrease/(increase) in recognisable asset Loss recognised in other comprehensive income Net pension income Contributions paid Exchange adjustment Asset at end of year
15,550 7,667 (8,286) 5,707 2,177 1,613 24,428
32,430 (16,514) (680) 3,493 1,788 (4,967) 15,550
Unrecognised asset Unrecognised past service cost Asset recognised in the statement of financial position
(43,625) 24,428
The amounts recognised in the consolidated income statement are as follows: 2010 2010 $ 2009 $ Actuarial losses recognised in other Current service cost Interest cost Expected return on plan assets Past service benefit non-vested benefits Total included in other income Actual return on plan assets 1,829 9,345 (16,961) 80 (5,707) 12,577 2,400 8,790 (14,761) 78 (3,493) 1,117 Plan assets are comprised as follows: Cumulative actuarial losses recognised in other comprehensive income (before tax) 26,184 27,183 comprehensive income (before tax) (8,286) (680) $ 2009 $
2010
2009
Equities Real Estate Government of Jamaica Securities Bonds Short term deposits/Money Market/Cash Fixed income Other
30% 2% 21% 7% 8% 26% 5%
27% 2% 22% 7% 10% 26% 6%
68
69

NOTES
NOTES
Overseas plans - BS& T
Plan assets are comprised as follows:
2010
2009
2010 $
2009 $
Cash and cash equivalents Bonds Mortgage loans
3% 8% 1% 14% 67% 6%
3% 8% 2% 14% 71% 2%
Fair value of plan assets Present value of the defined benefit obligation Liability in the statement of financial position
431,733 (455,690) (23,957)
440,754 (509,750) (68,996)
Real estate Equities Other
The amounts recognised in the consolidated income statement are as follows:
2010 $
2009 $
2010 Per annum
2009 Per annum
Current service cost Interest cost Expected return on plan assets Gains on curtailments / settlements Expense recognised in the profit or loss Actual return on plan assets
9,843 37,904 (34,490) 13,257 8,873
10,108 38,039 (36,568) (2,827) 8,752 (10,695)
Discount rates Expected return on plan assets Future salary increases Future NIS increases Future pension increases
7.5% 8.0% 5.0% 3.5%
7.5% 8.0% 5.0% 3.5% 2.75%
Assumptions regarding future mortality experience are set based on advice from published statistics and experience in each The liability recognised in the consolidated statement of financial position is included in provisions for other liabilities and charges: territory.
2010 $
2009 $
(Liability)/asset at beginning of year Income/(loss) recognised in other comprehensive income Net pension expense Contributions paid Exchange adjustment Liability at end of year
(68,996) 49,222 (13,257) 9,152 (78) (23,957)
16,284 (85,071) (8,752) 9,290 (747) (68,996)
70
71

NOTES
NOTES
The average life expectancy in years of a pensioner retiring at age 60 is as follows:
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 2010 2009 the consolidated statement of financial position. The post retirement medical scheme was valued by an independent actuary using the projected unit credit method.
Male Female
82 86
81 86
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&Ts self insured arrangement and the medical
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.
and personal index component of the Retail Price Index.
2010 Per annum
2009 Per annum
Discount rate Medical Claims inflation
7% 4.5%
7.5% 4%
The principal actuarial assumptions used were: The expected mortality before and after retirement is GAM 94. 2010 Per annum 2009 Per annum The effect of a 1% movement in the assumed medical premium escalation is as follows:
Discount rate Medical Claims inflation
7.5% 5.0%
8.0% 5.0% Effect on the aggregate of the current service cost and interest cost
Increase
Decrease
2,469 23,259
(1,680) (16,355)
The expected mortality before and after retirement is GAM 94.
Effect on the defined benefit obligation
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 Effect on the defined benefit obligation
397 2,824
(303) (2,214)
72
73

NOTES
NOTES
15 Inventories
16 Trade and other receivables (continued)
2010 $
2009 $
Aging analysis financial assets
Past Due But Not Impaired Finished goods and goods for resale Goods in transit Raw materials and consumables Work in progress 737,056 170,225 122,548 23,924 1,053,753 805,722 134,021 112,815 27,797 1,080,355 2010 Installment credit and other loans Trade receivables The cost of inventories recognised as expense and included in cost of sales amounted to $5,260 (2009: $5,409). Total 17,151 67,915 85,066 3,704 104,480 108,184 1,462 58,243 59,705 2,519 87,670 90,189 24,836 318,308 343,144 <30 days $ 31- 60 days $ 61- 90 days $ > 90 days $ Total $
16 Trade and other receivables <30 days 2010 $ 2009 $ 2009 Trade receivables Less: provision for impairment of receivables Trade receivables - net Other debtors and prepayments 921,096 (134,737) 786,359 804,984 1,591,343 932,707 (76,608) 856,099 697,705 1,553,804 Provision for impairment 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. Opening balance $ Provision Installment credit and other loans Trade Receivables Total 15,285 39,286 54,571 4,271 125,621 129,892 $ 31- 60 days $
Past Due But Not Impaired 61- 90 days $ > 90 days $ Total $
2,674 76,984 79,658
16,045 103,122 119,167
38,275 345,013 383,288
Written off during the year $
unused provisions reversed $ Closing balance $
for impairment $
2010 Installment credit and other loans Trade receivables Other debtors and prepayments 7,627 76,608 854 85,089 2,400 69,333 1,801 73,534 (3,074) (3,770) (461) (7,305) (1,055) (7,434) (8,489) 5,898 134,737 2,194 142,829
74
75

NOTES
NOTES
16 Trade and other receivables (continued)
17 Cash and cash equivalents (continued)
Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement: Provision Opening balance $ for impairment $ Written off during the year $ unused provisions reversed $ Closing balance $ Cash and cash equivalents 2009 Installment credit and other loans Trade receivables Other debtors and prepayments 19,110 64,233 10,141 93,484 2,682 25,563 28,245 (5,286) (6,882) (779) (12,947) (8,879) (6,306) (8,508) (23,693) 7,627 76,608 854 85,089 Bank overdrafts Other short term borrowings 1,137,935 (61,336) (30,000) (91,336) 1,046,599 957,933 (37,633) (37,633) 920,300 2010 $ 2009 $
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
18 Share capital
Number Of Shares 17 Cash and cash equivalents #
Ordinary Shares $ Total $
2010 $
2009 $
At 30 September 2008 Employee share option scheme - value of services provided
95,968
512,573
512,573
172 17 96,157
2,543 6,200 838 522,154
2,543 6,200 838 522,154
Cash at bank and in hand Short-term bank deposits
755,176 382,759 1,137,935
516,478 441,455 957,933
Share option exercised Acquisition of subsidiary At 30 September 2009
The effective interest rate on short-term bank deposits was 2% (2009: 4%); these deposits have an average maturity of 90 days.
At 30 September 2009 Employee share option scheme - value of services provided Share option exercised At 30 September 2010
96,157
522,154
522,154
438 96,595
250 15,816 538,220
250 15,816 538,220
The total authorised number of ordinary shares is unlimited with no par value. All issued shares are fully paid.
76
77

NOTES
NOTES
18 Share capital (continued)
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.
Expiry date 1 October
Exercise Price $
Options 2010 2009
2010 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. 2011 2012 2013 2014
34.90 49.39 37.03 47.52 58.33
483 344 558 443 1,828
196 483 585 748 756 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
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
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.
2010 Average Exercise Price in $ Options Average Exercise price in $
2009
19 Dividends per share Options 2010 2009 $
At 1 October Granted Forfeited Exercised At 30 September
2,768 (502) (438) 1,828
58.33
2,211 756 (27) (172) 2,768 Interim paid 40 cents per share (2009 40 cents) Final paid 100 cents per share (2009 100 cents)
40,038 99,797 139,835
39,863 99,524 139,387
Out of the 1,828 thousand outstanding options, 827 thousand options were exercisable.
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).
Share options outstanding at the end of the year have the following expiry date and exercise prices:
78
79

NOTES
NOTES
20 Non-controlling interests
21 Borrowings (continued)
2010 $
2009 $
The exposure of the Groups borrowings to interest rate changes and the contractual repricing dates at the statement of financial position dates are as follows:
Balance at beginning of year Disposals Share of net profit of subsidiaries Dividends paid Investment Other movements Balance at end of year
478,073 4,701 (32,449) 1,590 1,101 453,016
476,496 (10,000) 48,169 (26,191) (10,401) 478,073 6 months or less 6-12 months 1-5 years Over 5 years
2010 $
2009 $
91,336 567,744 1,040,145 279,014 1,978,239
37,633 590,590 1,184,349 362,785 2,175,357
21 Borrowings
The carrying amount and fair value of the non-current borrowings are as follows:
2010 $
2009 $ 2010
Carrying Amount 2009 $ 2010 $
Fair Value 2009 $
$ Fixed interest mortgage loans Other secured advances Unsecured advances Bank overdrafts and other short term borrowings Total borrowings Less short term borrowings Medium and long term borrowings 479,101 539,919 867,883 91,336 1,978,239 (659,080) 1,319,159 480,006 476,464 1,181,254 37,633 2,175,357 (628,223) 1,547,134 Fixed interest mortgage loans Other secured advances Unsecured advances 479,101 539,919 867,883 1,886,903
480,006 476,464 1,181,254 2,137,724
479,101 550,726 867,863 1,897,690
480,006 493,746 1,181,254 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%)
Short-term borrowings comprise: Bank overdrafts and other short term borrowings Current loan installments 91,336 567,744 659,080 37,633 590,590 628,223
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).
80
81

NOTES
NOTES
21 Borrowings (continued)
22 Customers deposits These represent the deposits for fixed terms accepted mainly by General Finance Corporation Limited. 2010 $ 2009 $ 2010 $ 2009 $
The maturity of borrowings is as follows: Payable within one year Payable between two and five years Payable between six and ten years Payable over ten years 567,744 1,040,145 181,286 97,728 1,886,903 590,590 1,184,349 354,557 8,228 2,137,724 Sectorial analysis of deposit balances Private sector 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: Consumers 30,635 255,500 286,135 35,758 307,351 343,109 Payable within one year Payable between one and five years 285,969 166 286,135 342,813 296 343,109
2010 uS$ % TT$ % Other % uS$ %
2009 TT$ % Other %
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
Fixed interest mortgage loans Other secured advances Unsecured advances Bank overdrafts and other short term borrowings
3.3-10.2 4.29-12 2.54-12
8-10 8.5-10.5 2.85-10.5
5.75 5.25-6.3 4-4.75
6-9 5-8
8-10 6-15 6-9
5.5 4-5.5
claims and past claims history. The remaining balance for provisions for other liabilities and charges stem from accruals for outstanding tax claims or assessments.
8.75-9
9-18.35
8.7-10.5
9-12
12.2
24 Trade and other payables
The carrying amounts of short-term borrowings and current borrowings approximate their fair value. The carrying amounts of the Groups borrowings are denominated in the following currencies: Trade creditors Other creditors and accruals
2010 $
2009 $
2010 $
2009 $
633,104 754,212 1,387,316
677,272 744,586 1,421,858
US dollars Barbados dollars Trinidad & Tobago dollars
903,743 638,153 345,007 1,886,903
958,108 761,547 418,069 2,137,724
82
83

NOTES
NOTES
25 Liabilities on insurance contracts The major classes of general insurance written by the Groups 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:
25 Liabilities on insurance contracts (continued)
Movement in the unearned premium reserve may be analysed as follows:
Insurance 2010 $ 2009 $ Liabilities 2010 $ Outstanding claims Unearned premiums 361,134 364,000 725,134 352,698 264,796 617,494 Beginning of the year Exchange adjustment Premiums written in the year Movement in outstanding claims reserve may be analysed as follows: Premiums earned in the year 264,798 834 770,341 (671,973) 364,000 Insurance Liabilities 2010 $ Reinsurers Share 2010 $ Insurance Liabilities 2009 $ Reinsurers Share 2009 $
Reinsurers Share 2010 $
Insurance Liabilities 2009 $
Reinsurers Share 2009 $
154,915 489 496,488 (378,872) 273,020
257,984 3,298 638,641 (635,127) 264,796
152,944 1,955 333,224 (333,208) 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.
Beginning of the year Exchange adjustment Claims incurred Claims paid
352,698 1,196 195,669 (188,429) 361,134
90,613 287 19,095 3,173 113,168
382,436 5,227 178,604 (213,569) 352,698
143,638 1,836 (11,276) (43,585) 90,613
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.
84
85

NOTES
NOTES
26 Operating profit before finance costs
27 Staff costs
2010 $
2009 $
2010 $
2009 $
Revenue Cost of sales Gross profit Selling, general and administrative expenses Other income
8,262,960 (5,799,491) 2,463,469 (1,921,366) 129,887 671,990
8,338,470 (5,818,314) 2,520,156 (1,878,293) 116,670 758,533
Wages and salaries and termination benefits Share options granted to directors and employees Pension costs
902,669 250 14,432 917,351
903,070 2,543 15,081 920,694
Average number of persons employed by the Group during the year:
Selling, general and administrative expenses include the following: Administration staff costs Depreciation Impairment of goodwill Directors fees Operating lease rentals 688,723 99,183 2,846 1,518 40,761 687,378 103,523 3,699 1,518 38,979
Full time Part time
7,967 1,982 9,949
7,734 2,190 9,924
28 Finance costs - Net
Administrative staff costs: Continuing operations Discontinued operations 688,723 5,047 693,770 687,378 5,024 692,402 Interest expense Interest income Depreciation: Continuing operations Discontinued operations 99,183 3,193 102,376 103,523 2,625 106,148 Finance costs net, continuing operations Finance costs net, discontinued operations
2010 $
2009 $
168,322 (91,344) 76,978 305 77,283
209,295 (107,321) 101,974 5,698 107,672
86
87

NOTES
NOTES
29 Income tax expense
30 Earnings per share (continued)
2010 $
2009 $
Basic (continued)
2010 Trinidad and Tobago subsidiaries Overseas subsidiaries Associated companies Deferred taxation (Note 12) 114,853 67,437 13,548 (14,073) 181,765 129,034 46,051 7,547 (7,246) 175,386 Profit attributable to shareholders continuing operations Profit attributable to shareholders discontinued operations 419,245 (117,880) 301,365 $
2009 $
468,687 (33,275) 435,412
The Groups effective tax rate of 30% (2009 25%) differs from the statutory Trinidad and Tobago tax rate of 25% as follows:
Weighted average number of ordinary shares in issue
96,390
96,069
Basic earnings per share continuing operations 2010 $ 2009 $ Weighted average number of ordinary shares Profit before taxation Tax calculated at a tax rate of 25% Effect of different tax rates in other countries Income not subject to tax/expenses not deductible for tax purposes Business levy/green fund levy/withholding taxes Other adjustments Adjustments to prior year tax provisions Tax charge 605,711 151,428 18,368 (6,312) 7,395 6,410 4,476 181,765 692,242 173,061 10,859 (7,927) 5,551 (8,104) 1,946 175,386 Diluted earnings per share continuing operations Diluted earnings per share discontinued operations for diluted earnings per share Basic earnings per share discontinued operations
4.35 (1.22) 3.13
4.88 (0.35) 4.53
96,390
96,109
4.35 (1.22) 3.13
4.88 (0.35) 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
There is no tax charge or credit relating to the components of other comprehensive income.
value (determined as the average annual market share price of the Companys 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.
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.
88
89

NOTES
NOTES
30 Earnings per share (continued)
32 Commitments Capital commitments
Basic (continued)
Capital expenditure contracted at the statement of financial position date but not yet incurred is as follows:
2010
2009
2010 $
2009 $
Profit attributable to equity holders of the Company Weighted average number of ordinary shares in issue (thousands) Adjustments for: share options (thousands) Weighted average number of ordinary shares for diluted earnings per share (thousands) Diluted earnings per share ($ per share)
301,365 96,390
435,412 96,069 Property, plant and equipment 31,969 13,063
96,390 3.13
36 96,109 4.53
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.
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 & Massys 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.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
2010 $
2009 $
No later than 1 year Later than 1 year and no later than 5 years Later than 5 years
31,878 99,442 66,259 197,579
23,224 76,335 80,052 179,611
Operating lease commitments - where a Group company is the lessor:
2010 $
2009 $
Less than one year One year to five years
82,005 50,908 132,913
86,991 73,721 160,712
90
91

NOTES
NOTES
33 Assets of disposal group classified as held for sale
33 Assets of disposal group classified as held for sale (continued)
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.
Warrens Motors (continued)
Analysis of the cash flows is as follows:
Analysis of the results is as follows:
2010 $ 2010 $ 2009 $ Operating cash flows Investing cash flows 17,090 666 17,756
2009 $
8,030 (5,055) 2,975
Revenue Operating loss before finance costs Finance costs net Loss before tax Tax Loss for the year
72,778 (29,757) (305) (30,062) (30,062)
87,529 (8,062) (5,698) (13,760) (13,760)
Financing cash flows Total Cash Flows
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 Groups investment in that entity has been presented as held for sale following the approval by the Groups Board on 28 September 2010. The transaction was completed on 10 November 2010.
Assets of disposal group classified as held for sale: Analysis of the results is as follows: 2010 $ 2010 $ Property plant and equipment Inventories Other current assets Total Assets 2,799 10,785 13,584 Share of loss Tax Share of loss for the year (87,818) (87,818) (19,515) (19,515) 2009 $
There are no liabilities of disposal group classified as held for sale.
Analysis of the cash flows is as follows:
2010 $
2009 $
Investing cash flows
(35,768)
92
93

NOTES
NOTES
34 Related party transactions The ultimate parent of the Group is Neal & Massy Holdings Limited (incorporated in Trinidad and Tobago).
34 Related party transactions (continued)
2010 The following transactions were carried out with related parties: $
2009 $
2010 $
2009 $
v)
Loans to associates: Beginning of year Loans advanced during year 54,190 976 (751) (39,165) 15,250 54,755 6,637 (7,107) 1,193 (1,288) 54,190
i)
Sales of goods and services: Sales of goods: - Associates 84,614 91,435
Loans repayments received Interest charged Interest received Other movements
Goods are sold on the basis of the price lists in force with non-related parties.
End of the year
ii)
Purchases of goods and services: Purchases of goods: - Associates 17,089 17,257
Included in other movements is a write off of a loan receivable balance from Bahamas Supermarkets Limited.
vi) Loans from associates: Beginning of year 3,307 49 (128) 3 3,231 6,276 (3,090) 219 (98) 3,307
Goods are bought on the basis of the price lists in force with non-related parties.
Loans advanced during year Loans repayments received
iii) Key management compensation: Salaries and other short-term employee benefits Post-employment benefits Share-based payments 55,975 3,638 250 59,863 56,406 3,666 2,543 62,615
Interest charged Interest received Other movements End of the year
vii) Total loans to other related parties: iv) Year-end balances arising from sales/purchases of goods/services: Receivables from related parties: Associates 4,727 4,652 Beginning of year Loans advanced during year Loan repayments received Interest charged Payables to related parties: Associates 697 2,052 Interest received End of the year 14,764 60 (511) 1,321 (19) 15,615 15,394 75 (1,272) 1,328 (761) 14,764
Goods purchased from entities controlled by non-executive Directors
54,267
59,892
The loans to associates are due on demand and carry interest rates between 4.2 % 12.5%.
94
95
NOTES
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.
96
97
98

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NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Our Vision Statement

Neal & Massy: A Force for Good

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

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Introducing Our New Vision Statement

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

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

AUTOMOTIve & INDUSTRIAl eqUIpMeNT

TRINIDAD & TOBAGO

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Table of Contents Reports

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Registrar and Transfer Office

Group Principal Bankers

(Trinidad & Tobago) Limited 74 Long Circular Road Maraval

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Arthur Lok Jack Chairman

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

E. Gervase Warner President & Group Chief Executive Officer

Chief Executive Officers Report

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Chief Executive Officers Report

Five Management Initiatives

Corporate and Business unit Strategy/Development

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Paula Rajkumarsingh Executive Vice President & Chief Financial Officer

Impact of the loss-making Companies

Chief Financial Officers Report

Continuing operations reported in 2010 Year on Year changes %

727,561 Year on Year changes % 2%

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Chief Financial Officers Report

Revenue by Operating Country (%)

Other Guyana Jamaica

1.0 7.2 9.3

0.6 6.7 7.0

0.2 7.0 7.4

Trinidad & Tobago

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

David OBrien Senior Vice President & Executive Chairman

Automotive & Industrial Equipment Business Unit

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Linford Carrabon Senior Vice President & Executive Chairman

Energy & Industrial Gases Business Unit

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Earl Boodasingh Executive Vice President & Executive Chairman

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

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Frere Delmas Senior Vice President & Executive Chairman

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

G. Anthony King Executive Vice President & Executive Chairman

Financial, Property & Other

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Financial, Property & Other

Ralph Taylor President & Managing Director Almond Resorts Inc.

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Keith Thomas Senior Vice President & Executive Chairman

Information Technology & Communications /Other Services

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT

Deo Persaud Executive Chairman Neal & Massy Guyana Group

NEAL & MASSY HOLDINGS LIMITED 2010 ANNUAL REPORT