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Annual Report 2006

 I am pleased to report that the Group in 2006 produced its best results in its entire 125-year history. You would recall that last year’s profit before tax of $645.8 million included an extra-ordinary gain – the profit on the sale of the Pigeon Point Estate to the State which amounted to $85.3 million. The profit contributions from the Group subsidiaries were such that it surpassed that figure by a further $64.1 million to produce a profit before taxation of $709.9 million – a 29.4% improvement excluding the Pigeon Point gain (or a net 9.9% improvement on 2005’s results inclusive of the Pigeon Point gain). Our earnings per share increased to $2.77 an increase of 31.3% over last year’s operating EPS of $2.11 while our share price also appreciated by 6% to $43.75 at year end. At the time of writing this report, our share price stood at $50.00.

2006 was the first full year the Group returned to a Sectoral approach for managing its operations. The Sectors are Beverage, Manufacturing, Automotive, Distribution, Financial Services, Media and Services. This approach to managing the operational companies has, in my view, proven to be a very successful strategy as all sectors recorded good growth in 2006 and our other listed Trinidad and Tobago companies recorded considerable growth.

2006 Significant Events
Investments in new plant and equipment continued in 2006. As in prior years ever increasing demand for our products and brands propels us to increase production capacity, contain costs at international benchmarks while maintaining quality at world-class standards. The investments in plant, technology and information technology will continue to improve our competitiveness at home, in the region and markets in the US and Europe.

At Bestcrete a new block manufacturing plant was acquired which is capable of producing an additional 1.2 million blocks monthly to meet the demand created by the very buoyant construction sector of the local economy.

At the breweries at Champs Fleurs and Grenada, work on completing the production line upgrades continued to improve through-put and efficiencies. The commencement of brewing capacity upgrades and the introduction of high-gravity brewing will support the bottling lines appetite for liquid as their speed continues to improve.

The increased demand, both local and export for our portfolio of brewed products, together with the popular stout and malt products, will enable these capital investments to bear fruit in the years ahead.
A decision was also made to invest in a newstate of the art printing press for our newspaper operations – the Guardian, and this new press will be housed in a new building located at the ANSA McAL Centre in Chaguanas.

Work also commenced in the year on planning for a furnace rebuild at our glass container facility, Carib Glassworks Limited. The rebuild is targeted to take place during the second quarter of 2007 and all indications are that the project will be delivered on time and within budget.

The year also saw the commencement of operations of our joint venture company Caribbean Roof Tile Company Limited that produces roof tiles primarily for the North American market. I am very pleased to report that the product has been well received in the US market and while the new housing market was originally targeted, the re-roofing market is now also being targeted and indications are that the product has been well accepted by that segment.

I reported last year that while the Group along with its international partners signed a Project Agreement with the Government of Trinidad and Tobago in respect of a significant investment in the energy sector, I wish to advise that the project has been delayed due to the non-delivery of a suitable parcel of land free of all encumbrances by the contractually stipulated date. The Group and its partners continue to evaluate their options.

Also in my report last year, I reported that in recognising the intensifying competition for talent, the Group partnered with the University of the West Indies and launched its own Executive Development Programme. I am pleased to report that that venture was most successful and feedback from all concerned – participants, coaches, mentors and academic staff was all extremely positive. This has prompted the Executive to repeat the programme in 2007. This year the programme has been expanded to incorporate executives at our Barbados operations. There are 22 participants in Trinidad and another 20 in Barbados and again feedback remains positive.

Group’s Overseas Operations
The Group’s interests in Barbados once again recorded good results and the outlook remains very positive. Profit for the year increased by 13.6% resulting in an EPS of BDS$1.70 up from BDS$1.49 in 2005.

Our operations in the OECS countries continue to produce good results but we remain concerned over the volume of illegally imported products into those territories. A strengthened commitment on the part of the Governments of those countries in addressing this problem is imperative to ensuring that critical tax revenues and employment in those countries are maintained and embraced.

I am pleased to announce that the Board of Directors has recommended a final dividend of $0.50 per ordinary share. This, together with the interim dividend paid of $0.25, will bring the total dividend payable to shareholders for the year to $0.75. The final dividend will be paid on June 15, 2007.

The Group in 2006 celebrated its 125th year in operation. To commemorate that significant milestone the Group held an interfaith thanksgiving service on July 29, 2006. On December 14 the Group paid tribute to its longer serving employees at its Long Service Awards function. At that function employees who had served the Group for more than 25 years were honoured. On that day, 400 such persons who contributed in excess of 14,000 years’ service were honoured. A commemorative book on the history of the ANSA McAL Group was also produced and will be launched in May 2007.

The ANSA McAL Foundation
While the ANSA McAL Foundation continued with its original mandate, 2006 saw the announcement of the first recipients of The Anthony N. Sabga Caribbean Awards For Excellence – a biennial event. The purpose of the Awards is to recognise significant Caribbean achievement and to encourage the pursuit of excellence. Awards were granted in the following areas: Arts and Letters, Public and Civic Contributions, and Science and Technology. The laureates were film-maker Robert Yao Ramesar, Professor Terrence Forrester and Rev Fr Gregory Ramkissoon.

The ANSA McAL Family
To my colleagues on the Parent Board, I wish to acknowledge your support and commitment during the year just ended. At the Annual Meeting of Shareholders, three (3) Board members would not be seeking re-election. They are Stephen R. Edghill, C Anthony Beaubrun and Stephanie Daly.

Stephen Edghill joined the Board when he became President and Chief Executive Officer of ANSA McAL (Barbados) Limited in 1998. Stephen retires on April 30, 2007. I wish Stephen, on behalf of my colleagues on the Board, a truly happy and well deserved retirement. Notwithstanding Stephen’s retirement he will be serving on a number of our Boards in a non-executive capacity.

Anthony Beaubrun has served as a Director of the ANSA McAL Board for 14 years having been elected to the Board in 1990 – the longest serving non-executive director. Tony has also served on the Audit and Compensation Committees of the Parent Board and again on behalf of my colleagues on the Board, I would like to thank him for his years of service and wish him well in the future.

Stephanie Daly joined in 2004 and I would like to thank her for her contribution.

I would also like to recognise the service of Colin Da Silva who was the President and CEO at Stokes & Bynoe Limited and a member of the ANSA McAL (Barbados) Board. Colin retired on December 31, 2006 ending an illustrious career spanning 44 years of service with the Barbados Group.

To the Group’s Executive Management and Staff these results could not have been achieved without your commitment, determination and support. I look forward to working with you in ensuring the delivery of our Vision 2010 (V’10) wherein we are seeking to deliver an EPS of $5.00 and our share traded on the Stock Exchange at $100 per share.

To our shareholders, stakeholders and partners thank you to for your support in 2006 and I look forward to your continued co-operation in 2007.

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